On 07 October 2026, a full bench of the High Court in Pretoria (Janse van Nieuwenhuizen, Mokose and Basson JJ) reviewed and set aside the decision of the Minister of Trade, Industry and Competition, Parks Tau, to gazette the Broad-Based Black Economic Empowerment (B-BBEE) Legal Sector Code. The Code, representing the first transformation framework designed specifically for the legal profession, had been challenged by four of the country’s largest law firms: Deneys (formerly Norton Rose Fulbright South Africa), Bowmans, Webber Wentzel and Werksmans. The trade union Solidarity brought a separate application, which was heard together with the firms’ challenge.

The decision is notable as much for what the court did not decide as for what it did. The court did not rule on whether the Code is constitutional, or on whether its targets are achievable or fair. It decided only that the Minister did not follow the legally required process in gazetting it. The practical result, however, is significant: the Code is now legally invalid, and law firms will no longer be rated against it.

Background: A Code Years In The Making

The Legal Sector Code was reported to have been in development since 2020, with the support of several legal bodies, including the Legal Practice Council. It was gazetted in September 2024, shortly after Minister Tau took office. His predecessor, Ebrahim Patel, had left office without approving the Code, having reportedly raised concerns about its compliance with the legal requirements for sector codes.

As reported, the Code required law firms to increase black ownership, management, control and procurement, with press coverage describing targets of up to 50% black ownership within five years, including a set proportion held by black women, and lowered thresholds at which firms are classified as large enterprises. It took effect on publication, with no transition period, and firms that failed to meet minimum sub-targets in key areas such as ownership, skills development and supplier development faced a downgrade in their B-BBEE status. Firms argued that the targets were impossible to meet, and challenged the Code on both substantive and procedural grounds, including that the Minister had not complied with the B-BBEE Act’s requirements before a sector code could be made.

The Court’s Findings

The court’s reasoning turned on the Minister’s power to issue a sector code under section 9(1) of the Broad-Based Black Economic Empowerment Act 53 of 2003 (the B-BBEE Act). A sector code that departs materially from the generic codes of good practice requires the Minister to be satisfied that the departures are justified. The court found that this evaluative function belonged to the Minister personally, and that he had not performed it.

The court found what it described as compelling evidence that the Minister misunderstood the function he was required to perform. On his own account, he relied on his department’s briefing on the Code, rather than assessing for himself whether its deviations from the generic codes were justified. The judgment records that the law required him to decide for himself on the material before him whether the proposed Code and its material departures were justified, and whether exercising the section 9(1) power was warranted. As the court put it, that is not the function the Minister understood himself to be performing.

The court also reportedly recorded its regret that the substantive questions could not be determined at this stage, given the urgency of transformation in the sector. Deneys, in a statement welcoming the outcome, said it shares the wish to see a lawful sector code in place.

The Arguments Before The Court

The review was heard in May 2026. The firms advanced several lines of attack. Among them, they argued that the B-BBEE Act requires the Minister to issue a national strategy before a sector code can be made, and that no valid strategy existed when the Code was gazetted. They also argued that the Code exempted more than 95% of legal practices, and, through counsel, that there was no evidence the Minister had considered the policy before signing it.

The Minister’s defence was that the strategy had been published on the department’s website before the Code was gazetted, and that, even if a step had been missed, this would not justify setting the Code aside. The Code was supported by, among others, the Justice Minister, the Legal Practice Council and groups of black lawyers, who argued that the legal sector had never had its own transformation policy.

The court resolved the matter on the narrower ground that the Minister had not personally performed the evaluation required of him. Having done so, it did not need to decide the firms’ remaining grounds, and it is not yet clear how, if at all, the judgment deals with them or with Solidarity’s separate application.

The Administrative Law Principle At Stake

The judgment is a clear application of a foundational rule of South African administrative law: where a statute vests a discretionary power in a particular functionary, that functionary must genuinely apply his or her own mind to the decision, and may not simply adopt the recommendation of officials. It is a principle that sits comfortably within the grounds of review recognised under the Promotion of Administrative Justice Act 3 of 2000 and the constitutional principle of legality, which requires that all exercises of public power be rational, lawful and procedurally sound.

This is not a technicality. A ministerial power to depart from the generic codes of good practice carries real consequences for those who are bound by the resulting sector code, including ratings, procurement eligibility and commercial reputation. The legislature entrusted the evaluation of whether such departures are justified to an accountable political office-bearer, and the court’s insistence that the Minister perform that function personally gives practical effect to that accountability. It also illustrates, once again, that even a policy objective of the highest constitutional importance, such as the redress of historical inequality, must be pursued through lawful and procedurally sound means.

What The Judgment Does Not Decide

It is important not to overstate the reach of the judgment. The court did not hold that sector-specific transformation codes are unlawful, that the legal profession is exempt from B-BBEE, or that the Code’s substantive targets are unconstitutional. The wider B-BBEE framework is unaffected. Whether the Minister may re-issue a corrected Code following a proper evaluation of the departures from the generic codes is, on the face of the judgment, an open question, as is whether the generic codes now apply to law firms in the interim and whether the order will be appealed. We have not yet seen the full judgment, and these questions should be revisited once it is available.

Transformation Policy Under Judicial Scrutiny

The judgment arrives at a time when government transformation measures are facing sustained challenge in the courts, and it follows a pattern that is now familiar. Courts are increasingly willing to examine not only the content of empowerment instruments, but the quality of the decision-making that produced them. Instruments that are well-intentioned but procedurally vulnerable, whether because of inadequate consultation, a missing statutory precondition or a decision-maker who did not engage with the material, are exposed to being set aside before their substance is ever tested.

For policy-makers, the lesson is practical: a defensible record of the functionary’s own evaluation is as important as the policy rationale itself. For regulated parties, it is a reminder that procedural defects can be as decisive as substantive objections, and that early identification of such defects, before significant compliance costs are incurred, is a legitimate and often cost-effective strategy. The same lesson applies across regulatory fields, including environmental and mining law, where ministerial and departmental decisions are routinely reviewed on precisely these grounds.

Implications For Law Firms And Their Clients

The judgment carries the following practical implications –

• Ratings under the Code fall away – firms will no longer be rated against the Legal Sector Code. Certificates issued under the generic codes before the Code took effect were reported to remain valid until their expiry, and firms should confirm with their verification agencies which framework applies to current and future ratings;
• Uncertainty about the interim framework – until the position is clarified, whether by the Minister, by an appeal, or by a corrected Code, firms and clients relying on B-BBEE status in procurement should assume that the generic codes are the safer reference point, and should document the basis on which any rating is relied upon;
• Client and procurement implications – corporate and public sector clients that apply B-BBEE criteria when appointing legal service providers should review panel and tender requirements, which may have been framed by reference to the Code;
• Appeal and re-gazetting risk – the Minister may seek leave to appeal, or may re-gazette the Code after properly performing the section 9(1) evaluation. Either route could revive the Code, potentially in an amended form, and firms should continue transformation planning rather than treat this outcome as a permanent reprieve; and
• A reminder to all functionaries – the judgment is a useful authority for any party challenging a decision on the basis that the decision-maker adopted a departmental recommendation without independently applying his or her mind, a ground that is relevant well beyond the legal sector.

What Happens Next

Three paths are realistically open to the Minister. The first is to seek leave to appeal, which, if granted and unless the court orders otherwise, would suspend the operation of the order pending the outcome. The second is to correct the defect by carrying out, and properly recording, a personal evaluation of the Code’s departures from the generic codes, and then re-gazetting it, potentially after a further round of consultation. The third is to leave the sector without a bespoke code for the time being, in which case the generic codes would presumably continue to govern the profession.

Whichever route is taken, the firms’ own public position, that they share the wish to see a lawful sector code in place, suggests that the underlying policy question has not been resolved, only deferred. Law firms should therefore treat the judgment as a pause in a continuing process, and use the interval to take advice on their transformation planning and on how their current ratings will be treated.

How Bishop Fraser Attorneys Can Assist

The judgment is a timely reminder that the lawfulness of a regulatory instrument depends not only on its policy objectives, but on the process by which the power to make it is exercised.

Bishop Fraser Attorneys advises clients on administrative law reviews under PAJA and the principle of legality, challenges to and the defence of ministerial and departmental decisions, and the regulatory and compliance implications of B-BBEE frameworks and sector codes. We are well placed to assist clients in assessing how this judgment affects their own ratings, procurement arrangements and transformation planning, and in responding to any further developments, including an appeal or the re-issue of the Code.