Letters to the editor – August 2022

August 1st, 2022

PO Box 36626, Menlo Park 0102

Docex 82, Pretoria

E-mail: derebus@derebus.org.za

Fax: (012) 362 0969

Letters are not published under noms de plume. However, letters from practising attorneys who make their identities and addresses known to the editor may be considered for publication anonymously.


Decorum of legal practitioners

I refer to a recent press report of the fact that the Legal Practice Council (LPC) cleared advocate Dali Mpofu SC of misconduct for the ‘shut up’ incident, which occurred at a hearing before the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector including Organs of State before then Deputy Chief Justice (now Chief Justice) Raymond Zondo.

The report follows hot on the heels of a letter sent to all legal practitioners reminding all of the necessity of legal practitioners to act with professionalism and decorum in our courts as failure to do so is a contravention of the Code of Conduct for all Legal Practitioners, Candidate Legal Practitioners and Juristic Entities published in terms of s 97(1)(b) of the Legal Practice Act 28 of 2014.

I was somewhat alarmed when reading the press report to the effect that Mr Mpofu SC was cleared of misconduct. The incident was screened on national television and coincidentally I was watching it at the time and although Justice Zondo appropriately rebuked Counsel, I found that in so doing he acted with restraint.

The press report following the letter to legal practitioners from the LPC referred to above seemed to indicate that the dissemination of the letter arose out of the conduct of advocates appearing in the controversial high-profile case in relation to the Senzo Meyiwa murder. Whether or not this is correct, is a matter of speculation in which I refrain from engaging.

Having regard to the large amount of publicity surrounding the incident of Mr Mpofu SC, irrespective of whether he was provoked or not, as well as those involving Counsel on the Meyiwa murder trial, is, in my view, appropriate and necessary to remind legal practitioners of the importance of acting professionally and with decorum and respect not only towards judges, magistrates, judicial officers and presiding officers in any court or tribunal, but towards one’s colleagues and members of the public at all times.

Furthermore, when in an adversarial environment, correspondence must also be exchanged with the same degree of courtesy and respect. I have had occasion to have received correspondence from colleagues which contain the sentence ‘Your letter under reply is noted and viewed with the contempt it deserves’. I find such letters unnecessary and unworthy of our profession.

I have no difficulty with litigation being conducted aggressively, fearlessly, and uncompromisingly. However, at no stage should a legal practitioner or a colleague or member of the judiciary, magistracy, or a presiding officer be treated with discourtesy and lack of respect.


Leslie Kobrin Dip Iur (Wits) Dip Bus Man (Damelin) is a consultant
legal practitioner at Bove Attorneys Inc in Johannesburg.


An explanation of the insurance cover available to legal practitioners

I read the article by Mr Sipho Nkosi, ‘Do you have adequate cover for your law firm?’, which I have noted is no longer available on the De Rebus website. However, some readers may have had sight of the article before it was withdrawn, and it is against that background that I have drafted this letter. Some of the contents of Mr Nkosi’s article warrant a reply.

Losses arising from theft

Fidelity insurance cover (sometimes called a fidelity guarantee policy) indemnifies a legal practice for losses arising from theft of the firm’s own funds (namely, funds in the firm’s business account). Fidelity insurance cover has nothing to do with the Legal Practitioners’ Fidelity Fund (Fidelity Fund) or with losses arising from the theft of trust money or property. Losses arising from the theft of trust funds are indemnified by a misappropriation of trust money policy, which is a separate and distinct policy from a fidelity guarantee policy.

The Fidelity Fund is a statutory client-protection fund, which subject to the provisions of the Legal Practice Act 28 of 2014 (the LPA), indemnifies a person who has suffered a loss arising out of the theft of money or property entrusted to the legal practice. The Fidelity Fund has nothing to do with the risks indemnified under a fidelity guarantee policy and the fact that the word ‘fidelity’ appears in the name of that entity and the separate and distinct insurance policy must not be construed to mean that there is a link between the two. There is no link. The Fidelity Fund does not indemnify legal practitioners for any losses and practitioners thus cannot regard the indemnity provided by that institution to members of the public as part of the insurance cover afforded to their respective practices.

When advising a party who has suffered a loss arising from the theft of funds entrusted to a legal practitioner, regard must be had to ss 55, 56, 57 and 79 of the LPA. The Fidelity Fund’s exclusions and limitations of liability are thus wider than stated in the article under reply.

Other policies that legal practitioners can consider purchasing to indemnify their practices for losses arising from theft or other criminal acts are, for example, commercial crime policies and policies that indemnify practices for criminal or civil liability arising from employee dishonesty. The wording of the respective policies must be studied carefully for the practitioners to understand what events are insured (and the extent of cover) under each policy. You must look beyond the name of the policy and consider what risks are covered by the insuring clause.

I note that Mr Nkosi has referred to s 19(3) of the Companies Act 71 of 2008 in respect of the joint and several liability of directors and shareholders with the juristic entity. Incorporated practices must have regard to s 34(7) of the LPA in this regard which prescribes that:

‘(7) A commercial juristic entity may be established to conduct a legal practice provided that, in terms of its founding documents –

(c) all present and past shareholders, partners or members, as the case may be, are liable jointly and severally together with the commercial juristic entity for –

(i) the debts and liabilities of the commercial juristic entity as are or were contracted during their period of office; and

(ii) in respect of any theft committed during their period of office.’

It is trite that legal practitioners who do not practice in commercial juristic entities (incorporated entities in terms of s 8(c) of the Companies Act) will be personally liable (jointly and severally liable in the case of a partnership) for the debts of the practice and for any theft committed during their period in office.

Professional Indemnity (PI) cover

The decision in Attorneys Fidelity Fund Board of Control v Mettle Property Finance (Pty) Ltd 2012 (3) SA 611 (SCA) referred to in Mr Nkosi’s discussion of PI cover relates to a claim against the Fidelity Fund (then known as the Attorneys Fidelity Fund) arising out of the theft of money purportedly entrusted to an attorney. That case did not deal with a PI claim. The Legal Practitioners’ Indemnity Insurance Fund NPC (the LPIIF) was not a party to those proceedings and the sentence quoted in the article was not a reference to a limitations of the indemnity provided by the LPIIF to insured legal practitioners in terms of its Master Policy but, rather, a reference to the limitations of the statutory indemnity provided by the Fidelity Fund to members of the public for losses arising from the theft of monies or property entrusted to attorneys. The dictum in the Mettle case can thus not be extended to the LPIIF. The statements by Mr Nkosi on the LPIIF policy in reference to the Mettle case are thus, with respect, incorrect.

The LPIIF only indemnifies legal practitioners who are actually in possession of an Fidelity Fund Certificate (FFC) on the date that the cause of action arose. The legal practitioner(s) concerned must have a FFC at the time of the circumstance, act, error or omission giving rise to the claim in order to fall within the definition of insureds in terms of the LPIIF policy (clauses XVI and 5 of the LPIIF policy). The requirement to possess the FFC is thus peremptory. The LPIIF will not provide insurance cover to a practitioner who, though obliged to possess an FFC, has not in fact been issued with one. The statement that the ‘LPIIF’s primary purpose is to provide all legal practitioners who are obliged to be in possession of a Fidelity Fund Certificate (FFC) with a primary level of professional indemnity’ is thus, with respect, also not correct. A practitioner who is obliged to practice with an FFC but practices without such a certificate is thus not covered by the LPIIF.

The LPIIF does not issue insurance certificates to legal practitioners as alleged in the article. The LPIIF’s position in this regard is stated on its website (https://lpiif.co.za/) and on page 8 of the May 2022 edition of the Risk Alert Bulletin (www.derebus.org.za).

It is, with respect, also not correct that legal practitioners applying for FFCs are now required to make a contribution to the LPIIF insurance premium. Since inception of the company in 1993, the LPIIF’s premium has been exclusively paid by the Fidelity Fund. The Fidelity Fund has not exercised its rights in terms of s 74(1)(a) of the LPA and r 51 to seek a contribution from legal practitioners for the insurance premium paid to the LPIIF.

The PI model for trust account practitioners in South Africa (SA) is that the LPIIF provides the primary layer of insurance to such practitioners in terms of one Master Policy issued annually. The LPIIF does not issue individual policies to the insured practices. Insured practitioners may then, applying their own discretion and according to the individual requirements of each practice, purchase addition PI cover in the commercial market. This is commonly referred to as ‘top-up insurance cover’. There is no ‘qualifying insurance’ model in SA and what is stated in the article in this regard is thus, with respect, incorrect.

Cyber liability cover

Liability arising from cybercrime is excluded from the LPIIF policy (clauses IX, 16(c) and 16(o)). Where the firm has purchased cyber risk cover in the commercial market, the policy wording must be carefully studied in order to understand the risks indemnified by such policies. Some policies, for example, exclude losses where there has been a hacking of the firm’s information technology system, others prescribe the minimum internal risk measures that must be implemented in the firm while others insist on a verification system before payments are made in order to mitigate the risk of business e-mail compromise losses. Rule 54.13 also obliges the firm to verify the bank account details provided to it, and any subsequent change to the banking details, before making any payment.


It is hoped that what is stated above addresses any misconceptions (or confusion) that may have arisen from the article under reply.

When purchasing insurance cover in the commercial market for your practice, it is advisable to use a broker or intermediary who has knowledge and experience of the insurance model in place for legal practitioners in SA, understands the risks flowing from legal practice and who can advise you correctly.

Thomas Harban
BA LLB (Wits) is the General Manager of the
Legal Practitioners’ Indemnity Insurance Fund NPC in Centurion.


This letter was first published in De Rebus in 2022 (August) DR 4.