BLA calls for transparency in distribution of legal work by banks

August 6th, 2020
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By Kgomotso Ramotsho

The Black Lawyers Association (BLA) has said in a statement that it rejects the commitments made by Standard Bank, Investec, First National Bank (FNB) and Nedbank, to change their distribution of conveyancing and legal work. This was after the Competition Commission (the Commission) announced the commitments made by Standard Bank, Investec, FNB and Nedbank, to reform their conveyancing practices, following advocacy engagements over the past two years.

The Commission said the bank’s renewed commitment is in response to concerns raised by the Commission on the relationship between banks and conveyancers, which is governed through service legal agreements, and structured in an exclusionary and anti-competitive manner. The Commission added that after engagements with the banks, it was agreed that contractual clauses that prevent law firms appointed to provide conveyancing services from acting against the banks in any matter should be removed. The exclusionary clauses created barriers for small, and particularly, firms owned by historically disadvantaged people to expand in the market.

However, in the statement released, the BLA said that it is calling for the cancellation of invalid and unlawful service level agreements between banks and some law firms. The BLA noted that there must be fair and transparent distribution of legal work.

The BLA further called for the establishment of an oversight Committee by the Competition Commission, the South African Bank Association, the Bank Ombudsman and the Legal Practice Council to monitor the distribution of legal work, including commercial work done by banks in South Africa (SA).

The BLA also said it condemns Absa and other commercial banks for refusing to participate in the process of transformation of distribution of conveyancing work by banks. The BLA pointed out that it declares banks in SA as a scene of crime against black and small law firms by insisting on using mainly big white law firms for legal work.

Meanwhile, Minister of Justice and Correctional Services, Ronald Lamola, has commended the Commission and banking industry on what he said is ‘a step towards transformation of the legal profession’. In a statement, Mr Lamola added that a true transformation of the legal profession is not just about demographics, but it is also about the types of work given to legal practitioners. He pointed out that commercial law and conveyancing have historically both been areas of legal practice that have been inaccessible to Black and previously disadvantaged legal practitioners.

The statement said that one of the main characteristics of the South African economy is its concentration in most of the strategic sectors of the South African economy. The statement added that conveyancing is certainly one of the areas, which has historically been an exclusive preserve of white legal practitioners.

‘Many practitioners from historically disadvantaged backgrounds have worked hard and have had to overcome many barriers in order to qualify as conveyancers. Yet, after qualifying to practice in this area of the law they continue to face further barriers and are not given fair and equal opportunities to ply their trade successfully in this area,’ Mr Lamola said.

Kgomotso Ramotsho Cert Journ (Boston) Cert Photography (Vega) is the news reporter at De Rebus.