A R500-million National Treasury "unlawful" tender is being legally challenged as a "threat to vulnerable advocates", who face exclusion from the envisioned Treasury legal practitioners panel. 

The General Council of the Bar of South Africa (GCB) and the Advocates for Transformation (AFT) – the entities that have hauled the government to court – claim the "dysfunctional" State Attorney's office rendered advocates not tax compliant by not paying them on time, leading to them not meeting the requirements to be part of the Treasury's legal panel.

Tax compliance is a prerequisite for advocates to be appointed to the panel.

Finance Minister Enoch Godongwana and Justice and Correctional Services Minister Ronald Lamola are the defendants named. 

The GCB, according to its chairperson, Myron Dewrance, in the founding affidavit filed in the Gauteng High Court in Pretoria, has 2 968 members and is recognised by South Africa's courts "to have a standing as the representative of the advocates' profession".

The AFT, which aims to transform the profession and include more historically disadvantaged groups, such as black people and women, has 583 members. 

In a breakdown of figures, using the justice department's estimated expenditure, Dewrance said the government budgeted R505-million in the 2023/2024 financial year for litigation and legal fees.

The legal panel, the open tender of which closed on Monday, aims to establish a group of lawyers to work with the government, its departments and state institutions – after being briefed by the State Attorney – as and when litigation arises without inviting bids for each case. 

Dewrance called the tender "unlawful" because, among other things, National Treasury wanted to appoint the advocates on a "transversal contract", a central contract facilitated by Treasury for goods and services procurement.

The GCB chairperson argued that transversal contracts were illegal under the Legal Practices Act because the law prohibits advocates from receiving briefs, otherwise known as legal instructions, "from any entity other than an attorney". 

"If the panel is constituted," Dewrance asserted, "National Treasury will be the briefing institution and not the State Attorney." 

He added that the State Attorney in Pretoria was "dysfunctional", leading to difficulties for junior advocates to be paid for work done from the briefs received from the office, with counsel not able to "keep their tax affairs in order".

"It follows logically that, if any person is not paid for work done, the person cannot pay his or her debts, including tax liabilities. This would exclude them [advocates] from participating in the tender," Dewrance said.

"These persons are not non-compliant taxpayers, but victims of the dysfunctionality of the offices of the State Attorney. I have received various reports of junior members who find themselves in this position. I cannot identify them, given the rules concerning tax secrecy, but I can confirm that various chairpersons of constituent [GCB] bars and AFT branches throughout South Africa have raised the same problem," he added.

However, in papers filed on Lamola's behalf, the government rejected that "dysfunction" rendered advocates not tax compliant, arguing that if the state does not pay a counsel on time, it does not mean they cannot pay their taxes. 

"Say, for example, counsel earns R1-million in a tax year. She is paid R400 000, and the balance is either bad debts or disputes relating to overbilling; the taxpayer pays tax on the R400 000 and not on more, unless she has other sources of income," the government contended. 

On the dysfunctionality of the State Attorney's office, the government said the current tender sought to remedy this anomaly, adding that, on the GCB's version, the office cannot handle the quantity of work, which sacrifices quality. 

"The tender seeks to enlist attorneys, who are interested in doing state work, to tender to be on the database from which these attorneys will service departments and other organs of state. They will brief counsel, who [are] also on the database." 

A court date has yet to be set for the application.