February 2025 | Uncategorized
“If you didn’t hear it from the horse’s mouth, it came from the other end of the horse.” (Anon)
The rapid rise of AI is hard to ignore. DeepSeek’s AI assistant, only launched on 10 January this year, has grown to rival ChatGPT in popularity, making it the most widely used AI language model at the time of writing. But DeepSeek isn’t alone in the race – major players like Copilot, Gemini 2.0, OpenAI o3, Meta AI, Grok, Anthropic and the like are all vying for our attention. The competition is fierce, and we’re spoilt for choice!
With AI becoming an integral part of so many aspects of our lives, it’s no surprise that some of us might be tempted to turn to these models for legal help. We decided to ask ChatGPT itself how it feels about that, and what follows is its unedited response. Direct from the horse’s mouth!
Our question to ChatGPT
“With the current high levels of public interest in using AI to answer questions, would you recommend that people without legal training use AI to answer legal questions and to provide legal advice on specific topics?”
ChatGPT said:
“AI is a powerful tool, but when it comes to legal advice, caution is essential. While AI can summarize laws, explain legal concepts, and assist with research, it cannot replace the expertise of a qualified attorney.
The risks of relying on AI for legal advice
- Lack of context: AI provides general information, but legal issues are highly fact-specific. What applies in one case may not apply in another.
- Potential for inaccuracy: AI models pull from vast datasets but do not verify legal updates, jurisdictional differences, or recent court rulings. This can lead to outdated or incorrect advice.
- No professional liability: If AI provides incorrect guidance, there is no recourse. Attorneys, on the other hand, are professionally accountable for the advice they give.
Ethical and confidentiality concerns: Sharing sensitive legal matters with AI platforms can pose risks, as they do not guarantee attorney-client privilege or data security.
Where AI can help
- Basic legal information: Understanding general legal principles, terminology, and procedures.
- Document review assistance: AI can help summarize contracts or flag potential issues but should not replace a lawyer’s review.
- Legal research: AI speeds up finding relevant case law or statutes, but attorneys must verify accuracy and applicability.
The key takeaways
- AI is a useful tool for research and general legal understanding, but not for personalised legal advice.
- Only a qualified attorney can provide case-specific guidance, apply legal reasoning, and ensure compliance with current laws.
- For critical legal matters, always consult a professional – mistakes can be costly.
In short, AI can support legal education but should never be a substitute for expert legal counsel. If in doubt, always seek professional advice.”
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A last thought or two from us…
In a South African context, we have found inaccuracy to be even more of a risk than it is internationally – no doubt because of the relatively limited online coverage our local laws enjoy. For example, a test question on a relatively simple aspect of South African law resulted in the bot quoting New Zealand legislation back to the asker! What’s more, there are already media reports of South African lawyers finding themselves in hot water after not thoroughly checking technical AI output (and rightly so!).
Whatever you use AI for, be really careful that its answers are factually and technically accurate before relying on them. As ChatGPT itself says under every question field: “ChatGPT can make mistakes. Check important info.”
AI is a useful tool that may be able to point you in the right direction, but it can never replace a human being – let alone a qualified lawyer. Relying on AI for legal advice could be the worst decision you ever make.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
© LawDotNews
January 2025 | Constitutional Law, Consumer Law, Uncategorized
“The secret of life is honesty and fair dealing… If you can fake that, you’ve got it made.” (Groucho Marx)
We’ve all had this experience – meal over, relaxed and happy, you call for the bill and decide to reward your friendly and helpful waitron with a good tip. Only to find, on checking the bill when you get home, that the restaurant had already added a “compulsory service charge” (perhaps 10% or 15% – sometimes even more). When you challenge it, the manager points to the small print on the menu which says something like “service charge applies to tables of six or more”, or “discretionary service charge may be levied”.
And it’s not only restaurants that engage in such shenanigans. Perhaps it’s a builder or any other service provider adding on bits and pieces to an invoice that you hadn’t noticed when you signed up with them.
Is this kind of behaviour allowed?
The devil, as always, is in the details. If the add-on was properly disclosed to you upfront, you have no legal leg to stand on. It’s up to you to check the menu, or the supplier’s website and Ts and Cs, before ordering.
But it’s a very different story if the add-on was not properly disclosed upfront by the supplier. As a recent judgment of the National Consumer Tribunal (“the Tribunal”) shows, heavy penalties await any “supplier” (widely defined to include not only restaurants and retailers, but anyone who markets or supplies any goods or services to consumers) who breaches any of their many obligations under the CPA (Consumer Protection Act). And that includes “no hidden charges allowed”.
Being found guilty of “prohibited conduct” will be an expensive exercise. Witness the R1m administrative fine imposed recently on a fast-food chain specialising in that beloved South African tradition – braaivleis.
The braai fast-food chain and the disgruntled customer
Acting on a tip-off from a customer, the NCC (National Consumer Commission) found that a fast-food chain, specialising in “organic braai fast food” (chew on that description for a moment) with 16 outlets across Gauteng was adding a service fee over and above its advertised prices. No mention of this was advertised in its branches, on its menus, or on its website.
Unabashed, the chain argued before the Tribunal that it was fully compliant with the CPA, that the charge was a fee “to ensure the best service to the consumer” and that there is “a transparent general practice to disclose cost structures rather than hide behind an exorbitant price model.”
The Tribunal, deeply unimpressed with this (frankly baffling) line of reasoning, found the chain guilty of prohibited conduct and gave it 90 days to pay a R1m administrative fine.
Two breaches of the CPA
The chain was found guilty of two contraventions of the CPA:
1. That as a supplier it “must not require a consumer to pay a price for any goods or services higher than the displayed price for those goods or services.”
2. It must also “provide a written record of each transaction to the consumer to whom any goods or services are supplied.” This record “must include at least the following information: the address of the premises at which, or from which, the goods or services were supplied.” Without that, as the Tribunal put it, “vulnerable consumers could find it difficult to institute legal proceedings and enforce their rights.”
A R1m fine for “preying on unwitting customers for selfish financial gains”
The chain, said the Tribunal, had “acted deceitfully towards its customers and contravened the CPA’s significant provisions. It acted contemptuously towards the very consumers who supported it.
Accordingly: “the Tribunal considers it appropriate to impose an administrative fine that will deter it and other suppliers from preying on unwitting consumers for selfish financial gains.”
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
© LawDotNews
January 2025 | Employment and Labour Law, Uncategorized
“Only in our dreams are we free; the rest of the time we need wages.” (Terry Pratchett)
Retrenching employees can be an expensive business. You’ll have to pay each employee a minimum of one week’s pay for each completed year of ongoing service, and that total liability can add up alarmingly.
A recent Labour Court ruling has however set out clear guidelines for avoiding that cost by arranging alternative employment for your retrenched employees.
A lost cleaning contract and a raft of retrenchments
A contract cleaning services company, fearing it would lose a particular contract in an upcoming tender process, warned all staff employed at the factory in question that they could face retrenchment.
Sure enough, the tender went to a competitor. The company was able to absorb 130 employees into other positions and locations, but 41 had to be retrenched. Eleven of them were given severance pay, but the employer declined to pay anything to the 30 who accepted alternative employment.
The employees were having none of that, and approached the CCMA (Commission for Conciliation, Mediation and Arbitration). The CCMA awarded them both retrenchment pay and notice pay.
The employer then took the matter to the Labour Court, which set aside those awards. So, the employer is off the hook on both counts – and employers and employees should understand the Court’s reasoning for that decision.
Having your cake, and eating it
- The BCEA (Basic Conditions of Employment Act) provides that employees cannot demand severance pay if they are offered alternative employment and unreasonably reject it. As the Labour Court here put it, “the raison d’être of [severance pay] is to compensate an employee who has been dismissed for operational requirements, through no fault of her own, to be paid compensation for her loss of employment. However, the legislature considered that an employee who unreasonably refuses an offer of alternative employment is not without blame. She should therefore shoulder the loss of employment without any compensation.” (Emphasis added)
- Equally, “where an employee accepts alternative employment, arranged by the employer, she forfeits her right to receive severance pay.” Being paid both severance pay and a salary is a double benefit not intended by the BCEA.
Employers: Two practical steps to avoid liability
Employers should take two lessons from this ruling:
- Don’t just “sit on your hands watching the world go by”! As this Court put it, employers are incentivised to ensure that their employees get another job. Which is exactly what the cleaning company did here: it “did not just sit on [its] hands and impassively watch the world go by,” it managed to find alternative employment for 30 employees. It was extremely pro-active in this regard, meeting with the new employer, giving it all the information it needed, and allowing employees paid time off to attend interviews at a venue which it arranged.
- Act early and urgently. This employer avoided the claim for notice pay by giving over four weeks’ notice of termination. What’s more, it engaged in the consultation process and issued notice of retrenchment circulars at the earliest opportunity, then acted “as a matter of some urgency” to collaborate with the new employer in arranging new job offers.
Another point to consider
It’s worth noting perhaps that the Court also mentioned in passing (“obiter dicta”) that even if an employee were to find her own new employment “through her own efforts and without the aid of her retrenching employer” she “needs no soft cushion of severance pay to land on” and would have to justify any such claim.
Still, on the “better safe than sorry” principle, employers should not take chances here – rather be pro-active in arranging alternative employment as soon as you can.
A final thought for employees
Before you decide to reject any offer of alternate employment bear in mind that, as this court confirmed, it will be up to you to prove your entitlement to severance and/or notice pay – it’s not automatic!
Whether you’re an employer planning to retrench staff, or an employee facing an impending retrenchment, getting the best legal advice is key.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
© LawDotNews
February 2019 | Uncategorized
“Animosity and difference of opinion are not sufficient to have a trustee removed from office and/or for the majority of trustees to unilaterally force another to vacate his/her office…” (Extract from judgment below)
When family infighting impacts a family trust, an early casualty is often the relationship between the appointed trustees and beneficiaries, and/or between the trustees themselves.
And if that results in irreconcilable differences and conflict between the trustees, the only answer may be for one or more of the trustees to be replaced. First prize of course will always be to achieve this with a voluntary resignation – but what happens if a trustee refuses to resign? Can the majority forcibly remove him/her?
A recent High Court decision dealt with just that question.
3 professionals v the beneficiary’s mother
- A “valuable property” in Knysna is owned by a trust created for the benefit of a couple’s daughter (11 years old at the time, now 30). There are four trustees appointed by the Master of the High Court (“the Master”) issuing “letters of authority” to two auditors and an attorney (“the professionals”), and to the beneficiary’s mother. The father farms the property through a company and a close corporation. Although no family feud is specifically mentioned in the judgment, it seems clear that the father is in one camp, and the mother and daughter in the other.
- The trust deed contained this clause – “The office of a TRUSTEE shall be vacated if …. the majority of TRUSTEES request a TRUSTEE to resign.”
- The trustees fell out in a dispute over the father’s loan account, with the professionals proposing that the trust should pay the father interest on his loan, and the mother objecting on the basis that payment of interest had never been agreed to.
- This was discussed in a telephonic trustees’ meeting, and resulted in the professionals writing to the mother to say she was removed as trustee for three reasons – “1) all items discussed were either rejected or opposed; 2) she made false allegations against the applicants and 3) she admitted that she did not have sufficient knowledge to fulfil her duties as trustee”. The Master then pointed out to the professionals that they could not resolve to remove the mother, only to request her to resign. They did so in a second letter to the mother.
- The mother refused to resign and the professionals asked the High Court to order that the mother “has lost her office as trustee”. Their attitude was that they were acting in terms of the trust deed, no reasons for the decision had to be given, and the Master had no option but to issue new letters of authority.
- The clause itself might seem pretty clear, the professionals clearly believed that they were acting entirely within their mandate and they presumably commenced their litigation with high hopes of success. But it was not to be…
- The Court, for the reasons we discuss below, held for the mother, who accordingly remains a trustee.
Ambiguity, showing good cause, and ubuntu
The Court’s reasons for its decision contain some important principles that anyone involved in a trust would do well to take note of (with some thoughts on how to deal with each issue in brackets) –
- The trust’s removal clause, held the Court, was ambiguous when it provided that a request (involving a choice) for resignation shall (peremptory – no choice) lead to vacation of office. The clause, said the Court, “must be interpreted to read that there must be good cause for such a request and that the trustee shall vacate his/her office only in the event of an acceptance of the request”. (Make sure the trust deed is clear and unambiguous).
- Secondly, an implied term should be read into the clause requiring good cause to be shown – to allow trustees to remove another without producing reasons “would be against public policy and the principles of ubuntu, reasonableness and fairness”. (Make sure you can show fairness and good cause for decisions).
- Thirdly, the professionals had failed to prove any justification for their action. They could not rely on the clause without giving reasons for their decision and proving that they took their decision “based on the discretion of a good person acting reasonably”. (Make sure you can justify your actions as reasonable).
- Fourthly, the resolution to request the mother’s resignation “should have been taken on a properly constituted trustees’ meeting and upon proper notice of their intention”. Instead, they took decisions “secretly and without notifying [the mother] in advance. They also “failed to give proper notice in compliance with the provisions of the Trust Act.” (Comply with all procedural formalities).
- Finally, said the Court, there was no deadlock between the trustees – “Decisions in the interests of the trust and trust beneficiary can be taken by the majority of trustees during a properly convened meeting on condition that sufficient notice of all matters to be considered is given. It is not necessary to remove the first respondent in order to conduct the business of the trust in a lawful manner.” (Be sure that removal is actually necessary).
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
February 2019 | Uncategorized
“It is the duty of an employee when rendering his or her services always to act exclusively in the interest of the employer … an employee is not entitled to use his or her employment relationship with the employer without the employer’s permission to make a profit or earn commission for his or her own account” (Extracts from judgment below)
Employees have very strong rights in our law, but employers also have effective remedies when employees “go rogue”.
A recent case, in which an employee was ordered to repay his employer R33m in “secret profits” including R9m in damages, provides a good example.
Diverted sales opportunities and secret profits
- A manufacturer employed a “Key Accounts Manager” as its agent in dealing with customers. He was trusted with an “almost unlimited discretion” and minimal management oversight to act in his employer’s interests.
- His employer sued him in the High Court on allegations that he breached both his employment contract and his duty to his employer, firstly by selling product to customers at below-minimum prices, and secondly by selling through his own companies to secretly profit thereby.
- The employee’s denials of wrongdoing cut no ice with the Court, which held that he “was clearly under a general obligation to do his best for his employer and to conduct the plaintiff’s business in good faith and for its benefit” but “was in breach of his fundamental obligation of loyalty and good faith which he owed to … his employer”.
- The secret profits claim. Ordering the employee to “disgorge” his secret profits of R33,291,599.24 (less any “amounts paid in making such profits” which the employee is able to prove), the Court held that the employer had proved the three elements needed to succeed in such a claim –
- The employee owed it a “fiduciary obligation” (a duty to act honestly and in utmost good faith),
- In breach of that obligation he placed himself in a position where his duty and his personal interest were in conflict, and
- He made a secret profit out of corporate opportunities belonging to the employer.
- The damages claim was for losses on product sold to customers at prices well below the employer’s base price “in order to further [the employee’s] secret profit-making activities.” Finding that but for the employee’s wrongdoing the customers would have bought product at no less than the base price, the Court awarded the employer R9,407,651.05 in damages (to be credited, when paid, to the R33m claim).
Rubbing salt in…
To really rub salt into the employee’s wounds, he was ordered to pay costs, and the bill will be a big one, including –
- Costs on the punitive “attorney and client” scale, an appropriate order said the Court “given the secret and unlawful nature of the scheme which the defendant ran for four years at the expense of his employer”,
- The cost of audio visual equipment used in the trial, and
- The (no doubt substantial) travel and subsistence costs of both the employer’s legal team and its six witnesses, all of whom travelled from Gauteng to Cape Town for the trial.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
February 2019 | Uncategorized
“People who complain about taxes can be divided into two classes: men and women” (Anon)
- How long will you work for the taxman today?
Input your salary into the 2019 Tax Clock calculator and find out how many hours you will spend today working for the taxman, and at what time precisely you will finally start working for yourself (warning – it’s not pretty!).
- How will your income tax change?
Put your monthly taxable income into Fin24’s Budget 2019 Income Tax Calculator to find out.
- How much extra will your sin taxes cost you this year?
Work out how much more you will be shelling out for spirits, wine, beer and cigarettes (or how much you will be saving if you don’t indulge!) with Fin24’s Budget 2019 Sin Tax Calculator.
- Your Pocket Tax Guide “From the Horse’s Mouth”
Download the official SARS Budget 2019 Tax Guide from the National Treasury website here.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
