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Johannesburg - The Competition Commission has denied the Law Society of South Africa (LSSA) an application for exemption from certain provisions of the Competition Act.
The LSSA had wanted exemption from rules on professional fees, reserved work, organisational forms and multi-disciplinary practices, and advertising, marketing and touting.
It said that it had consulted stakeholders in the legal fraternity, including the department of justice and constitutional development, before making its decision.
The commission said it had also researched how other countries dealt with the rules for the legal profession.
Attorneys are prevented by law from accepting fees except at prescribed rates.
"The commission found that this is tantamount to price-fixing, which is in contravention of the act. As such, legal practitioners are not allowed to discount below the set fees, thus inhibiting price competition," it said.
It said that a mechanism to protect the public from exorbitant legal fees might include setting of price caps or ceilings.
The rules for reserved work ensure that lawyers are prohibited from allowing or assisting an unqualified person to obtain payment for professional work that only attorneys may do.
The commission found that these rules should not be exempted because they were likely to harm competition, as they prevent other competent service providers from providing legal services to the public.
"It restricts the number of service providers which in turn limits consumers’ choice," it said.
Rules on organisational forms and multi-disciplinary practices prohibit the sharing of fees and offices with non-practising attorneys.
"The Commission found these rules were too wide and tend to prevent innovation and development of a fair competitive environment."
Under the rules on advertising, marketing and touting, lawyers are prohibited from using certain types of advertising and marketing which are regarded as unprofessional, dishonourable and unworthy conduct.
"The commission found that these restrictions were not necessary for the maintenance of professional standards as they extended beyond standard advertising norms. It is also in the consumers’ interests to lift these restrictions on advertising," it said.
The commission said it recognised that in principle it may be necessary to restrict competition to maintain professional standards or to protect the public.
"However, the current rules as crafted are too wide and need to be adjusted," it said.
It will work with the LSSA to redraft the rules in a "manner compatible with competition principles".
The LSSA had wanted exemption from rules on professional fees, reserved work, organisational forms and multi-disciplinary practices, and advertising, marketing and touting.
It said that it had consulted stakeholders in the legal fraternity, including the department of justice and constitutional development, before making its decision.
The commission said it had also researched how other countries dealt with the rules for the legal profession.
Attorneys are prevented by law from accepting fees except at prescribed rates.
"The commission found that this is tantamount to price-fixing, which is in contravention of the act. As such, legal practitioners are not allowed to discount below the set fees, thus inhibiting price competition," it said.
It said that a mechanism to protect the public from exorbitant legal fees might include setting of price caps or ceilings.
The rules for reserved work ensure that lawyers are prohibited from allowing or assisting an unqualified person to obtain payment for professional work that only attorneys may do.
The commission found that these rules should not be exempted because they were likely to harm competition, as they prevent other competent service providers from providing legal services to the public.
"It restricts the number of service providers which in turn limits consumers’ choice," it said.
Rules on organisational forms and multi-disciplinary practices prohibit the sharing of fees and offices with non-practising attorneys.
"The Commission found these rules were too wide and tend to prevent innovation and development of a fair competitive environment."
Under the rules on advertising, marketing and touting, lawyers are prohibited from using certain types of advertising and marketing which are regarded as unprofessional, dishonourable and unworthy conduct.
"The commission found that these restrictions were not necessary for the maintenance of professional standards as they extended beyond standard advertising norms. It is also in the consumers’ interests to lift these restrictions on advertising," it said.
The commission said it recognised that in principle it may be necessary to restrict competition to maintain professional standards or to protect the public.
"However, the current rules as crafted are too wide and need to be adjusted," it said.
It will work with the LSSA to redraft the rules in a "manner compatible with competition principles".
