KwaZulu-Natal Law Society AGM: Legal Practice Act at the core of deliberations

November 27th, 2015
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By Mapula Thebe

The KwaZulu-Natal Law Society held its annual general meeting (AGM) on 16 October in Durban.

The keynote address was delivered by nine times Comrades Marathon winner, Bruce Fordyce. Opening his addressed, Mr Fordyce said that society works because people put in hard work, long hours and dedication. He equated running a marathon with running a law firm by saying that firms compete in the same space with those that have the same genetics to work hard. ‘You have to work twice as hard to beat the other law firms. Running Comrades is a tough sport that takes a lot of hours. I would not have won, if it was not for the support of my team. Sometimes I play the role of a leader, and at times I am a member of a team. Rely on your team to get you to the finish line. Being a leader is hard, people are envious of your success, the money you make, the car you drive, but they do not see what comes with it. You have to deliver and produce results. The key thing with success is to persevere, even when everyone else says it cannot be done. I never gave up even though it looked like I should. Lastly, remember you do not always have to be number one to win,’ he said.

Library matters

Thembinkosi Ngcobo, from the Law Society Library, gave a brief presentation about the national library services. He said that the library is a national library that serves all attorneys in the country as a research resource. The library facilitates easy access to the latest up to date legal information especially for sole practices, small law firms and historically disadvantaged members.  To access the library visit: www.lawlibrary.co.za.

Co-chairperson of the Law Society of South Africa, Richard Scott, spoke on the need for a voluntary body in the Legal Practice Act dispensation.

Co-chairperson of the Law Society of South Africa, Richard Scott, spoke on the need for a voluntary body in the Legal Practice Act dispensation.

Legal Practice Act matters

Member of the National Forum, Jan Stemmett, made a presentation on the Legal Practice Act 28 of 2014 (LPA). He said the main provision of the LPA is to establish a unified legal profession. He added that attorneys should understand the implications of the LPA, which are –

  • the legal profession will no longer regulate itself;
  • there will be no law society accountable to members, instead there will be a regulatory authority accountable to the Minister of Justice;
  • Bar councils will be stripped of training, examination and disciplinary functions;
  • the Legal Practice Council (LPC) will emphasise on regulation and on matters of public interest.

Mr Stemmett said that during the LPA dispensation, advocates will be able to elect to accept briefs directly from the public, provided they have trust accounts. ‘Chapter 5 provides for an Ombud for Legal Services. Attorneys should take note of s 35, which deals with fees and states that tariffs are to be prescribed in regulations. The Act also makes provision for mandatory continued practice development and mandatory community service. The new funding regime of the Legal Practice Council will mean that practitioners will pay higher levies,’ he added.

Speaking about access to the profession Mr Stemmett said that the LPA calls for –

  • uniform admission requirements for attorneys and advocates;
  • minimum remuneration for candidate attorneys and pupils;
  • uniform registration with LPC;
  • easy conversion between the attorneys’ and advocates’ professions; and
  • recognition of foreign qualifications and admission of foreign legal practitioners.

Law Society of South Africa matters

Co-chairperson of the Law Society of South Africa (LSSA), Richard Scott, highlighted aspects of the 2015 Co-chairpersons’ Mid-term Report (the full report is available at www.LSSA.org.za). Opening his address he said that the National Forum has done tremendous amount of work thus far. ‘The working committees of the National Forum have been linked up with committees within the LSSA to ensure that the work of the forum continues even when the forum is not meeting. We have been a self-regulating profession, but that is set to change with the advent of the LPA. The LPA will not protect the interest of the profession; it will rather protect the interest of the public. It was resolved that practitioners should form a voluntary body that will uphold the rule of law and protect legal practitioners. This body must be based on constitutional democracy. There is no doubt that practitioners need such a body. Representatives on the envisaged body will represent attorneys and maintain their mandate from their members, the council of the body will be accountable to its members. Legal practitioners need such as a body so that they are seen to be speaking with one voice. Some of the objectives of the body will be to conduct training for legal practitioners, promote access to the profession, conduct all necessary research for the profession, publish a journal, represent and lobby for the profession. Membership of the envisaged body will comprise of practicing and non-practicing attorneys, advocates, candidate attorneys and pupils. In terms of funding, the body can be funded through legal practitioners paying fees towards the body, the Attorneys Fidelity Fund could also fund the body. Elections for council members can be by way of “one person one vote”, with an electoral process to ensure compliance with the rules. Undoubtedly legal practitioners need the support of a body that will fulfil a trade union function,’ he said.

Attorneys Fidelity Fund matters

Chairperson of the Attorneys Fidelity Fund (AFF), Nonduduzo Khanyile-Kheswa gave an address on the workings of the fund during the year. Giving a brief background of the AFF she said, the AFF is a creature of statute set up to protect members of the public. Adding that its primary objective is to ensure that no member of the public is left out of pocket as a result of misappropriation of trust funds and/or negligent or other conduct arising out of the implementation of client mandates by any attorney in the country.  ‘The Fund’s income, however, is and will always remain the interest rates, which are set by the Reserve Bank. Because of the low interest rate regime that has been in existence for quite a while worldwide, the traditional income of the fund has in fact shrunk significantly. However, because of the prudent manner in which the Fund Trustees and management have exercised their fiduciary duties, the Fund has nevertheless grown by 5,1% in 2014 and has base assets valued at R 4 229 837 913,’ she said.

Speaking about capping of claims, Ms Khanyile-Kheswa said that the AFF is liable for all initial claims paid up to a figure of R 150 million in any insurance year whereupon any excess up to R 475 million is re-insured and to be settled by the insurers. ‘It is against this backdrop that the debate regarding capping of claims has to be contextualised with concrete facts, scrutinised in all their dimensions from the perspective of the interest of members of the public in their social strata on one hand, for whom the fund exists, and practitioners in their various categories and layers in their practices on the other. The necessary legislation is now in place but as we move towards the implementation of the Legal Practice Act caution must be exercised that with the capping of claims, the poorest of the poor are not left even worse off through capping,’ she said.

Ms Khanyile-Kheswa said that in 2015 the AFF has paid claims amounting to R 80 424 100. ‘Various means and activities, as part of the Fund’s strategy going forward to assist in halting this kind of behavior are being implemented in line with the new regulatory dispensation,’ she said.

Speaking on monthly trust collection, Ms Khanyile-Kheswa said that in terms of reg 8(1), attorneys are under obligation to pay monthly trust interest. ‘The provincial law societies are urged to continuously encourage members to pay over trust interest monthly to enable the Fund to aggregate interest inflows at an early stage to improve the Funds investment returns. The Fund has enlisted cooperation of the four major banks in successfully implementing the system of automated monthly transfer of trust interest and as soon as the provincial law societies succeed in adapting their information technology infrastructures to cope efficiently with the increase in the volume of transactions, the present blanket exemption afforded by the Fund to practitioners will be withdrawn. Notice to this effect has already been furnished and it is envisaged that this system will better address the collection of interest, efficiencies as well as cash flows not only for the Fund but the societies as well,’ she said.

Ms Khanyile-Kheswa noted that fraud syndicates have come up with ways to defraud practitioners of monies in their trust accounts by holding themselves out to be representing the AFF. ‘These Fraud Syndicates send out communication on what is supposed to be the Fidelity Fund’s letterhead that they fraudulently generate to practitioners directing them to effect payments to a preferred account thereby fleecing practitioners. … Members of the profession are once more advised to be always watchful and cautious,’ she said.

Attorneys Insurance Indemnity Fund matters

General Manager at the Attorneys Insurance Indemnity Fund (AIIF), Thomas Harban, spoke on the changes to the AIIF Master Policy. He said:

‘We have written to the respective provincial law society councils giving some background to the reasons for the changes to the Master Policy and also seeking guidance from these bodies (as the regulators and representatives of the profession) on the appropriate form of communication with the profession. … The new policy wording will be implemented with effect from 1 July 2016.

The AIIF issues one Master Policy annually applicable to all practising attorneys. The policy was first introduced in 1993. In the intervening period, there have been some amendments to the policy wording from time to time, but this is the first major reworking of the policy wording. In redrafting the Master Policy, our aims included:

  • Modernising the wording and rewriting it in plain language.
  • Redrafting contentious clauses as phrased in the current wording in order to better articulate our intention and thus avoid interpretational disputes.
  • The enhancement of the policy as a risk management tool.

The new wording sets out, inter alia:

  • What the policy covers.
  • The rights and obligations of the parties to the insurance relationship.
  • What is excluded from the cover.
  • The limits of indemnity and deductibles.
  • How disputes will be dealt with.
  • The applicable limits of indemnity and deductibles.’

Attorneys Development Fund matters

Manager of the Attorneys Development Fund (ADF), Mackenzie Mukansi, said that attorneys should look out for a comprehensive report that will be contained in the Annual Report to be tabled at the ADF’s AGM to be held on 26 November.

Speaking on debtors management, Mr Mukansi said that the ‘ADF continues to be owed huge sums of money and our credibility and swift resolve on defaulters will help salvage the importance of our mandate and position of the ADF within the profession. Collecting from defaulting attorneys will assist in managing out our most single risk, non-payment. Sadly, we are in the process of handing over the bad debts for collection.’

 

Mapula Thebe NDip Journ (DUT) BTech (Journ) (TUT) editor of De Rebus.

This article was first published in De Rebus in 2015 (Dec) DR 5.

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