The Legal Practice Bill: The unfinished business

May 1st, 2012

Law Society of South Africa AGM 2012

The Law Society of South Africa’s annual general meeting took place from 26 to 27 March at Emperors Palace in Johannesburg. On the agenda were the Legal Practice Bill, court-based mediation, business rescue, corruption and the attorneys’ profession and social media.

By Nomfundo Manyathi

One of the topics that has featured on many LSSA AGM agendas is the Legal Practice Bill (LPB). This year the discussions on the Bill were divided into two sessions, one titled ‘Finding common ground with the advocates’ profession’ and the second titled ‘Roles in regulating the profession’.

Finding common ground

In the first of these, outgoing co-chairperson of the LSSA, Nano Matlala, and chairperson of the General Council of the Bar (GCB), Gerrit Pretorius, spoke about the unresolved issues relating to the LPB and the respective positions of the attorneys’ and advocates’ professions in relation to various aspects of the Bill.

Session facilitator and LSSA councillor Max Boqwana opened the discussion by saying that when the LSSA LPB Task Team visited Kenya on a study tour, the Minister of Justice of that country said that the only way to make progress in such a matter was with ‘mature leadership that did not focus on selfish interests’.

Mr Boqwana said that South Africa was ‘battling with the unity of the profession’, which needed to be addressed. ‘We need to answer the question honestly and truthfully: Are we prepared to move forward and do away with the legacy of divisions that apartheid has bestowed on us? Are we prepared to move forward … in terms of the new Constitution?’ he said, before inviting the two speakers to highlight issues they believed the two professions could find common ground on, as well as those they believed would be difficult to reach consensus about.

Mr Pretorius said that over the years there had been different views on the Bill within the GCB. For a long period the GCB was a proponent of voluntary associations, but recently its view was that it should become a statutory organisation, he said. However, he added that this would create practical difficulties for the GCB as every person who wishes to become a practising advocate will have to be recognised by or be part of the GCB, which includes undergoing one year of pupillage.

As a statutory body, the GCB would be responsible for all advocates, including those practising independently. He said that it would be difficult to provide pupillage to them together with the stream of LLB graduates coming from the universities. In addition, pupillage created difficulty for people joining the Bar as it was unpaid, as well as for the Bar as there was no income to be gained from a pupil.

Mr Pretorius said that the GCB saw the structure of existing Bar councils remaining as regional councils for advocates, with the South African Legal Practice Council as the overarching body with regulatory powers over attorneys and advocates. He said that the independence of the legal profession in general, and of advocates in particular, was non-negotiable and advocates would ‘fight to the highest court if necessary’ to protect this.

In terms of differences of opinion on the LPB by the two professions, he said that, as he saw it, this lay at the ‘interface in the desire of advocates to be the masters of their own profession and what attorneys feel that they should do’. He said that there was no desire on the part of advocates to have any say in what attorneys did and, while advocates had no problem in providing input on attorneys’ issues on the Legal Practice Council level, they did not want a vote on such matters and vice versa. He said that advocates had a ‘deep-seated’ fear that they would be outvoted on the council.

Mr Matlala said that, as he saw it, attorneys and advocates must find common ground on a number of issues, including:

  • Right of appearance. He said that the LPB did not give attorneys an automatic right to appear in the High Court and attorneys should not be discriminated against in this manner.
  • Access to both professions. Mr Matlala said that existing legal qualifications should enable one to practise in either the attorneys’ or the advocates’ profession and that it should be easier to move between the two professions.
  • Unity of the attorneys’ and advocates’ professions.
  • Ministerial representation on the Legal Practice Council. Mr Matlala said that attorneys had agreed that the Justice Minister should have one representative on the council and he ‘pleaded’ with advocates to agree to this.
  • The powers of the national and regional councils. Mr Matlala said that attorneys agreed that the national council should deal with issues of policy, but advocates indicated that they wanted advocates’ policy matters dealt with separately.

At the end of the presentations, Mr Boqwana said that it ‘was too ambitious for anybody to think that we can conclude some of these tricky issues in an hour’ in the light of the fact that debates about the Bill had been going on for more than ten years. Mr Boqwana also stressed the importance of unity in the legal profession. He said: ‘We had a number of possible executive attacks on our Constitution in this country and, because of the disintegrated nature of the profession, the profession has not been able to respond to those issues.’ He added: ‘If we do not play this role now, a few years down the line we will find this profession exactly in the same place that the profession in Zimbabwe is in, and that is why we are talking about unity. It is not about selfish interest; it is about guarding what we have in this country – our constitutional democracy, which I think is the biggest inheritance that we have.’

Roles in regulating the profession

The second session on the LPB dealt with roles in regulating the profession and included a discussion on a proposal by the Attorneys Fidelity Fund (AFF) relating to a change in its investigating functions. The AFF has proposed to become more actively involved in investigations involving attorneys by –

  • guiding investigations and supervising case progress periodically;
  • coordinating investigations and prosecution; and
  • providing technical and administrative guidance throughout the investigation

in order to ensure the sustainability of the fund and to strive for the successful investigation and prosecution of defaulters.

The panelists for the session were the executive director of the AFF, Motlatsi Molefe, who provided an outline of the proposal; and LSSA council members Mohamed Husain and Peter Horn, who commented on the proposal and other aspects relating to the LPB. The session was facilitated by LSSA councillor Jan Stemmett, who was later appointed as co-chairperson of the LSSA.

Mr Molefe said that the proposal was not intended to start a ‘power struggle’ and that the fund did not want to become a ‘super law society’, and nor did it want to regulate the profession, but it wanted to work together with the law societies to manage its risk. He said: ‘That is what this whole debate is all about: The ability to separate the Attorneys Fidelity Fund from the law societies within the context of risk management and not an attempt to actually regulate.’

He said that he saw figures relating to theft claims that ‘horrified’ him and the reason such figures continued to occur was because the fund was the only one taking the risk and not the regulatory bodies.

Mr Molefe said that claims for theft by those in the profession had cost the fund more than R 357 million in the last six years, from 2007 up to the first week of March 2012. However, in addition, the fund had paid more than R 356 million in agency fees for the same period. Mr Molefe said: ‘What is downright criminal for me, as a man with a fiduciary responsibility towards the fund, is the other figure that relates to agency fees. It is R 356 926 627. So, in essence, the real value between what we paid along agency fees, including regulatory fees, is just R 1 million or so less than the theft claims themselves.’

Mr Molefe said that to date the fund had been more ‘defensive’ than ‘proactive’ when dealing with theft, which was why there had been a ‘big jump’ in the amount paid out in 2007, which was R 27 million, to the R 133 million paid out in 2011. There was thus a need to become more proactive and the model that was used more than 70 years ago when the fund was established could not continue to be used now, as the legal profession had changed immensely.

Despite this, Mr Molefe said that the LPB sought to repeat this same model ‘with very little change’. He said: ‘The profession must wake up to the fact that what was appropriate in 1941, when we probably had only 100 attorneys in the country, can never be appropriate in 2012, when we have more than 20 000 practitioners.’

Mr Molefe concluded by saying that the AFF had a right to look after its risk.

Mr Horn commented on the AFF’s proposal and two other issues relating to the Bill that he viewed as ‘unfinished business’, namely the question of regional councils and the disciplinary process provided for in the Bill.

In respect of the AFF’s proposed powers of inspection, Mr Horn said that the fund had a significant role to play in the control of risk. He said that the fund had no inherent powers of inspection in terms of the current Attorneys Act 53 of 1979, adding that those powers had to be delegated. But, he said: ‘The Legal Practice Bill makes provision that the fund now has powers of inspection (section 73(e)). It has power to inspect the accounts of any attorney, and that must be read in conjunction with section 89, which empowers the Legal Practice Council to inspect the accounting records of any trust accounting practice.’

In addition, the Bill provides that the Legal Practice Council can conduct an inspection of an accounting practice ‘in order to satisfy itself that the practice has complied with the provisions relating to the opening and the operation of a trust account’.

If the provisions relating to the fund in the Bill are to stand, Mr Horn said that, in his view, they must be qualified in order to limit the right to inspect any issues relating solely to the theft of trust money, because this was the fund’s risk. ‘Any other unprofessional conduct not relating to that risk should not be the concern of the fund,’ he said.

On the issue of regional councils, Mr Horn said that the Legal Practice Council, as the national body, could delegate powers to the regional councils. He said that, in his view, the regional structures would continue to operate much as they do at present and will continue to be responsible for admissions, candidate attorneys, discipline, etcetera.

Mr Horn said that it had been mooted that there should nine regional councils, one per province; however, he did not believe this would be viable because of financial constraints, adding that this aspect needed to be reconsidered. He said that currently there were four councils and suggested that these could be reduced to three.

On the disciplinary process, Mr Horn said that the current disciplinary process was ‘extremely cumbersome’ and time consuming. He said that there was a perception by the public that the profession ‘looked after its own’, while there was a perception by practitioners that the regulator was out to target them. However, Mr Horn said that the disciplinary process provided for in the Bill was even more cumbersome than the present one. He suggested that perhaps the disciplinary committee should be totally independent from the council and consist of people in the profession who have no relationship whatsoever with any of the councils.

Mr Husain also spoke about the AFF’s proposal, as well as a number of aspects relating to the LPB. On the AFF’s proposal of increased investigative functions, Mr Husain said that there was a convergence in the interests of the fund and the law societies in having risk management measures in place. He said: ‘The protection of the public interest is key, and that is something that the law societies and the fund have as their objective. The legitimacy and credibility of the whole legal profession is something which the fund and the law societies share.’

He said that the fund and the law societies needed to work together, but that the regulator must be ultimately responsible for regulating the profession. In doing so, it could liaise with the fund to ensure investigations are conducted as efficiently as possible. However, there should not be a blurring between the regulatory functions and the key functions of the fund.

Mr Husain said that the LPB made provision for inspection of attorneys’ books and accounts by the Fidelity Fund. He said that he was sure the fund was not going to conduct an investigation without considering whether the law society was conducting a similar investigation. He said: ‘I think what really needs to happen is that within the regulatory remit of the law societies and the AFF remit of protecting the public against theft of trust moneys and making sure that its pool of funds from which it does so does not shrink – and it is shrinking, it is diminishing rapidly – that within those two functions, once one identifies the common grounds, you can identify the basis on which you can work more closely together.’ However, he said, the ‘devil is going to be in the detail’.

Mr Husain also spoke briefly about the evolution of the LPB over the past ten years and then went on to highlight some aspects of the draft legislation. He said that much progress had been made on the issue of appointing councillors as there had been movement away from the provision in one of the former drafts of the Bill that the Justice Minister appoint councillors. The department has now provided for the transitional council to make recommendations to the Minister as to the procedure to be adopted, he said, adding that this would require ‘mature leadership’.

Another issue relating to the Bill that Mr Husain raised was that it mentioned ‘fees that can be charged by legal practitioners only as determined by the national Legal Practice Council’, which he said seemed to suggest a maximum tariff similar to ‘medical aids and doctors’. ‘Whether that is going to withstand constitutional scrutiny, one does not know,’ he said.

Mr Husain also spoke about the training of candidate attorneys and pupils, and the exclusion of paralegals from the Bill, which he said was ‘salutary’ as it was something that attorneys had fought for. He said that they had their place in the delivery of legal services, but that the decision to exclude them from the LPB was correct.

Justice department’s update on the Bill

The Justice Department’s deputy chief state law adviser responsible for policy development and coordination, JB Skosana, provided an update on progress the department had made on the Bill.

Mr Skosana said that the department hoped that certification of the Bill would be completed by the end of March. He added that this meant that the Bill would be introduced before parliament shortly.

Mr Skosana said that the LPB would never be a ‘perfect Bill’ but it would also not be the worst Bill. He said that the LPB was one of the mechanisms of fast-tracking transformation, adding that there were aspects of the Bill that the Justice Department had never compromised on because of the premise that there were fundamental principles that informed the democratic dispensation that were agreed to in terms of the Constitution. He said it was not in the department’s power to change those fundamentals and renegotiate them, but its function was to provide space within which to implement those fundamentals.

Mr Skosana said that once the Bill was introduced in parliament it would then be channelled to the portfolio committee by the speaker and public hearings would take place. Depending on the line-up of all other Bills and events of significance which were going to take place this year, including the policy discourse of the ruling party, there would then be an opportunity to engage on the Bill.

He added that the department did not anticipate that that process would ‘come soon’ as two other Bills preceded the LPB, namely the Constitution Amendment Bill and the Superior Courts Bill. Mr Skosana said that the department expected these Bills to be passed into law by August/September and therefore he anticipated that discourse on the LPB would commence then, with the parliamentary process on the Bill starting after July or August if everything went according to plan.

Mr Skosana encouraged the LSSA and the GCB, in the meantime, to establish an interim advisory committee in the format of the transitional council that could start dealing with pertinent issues that the transitional council was going to deal with. This, he said, would ensure that once the Bill is enacted the transitional council would not fall short of time in terms of finalising the major principles, as it had only 18 months in which to do this.

He said: ‘In ten years we have not been able to reach consensus on many of the fundamentals in the Bill. The idea, therefore, is that we should continue to engage on those matters so that by the time the Bill comes into operation all those principles that have been laid out have been digested and refined by this advisory structure that will be put in place.’

Mr Skosana emphasised the fact that the role of government in respect of the transitional council and the national council was ‘facilitative’. He said that it was not there to guide, inform or drive the process, but to ensure that the process did happen and that all aspects pertaining to the public interest were taken care of.

Mr Skosana cautioned that if no consensus was reached on outstanding issues, parliament – as the ultimate lawmaker – would make law. In doing so, however, it would listen to those who were affected by the LPB and the community at large.

Mr Skosana concluded by saying that government did not want to subvert the independence of the profession but it wanted to provide a regulatory function and to facilitate aspects in terms of the Constitution.

Nomfundo Manyathi,

This article was first published in De Rebus in 2012 (May) DR 14.