By Kim Hawkey

Following the public hearings on the Legal Practice Bill (B20 of 2012) in February, on 19 and 20 March the Justice Department (the department) presented its responses to the public’s oral and written submissions on the Bill to the Justice Portfolio Committee (the committee). This is a summary of the department’s presentation to the committee.

The department was represented by deputy chief state law adviser responsible for policy development, JB Skosana; chief director of legislative development, Lawrence Bassett; and acting deputy director-general of legislative development and secretary for the Rules Board for Courts of Law, Raj Daya.

While the department prepared a detailed 85-page response to the issues raised in the submissions, during the presentation to the committee, the department focused on the broad themes highlighted in the submissions.

For a comprehensive summary of the oral and written submissions, see 2013 (Apr) DR 22 and 38.

Mr Skosana informed the committee that the current version of the Bill represented ‘a fundamental shift’ from previous versions and was a ‘compromise Bill’ derived from extensive consultation with various stakeholders. Mr Bassett added that the Bill would ‘democratise’ the current structures in the legal profession, which was an evolutionary process.

Independence and ministerial appointments to the council

In terms of the Justice Minister’s power under the Bill to appoint three members of the 21-member South African Legal Practice Council (the council), Mr Bassett said that the department did not believe that the appointment of these three members would affect the independence of the profession, noting that government had a duty to promote the public interest. Further, he highlighted that a safety mechanism was built into the Bill in that the council could remove any of its members if it was of the opinion that the member was undermining the integrity of the council.

The department added that, to further alleviate concerns in this regard, consideration could be given to including provisions similar to those in the Independent Communications Authority of South Africa Act 13 of 2000.

‘If there is this concern that the Minister’s appointees are going to impact negatively on the independence of the profession, … a possibility that could be put forward for the committee’s consideration is to have a look at the ICASA Act … One could have a look at building in some of those features …, that appointees may not be public servants, they may not be the holders of any other remunerated position under the state, they may not be members of parliament or any provincial legislature or any municipal council and may not be office bearers or employees of any party, movement or organisation of a party political nature …,’ Mr Bassett said in this regard.

Committee member Dene Smuts proposed that the reference to ‘the Minister’ be substituted with ‘the judiciary’ and that the regulation of legal practitioners should properly fall under the judiciary to ensure its independence. She suggested that the ‘instrumentality’ to do this could be the Office of the Chief Justice or a judicial council, which had been proposed previously. She added that such a council would set judicial policy and should appoint the three appointees in question, or at least two of them, to the council, as well as the legal services ombud (the ombud), which would ease some of the concerns regarding the independence of the profession.

Committee member Steve Swart agreed with this proposal and noted that it could tie in with the Minister’s powers to dissolve the council in terms of the Bill.

However, committee member John Jeffery highlighted that a problem with the Chief Justice appointing members to the council was that, unlike the Minister, he was not accountable to the electorate and responsible for ensuring accessibility to the legal system. Committee members Makgathatso Pilane-Majake, Sheila Shope-Sithole and Nkosi Patekile Holomisa also supported the involvement of the Minister in the nomination of appointees to the council.

Mr Daya noted that the Office of the Chief Justice could be ‘compromised’ if tasked with the responsibility of making appointments in matters which ‘could come before the very court’ and, ‘for the very basis of the separation of powers, the appointment from the office of the Minister is a more feasible option’. Ms Smuts conceded this and emphasised the possibility of creating a judicial council, which could take over the roles of the Minister as provided for in the Bill.

Dissolution of the council

Mr Skosana said that it was necessary to provide for the Minister to dissolve the council in order to address the reality that the statutory body may become dysfunctional.

‘There must be one person … who takes that responsibility for putting order back,’ Mr Skosana said. Mr Bassett added: ‘The reality is that statutory bodies do become dysfunctional and one has to think about this; one cannot just wish away or delete this provision. … Something has to be in place to address the possibility.’

Mr Bassett said that the issue was how best to put in place checks and balances to ensure the power was not used arbitrarily. Additional checks and balances, such as further recourse to the ombud, could be introduced in this regard.

Mr Swart noted that he was ‘very concerned’ that the provision threatened the independence of the profession, adding that consideration should be given to the preferable option of referring the issue to the ombud. He said that he would like the checks and balances in this regard ‘significantly strengthened’. Mr Holomisa, however, stated that it was unlikely that the Minister would use the power arbitrarily.

Committee member Debbie Schäfer was of the opinion that it was necessary to rework the section to avoid the Minister abusing this power, stating that it was ‘unacceptable’ that a small minority of the council may be able to ‘hijack the process’.

Representation of attorneys and advocates on the council

Mr Skosana said that the department viewed the request for parity of representation between attorneys and advocates on the council as a non-issue, as there were many more attorneys in the country than advocates. ‘It is only democratic that they have greater representation on the council,’ he said.

Fusion of the profession, fees and access to justice

The committee discussed the fusion of the profession and the implications for legal fees, with committee member Mario Oriani-Ambrosini advocating for the abolishment of the split Bar and the division between senior and junior counsel.

Ms Smuts said that an evolutionary approach to the fusion of the profession was probably the best option, adding that the need for a separate advocates’ profession had been ‘well articulated’ in certain of the presentations made to the committee during the hearings and elsewhere.

Dr Oriani-Ambrosini, however, emphasised that the Bill was ‘a last resort’ at reforming the legal profession and parliament must ‘do what was right for the people’ and not serve the interests of the profession alone.

Ms Schäfer noted that high legal fees were not necessarily the direct result of a split Bar and that safeguards, such as the cab-rank and referral rules, existed. Mr Swart agreed that the two branches of the profession should remain separate.

In terms of access to justice, Dr Oriani-Ambrosini noted his concern that consumers of legal services, the general public, had not made input on the Bill. If the Bill did not properly address access to justice, he said the committee would have failed in carrying out its duties.

Dr Oriani-Ambrosini added that the distinction between senior and junior counsel ‘undermined the concept of equality before the law’, and gave credence to a group of practitioners on the basis of the number of years in practice rather than competence.

‘We must consider very seriously – not in the interests of lawyers, but in the interest of the people who we are to protect – getting rid of this absurd antiquity of a split Bar and division between junior and senior counsel if we are all equal before the law,’ he said.

Dr Oriani-Ambrosini added that there were a number of elements that made a lawyer good or a bad, including affordability. He said that a bad lawyer would not become a good lawyer simply by the number of years he had been in the profession. The hierarchical system of the legal profession in South Africa served the interests of the profession, not the citizenry, he emphasised.

Dr Oriani-Ambrosini said that it was necessary to ‘bring back true market dynamics’ and to eliminate the perception that some were better than others and, hence, the fees of some should cost more than others. He added that legal matters tended to be interrelated and cut across many specialist fields, which indicated that the future was aimed towards specialisation – hence the advent of large firms that pulled together a variety of specialist skills. The legislature should therefore encourage the profession’s transformation in this direction, he said, adding that single proprietorships were ‘no longer viable’ from a competency point of view.

Mr Holomisa remarked that if one party in a matter was represented by senior counsel and the other by less experienced junior counsel, there would be no equality. Mr Swart echoed the sentiments in respect of inequality and said that this was particularly true in criminal cases, for example in situations where an inexperienced prosecutor faced an experienced senior counsel. However, he added that it was important for the committee to consider that the conferment of silk was an honour and its award was a presidential prerogative, which had been recognised by the Supreme Court of Appeal. The fees charged by senior counsel was a separate issue, he added.

Mr Daya noted that the current draft of the Bill did not retain any reference to rankings in terms of status.

The committee decided not to deal with the issue of fusion in depth as no case for it had been made out in the Bill. However, it was generally agreed that increasing legal fees were of concern and this was a primary motivator for the Bill and transformation of the profession.

Fee structures

In respect of fee structures, Mr Skosana said that confusion had been created in the media – the Minister’s reference to capping of fees related to matters in which the state had an interest and thus the Minister had advocated for setting parameters in relation to what government paid for legal services in that context. He added that the department did not consider anything ‘untoward’ in this.

However, Ms Schäfer responded that there had been no misunderstanding in respect of the Minister’s statements – the Bill provided for regulations ‘which were open to the capping of fees’.

Committee chairperson Luwellyn Landers asked if the current fee structure in the profession was determined by market forces. Mr Swart said that, generally, there were more fixed fees for attorneys than advocates; advocates’ fees seemed to be dictated by market forces more than those of attorneys.

Dr Oriani-Ambrosini added that, even though there were no guidelines for advocates’ fees, there was a general understanding between advocates that fees were not to be capped without the approval of colleagues, which was ‘a highly uncompetitive’ practice, ‘typical of a cartel’. There was a need to re-examine the Bill in the light of existing uncompetitive practices, especially as clients had no power to negotiate these fees, he said.

Ms Pilane-Majake said that leaving the market to determine legal fees contradicted the intention of the Bill to ensure affordable legal fees.

In respect of attorneys’ fees, Mr Daya said that it was necessary to have a mechanism to protect the public from those practitioners who saw it as a right to charge ‘injurious’ fees in non-contentious matters.

Ms Schäfer asked the department why a maximum fee cap should be allowed and not a minimum limit, and why tariffs were permitted for litigious matters, but not non-litigious ones. ‘If clients are prepared to pay more, why should they not?’ she asked. Mr Daya responded that, in terms of the current rules, when a person was sued or brought an application before court, there were distinct tariffs attorneys and advocates were allowed to charge to take a matter to trial stage, which were reviewed by the Rules Board from time to time. These were developed to enlighten the public on what fees were chargeable and to make attorneys and advocates aware of what they could charge.

He added that it was problematic that there were no guidelines to address the fees chargeable in ‘a whole range of matters’ that were non-litigious. He added that the Competition Commission had viewed such guidelines as anti-competitive.

Mr Swart referred to the provision in the Bill relating to a fee structure for attorneys and asked if the legislated provisions providing for rules relating to tariffs would be repealed. Mr Daya replied that the Rules Board would continue to make rules on litigious matters that go before court; it was also considering introducing fee tariffs for advocates and had received certain requests in this regard.

Mr Skosana conceded that there was a need for further discussion on the issue of fees.

Funding and model of the council

Mr Skosana told the committee that the department was of the view that the council and regional councils should be funded by the profession, which was consistent with the profession’s desire for independence. The government was only committed to funding the Transitional South African Legal Practice Council (the transitional council), and an initial cost analysis had indicated that this would cost approximately R 2 million.

Ms Pilane-Majake supported the model proposed by the department, while Ms Schäfer said that there was ‘no sense’ in the department’s position. ‘You want to have your bread buttered on both sides – you want the profession to fund the model and you want to say how they will do it. You are wanting to prescribe their fees, you are wanting to prescribe community service, you are wanting to prescribe how many regional councils they can have and where they can have them, but they must fund it. … Those principles contradict each other completely,’ she said.

Mr Bassett responded that in the past the attorneys’ profession was not in favour of an accreditation model.

Mr Daya added that, based on his experience as former chief executive officer of the Law Society of South Africa, attorneys had objected to this model as it simply retained the status quo, with a unifying body at the top.

He added that there should not be concern that ‘an enormous amount of money’ would be spent on ‘breaking up the regional councils’.

Transfer of voluntary associations’ assets

Mr Skosana said that the assets of organisations established in terms of statute were intended to be transferred to the council and not those of voluntary associations, which could only be dealt with on a ‘negotiated basis’.

Further, under the current dispensation, some of the voluntary organisations performed regulatory functions; the Bill thus contemplated the possible transfer of those functions to the council when the Bill came into effect.

Ombud

Mr Skosana noted that there had been suggestions in the submissions that the ombud be appointed by the Chief Justice or the Judicial Service Commission, but the department continued to support the President appointing the ombud. However, the department may consider putting in place additional measures to strengthen the checks and balances to ensure the power is not exercised in a manner that undermines the independence of the ombud, he added.

Attorneys Fidelity Fund (AFF)

Mr Skosana said that it was the department’s view that the process of nominating attorneys to the AFF board should be regulated outside of the Bill, by the profession.

Mr Jeffery referred to the provisions of the Bill relating to ministerial appointments to the council and the AFF board, and stated that it was important to define ‘competence’ and ‘incapacity’. Dr Oriani-Ambrosini agreed, adding that it was necessary to establish a framework to assess competence.

Ms Schäfer questioned why the Minister should be vested with powers in the Bill to prescribe where the AFF board could invest funds, to which Mr Skosana responded that the provision was based on the notion that the funds were aimed at protecting the public, and government therefore had an interest on behalf of the public. Ms Schäfer said the Minister could perhaps specify that a certain amount be invested and ensure that it was in a secured fund, but it was not appropriate for him to prescribe where the funds should be invested.

In response to a question from the committee, Mr Bassett said that the department had no serious objections to the proposal to cap individual claims payable by the AFF.

Rules and regulations

Mr Skosana said that the arguments against the Minister’s powers to make regulations under the Bill were ‘properly addressed’ by parliament’s oversight powers.

It was, however, important to distinguish between merely technical regulations, which would not require parliament’s approval, and fundamental regulations, such as those related to the independence of the profession, which must be approved by parliament.

In this regard, Ms Pilane-Majake asked how the department intended to distinguish between these two types of regulations. It was of concern that there was the possibility that regulations which should have the input of parliament may not receive this, she said.

Direct briefing of advocates

With regard to the ministerial powers to create regulations on the referral rule under the Bill, the department highlighted that the instances in which it was permissible for an advocate to be briefed directly needed to be debated further. Mr Skosana advised the committee that the intention was to create ease of access to justice, with the details and parameters relating to this aspect to be fleshed out in the regulations at a later stage.

Ms Schäfer remarked that it was of concern to insist that attorneys hold Fidelity Fund certificates, yet advocates could be allowed to carry out similar functions without holding a certificate.

Mr Daya agreed with this and said it should be ‘impossible and illegal’ for a practitioner to accept public money without such a certificate. He added that the instances in which advocates could deal with the public directly required further consideration and debate and brought with it certain responsibilities, such as an understanding of and training in trust law practice.

Dr Oriani-Ambrosini asked whether, from the moment the Bill came into effect, an advocate would be permitted to take briefs directly from clients. Mr Daya replied that advocates could not accept direct briefs until the Minister had made regulations on the issue. It was anticipated that, at the stage of drafting the regulations, further debate would ensue. The provision had been inserted in the Bill to create an enabling environment that, if not created, would have required the Bill to be tweaked at a later stage.

Dr Oriani-Ambrosini remarked that over the past 13 years, parliament had spearheaded the transformation of several sectors in the country by adopting ‘extraordinary reforms’ in legislation. The department’s response with regard to the determination of regulations related to this provision was thus unsatisfactory. He added that parliament’s responsibility was to determine this outcome and not leave it to the Minister. Ms Smuts said that, while she supported the evolutionary approach, this Bill was ‘one of a kind’ and the evolutionary approach did not apply throughout and that it was necessary to relax the referral rule.

Committee member Luzelle Adams noted that the wording of this provision in the Bill created the assumption that the Minister’s discretion may be applied in deciding whether or not to enact any regulations on the referral rule. She asked the department’s representatives whether there were any thoughts on the content of the regulations and whether any draft regulations had been prepared.

Mr Skosana replied that no thoughts had been formed yet and no drafts drawn up with regard to the regulations. It was envisaged that the process would be initiated by the council and the profession, he said. The Bill was structured in a way that it afforded discretion for certain regulations – some may be made and some must be made, he explained.

The transitional council

Mr Skosana noted that the same concerns expressed with regard to ministerial appointees, independence and parity of representation on the council applied to the transitional council. From the department’s perspective, the latter would deal with the immediate business necessary to ensure there would not be a vacuum in regulating the profession. The ministerial role was, therefore, ‘more direct’ at this stage.

Ms Schäfer questioned what would happen if at the end of the term of the transitional council agreement had not been reached on the election process for a new council. Mr Bassett said that the Bill provided for an extension of its initial period. Mr Daya added that there was an arbitration clause in the Bill that could be resorted to. He said that the rationale behind not leaving too many options open for decisions not being reached was to ‘force the parties to be serious about reaching the decisions that they need to within the time frame’.

Mr Jeffery added that ‘the pressure is necessary’ to force a determination by the transitional council in light of how long it had taken to come to ‘an agreement of sorts’ on various issues in the Bill.

At the end of the session, Mr Landers concluded by saying to the department’s representatives: ‘I will ask you to keep looking at the Bill, with a view to improving it.’

Kim Hawkey, kim.hawkey@derebus.org.za

This article was first published in De Rebus in 2013 (May) DR 34.