The preceding week has been busy for those who choose to litigate in the name of black economic empowerment (BEE). Sakeliga has now lodged two cases (see here and here), the Dimension Data executives have been given leave to appeal against the damning judgment in the property fronting case, and Norton Rose Fulbright SA (NRFSA) withdrew its urgent application for the suspension of the Legal BEE Code.

The latter case interests me the most. I wrote about it in this publication a few weeks ago. For me, it is the most significant legal attack on empowerment legislation that we have ever seen.

I need to preface this with a disclaimer. I am not a lawyer. I did study law but never followed through. These opinions should not be viewed through a legal prism.

NRFSA gave the Department of Trade, Industry and Competition (dtic) et al until 24 January 2025 to respond to its urgent application for the suspension of the Legal Black Economic Empowerment Codes of Good Practice.

The biggest risk it faced in its application to have the legal code suspended (Part A) was whether the judge in question would have viewed the application as urgent. I have heard that it can be a lottery in terms of who hears these cases, with some judges taking a dim view of empowerment litigation. My sources had their doubts that they would have been successful in their urgent application.

With that in mind, Norton Rose must have been somewhat relieved when the dtic approached it directly to discuss this action.

As a result, the urgent application has been put on hold, and Part B, the application for the removal of the code from the law books, will be heard in the next few months.

Certain articles have averred that Norton Rose backed down in their urgent application. I don’t think there is any substance to this assertion. If Norton Rose was concerned about the success of their urgent application then the dtic must also have been aware that the odds of a successful urgent application failing were stacked in their favour, yet they chose to negotiate.

To my non-legal mind, this strongly suggests that the dtic knows that they have a weak case and must be aware that the legal brains that they are able to muster do not stand a chance against the combined brain power of the largest law firms in South Africa.

All the dtic has done is delayed their fight by a few months. This seems to be a huge strategic blunder.

If the urgent application had failed, then the second part of the case could have waited for years until it was heard. By then, the code would have become established, with legal firms figuring out how to get around it. The case might not have proceeded at all.

It’s very obvious that the dtic blinked first. It’s a tactical error that will probably work against them. Sadly we also didn’t get to see their responding affidavit for the urgent application, but we’ll most likely see a more comprehensive one in a few months’ time.