Legal practitioners taught risk management at SAWLA’s exhibition and seminar

November 1st, 2017


Executor Bonds Executive at the Attorneys Insurance Indemnity Fund NPC, Zodwa Mbatha, spoke at an exhibition by the South African Women in Law Association (SAWLA) in partnership with Nedbank, Old Mutual and the Attorneys Fidelity Fund in September.

By Kgomotso Ramotsho

The South African Women in Law Association (SAWLA) in partnership with Nedbank, Old Mutual and the Attorneys Development Fund held an exhibition and seminar for female legal practitioners in September. Executor Bonds Executive at the Attorneys Insurance Indemnity Fund NPC (AIIF), Zodwa Mbatha said the AIIF issues security bonds to practising legal practitioners with a valid Fidelity Fund Certificate, who are appointed as executors, in a deceased estate. She said the legal practitioner has to administer the estate in terms of South African law and within the timelines that the Master of the High Court requires them to.

Ms Mbatha pointed out that the AIIF mostly receive claims of estate theft. She added that this was as a result of executors failing to supervise employees who deal with estates in their offices, which lead to employees stealing from the estates. She pointed out that if the Master of the High Court approached the AIIF for a claim on the misappropriation of acts on estates, this would result in further consequences for the legal practitioner. The AIIF will meet the liability because we have stood surety for that, but and that is done, we will institute criminal proceedings and charges will be brought against the legal practitioner and we will report the legal practitioner to the provincial law society, Ms Mbatha said.

Ms Mbatha added that if the AIIF institutes a recovery action against a legal practitioner, as the executor, that will result in the legal practitioner not being able to get any further bonds from the AIIF. Ms Mbatha said that legal practitioners have to finalise and inform the AIIF, when they finalise an estate.

A representative from the AIIF claims department, Joseph Kunene, spoke about risk management. Mr Kunene noted the AIIF strives to protect the legal profession, while at the same time they are looking at the interest of the public at large. He said it gives assurance to the public to know that the legal practitioner they are dealing with has cover in the event of something happening during the client’s matter.

A representative from the claims department at the Attorneys Insurance Indemnity Fund NPC, Joseph Kunene, spoke about risk management.

Mr Kunene pointed out that the AIIF insures legal practices, which includes –

  • sole practitioners;
  • partnership of practitioners; and
  • incorporated legal practices.

He said that the cover extends to principals and former principals as long as the issue at hand that they are dealing with arose at the time the legal practitioner was still in practice and had a Fidelity Fund Certificate. He noted that the cover also extends to all employees at the legal practice such as –

  • paralegals;
  • candidate attorneys;
  • bookkeepers and so forth.

Mr Kunene said this would cover the firm if anything were to happen to a matter that a legal practitioner was dealing with, which would result in legal liability and as a result of which a legal practitioner had to pay compensation to a third party because of an action of one of the employees in the practice. Mr Kunene noted that the AIIF covers legal practitioners against a professional legal liability, to pay compensation to any third party arising from the provision of legal service, as long as the issue can be classified as a legal service.

Mr Kunene added that the AIIF receive many claims, mostly in conveyancing and litigation matters in general and that is a concerning matter to the AIIF. He noted that the insurance by the AIIF to legal practitioners is free of charge, however, he said that this will change in the future and legal practitioners will have to start contributing towards the premium.

Member of the National Forum on the Legal Profession and attorney, Jan Stemmett spoke about the Legal Practice Act at the exhibition in Johannesburg.

Legal Practice Act

National Forum on the Legal Professionmember and attorney, Jan Stemmett said the main emphasis of the Legal Practice Act 28 0f 2014 (LPA) is on public interest. He referred to s 35 of the LPA, which concerns legal practitioner’s fees. Mr Stemmett added that there will have to be discussions between legal practitioners and clients about fees and a written agreement before the legal practitioner takes on the client’s matter.

Mr Stemmett pointed out that attorneys will still be admitted by the High Court and enrolled by the Legal Practice Council (LPC). He added that there will be an easy conversion with the LPA if an attorney wants to be an advocate, and vice versa. He said for an attorney to appear in the High Court, Supreme Court of Appeal or the Constitutional Court, the attorney will need a certificate from the Registrar of the court where they were admitted. However, he noted that the attorneys who represent the attorney’s profession in the National Forum have rejected that part of the legislation and said it was discriminatory to attorneys.

Mr Stemmett noted that the new governing structure of the legal profession will be as follows: At the top it will be the LPC at national level, followed by the nine provincial councils, in each of the nine provinces in the country. He added that there will also be an Ombud who will have the role of overseeing the disciplinary section of the whole structure. He pointed out that instructions and power will be at the national level and will then be delegated downwards to the nine provincial councils.

Mr Stemmett said the new structure is more of a regulatory structure, and will not look after the interest of legal pratitioners. The life of the Law Society of South Africa has been extended and ways to fund it are being investigated.

Kgomotso Ramotsho Cert Journ (Boston) Cert Photography (Vega) is the news reporter at De Rebus.

This article was first published in De Rebus in 2017 (Nov) DR 8.