Prepared by Stephanie Chetty and Nomonde Shelembe
The High Court has set aside the Legal Sector Code of Good Practice, not because transformation in the legal profession isn’t a lofty cause, but because the Minister did not make the decision himself. The judgment is a quiet and rather pointed lesson in what statutory discretion actually requires.
High Court of South Africa, Gauteng Division, Pretoria | Cases 2024-149523 and 2025-033365 | Judgment handed down 7 October 2026 |
The challenge
The applicants challenged the Legal Sector Code of Good Practice (the “Legal Sector Code”), promulgated by the Minister of Trade, Industry and Competition (“the Minister”) in terms of section 9(1) of the Broad-Based Black Economic Empowerment, Act 53 of 2003 (“the B-BBEE Act”), by notice published in Government Gazette 51271 (Government Notice 5221) on 20 September 2024.
Two applications were heard together: one brought by four of the largest commercial law firms, Deneys Reitz, Bowmans, Webber Wentzel and Werksmans, and one brought by the Solidarity Trade Union. Both sought the review and setting aside of the Minister’s decision and a declaration that the Code is invalid, unconstitutional and of no force or effect, with costs.
The grounds
Nine grounds of review were pleaded, from unjustified departures from the Generic Codes to irrational targets, excluding scorecard elements and the absence of transitional arrangements, however, the issues narrowed considerably during oral argument.
It bears emphasis that the applicants did not attack the constitutional imperative of transformation, nor the principle of sector-specific codes. They accepted that a lawful sector code may depart from the Generic Codes where the departures are justified.
Their complaint was about the lawfulness of how this Code was made, the departures from the Generic Codes and justifications therefor, the targets, methodologies and weightings, the elements excluded from the scorecard, and the absence of transitional arrangements after immediate implementation.
Statutory discretion
On the merits the case ultimately turned on one question: whether the Minister himself exercised the statutory discretion conferred by section 9(1) of the B-BBEE Act, a power the Court described as both discretionary and evaluative, or whether he deferred to the legal profession and to his officials.
Flowing from that was a second question: whether the Rule 53 record was complete enough to show what material was actually before the Minister when he decided. The Rule 53 record comprises documents, evidence, memoranda, commentary, and reasons to be considered when making a decision.
The Court reaffirmed that transformation is a constitutional imperative, not a policy preference, drawing on Van Heerden, National Coalition, Bato Star, Barnard and SARIPA. The Court noted that on the evidence, meaningful progress has been made at entry level but not at ownership and leadership levels.
The decisive defect
The decisive defect lay in the Minister’s own account of his role. His answering affidavit repeatedly described his function as recognising and gazetting what the legal sector had agreed. He said that: (i) the targets were not his space and a function of the profession and stakeholders; (ii) he was duty-bound to gazette the Code; (iii) he gazetted it at the request of the legal sector; and (iv) he had done nothing except execute his legislative obligation of gazetting the Legal Sector Code.
The Court held that this understanding cannot be reconciled with section 9(1) of the B-BBEE Act.
The B-BBEE Act
Section 9(1) of the B-BBEE Act empowers the Minister to issue codes of good practice. It does not oblige him to publish whatever is placed in front of him. The Court described the power as both discretionary and evaluative.
The Minister was entitled to rely on the technical work, advice and recommendations placed before him, but the statute required him to personally apply his mind and make the evaluative judgment, including whether the departures from the Generic Codes were properly justified.
Consultation vs statutory discretion
The judgment draws an important distinction between consultation and the exercise of statutory discretion. Consultation allows a decision-maker to benefit from the expertise, experience and perspectives of stakeholders. It does not, however, relieve the decision-maker of the obligation to make the decision entrusted to them by legislation.
This distinction is particularly significant where a regulatory framework is developed through extensive industry consultation and technical processes. Stakeholder consensus may be relevant to the decision, but it cannot, without more, determine the outcome. The statutory decision-maker must still evaluate the material before them, consider the relevant statutory requirements and reach their own conclusion.
Procedural participation vs lawful decision making
The broader lesson is that procedural participation and lawful decision-making are not interchangeable. A process may be consultative, technical and supported by industry stakeholders, yet the resulting decision must still reflect the independent exercise of the power conferred by the enabling legislation.
This judgment is a reminder that the legitimacy of public power depends not only on the objective being pursued, but also on the lawful exercise of the authority through which that objective is pursued.
Where legislation entrusts a decision to a particular functionary, consultation, technical expertise and stakeholder consensus may inform that decision, but cannot replace it. The distinction matters wherever public power is exercised through complex regulatory processes.
Ultimately, lawful process and transformative purpose need not be competing considerations. A decision that is properly informed, independently evaluated and lawfully taken is better placed to withstand scrutiny and command institutional legitimacy.
The question, therefore, is not simply whether the right person signed the decision, but whether that person actually exercised the power Parliament entrusted to them.
The ruling
Accordingly, the Court ruled that the Minister’s decision of 20 September 2024 promulgating the Legal Sector Code is set aside. The matter has been remitted to the Minister for reconsideration.
The order is significant. It preserves the distinction between judicial review and the exercise of the original statutory power. The Court’s role was to determine whether the decision was lawfully taken; it was not to formulate or impose its own preferred version of the Code.
Reconsideration therefore places the focus back on the statutory decision-maker. The Minister must engage independently with the material available, including the justification for departures from the Generic Codes, and arrive at a decision that demonstrates the exercise of the discretion conferred by the B-BBEE Act.
Important to note
On reconsideration, the Minister is not required to recommence the entire process. The consultation, the technical work of the Steering and Technical Committees and the stakeholders’ contributions all remain available to him and nothing in the judgment invalidates them. What the Constitution requires is that he independently evaluate that material, apply his own mind to the Code and to the justification for the departures from the Generic Codes, and satisfy himself that the statutory requirements have been met.
The Judgment’s boundaries
The judgment is careful about its own boundaries, and this is important for anyone reading it as a verdict on transformation policy. The Court did not question the legitimacy of the Code’s transformative objectives, did not find the Code incapable of lawful promulgation, and expressed no view on the substantive grounds of review (which were fully argued). The defect was one of process and of the exercise of statutory power, not of policy.
Final thoughts
It is important to note that the constitutional commitment to transformation is untouched. The Court went out of its way to record that the imperative of transformation and the need to address persistent inequality in the profession remain, and that the failure was one of lawful process rather than of purpose.
As the Court put it, the constitutional defect lay neither in the transformative objectives of the Code nor in the extensive consultative process that preceded it, but in how the Minister exercised the statutory discretion Parliament entrusted to him.
Strip away the personalities and the policy argument, and this is a judgment about how public power is exercised. A discretion conferred on a functionary must be exercised by that functionary, and a decision that is in substance somebody else’s cannot stand simply because the right person signed it.
