{"id":878835,"date":"2026-10-08T09:03:33","date_gmt":"2026-10-08T07:03:33","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=878835"},"modified":"2026-10-08T09:24:24","modified_gmt":"2026-10-08T07:24:24","slug":"new-bee-rules-in-south-africa-declared-invalid","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/878835\/new-bee-rules-in-south-africa-declared-invalid\/","title":{"rendered":"New BEE rules in South Africa set aside"},"content":{"rendered":"\n

Legal firms have won a case in the Pretoria High Court against the Minister of Trade, Industry and Competition over the promulgation of new BEE rules for the legal profession.<\/p>\n\n\n\n

The rules in question were contained in the Legal Sector Code, published by Trade Minister Parks Tau in September 2024.<\/p>\n\n\n\n

The Code was published under the Broad-Based Black Economic Empowerment Act and set new transformation and ownership targets for legal practices to hit over five years.<\/p>\n\n\n\n

Among other requirements, the code required these firms to move towards 50% black ownership, including at least 25% black women’s ownership.<\/p>\n\n\n\n

It also set representation targets of up to 50% for black managers, executives, partners, and directors.<\/p>\n\n\n\n

Notably, the rules had exemptions, with law firms and attorneys with an annual turnover of R5 million and R3 million or less, respectively, not impacted.<\/p>\n\n\n\n

This was a lower threshold than previously, meaning that smaller firms would have had to comply with rigid BEE requirements.<\/p>\n\n\n\n

Law firm Denys (formerly Norton Rose Fulbright) initially brought the legal proceedings to the court, and Bowmans, Webber Wentzel, and Werksmans intervened. Trade union Solidarity also joined the case.<\/p>\n\n\n\n

The law firms argued that the Code was implemented improperly and unlawfully, and contained arbitrary and ineffective measures. Solidarity argued that the ‘targets’ amounted to racial quotas.<\/p>\n\n\n\n

The firms stressed that they were not opposed to the transformation of the legal sector, but that any codes governing it must be implemented lawfully.<\/p>\n\n\n\n

The High Court ultimately agreed, finding that Minister Parks Tau had failed to apply his mind and exercise his ministerial discretion when promulgating the Code.<\/p>\n\n\n\n

According to the ruling, the minister’s position throughout the process was that he had no say in the “nitty gritty” and minutiae of the Code, relying on the legal sector itself to resolve its issues.<\/p>\n\n\n\n

He argued that it’s just his job to promulgate the Code, not justify it. <\/p>\n\n\n\n

“It is really not my space to be involved in the nitty-gritty of the [Code]…This is a function of the legal profession and all the stakeholders,” the Minister said.<\/p>\n\n\n\n

“The legal sector has decided on how best it regulates itself through the [Code]. I have simply carried out my constitutional functions.”<\/p>\n\n\n\n

The Court disagreed.<\/p>\n\n\n\n

It made it clear that the Minister’s Constitutional mandate is not simply to rubber-stamp policy in front of him, but is entrusted with statutory discretion.<\/p>\n\n\n\n

“Public power exercised to advance transformation must comply with the Constitution and the empowering legislation,” the Court said.<\/p>\n\n\n\n

“Consultation, technical expertise and stakeholder participation may inform the Minister’s decision, but they cannot supply the judgment that Parliament has required him to exercise.”<\/p>\n\n\n\n

The Court said that the ultimate responsibility remains with the minister; accordingly, his decision to promulgate the Legal Sector Code cannot stand.<\/p>\n\n\n\n

“The Minister’s failure to exercise that discretion in accordance with the Constitution and the B-BBEE Act requires remittal for a fresh decision,” it said.<\/p>\n\n\n\n

Set aside for now<\/h2>\n\n\n\n
\"\"<\/a>
Minister of Trade, Industry and Competition, Parks Tau<\/figcaption><\/figure>\n\n\n\n

While the litigants sought a ruling on the Code’s validity, the Court did not go that far.<\/p>\n\n\n\n

It said that the promulgation of the Code was already deemed unlawful, and it would be inappropriate to express views on issues that may change when the Code is lawfully in place.<\/p>\n\n\n\n

That has two clear impacts: <\/p>\n\n\n\n

    \n
  • The court has not concluded that the Legal Sector Code is incapable of lawful promulgation. <\/li>\n\n\n\n
  • Nor has it been determined that the Code’s provisions are inconsistent with either the Constitution or the B-BBEE Act. <\/li>\n<\/ul>\n\n\n\n

    This means that the Code hasn’t been sent back to the drawing board, merely sent back to the Minister to properly “apply his mind” on the matter.<\/p>\n\n\n\n

    “The Minister is not required to recommence the entire process that led to the development of the Legal Sector Code,” the Court said.<\/p>\n\n\n\n

    “Nothing in this judgment invalidates the extensive consultative work already undertaken, the technical expertise brought, or the valuable contributions made by the many stakeholders who participated in the process.”<\/p>\n\n\n\n

    The Court said that the constitutional requirement is simply that the Minister must independently evaluate that material, apply his own judgment, and satisfy himself that the requirements for the promulgation of the Legal Sector Code have been met.<\/p>\n\n\n\n

    The Minister was ordered to pay the applicants’ costs.<\/p>\n\n\n\n

    The full ruling can be read below:<\/p>\n\n\n\n