One of the greatest concerns for people who need legal assistance is the cost of litigation. Many individuals and businesses have strong legal claims but simply cannot afford to pay legal fees while their matter is still pending. To address this problem, Parliament enacted the Contingency Fees Act 66 of 1997, which allows legal practitioners, in appropriate circumstances, to enter into what is commonly known as a "No Win, No Fee" agreement. Unfortunately, many people misunderstand what this means. A contingency fee agreement does not mean that legal services are free. Instead, it shifts much of the financial risk from the client to the legal practitioner.
A legal practitioner may only enter into a contingency fee agreement where they are of the opinion that there is a reasonable prospect of success in the matter. In other words, an attorney cannot simply agree to act on contingency in every case. The merits of the matter must first be carefully evaluated, and if the prospects of success are poor, the Act does not permit such an agreement.
The most important feature of a contingency fee agreement is that the legal practitioner does not earn professional fees if the matter is unsuccessful. This means that:
The client generally remains responsible only for disbursements. Disbursements are expenses paid to third parties during the course of litigation, such as:
These are not fees earned by the attorney, but actual expenses incurred in conducting the litigation.
If the client is successful, the legal practitioner becomes entitled to recover:
The Act defines the attorney's "normal fee" as the reasonable fee that could ordinarily be charged for the work performed, assessed on the basis of attorney-and-own-client costs in the absence of a contingency fee agreement. Attorney-and-own-client costs represent the full reasonable remuneration for the professional work actually performed by the attorney for the client, subject to taxation or assessment where necessary. They are different from the more limited costs that may be recovered from an opposing party after judgment. This ensures that the attorney is fairly compensated for the work undertaken throughout the litigation. (For a more detailed explanation of the different categories of legal costs, see our article on attorney-and-own-client costs.)
The Act also recognises that, under a contingency fee agreement, the attorney assumes a significant financial risk. The attorney may spend months — even years — working on a matter without receiving any payment, knowing that if the case is unsuccessful, no professional fee will be earned. To compensate for accepting this commercial risk, the Act allows the attorney to charge a success fee if the matter is successful. The success fee is not an additional arbitrary charge — it is an agreed percentage calculated on the attorney's normal fee as additional compensation for the risk undertaken.
The success fee should reflect the level of risk accepted by the legal practitioner. For example, relevant considerations may include:
A matter with exceptionally high risk, substantial complexity and uncertain prospects may justify a higher success fee than a relatively straightforward claim with strong prospects of success. However, the Contingency Fees Act places strict limits on this additional remuneration.
The Act contains two important safeguards that protect clients.
The success fee may never exceed 100% of the attorney's normal fee. For example:
An attorney therefore cannot simply charge whatever amount they wish.
Where the client's claim is one sounding in money, the attorney's total success fee may never exceed 25% of the amount awarded or recovered by the client, excluding any legal costs recovered.
For example:
If a client recovers damages of R 100,000
The attorney's success fee may never exceed:
Even if the agreed percentage calculated on the normal fee would produce a higher amount, the Act limits the success fee to the statutory maximum. The legislation therefore protects clients against excessive contingency fee arrangements while still allowing attorneys to be fairly compensated for the substantial risks they undertake.
Many worthwhile legal claims would never be pursued if attorneys were expected to work for years with no prospect of compensation for the risk they assume. A contingency fee agreement allows people who may not otherwise be able to afford litigation to obtain legal representation, while ensuring that attorneys who successfully carry that financial risk are appropriately compensated. The arrangement therefore benefits both parties:
No. Every matter must first be carefully assessed. Some disputes may not have sufficient prospects of success, while others may be unsuitable because of their nature, complexity, recoverability or commercial considerations. For this reason, a contingency fee agreement should never be entered into without first obtaining proper legal advice and a thorough assessment of the merits.
A contingency fee agreement is not a licence for excessive legal fees, nor is it simply 'free legal representation'. It is a carefully regulated statutory arrangement designed to balance two important objectives:
The Contingency Fees Act places clear limits on what may be charged, ensuring that both the attorney and the client receive the protection intended by the legislation. If you believe you have a valid legal claim but are concerned about the cost of litigation, speak to an experienced attorney to determine whether your matter qualifies for a contingency fee agreement and whether such an arrangement is appropriate in your particular circumstances.
Copyright © 2026 Rohan Lamprecht. Disclaimer: The information in this article is of a general nature for educational purposes only, relevant to the publishing date. Any opinions expressed are solely those of the author and do not necessarily reflect the views or opinions of Grobler Malope Inc. The content is not intended to constitute professional or legal advice, and you are encouraged to call and consult with our attorneys to discuss your specific situation before making any decisions. Grobler Malope Inc - 087 057 1790 - info@gmilaw.co.za