1

WHISTLEBLOWING ON THE LAWYERS CARTEL: AN ANALYSIS OF ANTI-

COMPETITIVE TRADE PRACTICES IN THE MALAWIAN LEGAL PROFESSION.

Lusungu Mtonga

Abstract

Competition Law is mainly concerned with promoting consumer welfare. Competition

Law aims at encouraging competition by prohibiting anti-competitive trade practices.
The Competition and Fair-Trading Act prohibits certain horizontal practices i.e., certain
arrangements or agreements between firms that are in actual or potential competition.
Among other things, the Competition and Fair-Trading Act prohibits price fixing and
other arrangements that have a substantial negative impact on competition. This paper
argues that there are a number of trade practices in the Malawian Legal Profession
which violate provisions of the Competition and Fair-Trading Act. More specifically, the
paper argues that The Scale and Minimum Charges Rules are anti-competitive
because they prescribe the fee or minimum fee that Legal Practitioners can charge for
certain specified services. The paper argues that this is a form of price fixing that
affects consumer welfare; therefore, contravenes the Competition and Fair-Trading
Act. The paper further argues that the complete prohibition of advertisement and
touting in the Malawian Legal Profession is anti-competitive and violates provisions of
the Competition and Fair-Trading Act.

Keywords: Competition Law, Competition and Fair-Trading Act, Malawi, Legal Profession, Scale
and Minimum Charges, Advertisement, Touting, Competition, Price-Fixing, Anti-competitive

1. Introduction

The advantages of competition cannot be overemphasized. Competition between

firms leads to better quality products and services, better prices for the consumers and
helps in fostering innovation. The importance of competition has led to the passing of
legislation aimed at promoting competition and preventing anti-competitive practices
in different countries.

This paper looks at some of the rules, practices and conduct within the Malawian Legal
Profession and how they relate to Competition Law. Firstly, the paper looks at the
economics behind competition law. Secondly, an exposition of Malawian competition

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law principles related to horizontal practices is conducted. Thirdly, the paper provides
an exposition of some of the rules in the Legal Profession which have a nexus to
Competition Law. Lastly, the paper conducts a critical analysis of the said rules in order
to establish whether they violate principles of competition law

2. Understanding the Economics Behind Competition Law

Generally, the aim of Competition Law is to safeguard the process of competition

between firms. Firms, in a free market economy, prioritise their self-interest by aiming
at making the highest profit possible for their proprietors or shareholders.1 The
presence of competition between the firms leaves them with no option but to be more
innovative, improve the quality of the goods or services being offered and/or lower the
prices of their products and services so that they can get more business than their
competitors.2

Competition between firms is important because it promotes ‘consumer welfare’.

Consumer welfare is the primary goal of Competition Law.3 “Consumer welfare is a
measure of benefits derived from the consumption of goods and services, less the
costs incurred in providing them. Consumer welfare increases with lower prices and
better quality products. It also increases with a greater variety of products, as more
consumers will then have products that more closely match their needs”.4 When, due
to competition, goods and services are distributed or allocated to consumers based
on the consumers' ability to pay, consumer welfare is maximized. In the long run, what
follows is a scenario where the price of a service or good is equal to its marginal cost
i.e. the cost of having one additional unit produced. This concept is called allocative
efficiency.5

Now consider the opposite of the above scenario. A situation where there is no
competition in the market. Here is what would most likely follow: higher prices for

1
Kelly, Luke et al. Principles of Competition Law in South Africa: Commercial Law. Cape Town: Oxford
University Press, 2017.
2
Ibid
3
Ibid
4
Ibid at page 21
5
Ibid

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goods and services, little to zero innovation, poor quality products and services and
fewer choices for the consumers.6 A market controlled by a monopolist is a perfect
example of this scenario. Picture a market where there is only one firm supplying
goods or services. The said firm would have no incentive to innovate or improve on
service delivery. The firm would raise prices with impunity and the quality of the goods
or services would likely be substandard. Good examples of monopolies in Malawi
would be the Electricity Supply Corporation of Malawi (ESCOM) and the Blantyre
Water Board (BWB). The former being a monopoly in the supply of electricity in Malawi
and the latter being a monopoly in the supply of potable water in the city of Blantyre.
Consumer complaints concerning increasing tariffs or poor customer service usually
fall on deaf ears. These two institutions are aware that they have no competition,
therefore, a reduction in market share is very unlikely.

3. An Exposition of Competition Law Principles Related to Horizontal

Practices

Malawi’s Competition and Fair-Trading Act, 1998 (‘the Act’) came into force on 1st April
2000. The Act aims at encouraging competition by prohibiting anti-competitive trade
practices, regulating and monitoring monopolies and concentration of economic
power, protecting consumer welfare, strengthening the efficiency of the production and
distribution of goods and services, securing the best possible conditions for the
freedom of trade and to facilitate the expansion of base entrepreneurship. 7 The Act
also establishes the competition and fair trading commission (‘the Commission’). The
general functions of the Commission are to regulate, monitor, control and prevent acts
or behaviour which are likely to adversely affect competition and fair trading in Malawi.8

The main Competition Law area that this paper is concerned with is horizontal
practices i.e. relationships between firms that are in real or potential competition. The
Act provides for two different methods of prohibiting certain horizontal practices

6
Ibid
7
The chapeau of the Competition and Fair-Trading Act 1998, Laws of Malawi, cap 49:02.
8
Ibid. Section 8(1).

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between competitors. It provides for what can be deemed as a ‘per se’ prohibition and
a ‘rule of reason’ prohibition.

The per se prohibition is a strict prohibition of certain (usually specified) conduct or

agreements by competitors or potential competitors. In dealing with per se prohibition
cases, there is rarely a need for the party alleging violation to show the impact of the
alleged conduct on the economy or competition and neither is the violating party
allowed to show the pro-competitive effects of the conduct. The per se prohibition was
well justified by the Supreme Court of America in Northern Pacific Railway v United
States9 as follows:

‘there are certain agreements or practices which because of their pernicious

effect on competition and lack of any redeeming virtue are conclusively
presumed to be unreasonable and therefore illegal without elaborate inquiry as
to the precise harm they have caused or the business excuse for their use. This
principle of per se unreasonableness not only makes the type of restraints
which are proscribed by the Sherman Act more certain to the benefit of
everyone concerned, but it also avoids the necessity for an incredibly
complicated and prolonged economic investigation into the entire history of the
industry involved, as well as related industries, in an effort to determine at large
whether a particular restraint has been unreasonable - an inquiry so often
wholly fruitless when undertaken.’10

The rule of reason prohibition, on the other hand, is where certain practices or
agreements between competitors are prohibited if they are capable of having a
substantial impact on competition and the economy and they do not have a pro-
competitive value that would outweigh their anti-competitive effects. For practices or
agreements to be found in contravention of this kind of prohibition, in most cases, the
court would have to analyse the pro-competitive and anti-competitive effects of the
conduct, agreement or concerted practice, define the market affected by the practice

9
Northern Pacific Railway v United States 356 US 1 (1958) 5.
10
Ibid

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or agreement, assess the market powers of the parties and assess the justification of
the parties for entering into the agreement or engaging in the practice.11

Section 33(3) of the Competition and Fair Trading Act provides for a per se prohibition
of price-fixing by enterprises engaged in rival or potentially rival activities if the said
enterprises are monopolies of two or more manufacturers, wholesalers, retailers,
contractors or suppliers of services.12 This provision labels this act of price-fixing by
monopolies as an offence.13 Any form of price-fixing that is aimed at reducing
competition done by monopolies in real or potential competition would easily be caught
by this provision. This can be contrasted with a rule of reason prohibition found in
section 32(2)(g) of the Act. Section 32(2) provides that enterprises are to refrain from
trade agreements of fixing prices if that would limit access to markets or otherwise
unduly restrain competition or if it would have an adverse effect on trade or the
economy in general.14 Clearly, a case involving this type of price-fixing prohibition
would require a deeper inquiry as compared to a case involving the per se price-fixing
prohibition.

The Competition and Fair-Trading Act provides for a third form of price-fixing
prohibition. This is price-fixing by trade associations. Section 34(1)(b)(i) prohibits “the
making of recommendations, directly or indirectly, by a trade association, to its
members which relate to setting of the price charged or to be charged by such
members or any such class of members or to the margins included or to be included
in the prices or to the pricing formula used or to be used in the calculation of those
prices”.15 This is another per se prohibition of price-fixing. The Act further provides that
any trade association that contravenes the above provision commits an offence.16

The reading of the above three provisions points to the conclusion that price-fixing by
monopolies as well as price-fixing recommendations by trade associations are per se
prohibited and are deemed as offences. On the other hand, price-fixing by non-

11
Paul Scott, Unresolved Issues in Price Fixing: Market Division, the Meaning of Control and Characterisation,
12 CANTERBURY L. REV. 197 (2006).
12
Competition and Fair-Trading Act 1998, Laws of Malawi, cap 49:02., section 33(3)
13
Ibid
14
Ibid, section 32(2)
15
Section 34(1)(b)(i)
16
Ibid

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monopoly entities is only prohibited if it has an adverse impact on competition, the

trade or the economy in general. This last form of price-fixing is not considered as an
offence and is a rule of reason prohibition.

The Act also covers certain general unspecified horizontal practices that would be
deemed as anti-competitive. Section 32(1) of the Act prohibits and deems as anti-
competitive trade practice, any category of agreements, decisions and concerted
practices which have the potential of preventing, restricting or distorting competition to
an appreciable extent in Malawi or any substantial part of Malawi.17 This is another
rule of reason prohibition. Clearly, for an entity to be found in violation of this provision,
there is a need to establish that the agreements, decisions or concerted practices have
the potential of substantially affecting competition in Malawi or part of Malawi.

The Act further provides for a per se prohibition of the following practices if done by
enterprises engaged in rival or potentially rival activities: collusive tendering and bid-
rigging; market or customer allocation agreements; allocation by quota as to sale and
production; collective action to enforce arrangements; concerted refusals to supply
goods or services to potential purchasers; or collective denials of access to an
arrangement or association which is crucial to competition.18

4. An Exposition of Selected Rules Within the Legal Profession

As is expected of most professions, the Legal Profession in Malawi is heavily

regulated. The Legal Education and Legal Practitioners Act of 2017 (“the LELP”) is the
main statute that regulates the Legal Profession in Malawi. Among other things, The
Legal Education and Legal Practitioners Act establishes the Malawi Law Society.19
The Malawi Law Society has the following mandate: to promote professional standards
among legal practitioners and in legal practice; to enhance credibility in the delivery of
legal services; to promote integrity, competence and transparency of professional
services in legal practice; to protect matters of public interest touching, ancillary or
incidental to the law; to promote research towards the development of the law; to
regulate the setting up, management and dissolution of legal practice and; to do all

17
Ibid, Section 32(1)
18
Ibid, section 33(3)
19
Section 63 of the Legal Education and Legal Practitioners Act of 2017.

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other things that are incidental or conducive to the attainment of the above
objectives.20

Every Legal Practitioner inscribed on the Roll automatically becomes a member of the
Malawi Law Society.21 The Malawi Law Society has powers to make rules aimed at
enhancing its objectives under the Legal Education and Legal Practitioners Act.22 In
exercise of such powers, the Malawi Law Society came up with the Code of Ethics
(‘the code’) which comprises of rules of professional conduct for Legal Practitioners.
Chapter 14(1) of the code provides that a lawyer’s fee must not exceed a fair and
reasonable amount. Chapter 14 (3) provides that a lawyer and client, in persona injury
cases, may agree on a contingent fee not exceeding 25%.23 Chapter 14(11) of the
code provides that all lawyers in private practice are supposed to be bound by the
Minimum Scale Charges made under the Legal Education and Legal Practitioners Act.

The Scale and Minimum Charges are found under the Legal Practitioners (Scale and
Minimum Charges) Rule made under the Legal Education and Legal Practitioners Act.
The said rules are aimed at prescribing the amount or minimum amount to be charged
by Legal Practitioners in specified matters. For example, table 6 of Part 1 of the first
schedule to the Scale and Minimum Charges Rules provides that the amount to be
charged in debt collection matters is supposed to be 15% on the first MK500,000, then
10% on the next MK1,000,000 and 3% on the balance collected. Another example is
Table 8 of the same Rules which provide that in probate and administration of
deceased person’s Estate matters, for specified work, what has to be charged by the
Legal Practitioner is 5% of the gross value of the property. The Rules prescribe
charges or minimum charges for different other matters.

Chapter 5(4) of the code of ethics provides that every lawyer is supposed to abide by
the Legal Practitioners Practice Rules. Rule 4 of the Legal Practitioners Practice Rules
states that a legal practitioner is not supposed to hold himself out or allow himself to
be held out directly or indirectly as prepared to do professional business at less than
the scale of charges fixed by the Scale and Minimum Charges Rules or prescribed by

20
Ibid, section 64.
21
Ibid, section 67.
22
Ibid, section 73
23
Initially, this was 15%. It was raised to 25% through a resolution passed on 3rd July 2015.

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any other written law. Rule 3 of the Legal Practitioners Practice Rules also provides
that a Legal Practitioner is prohibited from doing anything that can reasonably be
regarded as touting or advertising.

In a nutshell, the above exposition is of some of the rules and practices in the legal
profession which are relevant for this paper. Some of the rules are setting a maximum
of what can be charged by legal practitioners (for example, the 25% contingency fee
under the code of ethics). Some are prescribing the amount to be charged or the
minimum amount to be charged for certain work (for example, the Scale and Minimum
Charges Rules). And lastly, some of the rules are simply prohibiting lawyers from
touting or advertising (for example, rule 3 of the Legal Practitioners Practice Rules).

5. Are Some of These Rules Enabling a Cartel of Legal Practitioners?

As indicated above, this paper is only concerned with some of the rules and practices
which affect the horizontal relationship between legal practitioners i.e. the relationship
between Legal Practitioners in actual or potential competition as service providers.
The South African case of Johan Venter vs The Law Society of the Cape of Good
Hope24 held that rules intended to regulate the legal profession are capable of being
subjected to competition law principles. The author of this paper sees no reason why
the situation would be any different in Malawi.

(a) Rules on Minimum Scale Charges and Contingency fee

For matters that are covered by the Scale and Minimum Charges Rules, Legal
Practitioners are prohibited from charging any amount other than what is specifically
prescribed or from charging an amount less than what the rules prescribe. What this
means is that the prices to be paid for those specific services are fixed. In the author’s
view, this amounts to price-fixing. The question is whether this is the kind of price-
fixing that the Competition and Fair-Trading Act prohibits.

Section 34(1)(b)(i) of the Competition and Fair-Trading Act prohibits trade associations
from making recommendations which relate to price charged or to be charged by the
members or to the margins included in the prices or the pricing formula to be used in

24
Johan Venter vs The Law Society of the Cape of Good Hope, case No 24/CR/Mar12 (014688)

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the calculation of those prices. Section 2 of the Competition and Fair-Trading Act
defines a trade association as “a body of persons, whether incorporated or not, which
is formed for the purpose of furthering the trade interest of its members.”25 In the
author’s view, the Malawi Law Society qualifies as a trade association. Among other
purposes, the Malawi Law Society is undoubtedly concerned with furthering the trade
interests of its members. For example, it was the Malawi Law Society that increased
the contingency fee in personal injury matters from 15% to 25% on 3rd July 2015. This
was done after its members had complained that 15% was too low.

As a trade association, the Malawi Law Society makes it mandatory for all lawyers in
private practice to follow the Scale and Minimum Charges Rules.26 The Scale and
Minimum Charges Rules sets out the prices to be charged or the price formula to be
used in coming up with the prices for specified legal services. A mere recommendation
of prices or price formula by a trade association is prohibited by the Competition and
Fair-Trading Act. What the Malawi Law Society does is actually going beyond a
recommendation. The Malawi Law Society makes all its members bound by the prices
fixed or minimum prices set by the Scale and Minimum Charges Rules. The same
thing applies to the contingency fee in personal injury matters. The only difference with
the latter is that a maximum percentage is what is prescribed.

It is a known fact that most professions are allowed to self-regulate. Section 3(g) of
the Competition and Fair-Trading Act recognises the special status afforded to
Professions. The said section provides that nothing in the Act “shall apply to those
activities of professional associations which relate exclusively to the development and
enforcement of professional standards of competence reasonably necessary for the
protection of the public”.27 Section 3(h) also provides that the Minister, by a notice
published in the gazette, can specify businesses or activities exempted from the
application of the Act. At the time of writing this paper, there was no notice exempting
activities of the legal profession.

Professions are not completely exempted from the application of the Competition and
Fair-Trading Act. According to the Act, the only time the activities of the Malawi Law

25
Section 2 of the Act
26
Chapter 14(11) of the Malawi Law Society Code of Ethics.
27
Section 3(g) of the Competition and Fair-Trading Act.

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Society would be exempted is if they exclusively relate to developing and enforcing

professional standards of competence reasonably necessary for the protection of the
public. A good example of an activity in the legal profession that would perfectly fit the
exemption under section 3(g) of the Competition and Fair-Trading Act is the regulation
of the requirements and minimum qualification for one to be admitted as a Legal
Practitioner. This would clearly be setting standards of competence necessary for the
protection of the public. Letting unfit and unqualified individuals practice law would be
contrary to the interests of the public.

However, it is difficult to see how the Scale and Minimum Charges can be justified as
‘exclusively relating to the development and enforcement of professional standards of
competence reasonably necessary for the protection of the public’. It is doubtful that a
rule setting a minimum charge or prescribing a specific charge can be beneficial to the
public. In fact, the Scale and Minimum Charges have resulted in Legal Practitioners
being entitled to sums of money that would otherwise be unreasonable when the
actual work done is considered. For example, in 2013, the High Court of Malawi
entered Judgment on behalf of a private practice lawyer who was claiming the sum of
K3.5 billion (about US$7,478,632 at the then prevailing exchange rate) as his legal
fees, for merely obtaining letters of administration.28 The said legal fees came about
because of the prescription under table 8 of part 1 of the first schedule to the Scale
and Minimum Charges Rules (which provides that a Legal Practitioner is entitled to
5% of the total value of the Deceased Person’s Estate).29 K3.5 billion is a lot of money
as legal fees for simply obtaining letters of administration. Without a doubt, other
lawyers would have been willing to do the work for a fraction of the said amount. This
would have worked to the advantage of the client/consumer.

It is difficult to see how such an arrangement of prescribing a fixed percentage as fees

to be charged would be beneficial to the public. If the idea is to protect the public from
excessive pricing, then a maximum percentage would make more sense. As shown
above, a prescription of a maximum percentage is what is applicable to contingency

28
The Judgment was later on overturned by the Supreme Court of Malawi. The grounds for overturning the
High Court Judgment are not related to this paper and do not negate the relevance of the example.
29
The Estate belonged to the former President of Malawi and its estimate value was around
K61,350,437,237.62.

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fees in personal injury matters. This arrangement can at least be provisionally justified
by a public interest argument. It can be argued that the Malawi Law Society prescribes
a maximum percentage to avoid overcharging in personal injury matters. The other
argument can be the fact that Legal Practitioners can still compete by charging less
percentage than their competitors. However, in practice, almost all lawyers in personal
injury matters use the maximum percentage of 25%. This results in uniform pricing
and can arguably be considered as price-fixing.

The maximum percentage contingency fee arrangement does not meet the exemption
under section 3(g) of the Competition and Fair-Trading Act. Even though the said
arrangement can be said to benefit the consumers/public, it is not an activity done
‘exclusively relating to the development and enforcement of professional standards of
competence reasonably necessary for the protection of the public’.

However, the maximum percentage contingency fee arrangement does not violate
section 34(1)(b)(i) of the Competition and Fair-Trading Act and cannot be regarded as
anti-competitive. What is required is proper characterisation. As indicated by the
Supreme Court of South Africa in American Natural Soda Ash Corporation v the
Competition Commission and Others30, in ‘per se’ horizontal practice prohibition
cases, there is a need for an inquiry to establish whether the character of the conduct
complained of coincides with the character of the prohibited conduct. What section
34(1)(b)(i) prohibits is a form of price-fixing initiated by trade associations. In the
author’s view, for a section 34(1)(b)(i) violation, the direct effect of the activity or
recommendation by a trade association is supposed to be price-fixing. This is not the
case with the contingency fee arrangement. The fact that most lawyers end up
charging the maximum percentage, resulting in uniform prices, is just coincidental.
There is no doubt that the maximum percentage was set to prevent lawyers from
overcharging in personal injury matters. Therefore, with proper characterisation, the
contingency fee arrangement would be found not to be in violation of section 34(1)(b)(i)
nor any of the provisions of the Competition and Fair-Trading Act. On the other hand,
the author is of the view that the Scale and Minimum Charges Rules violate section
34(1)(b)(i) of the Competition and Fair-Trading Act. Considering that this is a per se

30
American Natural Soda Ash Corporation v the Competition Commission and Others [2005] 3 All SA 1 (SCA)

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prohibition, any justification for coming up with the Scale and Minimum Charges would
be irrelevant.

Alternatively, in the author’s view, the Scale and Minimum Charges Rules are in
violation of section 32(1) of the Competition and Fair-Trading Act. The said section
prohibits any category of agreements, decisions and concerted practices which
prevent, restrict or distort competition to an appreciable extent in Malawi or part of
Malawi. The passing of the Scale and Minimum Charges Rules or the passing of the
code of ethics, which makes it mandatory for all lawyers to follow the Rules, amounts
to a decision or agreement by Legal Practitioners. There is no doubt that this form of
decision or agreement was aimed at price-fixing and the same restricts competition to
an appreciable extent within the Legal Profession in Malawi.

There are a number of Jurisdictions that have rejected attempts by law societies to
prescribe legal fees. The rejections have been based on the fact that a prescription of
fees amounts to price-fixing. For example, through notice 113 of 2011, the Competition
Commission of South Africa rejected an application by South African law societies to
have some of its rules exempted from the application of the South African Competition
Act.31 Some of these rejected rules were prescribing fees that lawyers were mandated
to charge. The South African Competition Commission held that the prescription of
fees by an association of firms that are in a horizontal relationship was prohibited by
section 4(1) of the South African Competition Act. The Commission further held that
the restriction on pricing contained in the said rules was not reasonably required to
maintain professional standards or the ordinary function of the profession since there
are other ways of preventing excessive pricing or overreaching other than through a
guideline of fees.32

(b) Rules on advertisement and Touting

According to Rule 3 of the Legal Practitioners Practice Rules, a Legal Practitioner is

prohibited from doing anything that can reasonably be regarded as touting or
advertising. This means that any form of Touting and advertisement by Legal
Practitioners is prohibited. Economic theory points to the fact that advertisement

31
Notice 113 of 2011 published by the South African Competition Commission. Notice in Terms Item (4)(c) of
Part A of Schedule 1 of the Competition Act 89 of 1998.
32
Ibid

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facilitates competition by ensuring that consumers are aware of different products

which results in better-informed purchasing decisions.33 Restricting advertisement has
the potential of reducing competition because the costs of gaining information about
different products becomes higher. This makes it difficult for consumers to find the
quality and price that is most suitable for their needs.34 Advertisement also promotes
competition by helping new firms entering the market to be known by consumers or
for existing firms to launch new products.35 This means that restricting advertisement
makes it harder for new firms to enter the market or for existing firms to introduce new
products.

According to the preamble of the Competition and Fair-Trading Act, among other
reasons, the Act was enacted to encourage competition in the economy by prohibiting
anti-competitive trade practices. The prohibition of advertisement and touting in the
Legal Profession makes it hard for consumers to find Legal Practitioners, or Legal
Firms, most suitable for their matters. It also makes it harder for Legal Practitioners or
Legal Firms, that are new in the market to get established. Clearly, advertisement is
good for competition and its restriction is anti-competitive. In the author’s view, the rule
against advertisement and Touting amounts to a decision or agreement that prevents
or restricts competition to an appreciable extent in Malawi. The prohibition of
advertisement and touting is not only against the general spirit of the Competition and
Fair-Trading Act, but it also violates section 32(1) of the Act.

The general and complete prohibition of advertisement by Legal Practitioners cannot

be saved by the exemption under section 3(g) of the Competition and Fair-Trading
Act. It would make more sense if the rules were aimed at restricting certain forms of
advertisement and not a general prohibition. In denying an exemption to rules
prohibiting advertisement in the South African Legal Profession, the Competition
Commission of South Africa held that advertising and marketing should be subject to
the following restrictions: the advertising to fall in line with general advertising laws of
South Africa; the advertising was not to be misleading or false and; the advertising

33
Communication from the Commission of the European Communities, Report on Competition in Professional
Services, Brussels, 9.2.2004, COM (2004) 83.
34
Ibid
35
Ibid

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was not to bring the administration of justice into disrepute.36 In the author’s view, the
said restrictions on advertisement or marketing restrictions are capable of maintaining
the integrity and special character of the legal profession without entirely hindering
competition. A rule that reasonably restricts advertisement in the Legal Profession
cannot be anti-competitive. However, a rule providing for a general and complete
prohibition of advertisement is definitely anti-competitive.

6. Conclusion

Promotion of consumer welfare is one of the objectives of the Competition and Fair-
Trading Act and arguably the main goal of Competition Law. The prohibition of certain
agreements or arrangements between competitors is one way of promoting
competition. The promotion of competition leads to the promotion of consumer welfare.
20 years after the coming into force of the Competition and Fair-Trading Act, nothing
has been done to the lawyers cartel that has existed in Malawi for decades. Through
the Scale and Minimum Charges Rules, lawyers in Malawi have fixed prices of legal
services in selected matters. The Malawi Law Society endorses this price-fixing
arrangement by making it mandatory for all its members to follow the said ‘price-fixing’
rules. The lawyers have even gone further to restrict competition in the legal profession
by completely prohibiting any form of advertisement or touting. Lawyers are fixing
prices and restricting competition by prohibiting advertisement. Consumers are
complaining about the high cost of legal services. Coincidence? There is no doubt that
the arrangements existing in the Legal Profession have a negative impact on
consumer welfare.

The Scale and Minimum Charges Rules are anti-competitive. The rules violate a
number of provisions of the Competition and Fair-Trading Act. It is high time that these
rules were completely abolished. The rules which completely prohibit advertisement
in the Legal Profession are also anti-competitive and should as well be discarded.
Advertisement would promote competition in the Legal Profession; therefore, it should
be allowed with reasonable restrictions put in place.

36
Supra, note 31.

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