Logo

Our Posts

Does Section 101(1)(G) of the National Credit Act cap an Attorney’s legal costs (even if taxed) equal to the capital being collected for ones Client? The Law Society of the Northern Provinces does not want to give their view. This will obviously have a vast and detrimental effect on all Attorney firms doing collections

~ Christian Steyn After due consideration of NEDBANK LTD AND OTHERS v NATIONAL CREDIT REGULATOR AND ANOTHER 2011 (3) SA 581 (SCA) and after soliciting opinions from Senior Legal Practitioners knowledgable in the area, I must deduce and conclude that an Attorney’s fees and charges, when acting as Agent for a Credit Provider, are NOT automatically capped as provided in Section 101(G) of the National Credit Act. It is my humble view that the relationship between the Credit Provider (the Client) and his Agent (the Attorney) are un-affected by the Act as this Attorney and Client relationship appears to clearly stand outside the limitations of Section 101. What the Act does do is to limit the Credit Provider on recovery of collection fees, as you also argue. This limitation must be seen in the same light as collection commission (in the Tariff) capping such charges recoverable as between “Party and Party” (for want of a better comparison). As between “Attorney and Client”, however, the Attorney should not be limited in any way to do work and render an account as per the normal, UNLESS the Credit Provider wishes to bind and limit the Agent in terms of Section 101, in which case the Attorney should have the freedom of choice to NOT bind himself in that manner. In short it appears that should a Credit Provider choose to employ an Agent (Attorney) to do collections, and if the costs of so doing exceeds those as capped by Section 101, then such additional costs incurred shall be for the Credit Provider’s own account, the end-user not to be burdened by the Credit Provider’s decision.