ZA: Nkosana Makate Legal Funding Dispute Ignites Post-Vodacom Settlement

• Nkosana Makate's decade-long legal battle against Vodacom over his "Please Call Me" invention concluded with a confidential settlement in late 2025.
• The settlement's value is disputed, with estimates ranging from R660 million to R1 billion, leading to a new Nkosana Makate legal funding dispute.
• Errol Elsdon of Black Rock Mining claims to have funded Makate's litigation and seeks 40% of the settlement, asserting its value was R1 billion.
• Makate and his legal team deny Black Rock Mining provided funding, stating only a R7,853 payment was made by deceased advocate Chris Schoeman in 2014.
• The case highlights the critical importance of meticulously drafted litigation funding agreements to prevent disputes over contributions and settlement entitlements.

The current Nkosana Makate legal funding dispute highlights the potential pitfalls when such agreements are not meticulously drafted.

Nkosana Makate, the inventor of the "Please Call Me" service, engaged in a prolonged legal battle against Vodacom spanning over a decade, from 2014 to 2025. This extensive litigation unfolded across four different courts and involved six separate cases, all aimed at securing a share of the proceeds generated by his invention. Throughout this period, Makate was represented by Stemela & Lubbe Inc., with Wilna Lubbe serving as his attorney of record since mid-2011.

The protracted dispute culminated in a confidential settlement between Makate and Vodacom in late 2025, following a Constitutional Court ruling that mandated the matter return to the Supreme Court of Appeal. The apex court had determined that the SCA had not adequately considered evidence when it previously ordered Vodacom to pay Makate between 5% and 7.5% of the "Please Call Me" revenue. While the exact terms of the settlement remain undisclosed, estimates of its value vary significantly, with Mergence Investment Managers' chief investment officer, Peter Takaendesa, suggesting approximately R660 million, contrasting with a claim of R1 billion made by Errol Elsdon.

This substantial settlement has, however, ignited a new conflict: a significant Nkosana Makate legal funding dispute. The original legal bill for Makate's pursuit of Vodacom ran into hundreds of thousands of rand, highlighting the immense financial burden of such high-stakes litigation. For instance, in October 2024, as Makate prepared for what would be his final court appearance, the daily cost for three senior and three junior advocates drafting his Heads of Argument was estimated to be between R90,000 and R145,000.

At the heart of the current dispute is the question of who financed Makate's lengthy legal challenge against Vodacom. Wilna Lubbe's initial appointment as Makate's attorney in mid-2011 was part of a funding agreement established with Chris Schoeman, a debarred advocate who has since passed away earlier this decade due to heart problems. Schoeman acted on behalf of a company that was to be nominated later. This early arrangement set the stage for the complex web of claims surrounding the Please Call Me settlement funding.

Errol Elsdon, representing Black Rock Mining, asserts that his company provided the necessary legal funding for Makate's case. Consequently, Elsdon is now claiming 40% of Makate's late-2025 confidential settlement, which he estimates to be worth R1 billion. This Errol Elsdon Makate claim is vigorously contested by Makate and his legal team.

Makate's representatives have consistently maintained that Black Rock Mining never contributed any funding towards his litigation costs. This assertion was also presented in the inventor's answering papers when Elsdon unsuccessfully attempted to freeze the settlement payout. According to these documents, the only recorded contribution was a "paltry amount" of R7,853 paid by Schoeman on December 5, 2014, underscoring the core of the litigation funding South Africa dispute.

The financial strain on Nkosana Makate during his legal battle was considerable, as documented in a 2014 Johannesburg High Court decision. This ruling noted Makate's "precarious financial situation," stating that he was "not financially well-off" and had to pay his lawyers from his own salary, eventually running out of funds. This precarious position underscores the critical role of litigation funding in South Africa for individuals pursuing complex claims against large corporations.

The costs associated with high-profile legal proceedings are substantial. According to 2020 costings, senior counsel typically charge between R3,000 and R4,400 per hour, while junior counsel's rates range from R700 to R1,700 per hour. Senior attorneys command fees of around R2,800 per hour. Even Legal Aid, which offers services to those unable to afford private practitioners, caps senior counsel fees at R2,589 per hour. These figures illustrate the significant financial commitment required, making clear and unambiguous funding agreements paramount.

The current Nkosana Makate legal funding dispute highlights the potential pitfalls when such agreements are not meticulously drafted. Despite Vodacom noting in its Heads of Argument in 2016 that Makate was being funded by "professional litigants" and had nominated Black Rock as his funder, the exact nature and extent of Black Rock Mining Makate's funding contribution remain hotly debated. The case serves as a stark reminder for lawyers to ensure clarity in third-party funding arrangements to prevent disputes over contributions and settlement entitlements.

Makate's journey through the courts saw an initial setback in the Johannesburg High Court, where Judge Phillip Coppin ruled that while a contract existed, it was with the wrong person, and any claim had expired. However, Makate successfully overturned this ruling at the Constitutional Court in 2016, a pivotal moment that paved the way for the eventual settlement negotiations. The Constitutional Court's intervention also led to Vodacom being ordered to cover the costs of two counsel and a US-based telecommunications expert, Ivan Zatkovich, who provided technical testimony on the invention.

The ongoing battle between Errol Elsdon and Nkosana Makate over the settlement funds is now the subject of its own legal scrutiny, with "five different amounts cited across hundreds of pages" regarding how much was contributed and by whom. This secondary dispute underscores the complexities that can arise even after a primary legal victory, particularly concerning the allocation of settlement proceeds when multiple parties claim to have provided litigation funding.

This case serves as a crucial example of the challenges inherent in litigation funding South Africa, emphasizing the necessity for explicit and detailed agreements from the outset. The lack of clarity surrounding the Please Call Me settlement funding has led to a protracted and costly secondary dispute, demonstrating the significant risks involved when the terms of funding contributions and subsequent entitlements are not unequivocally defined.

This case underscores the critical importance for lawyers to ensure meticulously drafted and unambiguous litigation funding agreements. It highlights the significant risks of disputes over funding contributions and settlement entitlements, particularly when advising clients on third-party funding arrangements in high-stakes litigation.

Source: Original reporting via ITWeb