DEPARTMENT OF PRIVATE LAW
Ms Dalita Ramwell
The preamble of the Bill sets out what it sets out to achieve, namely:
1. transformation and restructuring of the profession into a unified and demographically representative profession
2. that the values underpinning the Constitution and the rule of law are embraced and upheld
3. ensure affordability of legal services
4. regulation of the legal profession in the public interest in a single statute
5. remove entry barriers to the profession
6. strengthen the independence of the legal profession
7. ensure accountability of the legal profession to the public
What are the main effects of the Bill currently:
It provides for:
· a unified Legal Council, a transitional council and an umbudsman
· legal practitioners (being both advocates and attorneys) being able to practice freely throughout the RSA (no provincial re-enrolment)
· legal practitioners (both advocates and attorneys) may appear in a court of law
· only legal practitioners may render legal services for reward (although later in section 35 of the Bill it provides that non- profit organizations may charge for legal services)
· compulsory community service by legal practitioners, failing which their right to practice is in jeopardy
Specific potential problem areas
Section 1 defines an attorney as “a legal practitioner practicing with a fidelity fund certificate.” Given that a legal practitioner is defined as either an attorney or an advocate, then that necessarily means that an attorney who fails to obtain a fidelity fund certificate in a specific year, is automatically an advocate.
“Trust account practice” means a practice conducted by one or more attorneys who are in terms of this Act, required to hold a Fidelity fund certificate” i.e. what used to be an attorneys practice. However, some legal practitioners do not need fidelity fund certificates and if a sole practitioner then in a particular year does not get a fidelity fund certificate for whatever reason, does his firm then change from a trust account practice to something else?
Section 3 sets out the purpose of the Act which mostly corresponds with what preamble above, but includes: (d) to protect and promote the public interest.
“Public interest” has developed a specialised and specific meaning in international law and I am not sure that this is really what the legislator means here, but there is no definition of the public interest in this bill. Perhaps there should be a reference to the public interest as in the SA Constitution. (There are also theoretical philosophical problems with the “public interest” concept. Must an interest be universal to be accepted as worthy of protection as a public interest? Few interests would then qualify as in the public interest. If universal acceptability is not required, but only preponderance of public, it necessarily leads to the marginalisation of minority interests.)
The definition of the legal practitioner means and advocate or attorney registered as such in terms of section 30 of the Act, and section 2 provides that the Act applies to legal practitioners. Similarly section 4 provides that the Legal Practice Council will have jurisdiction over all legal practitioners – yet later in the Act it deals legal aid clinics, non profit organisations and even legal advisers and in some instances specifically excludes state legal practitioners from the operation of the Act. Are these persons then also subject to the general provisions of the Act?
Section 5 sets out the objects of the Legal practice Council. Subsection 5(b) aims to ensure that legal fees are reasonable and promote access to legal services. Section 5(d) stipulates that one of the objects of the Legal Practice Council is to regulate legal practitioners. It is debatable whether it is wise to fix prices in this manner in a largely capitalist economy. That such price fixing only applies to registered attorneys and advocates seems undeniably discriminatory. It also risks benefitting only the rich and not the poor, whom it is designed to assist. For instance, in an ordinary capitalist system different legal practitioners would charge different fees depending on their experience and expertise and client base. If fees were then capped, the cheapest attorneys would still be under the cap and still charge the same (or possibly more up to the maximum of the cap), while the most expensive legal practitioners, who perhaps mostly work for corporate clients would be obliged to reduce their fees – benefitting only their wealthy clients. The same applies to conveyancing – the person purchasing a R200 000 house would still have to pay a reasonable fee to make it worthwhile for the legal practitioner to undertake the work, otherwise he would simply decline the instruction. Let us assume that a reasonable fee for such work is R10 000 on this R200 000 house. But the R20m purchaser would pay the same capped fee. The Bill does not prescribe how the reasonable fees will be achieved, and that is perhaps the key issue.
Section 12 provides for circumstances where a member of council must vacate his/her office (misconduct, incapacity, etc). I suggest that since the Council consists of 16 legal practitioners, 1 academic, 3 minister appointees and 1 Legal Aid SA appointee, if one of the 16 legal practitioner members were to no longer be a legal practitioner, he/she should vacate the seat on the Council.
Section 14 provides for the dissolution of the Council and the appointment of an interim Council. Section 14(6) provides that the chairperson of the interim council may of his own accord or at the request of at least 5 members, convene a special meeting and at such meeting 5 members shall be a quorum. This seems to create the potential for a relatively small number of members to “highjack” the council and pass undemocratic resolutions.
Chapter 3 – Regulation of legal practitioners
Section 24 seems to provide for a dual system for enrolment as a legal practitioner. (either in terms of section 24(2) by the High Court if the applicant is a South African citizen or permanent resident and meets certain requirements or alternatively, in terms of regulations to be drafted by the minister for foreign legal practitioners (section 24(3)). It may perhaps depend on the contents of the regulations to be drafted, but it appears as though admission as a South African citizen (via court) is a more onerous and perhaps expensive process. This seems to be contrary to the objects of the Bill of removing entry barriers to the profession.
Section 28 provides for the assessment of legal practitioners. There appears to be no differentiation between the assessment of Advocates and Attorneys – just legal practitioners generally. (This seems to be born out by section 32 which provides for conversion from advocate to attorney and vice versa with a simple administrative process - no additional exams). One generic assessment for all legal practitioners is problematic because the attorney’s work is of a much more varied and wider scope. It requires amongst others, vocational training about accounting, estates and the business management of an office, while the Advocate’s focus is mainly litigation. If assessment of legal practitioners were to be done generically for both, some aspects would have to be neglected.
Section 34 provides for the forms of legal practice being for attorneys:
- for their own account
- as part of a commercial juristic entity
- as part of a non-profit juristic entity
- as part of Legal Aid SA
- as a state attorney
Advocates can practice:
- alone for their own account (but not in partnership or in any fee sharing arrangement)
- as part of non-profit juristic entity
- as part of Legal Aid SA, at a public interest legal centre or a as a state advocate.
My problem here is two-fold. Can this bill still regulate persons who are not in private legal practice? What would be the incentive for non-practitioners to comply? Secondly, section 34(7) dealing with a non-profit jurisitic entity, prohibits any part of such non profit juristic entity’s fees being distributed – but can they charge fees for legal work?
Section 34(8) provides for legal aid clinics which must provide free services and prohibits them from administering and distributing insolvent or deceased estates, judicial managements and Road Accident Fund claims. It is not clear to me what the motivation for this prohibition is, especially with regard to deceased estates, which must necessarily be a legal minefield in the poorer, polygamous communities.
Section 35 provides the criteria for the legal practitioner’s fee structure, eg importance, significance, complexity and volume of work. It omits, however, seniority and experience of the practitioner as a criterium. It is the basis of any professional work that the more experienced and specialised the professional, the more they may charge.
Section 37 provides for disciplinary bodies and refers specifically that it applies to legal practitioners, candidate legal practitioners or juristic entities. Are legal aid clinics then excluded from such disciplinary action? (Similarly section 38 dealing with complaints of misconduct and section 40 dealing with disciplinary hearings and remedial action.)
Section 49 deals with the powers of the ombudsman and particularly reports. However, it is not clear to me whether such reports will be made public and whether such reports will actually also be made available to the complainants.
Chapter 6 deals with the Attorneys’ Fidelity Fund. Section 56 in particular provides that the fund is liable to reimburse persons who suffer pecuniary loss of money given to a trust account practice in the course of practice as an attorney. Does this apply only attorneys and not to non-profit juristic entities and legal aid clinics who even if they do not charge fees, will collect money from the public to cover disbursements?
Chapter 7 that deals with the handling of trust moneys in section 84 refers to “every attorney, other than an attorney in the full time employ of the state, state legal adviser, state law advisor ...” This seems to indicate that earlier references to attorneys in the Act, included all of these categories of state legal practitioners. If this is so, then it seems state attorneys and advocates can and must do everything that private legal practitioners can.
Section 85 deals with the application for and issue of a fidelity fund certificate and provides criteria for determining the amount contribution such attorney legal practitioner must make. It does not, however, mention the attorney’s past claims record as a criteria. Surely where a practitioner has been the cause of prior claims against the fund, such attorney’s contribution should be “loaded”?
Section 93 provides for penalties where “Any person who in a practice, without the written consent of the Council, employs in any capacity any person who has been struck of the roll or suspended from practice… shall be guilty of an offence.” It is an offence to employ such a person even as a secretary or tea girl? This makes it almost impossible for such an ex legal practitioner to earn any kind of living, which seems unconstitutional.
Section 94 dealing with regulations, refers to a framework for the creation of “limited liability legal practices”. What is this? There is no definition for this.
Chapter 10 deals with the creation and operation of a transitional South African Legal Practice Council. The question that arises relates to the need for such a Transitional Council. Why not go from ordinary Law Societies to the Legal Practice Council? The answer seems to be contained in section 97. It merely postpones the problems and disputes that could not be resolved thus far, in that the Transitional Council must advise the Minister on problematic and controversial issues, eg practical vocational training for candidate legal practitioners, fee structures for legal practitioners, and most importantly, the Transitional Council must, within 24 months, “negotiate with and reach an agreement” with the attorneys’ and advocates’ professions in respect of the transfer of their assets, rights, liabilities, obligations and staff. To provide that parties must reach an agreement seems contra bones mores and unenforceable. Furthermore, taking over the assets of private institutions, operating more of less like a club, where all the members have a shared interest in the assets, seems to indicate a deprivation or expropriation, with all the Consitutional implications of that.
Section 113 deals with existing advocates, attorneys, conveyancers and notaries and provides inter alia that the registrar of the high court must as soon as possible … furnish a list of the names on the roll of attorneys, conveyancers, etc. I am not sure I understand the point of this. The Law Societies already have these lists and in any event that would not be comprehensive since legal advisers are not required to be admitted by Court.
General Comments – does the Bill achieve what it sets out to do in the preamble?
An estimated eighty per cent of the bill deals with administrative issues – constituting the Legal Practice Council, the Transitional Council and the Ombud - who may serve, how appointed, when and how they will meet, how they will be funded, how they will discipline, etc . It seems that the Bill addresses the regulation, unification and disciplining of the legal profession in detail. Likewise, transformation and access to the profession are addressed. The values underpinning the constitution are often implied, but not specifically referred to, eg reference to the public’s interest. However, the compulsory take-over of the current Law Society and Bar Council assets seem to be contrary to constitutional values. The difficult issue of affordability of legal services is addressed, but in such a vague manner that it merely postpones the issue and leaves it to be dealt with by administrative rather than legislative decisions. Most concerning, however, is that I did not find any provisions that may strengthen the independence of the legal profession. On the contrary, the over regulation seems to have the opposite effect.