The ongoing legal battle between financier Errol Elsdon and Nkosana Makate over the funding of the “Please Call Me” litigation raises crucial questions about the state of litigation financing in South Africa.
Following a legal battle spanning nearly two decades, Makate settled with Vodacom out of court in November 2025 for an undisclosed sum, with media reports suggesting approximately R700 million, for the ‘Please Call Me’ process that would allow people without airtime to request a call back from a friend. This settlement came after the Constitutional Court, on 31 July 2025, set aside the Supreme Court of Appeal’s February 2024 order, which had awarded Makate a percentage of the revenue from the service, and remitted the matter for rehearing; the parties settled while that rehearing was pending.
Black Rock Mining Ltd, a British Virgin Islands company of which Elsdon was a director, claims to have provided about R4.3 million to fund Makate’s litigation against Vodacom and now asserts an entitlement to 40 per cent of the proceeds of the settlement.
Makate disputes that any entitlement arises, the validity of the agreement and that the funding was provided as claimed; he contends the agreement is tainted by misrepresentation and that his signature on a related agreement was forged. Black Rock denies this and maintains that the agreement is valid and binding. The dispute has more recently seen Elsdon threaten to sue Makate for defamation while defending the legitimacy of litigation financing contracts. The dispute is before the courts and has not been determined.
Whatever the merits of the various disputes between Elsdon and Makate, the dispute itself raises important questions about litigation funding and the transparency of the agreements that underpin it. This shows the urgent need for regulation and transparency in litigation financing.
Litigation financing, where third parties such as investment firms or private equity provide funds to litigants in exchange for a portion of any settlement, is not inherently problematic. In fact, it can serve a vital role in enabling access to justice for those who may not have the resources to pursue genuine legal claims – but only if robust safeguards are put in place to prevent abuses. Third-party funding is lawful in South Africa. In Price Waterhouse Coopers Inc v National Potato Co-operative Ltd 2004 (6) SA 66 (SCA), the Supreme Court of Appeal held that an agreement under which a third party funds a litigant in return for a share of the proceeds is not contrary to public policy, while confirming that litigation conducted under such an agreement may nonetheless amount to an abuse of process which a court can prevent. Lawfulness, however, is not the same thing as oversight, and the opacity surrounding these agreements in South Africa can lead to confusion and exploitation, particularly for claimants who might not fully grasp the implications of the contracts they are signing and how much they may owe funders when their claim is eventually settled.
The lack of transparency is alarming. Many South Africans remain unaware of how litigation financing operates, often viewing it as an unusual or niche practice. Due to the lack of regulatory oversight, there is no reliable South African data on how common it is, but better data is badly needed.
In June 2025 the UK Civil Justice Council published a Final Report making 58 recommendations for the reform of litigation funding, none of which is yet law. Two matter most here. The first is light-touch statutory regulation of the industry, overseen by the Lord Chancellor. The second is disclosure: a funded party would have to tell the court and its opponent that funding is in place, who the funder is and where the money ultimately comes from, and in class actions and consumer cases the funding agreement itself would be placed before the court so that the funder’s share of any proceeds could be approved.
While practices vary across US states, the principle of limiting funder control is increasingly recognised as a safeguard against abuse.
In the UK, it has been advised that class action claimants be counselled by a senior advocate on the contents of their funding agreements.
This ignorance as to the cost of funding can jeopardise the interests of claimants, who may find themselves receiving a meagre share of any eventual settlement after their lawyers take substantial contingency fees and then repay funders.
South Africa has none of this: no regulator, no disclosure rule, no requirement that a funded party be independently advised.
As South Africa grapples with these issues, we must advocate for reforms that enhance transparency and protect the rights of claimants.
The case of Elsdon and Makate serves as a clarion call for the legal community and policymakers alike to rethink how we approach litigation financing. Ultimately, a more regulated and transparent funding system will not only benefit individuals seeking justice but also strengthen the integrity of our legal framework and speed up access to redress for those consumers that have suffered harm.
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The views of the writer are not necessarily the views of the Daily Friend or the IRR.
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