The clock is ticking… time to start applying for Fidelity Fund Certificates

September 1st, 2017
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By the Practitioner Support Unit of the Attorneys Fidelity Fund

It is almost that time of the year when practitioners will start applying for their 2018 Fidelity Fund Certificates (FFC) online. The Attorneys Fidelity Fund (AFF), have in the past two years, had to assist practitioners on a number of areas regarding the issuance of their FFC, using the online system. This article aims to further equip practitioners as they prepare for the next round of applications for the 2018 FFCs. As a reminder, current practitioners are expected to apply for their FFCs between October and December in order to be compliant with the legislative requirement to hold an FFC in order to practice.

The AFF have noted that some practitioners continue to practice without valid certificates, as they only apply for their certificates later in the year, after their certificate has expired. This is a compliance issue that each active practitioner is expected to comply with.

In an attempt to manage the call volumes and assist practitioners in understanding the various criteria used to issue certificates, the AFF will, in detail, deal with the two major areas that the provincial law societies will consider in deciding whether to issue the certificates.

Firm(s) audit report(s)

Practitioners must ensure that they conclude their firm(s) audits on time, submit their audit reports to the respective provincial law societies, and ensure that the provincial law societies approve the submitted audit reports. Submission of the audit report does not automatically qualify a practitioner for a FFC, but an approved audit by the provincial law societies satisfies one of the criteria that should be met.

The provincial law societies issue certificates to practitioners and not to firms, but they issue to practitioners for specific firms. Practitioners linked to more than one firm – either as a director, a partner or a sole practitioner – should ensure that each of the firms to which they are linked has an approved audit. Failure to meet this requirement on any one of the firms will prohibit the issuance of a certificate even for the other firms, irrespective of the audit approval status in the other firms.

The provincial law society will consider the following audit approval statuses for the respective year as follows:

  • Yes – this is the audit approval status acceptable for issuance of a certificate. This status suggests that an audit report was submitted by the firm, reviewed and approved by the provincial law society.
  • No – this audit approval status will result in a withheld certificate. This status suggests that the firm submitted the audit report, the provincial law society reviewed the report, but did not approve the audit report. There are various reasons why the provincial law society would not approve the audit report, and those reasons can be sourced directly from the affected provincial law society’s audit section.
  • None – this audit approval status will result in a withheld certificate. The status suggests that there is no approval status. This could be as a result of an audit report not submitted to the provincial law society, or the status not captured.
  • Future – this is another audit approval status acceptable for issuance of a certificate. This status is assigned to new firms who are not yet required to furnish any form of an audit report. However, it should be noted that even for new firms, whose opening audit has already fallen due, the other statuses will apply, and the affected firms will be assessed in terms of the same criteria applied to other firms depending on the assigned status.

In this regard, we urge practitioners to pay special attention to the ‘Reporting Requirements’ as contained in the Rules for the Attorneys’ Profession, r 35.19 up to and including r 35.29.

Practitioners who are not sure of their firm(s) audit report status can log onto the application system and navigate the system as follows:

  • Log into the system using existing credentials.
  • Go to firm/member administration.
  • Go to PCC practice/firm under available participant types.
  • Go to practice/firm under select participant type.
  • Select the firm’s name under maintain firm.
  • Select the audit history tab from the listed tabs and view the audit approval status for each year.

Practice management training

The practice management training (PMT) course provided by the Legal Education and Development unit of the Law Society of South Africa became compulsory to all practitioners who started practising post 14 August 2009. This training, aimed at equipping new practitioners with skills on running a practice, is another criterion that the provincial law societies strictly consider for issuance of FFCs. Practitioners who are expected to conclude this training should do so within the specified timeframes, as failure to do so will result in non-issuance of a certificate. Practitioners, who are unsure of the due dates for completion thereof, are advised to contact their provincial law societies and get clarity in this regard.

The provincial law society will consider the following PMT statuses as follows:

  • Exemption – this is based on various considerations that the provincial law society will make. Only the provincial law society can exempt a practitioner from doing the course, either based on when the practitioner practised for his or her own account for the very first time, or other criteria as the provincial law society may determine. A practitioner with this status will be eligible for a certificate, if all other requirements are met.
  • Completed – a practitioner gets this status once the course has been completed and the provincial law society is aware of this fact. A practitioner with this status will be eligible for a certificate, if all other requirements are met.
  • Future – this status is assigned to newer practitioners who are expected to complete the course in a future date. A practitioner with this status will be eligible for a certificate, if all other requirements are met.
  • Required – for practitioners reflecting a status that the course is required, meaning the practitioner should have completed or should complete the course before the provincial law society issues the certificate, a certificate will be withheld until the requirement is met. A practitioner with this status will, therefore, not be eligible for a certificate.

Practitioners who are not sure of their PMT status can log onto the application system and navigate the system as follows:

  • Log into the system using existing credentials.
  • Go to firm/member administration.
  • Go to MEM member under available participant types.
  • Go to members under select participant type.
  • Select the practitioner’s name under members’ administration.
  • Select the Risks tab from the listed tabs and view your status.

Should a practitioner not agree with the reflected status, on either or both the audit report and PMT, practitioners should contact their respective provincial law societies to resolve the issue.

If these requirements are met, there are no outstanding amounts due to the provincial law society, and the practitioner and/or the firm(s) are not black listed or red flagged by any of the provincial law societies, the provincial law society may issue a practitioner’s certificate.

Practitioners are also required to have their balances and other information required for completion of the application form ready. We dealt with this in detail in ‘Applying for a Fidelity Fund Certificate’ (2016 (Sept) DR 15) and we urge practitioners to read this article together with that one.

Conclusion

In conclusion, we urge practitioners to apply for their certificates for 2018 on time. Practitioners must endeavour to have the certificates for 2018, at the latest, by 31 December 2017.

The Practitioner Support Unit of the Attorneys Fidelity Fund is situated in Centurion.

Contact details for your provincial law society:

  • Cape Law Society:
    (021) 443 6700
  • Free State Law
    Society:
    (051) 447 3237
  • KwaZulu-Natal
    Law Society:
    (033) 345 1304
  • Law Society of the Northern Provinces:
    (012) 338 5800

This article was first published in De Rebus in 2017 (Sept) DR 21.

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