Legal Practice Bill [B 20–2012]: briefing by Department

Meeting report

Adv Jacob Skosana, Deputy Chief State Law Advisor: Policy Development, gave the Committee an overview and historical background of the Bill, and set out some of the reasons that the Bill was both necessary and justifiable. The legal profession had always been tightly regulated by legislation and rules, and government would always have a say in how lawyers operated in a public space which must guarantee access to justice for all. The independence of the profession had to be seen against that background, as did the role of the government, and of the Minister of Justice Department of Justice and Constitutional Development. Although there were some differences between the attorneys’ and advocates’ professions, both had similar academic qualifications, appeared before the same courts, represented the same people, contributed to the same jurisprudence, and drew their fees from the same customers.

Among other initiatives, the Bill sought to ameliorate the burden of requiring a client to “pay twice” for an attorney and an advocate by providing, in clause 34, for regulations whereby an advocate could receive a brief directly from a client. The Minister’s interest in being involved in the governance of the legal profession was a result of his responsibility to safeguard the public interest.

While the beginning stages of transformation could be seen by looking at the roll of advocates, which showed that 1 465 of the total 4 762 were women and just less than 2 000 were black, the attorneys’ profession was still lagging behind in this respect. Of an estimated 20 000 attorneys, 7 000 were black, and women constituted a lesser number. The Law Societies, like the High Courts, still mirrored the defunct homelands, and still operated under laws passed by the old Bantustans. Those who argued for the retention of the current structures were arguing for the perpetuation of the old structures founded on the segregation policies of the apartheid government, which went against the grain of the Constitution.

There were many different parties who had a stake in the transformation of the legal profession, and who would be affected by the Bill, including the General Council of the Bar (GCB) and its constituent Bars; the Independent Association of Advocates; the Forum of South African Advocates; the Law Society of South Africa (LSSA) and the various provincial Law Societies; University Law Clinics; Legal Aid South Africa; the National Prosecuting Authority (NPA); State Attorneys; the judiciary, which was sustained by the pool for appointment in the legal profession; legal advisers in the public and private sectors; public interest institutions; legal companies; and communities as customers of legal services. A wide spectrum of interest groups were affected by the Bill, and the most dominant or loudest voice from one sector did not represent the views of all.

The constitutional imperative that required the rationalisation of all legislation relevant to the courts with a view to establishing a judicial system suited to the requirements of the Constitution as set out in Item 16(6) of Schedule 6, also applied to the legal profession. The character and structure of the legal profession was premised on the courts, and the rationalisation of the courts would inevitably impact on the profession. Access to justice was one of the fundamental constitutional values that the proposed legislation sought to achieve. The reform of the legal profession constituted part of a holistic trajectory of transformation which constituted a package within the wider context of the transformation of the judicial system. Certain transformative initiatives would impact on the initiatives envisaged by the Bill, including the pursuit of a single judicial system, the reform of state legal services, and the review of the civil justice system, including the rationalisation of the rules of court.

The fact that the legislation had been around in various draft forms for 15 years was a result of protracted consultations, during which the Department had made a number of concessions, including that of retaining the names “attorney” and “advocate” instead of referring to them as “legal practitioners” with or without a Fidelity Fund certificate. There had also been a fundamental shift away from a South African Legal Practice Council ("Council") of Minister’s appointees to a model in which the profession would be able to nominate 16 legal practitioners to the 21-member Council, with the Minister appointing only three people to represent the public interest. The provision that dealt with assets devolving from the existing regulatory bodies to the Council had also been removed because of the fears of “expropriation” that it had raised. Now, it was left to the current structures to negotiate with the new structure, which would take the form of a Transitional Council. The notion of the Transitional Council was the biggest concession made by Minister Radebe to date. The Transitional Council would have two years to sort out all transitional issues, in consultation with the Minister. For those two years, the Department would carry the costs involved.

The Bill would provide an opportunity for customers of legal services to participate in the consultation process for the first time. The Competition Commission had ruled that the determination of fees by practitioners to the exclusion of customers was inconsistent with competition laws and policies. In the current legal environment, access to justice was restricted to the very rich and those poor enough to receive free legal services from Legal Aid South Africa, an untenable situation in which ordinary people were not able to afford legal services. The transitional phase, as set out in the Bill, gave the profession an opportunity to proactively revise its fee determination mechanisms.

The introduction of the Bill had been met with headlines suggesting that the Bill offended against the rule of law and compromised the independence of the profession by providing for state control and interfering with the current fee structures. Nothing was being said about the value of entrenching legal community service, which had been highly successful in the context of the medical profession, or of the establishment of a Legal Services Ombud. Thousands of cases that would otherwise clog the courts would be resolved as a result of these arrangements, which also would strengthen accountability in the profession. The Department did not believe that the Bill contained anything opposed to the rule of law. In fact, it believed that the Bill would strengthen the rule of law.

The notion of the independence of the profession – which was not synonymous with the constitutionally entrenched independence of the judiciary – permeated the Bill. The Bill gave effect to the International Bar Association's General Principles for the Legal Profession which promoted the independence of the profession and placed the interests of clients above all other interests. The non-state participation in the Council would enhance the independence of the profession. The transitional phase under parliamentary oversight was the best approach for advancing the transformation of the complex legal profession, as it would leave the destiny of the noble profession largely in the hands of the profession itself.

Discussion
Ms D Schafer (DA) said that while no one had a problem with doing away with the historical links to the homelands that were still reflected by the various law societies, she thought that there were some “cleverly disguised” clauses in the Bill that had not been raised in the presentation. She noted that the Minister had a “final say” on the amount of the fees charged by legal practitioners and the amount of community service that they had to do. She knew from experience as working as an attorney that lawyers spent between 60-70% of their income on overhead costs, and asked whether that had been taken into consideration. She asked how the Minister would go about determining the amounts that lawyers could charge for their fees. It was an area of concern that the Minister had the power to determine fees and community service requirements. The establishment of a Legal Services Ombud was a good initiative, but the fact that the Minister would appoint the Ombud meant that office might be of questionable independence. She asked why, if advocates could receive briefs directly from the public, those advocates would not be required to hold Fidelity Fund certificates. She asked for clarity about the definition of “transformation” of the legal profession that was required, and wanted to know whether the Council would decide who could and could not enter the legal profession. She asked why the composition of the envisaged Transitional Council was different from that of the Council in its final form, and why the Black Lawyers Association (BLA) and the National Association of Democratic Lawyers (NADEL) had representation double to that of the other law societies.

Ms M Smuts (DA) said that Minister Radebe was the fifth Minister of Justice and Constitutional Development that was dealing with the Bill, and that it would be wrong not to acknowledge the concessions he had made. One big difference that arose from the Bill in its most recent form to the previous draft – the “game changer” – was the idea of regulating fees, and she asked why that provision had been added. She said that everyone was agreed that there was a problem with legal costs, but that the debate changed when it was viewed as balancing the need for access to justice against the fact that lawyers needed to make a living, as viewed from a competition angle. The debate came down to whether legal services were to be seen as a public interest enterprise or as a business. The current laws regulating competition were not currently strong enough to deal with the issue of legal fees. There was still a long road to travel with the Bill. She asked whether it would not be better to get the attorneys’ and advocates’ profession to look at formulating rules to regulate anti-competitive practices, under the leadership of a retired senior judge. It would be possible to form a board of judges who would work with the Minister to oversee the process, so that it would not be a case of the executive unilaterally setting caps on legal fees. She asked why, if the Bill still gave separate observance to attorneys and advocates, there had to be a single regulatory framework for unified norms and standards of the two professions.

Mr S Swart (ACDP) noted that the Committee was at the beginning stages of its deliberations on the Bill, and agreed that the Minister had made some important concessions. He asked to what degree the Department was nearing a point of agreement with the attorneys’ and advocates’ professions, and made reference to a recent Business Day article by Jeremy Gauntlett SC in which the Bill was strongly criticised. While it was true that there had been major concessions around the composition of the Council, clause 14(1) of the Bill provided that “[t]he Minister may dissolve the Council if the Minister, on good cause shown, loses confidence in the ability of the Council to perform its functions effectively and efficiently or on any reasonable grounds.” If the Minister believed that the Council was failing to advance transformation rapidly enough, he would be empowered to dissolve the Council. The Committee needed a clear idea of what costing would be involved during the two-year transitional phase, and beyond.

Mr L Ndabandaba (ANC) asked whether the Department would hold additional workshops about the Bill for legal practitioners, and whether something would be done to teach the public about it.

Ms C Pilane-Majake (ANC) said that the Bill was important, as ultimately, it was about the lives of South Africans and the important objective of access to justice. The country needed a system that worked, and government needed to create a system that was not so imbalanced that only the very rich and the very poor were able to access legal services. There was a need to fast track the process whereby the imbalances of the past were addressed. Imbalances and inequities would continue to exist where there was no access to justice. A number of concerns had been raised about the Minister’s involvement in the Council, but any process had to have a leader. The Committee needed to understand the cost implications of the two-year Transitional Council before it could give it the go-ahead. There was a need to secure a situation that allowed legal professionals to operate in an environment that made it possible for them to carry out their businesses. Universities should also be involved in the process.

Mr J van der Merwe (IFP) asked what stance the attorneys’ and advocates’ professions had taken at this stage of the Bill’s development.

Adv Skosana addressed the matter of legal fees, and explained that the Minister’s statement that he would “cap” legal fees had to be seen in the context of those fees that the government paid in respect of legal services offered to government. The Minister already had the power to do just that in terms of the State Attorneys Act (No 56 of 1957). The Minister had to act in the interests of the government, but he also had a public interest role to fulfill. The Department had already consulted with the Competition Commission about the Bill, and the Commission had informed the Department of those provisions that would not pass constitutional muster. A body comprised of a majority of lawyers should not be responsible for determining legal fees. The Bill provided that the Minister would, on the advice of the Council, determine a fee structure. There was a need to balance what people could afford to pay with what lawyers needed to keep their businesses running. The Minister’s involvement in community service was important. Currently, there were commendable pro bono initiatives in place. Government want to be involved in that process, as well as to empower female and black practitioners, and to ensure that legal services reached people in the rural areas. Community service could happen at the State Attorneys’ offices and community advice centres, and government would pay stipends to those engaged in community service. It was not a matter of the government taking over the transformation of the legal profession, but rather, being a part of the process. The difference in the composition of the transitional as opposed to the final Council was to ensure that the Transitional Council did not exclude people currently in leadership positions in the existing structures. The envisaged process would ensure that the Transitional Council would fulfill its responsibilities, with the oversight of Parliament. If government were to wait for absolute consensus between all stakeholders, it would take another 30 years to finalise the legislation, while people suffered. The Transitional Council should be able to resolve some of those issues that still needed to be agreed upon. The issue of legal fees was a complicated one. Some current policies militated against access to justice. The rules that currently governed contingency fee agreements did not provide enough protection for litigants. The introduction of the Bill had started a discussion that was long overdue. At present, the Department had created formidable grounds for agreement by the profession. Some of the opinion pieces in the media represented the views of individuals, as opposed to the entire legal profession.

Ms Smuts remarked that there had been differences between the various law societies representing attorneys and the GCB, representing advocates, throughout the history of the Bill, and asked Adv Skosana to elaborate on what their current stances were. She asked whether the real reason for the Transitional Council was to create a mechanism to give them one last chance to sort out their differences.

Adv Skosana replied that he did not want to comment on behalf of the professions, but that the gap between attorneys and advocates had been narrowed. Although attorneys and advocates were different in some respects, they worked in the same environments and provided similar services. Therefore, the standards that regulated their services had to be uniform. Those standards also had to ensure access to justice. There should be uniform rules governing admission to the profession. In the past, some people had not been able to join the bar because of “gatekeepers” at the bar. There was also a need for norms and standards to govern vocational training of both attorneys and advocates. In order for an attorney to appear at court, he or she needed to have completed a LLB, articles, admission exams, to be found a fit and proper person, and admitted to practice. To appear in court as an advocate, one only needed a LLB, to be fit and proper, and to be admitted as advocate. It was therefore much less onerous to be allowed to appear in court as an advocate. The Council would ensure uniform standards for training of both attorneys and advocates. In certain cases where a client’s money did not need to be held in trust, as in the case of a bail application, an advocate could provide services without the need to go through an attorney. In cases in which the Fidelity Fund did not play a role, advocates should be able to deal directly with the public. The Department had been paying for the costs of workshops on the Bill, and the Director-General of Justice and Constitutional Development was currently engaging with National Treasury to ensure there are enough funds available to continue with workshops. The Department would inform the Committee of all of the cost implications in due course.

Mr van der Merwe asked if an advocate would be required to have a trust fund if he or she were enabled to instructions directly from the public. Adv Skosana replied that the Bill provided that there were “circumstances under which” an advocate could do so without a trust fund, and that those were to be determined by the profession themselves, as represented by the Council.

Mr Lawrence Bassett, DoJCD Chief Director: Legislative Drafting, added that the matter would be dealt with in terms of regulations, and that all regulations made in terms of the Bill had to be approved by Parliament, and not just the Minister. The provision providing for the dissolution of the Council was a new provision, and had been added at the end of the drafting process. It was understandable that it raised concerns, but there was a need for such a provision, since one of the objectives of the Bill was to protect the public interest. The Bill provided that the Minister may only do so “on good cause shown” and that he must also appoint a judge to consider the matter and report back to him before deciding to dissolve the Council. There would need to be more workshops, possibly during the time that the Bill was being considered by Parliament. It was true that the attorneys’ and advocates’ professions had not reached consensus on all aspects of the Bill, but the Department planned to continue engaging with the professions. There also needed to be public participation. The Bill was one of the most challenging pieces of draft legislation that the state law advisers have ever dealt with. The 1996 rationalisation process had gone forward with the exception of three pieces of legislation, of which the Legal Practice Bill was one. The fact that the Bill had now been introduced to Parliament represented a milestone. The process ahead would not be an easy one.

Mr Swart asked whether the Department had addressed the issue of the costing of the Transitional Council, to which Mr Bassett replied that the Department would pay the costs for the two years that the Transitional Council was in existence, and that the Department would provide the Committee with more detailed information at a later stage.

The Chairperson said that the Committee would put out an advertisement calling for submissions on the Bill during the upcoming weekend.

Mr J Sibanyoni (ANC) said that in view of the fact that the Bill concerned legal professionals, the advertising strategy should target publications that reached attorneys and advocates. He suggested that advertisements be put in both the “De Rebus” and “Advocate” magazines.

The Chairperson said that aside from the normal newspapers, the advertisement would at least be carried in “De Rebus”. The Committee might not be able to afford advertising in “Advocate” as well, as the Committee  was “supposedly bankrupt” as a result of all of the work that it had been doing.

The Chairperson asked the law advisers whether there was a policy document on the transformation of the legal profession, and if so, whether it could be made available to the Committee.

Adv Skosana replied that the Minister had not submitted a policy document to Cabinet for approval on that topic, but that the Department had undertaken research to substantiate some of the transformative principles that informed the Bill. There was the Charter on Legal Services, which was already in the public domain, and which constituted a statement of commitment by government, attorneys and advocates, and included aspects of transformation, the empowerment of woman and black people to enter the profession, and access to justice. Even though it was an important document that supported the need to transform the profession, there was no enforcement mechanism, so it remained toothless.

Mr Swart asked how much time would be allowed for submissions on the Bill.

The Chairperson replied that because of the enormous interest in the Bill, people would be given until 6 July to make submissions. The usual time given for submissions was between two and three weeks, and the advertisement would be placed during the coming weekend.

Mr Swart pointed out that it might take longer for the advertisement to appear in “De Rebus”. Ms Smuts felt strongly that people should be given more time to make submissions, and pointed out that the Committee would only be considering those submissions in the latter part of the year.

The Chairperson said that it was irrelevant when the Committee would be considering the submissions, and that it came down to a matter of fairness, since two to three weeks was the usual time given for submissions, and there was no need to extend the period because of the interests of the legal profession. Upon further strenuous objections by Ms Smuts, the Chairperson agreed to move the date for closure of submissions from 6 July to mid-July.

Mr Bassett told the Committee that he had prepared a briefing note for Committee members to read, but that Adv Skosana’s presentation had already covered most of its content.

The Chairperson said that the Committee members would read the document. He thanked Adv Skosana, Mr Bassett, and Ms Sheetal Roopram, DoJCD Deputy Director: Policy Research & Co-Ordination, for their assistance.

The meeting was adjourned.