When a personal injury claim succeeds, the client’s statement of account will show more than the attorney’s fee. It will also show disbursements: amounts the firm paid out along the way to prove the claim. Clients are sometimes surprised by these deductions, and it is a fair question to ask what they are, why they exist, and why they are not always recovered in full from the “other side”. This article answers those questions openly, because we believe a client should understand every line of an account before a claim is finalised.
What it costs to prove a claim
A serious injury claim in the High Court is not won on argument alone. It is won on evidence, and that evidence must be bought at professional rates. In a typical matter the firm briefs medico-legal specialists — orthopaedic surgeons, neurosurgeons, occupational therapists, industrial psychologists — to examine the client and prepare reports, and an actuary to calculate the value of the losses. Counsel (an advocate) is briefed to prepare the matter and to argue it in court. To these are added court fees, sheriff’s fees and the ordinary costs of running litigation. Each of these amounts is a disbursement: money actually paid out to a third party on the client’s behalf, which the attorney bears.
In a contingency matter, the firm funds these disbursements as the case runs. The client is not asked to pay for expert reports out of their own pocket while the claim is pending, and if the claim fails, the client does not repay the attorney’s fee. Disbursements are, in that sense, the investment the firm makes in proving the client’s case. The attorney also takes a large risk in outlaying the funds in these matters.
What is recovered from the other side
When a claim succeeds, the court will ordinarily order the losing party — the Road Accident Fund, or the hospital’s insurers or the State — to pay the successful party’s legal costs. This is a real and valuable protection, and we pursue it in every matter; every account is drawn, presented for taxation before the Taxing Master where necessary, and recovered as fully as the rules allow.
But an important feature of our law needs to be understood: a costs order is almost always made on the “party and party” scale. This does not mean everything that was actually spent. It means what the court tariff allows for each item. The tariff is a schedule of prescribed rates, and those rates are lower than the rates professionals actually charge. Since April 2024, Rule 67A of the Uniform Rules has gone further and required courts to fix the scale on which counsel’s fees may be recovered, which even on the highest scale is capped at prescribed hourly limits. Senior counsel in a complex medical negligence trial may well charge more than the scale the court allocates. The difference cannot be recovered from the other side, however carefully the matter was run.
Why a gap can remain and how we handle it
The result is a gap that no attorney can entirely close: the difference between what was actually and reasonably spent to win the claim, and what the tariff permits us to recover from the losing party. That gap is not of the firm’s making and it is not to the firm’s benefit. Our interest and the client’s interest point the same way — every rand we recover from the other side goes to paying off the disbursements incurred, which is why we tax and pursue costs in every matter as a matter of course.
Where a shortfall remains, it is deducted from the award, alongside the agreed fee. Two protections apply. First, the fee itself is regulated: under the Contingency Fees Act the success fee is capped at the lesser of double the normal fee or 25% of the amount recovered. Second, disbursements are not fees. They are actual amounts paid out, each supported by an invoice, and each one appears on the statement of account. A client is entitled to see every disbursement, to ask why it was incurred, and to have the recovery from the other side accounted for in full.
The questions any client should ask
Before signing with any firm, a client is entitled to plain answers to a few questions. Who pays for expert reports while the case runs? What happens to disbursements if the claim fails? How will costs be recovered from the other side, and what happens if there is a shortfall? How will the final account show what was spent, what was recovered and what was deducted? A good attorney will welcome these questions.
How we can help
A C De Sousa Attorneys has practised specialist personal injury litigation since 2004. If you are considering a claim and would like the fee arrangement and the treatment of disbursements explained before anything is signed, or if you have an account you would like explained, call 0860 33 33 55 or visit acdsattorneys.co.za.
This article is general information, not legal advice. Every matter depends on its own facts, and you should obtain advice on your specific circumstances.
