LSSA strongly opposes Debt Collectors Amendment Bill

February 24th, 2016
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Compiled by Barbara Whittle

The Law Society of South Africa (LSSA) expressed its strong opposition to the Debt Collectors Amendment Bill, 2016, in submissions made to the Justice Department at the end of January. The LSSA Co-chairpersons were also seeking a hearing with Justice Minister Michael Masutha to discuss the Bill.

The controversial Bill proposes making attorneys and their staff subject to the jurisdiction of the Council of Debt Collectors and the provisions of the Debt Collectors Act 114 of 1998. In its submissions, the LSSA noted that the attorneys’ profession was being blamed unfairly for ambiguities in the legislation governing emolument attachment orders and for the conduct of a relatively few attorneys.

The LSSA is, in particular, concerned that the measures introduced by the Bill –

  • will not contribute towards a solution, instead it will create more setbacks than solutions;
  • are premised on flawed interpretations of court cases and media reports with regard to the abuses regarding the collection of debts;
  • will make significant inroads into the independence of the legal profession;
  • will result in the overwhelming majority of attorneys, if not all, together with their staff members having to register as debt collectors, including those attorneys who do not primarily engage in debt collection;
  • are based on misconceptions as to the extent of abuses by attorneys. We submit that there are relatively few attorneys that are guilty of such abuses;
  • completely disregard existing legislation regulating attorneys and duplicate the regulation of attorneys;
  • disregard proposed amendments to the Magistrates’ Courts Act 32 of 1944 to remedy the abuse of emolument attachment orders and jurisdictional matters, which are due to be promulgated in early 2016;
  • completely disregard the firmly established principle of legal privilege, which is an inherent part of the South African and global legal profession;
  • will render invalid, in terms of s 8(3) of the Debt Collectors Act, any agreement (or parts thereof) entered into between an attorney and his or her client (which involves debt collection) before or after the Bill becomes law – if the attorney is not registered with the Council for Debt Collectors. This will have far-reaching implications for the overwhelming majority of law firms and their clients;
  • may result in a situation where a legal practitioner, who has been reprimanded by a law society for a relatively minor transgression such as not having answered correspondence timeously, is considered not to be competent to be registered as a debt collector and will effectively be prevented from operating a legal practice; and
  • endeavour to compare fees between attorneys in litigious matters and debt collectors in non-litigious matters, even though there is virtually no comparison between the academic qualifications of debt collectors and attorneys.

The LSSA’s full submissions can be accessed on the LSSA website at www.LSSA.org.za (under the tab ‘Our initiatives’ > Advocacy > Comments on legislation).

 

Compiled by Barbara Whittle, communication manager, Law Society of South Africa, barbara@lssa.org.za

This article was first published in De Rebus in 2016 (March) DR 10.