B-BBEE Reset for Law Firms: High Court Sets Aside the Legal Sector Code
Key point: The judgment concerns the lawfulness of the Minister’s decision-making, not the merits of transformation. The court did not find that the Code cannot lawfully be promulgated.
Background
The Legal Sector Code, gazetted on 20 September 2024, replaced the Generic Codes as the B-BBEE measurement framework for law firms. Developed under a Steering Committee supported by the Legal Practice Council, it introduced escalating black and black women ownership targets, a Legal Sector Transformation Fund, a Charter Council and significant weight on the briefing of black advocates.
Minister Patel declined to approve the Code; his successor, Minister Tau, approved it shortly after taking office. Deneys, Bowmans, Webber Wentzel and Werksmans challenged that decision, as did Solidarity Trade Union, in Deneys Reitz Inc t/a Deneys and Others v Minister of Trade, Industry and Competition and Others (cases 2024-149523 and 2025-033365).
The ruling
On 7 October 2026, a full bench of the High Court, Pretoria, set aside the Minister’s decision to promulgate the Code and remitted the matter to him for reconsideration.
Section 9(1) of the B-BBEE Act confers a discretionary power. The Minister may rely on consultation and departmental advice, but he must evaluate the material and decide for himself. His own affidavit was fatal: he described his role as recognising “what the legal sector has collectively agreed on” and regarded himself as “duty-bound to gazette” the Code. The court held that this understanding is incompatible with the discretion Parliament conferred on him.
What the court did not decide
The court made no finding on the Code’s targets, timelines or exclusions. The Minister may take a fresh decision without restarting the consultation process.
The current position
The court did not suspend its order, so the Code has no legal force and the Generic Codes apply by operation of law. That position will change if:
any respondent applies for leave to appeal within 15 court days, by about 28 October 2026, which suspends the order under section 18(1) of the Superior Courts Act and revives the Code pending the appeal; or
the Minister re-gazettes the Code after a properly reasoned decision.
The dtic has not yet issued formal guidance, and SANAS has indicated to verification agencies that it will not advise until the dtic does.
Practical implications
Affidavits. The Generic Codes set the EME threshold at R10 million, against R5 million under the Code. Attorneys with turnover between R5 million and R10 million therefore qualify for an affidavit: Level 4 by default, Level 2 if at least 51% black owned and Level 1 if wholly black owned.
Closed financial years. In practice, verification follows the code in force at the time of measurement. Spend planned under the Code is not forfeited: the core elements count under both frameworks, and the Generic Codes also recognise socio-economic development, bursaries and black non-lawyers in management.
Existing Code certificates. These lack a legal foundation while the order stands, but should not be withdrawn unilaterally. They remain operative if leave to appeal is sought.
Transformation Fund. Contributions made for scoring purposes should be suspended until the position is settled, subject to any existing contractual commitments.
What firms must do now
Defer new affidavits and verifications until the appeal window closes and the dtic has issued guidance. Where a tender, client requirement or certificate expiry cannot wait, take specialist advice on the firm’s specific position. Misrepresenting B-BBEE status is an offence under section 13O of the B-BBEE Act.
Retain existing Code certificates.
Model the firm’s scorecard under both frameworks with specialist B-BBEE input.
Confirm in writing which code will apply before any verification commences.
Maintain transformation programmes. Genuine ownership by black attorneys remains decisive, and nominal arrangements constitute fronting under section 13O.
The bottom line
Transformation and the rule of law are mutually reinforcing constitutional commitments (para 137). The judgment does not end transformation obligations in the legal profession; it requires the Minister to exercise his discretion personally and on a properly reasoned basis. Firms that act before the position is settled risk having to reverse their compliance decisions.
Sources
Deneys Reitz Inc t/a Deneys and Others v Minister of Trade, Industry and Competition and Others; Solidarity Trade Union v Minister of Trade, Industry and Competition and Others, Gauteng Division, Pretoria, cases 2024-149523 and 2025-033365, order made 7 October 2026
This article is for informational purposes only and does not constitute legal advice. For specific legal guidance on protected disclosures, employment practices, or compliance obligations, consult a qualified labour law practitioner.
© 2026 Global Business Solutions (GBS). All rights reserved.
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