Legal Practice Bill: public hearings Day 1

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Justice and Correctional Services

19 February 2013
Chairperson: Mr L Landers (ANC)
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Meeting Summary

A selection of comments made by the five organisations that gave oral submissions on the first day of hearings included:

The Competition Commission commented that the Bill was not transformational enough and should include a framework to ensure broader representation within a specified timeline.

The Independent Association of Advocates of South Africa submitted that the government should have no role in the governance of the legal profession hence sections in the Bill requiring the intervention of the Minister in the governance of the profession should be deleted. Further, it submitted that it did not support the capping of legal fees as this was tantamount to restrictive practice, except in cases where practitioners were briefed to render services on behalf of the State. The Bill was made up of a pack of issues which was best dealt with by consensus rather than dictation. A settlement of issues within the profession and the creation of one united profession was the solution to finally reaching a consensus on the Bill. It was important that the Parliament did not sign off its rights to the Minister in a piece of legislation but ensured that the Minister was not empowered as he was under the current version of the Bill.

The Legal Resources Centre said the Bill afforded South Africans the opportunity to access justice. Adv George Bizos on behalf of the LRC, suggested that a settlement of issues within the profession and the creation of one united profession should be reached by consensus rather than dictation. It was important that Parliament did not sign off its rights to the Minister in a piece of legislation and ensured that the Minister was not empowered as he was under the current version of the Bill. There was also a need to critically reassess clauses that related to regulation of the profession by statutory bodies. The Legal Resources Centre proposed substantive amendments to the definitions of attorneys and advocates and to the forms of legal practice.
The Black Lawyers Association submitted that the fears expressed over Clause 14 of the Bill which granted the Minister powers to effect the dissolution of the South African Council of Legal Practice were misplaced; stringent procedures existed in the Bill to checkmate any abuse of powers by the Minister. Further, aggrieved parties could challenge the Minister’s decision through the appropriate channels available within a constitutional democracy.

The Law Society for South Africa submitted that the Bill failed to provide for a unified body to represents all lawyers in South Africa. It conceded an exception that in public interest matters, the Minister may not need to consult with the profession but for issues relating directly to the governance of the profession, it was important the Minister consult with members of the profession before making regulations. On consultation with the Minister, LSSA suggested these matters could be carried out "in consultation with" the Minister rather than "after consultation with". Self-regulation of the profession was very important for the independence of the judiciary; hence there should be minimal government interference.

The Attorney’s Fidelity Fund was concerned about the provisions of Clause 5(d) of the Bill which it considered too open handed - with a majority of five members appointed to the board by attorneys, the risk of the funding law societies were likely to be prioritised over the core functions of the Fund. The Attorney’s Fidelity Fund submitted that nothing in the Bill addressed the sustainability of the Fund and its protection against disaster claims. The Fund had faced considerable risk from recent mergers with international practices. There was a need to cap individual claims against the Fund. If this was not done, the government inadvertently became the guarantor of theft by practitioners.

Members noted that access to justice seemed to be the underlying theme of the Competition Commission’s submission; asked what possible measures were available to address the observations made about the proposed fee structure; questioned how the Independent Association of Advocates of South Africa dealt with disciplinary matters of its members; asked how much cooperation and overlap existed between the Legal Resources Centre and Legal Aid South Africa. Members asked why the Black Lawyers Association proposed community service should not reoccur, given it would be more beneficial. Members noted the perception that the Law Society of South Africa excelled in pursuing disciplinary matters for the theft of trust funds but for other disciplinary issues, it was slack and that instead the interest of members were often protected. Members expressed concern over the provision in the Bill that granted the Minister powers to prescribe where the funds of the Attorney’s Fidelity Fund were invested.

Meeting report

The Chairperson kicked off the meeting with brief introductory remarks on the background and history of the Legal Practice Bill. The Chairperson encouraged all present to engage the Committee in robust debate on the Bill. He invited the Competition Commission to make its submission.

Competition Commission submission
Mr Tembinkosi Bonakele, Deputy Commissioner: Competition Commission, stated that the Competition Commission’s interest in the Bill was the impact it had on competition. The Commission was interested in greater ownership of the economy and considered the Bill from this perspective.

The Competition Commission expressed concern about the regulatory barriers and skewed briefing patterns contained in the Bill which had a negative impact on competition. Further, in its opinion, the Bill did not address issues of access to the profession and access to justice. The Commission recommended that the South African Legal Practice Council (the Council) be committed to develop a transformation charter to meet the objects of the Bill with clearly defined timelines. On fees and advertising, there was a potential concern of ‘cartel conduct’ developing from provisions of the Bill with the excessive reliance on lawyers to determine and recommend fees. Fees aimed at protecting the public should not set minimum fees- but rather the aim should be to cap fees at maximum prices. The Commission was of the opinion that the Bill gave excessive discretionary powers to the Minister to determine fees. With regard to the issue of reserved work, the Commission noted that the status quo was maintained and commented that this was restrictive as it prevented paralegals from performing some simplistic transactions such as conveyancing. The Bill ignored the growing relationship between the legal profession and other professions such as law firms which employed tax advisers to advice on tax related matters.

Independent Association of Advocates of South Africa submission
Mr Mark Hawyes, Chairman: Independent Association of Advocates of South Africa (IASA), gave a brief introduction of IASA and its objectives. He stated that IASA had always stood for the concept of fusion of the profession without distinctions between attorneys and advocates. IASA had always championed the cause of advocates taking briefs directly from the public on a more frequent basis because it was more expensive to have two lawyers involved in court processes. Court judgements had constantly upheld that the advocates’ profession was referral in nature and in this light; IASA adapted its rules to comply with the judgements. The minority ruling in a recent case on the referral rule compared this practice as affixing an English rose on an African stamp. Nations from which South Africa adopted the referral rule had adjusted their legislation to allow for direct briefing of advocates, South Africa however remained unbending in this regard.

The legal profession was no better than any other profession that it should be entirely self-regulated, in this regard. IASA supported the Bill in principle - however, it was its position that on governance of the legal profession, the government should have no role to play. IASA supported the views of the independence of the legal profession, as an independent legal profession was essential for the rule of law and the promotion of constitutional democracy. Hence, sections in the Bill requiring the intervention of the executive through the Minister, such as Clauses 41 and 101 should be expunged from the Bill. From the construction of Clauses 34 (2)(b) and 94(1)(p) of the Bill, it was heartening to note that the Bill envisaged instances of direct briefing of advocates. This was a sure way to promote access to justice. It was imperative that the instances in which advocates may be directly briefed be clearly defined in the Regulations which the Minister was to promulgate. IASA submitted that instances where advocates should be directly briefed included: all criminal matters, specialised areas of legal advice, opinions, drafting of contracts, drafting of wills, drafting of memorandum of incorporation, matters in terms of the Consumer Protection Act, arbitrations and mediations, maintenance matters, enquiries in terms of the Insolvency Act, forensic investigations, quasi-judicial matters etc. With regard to the concerns on costs that may arise from direct briefings, IASA proposed that all advocates be required by law to have indemnity insurance and in the event of problems with the advocate, the client could fall back on the advocate's insurance. In addition to this, trust money could be safeguarded through the use of management agents as applied to debt councillors currently.

IASA was not in support of the general capping of fees for legal practitioners as it viewed this stance as restrictive. It however, encouraged capping of fees for rendering of state legal services. With regard to the composition of the Council as outlined in Clause 96 of the Bill, IASA currently had one seat on the Council and believed that its representation should be increased. Further, the constitution of the Council should reflect an equal number of advocates and attorneys.

Legal Resources Centre (LRC) submission
Adv George Bizos opened by tracing the history of the Bill and stated that the consciousness for a revamp of the South African legal system had started as far back as 1980. The LRC identified strongly with the objectives of the Bill as stated in Clause 3. Over the years, the LRC along with other law clinics had provided access to justice for poor people. The Bill afforded South Africans the opportunity to access justice. The Bill was made up of a pack of issues which was best dealt with by consensus rather than dictation such as the creation of one united profession. It was important that the Parliament did not sign off its rights to the Minister in a piece of legislation and ensured that the Minister was not empowered as he was under the current version of the Bill. The legal profession must strive to protect its independence by ensuring access to its services by all. There was also a need to critically reassess clauses that related to regulation of the profession by statutory bodies.

Mr Steve Kahanovitz, Legal Attorney at LRC, continued the submission with a perspective on the law clinics whose objective was for access to justice by all, but particularly indigent persons. It was essential that the Bill did not confuse and in turn obstruct access to justice when it finally became law. There were some instance where the Bill seemed to create confusion and were of concern to the LRC. Paragraph 12 of the written submission of the LRC was highlighted as an area of concern for the LRC. The Bill provided for a number of institutions at which legal practitioners may practice. At times the institutions were defined, however referenced a number of unidentified institutions. This confusion needed to be avoided. Terms used should be defined and consistent. The Bill attempted to set up two different entities in Clause 34(7) and 34(8) but unfortunately confused them by including a definition of Law Clinics in the definitions which again collapsed both into a single type of law clinic, encompassing either type of governance structure separated into both sections. This confusion could be avoided by simply providing for one law clinic which retained the proposed definition in Clause 34. The LRC submission provided an alternative definition for law clinics in Paragraph 34 and other proposals about Law Clinics (see document).

With regard to where attorneys and advocates may practice as legal practitioners, the LRC proposed that Clauses 34(4)(c), 34(5)(b) and (d) be deleted and replaced with a provision allowing advocates and attorneys to practice at a law clinic. On the distinctions between attorneys and advocates, the definitions were problematic because attorneys working at Legal Aid South Africa and State Attorneys were excluded from having to hold Fidelity Fund Certificates. Also the manner in which practitioners were required to do community service was inadequately defined in the Bill and the LRC in its submission proposed an alternative definition.

Adv Bizos further suggested that a five-person committee from members of the Portfolio Committee be formed in order to take into consideration the submissions that had been made. The deliberations of this proposed sub committee should give rise to the formulation of a new draft, to be sold to the constituencies.

Black Lawyers Association (BLA) submission
Mr Busani Mabunda, BLA President, commenced the submission with initial remarks on the current state of the legal profession not reflecting the demographics of the country in terms of race and gender. Only about 30% (including coloured and Indians) blacks were represented in the legal profession. The Constitution was clear on demographics where any profession was skewed, therefore the BLA supported the Bill on representativity. On regional councils, the BLA believed there was nothing untoward in the Minister making determinations of where regional councils should be cited. Much as independence was necessary, political oversight with a view to healing a society which was not perfect, was instructive. On the powers granted to the Minister in terms of Clause 14 to effect the dissolution of the Council, the BLA was of the opinion that fears expressed about this section were misplaced. No provision in the Bill had been made for the anticipated dysfunctional council and the language of the clause did not prohibit aggrieved parties from going to court. With regard to fees, the BLA welcomed the idea of capping fees of state service providers. Exorbitant fees could be dealt with by having regard to the existence of law clinics and improving on pro bono work. On the provision empowering the Minister to appoint members to the Council, the BLA commented that there was nothing in the clause to suggest any form of interference with the independence of the profession. The bottom line was the protection of the public. What happened behind closed doors should be put in the public domain. The profession could not regard itself as being so independent as not to be intruded upon by the citizenry, of which it is a part. On fragmentation of the legal profession, it was essential to put an end to pre apartheid legislation which affected the practice of attorneys in certain areas.

Law Society of South Africa (LSSA) submission
Mr Max Boqwana, LSSA Councillor, stated that LASA had made attempts to reach a consensus with the General Council of the Bar (GCB). Unfortunately, it had not been achieved. LSSA appeared before the Committee to make its submissions as a representative body of attorneys. He went on to trace the history and background of LSSA, as well as strides made on the Bill.

With regard to unity of the profession, there was a need to depart from apartheid divisions which still engulfed the profession - it was necessary that the profession be governed properly and all entities unified. The Bill simply discussed the establishment of a Council but failed to provide a unified body to represent all lawyers in South Africa. South Africa remained the only country within the SADC which did not have a general body that represented all of its lawyers. The Bill in its present state failed to address this. It was imperative that the body that emanated from this bill must be a united body. On the independence of the profession, a united profession births a strong profession which was in turn independent. Without a strong, united profession, an independent profession could not be achieved. This process started from the practitioners, not the government.

 On the issue of repeated consultation with the Minister, LSSA held the view that these matters could be carried out "in consultation with" the Minister. LSSA was an example of a body formed in consultation with the Minister. LSSA suggested that wherever there was a reference to ‘after consultation with’ it should be changed to ‘in consultation with’ with the Minister. LSSA did not have a consensus on the position in Clause 14 which gave the Minister the power to dissolve the Council. Some members of LSSA believed that members of the profession who had elected a Council must be able to vote out the council in instances of non-functionality. Therefore, the leadership of the Council should be accountable to members as a basic tenet of democracy. On the enhancement of standards of practice, LSSA believed that the training of legal professionals was a very serious issue and to protect the public, half-baked lawyers should not be unleashed onto the public. Conveyancing should not be left to paralegals - property acquisition was the greatest achievements for most South Africans and should be accorded the seriousness it deserved; it should be handled only by persons well informed and accountable, i.e. lawyers. On transformation of the legal profession, LSSA believed there had to first be political will on this if transformation was to occur. The Legal Services Charter must be uplifted and was a key point that had to be dealt with. LSSA commented that access to justice was important even for the existence of the legal profession. The outlook on fees must be one that strengthened the 82% of small law firms in the country. Geographical spread of lawyers also needed consideration as another area of transformation. On access to the profession,LSSA had definitely made strides by reducing the number of years of articles for persons who attended schools for legal practice, introduced compulsory courses on entrance into the profession such as the practice management course to ensure that those admitted to practice did not fail. LSSA was aware of matters that touched on global trade and there was an urgent need to address lawyer mobility particularly within the SADC region. The cost of running the structures that emanated from the Bill needed to be addressed.

Mr Jan Stemmett, LSSA Co-Chairperson, continued by stating that the written submissions revealed some areas where LSAA differed amongst itself, particularly on the independence of the profession. Self-regulation of the profession was very important for the independence of the judiciary; hence there should be minimal government interference - the government should provide the framework but not run the profession. He agreed with Ms Smith on the suggestion to making the judiciary the final authority On the Profession. The LSSA disagreed with the principle of the Minister appointing representatives to the Council and dissolving the Council - this function should rest with the courts. The LSSA conceded an exception that in public interest maters, the Minister may not need to consult with the profession but for issues relating directly to the governance of the profession, it was important the Minister consulted with members of the profession before making regulations. The appointment of the Ombud should be done by the Chief Justice and not the Minister. Regulations on fee guidelines or caps should be determined by the Chief Justice and not the Minister. The provision in Clause 24(3)(c) granting the Minister powers to approve any person to practice regardless of qualification, should be deleted from the Bill. An additional object should be inserted under Clause 5 on the Objects of the Council should be to promote the interest of the profession, subject to overriding public interest. Paragraph 8.2 of the LSSA submission on the definitions of attorneys and advocates should also be taken into consideration (see document). On briefing of advocates, the protection of the public should be the uppermost consideration. It was important to note that there were no quick fixes to transformation of the profession; it was a process - one which was already yielding results. 80% of students who passed through the LSSA’s practical law school were black, statistics showed that the racial composition of practitioners in Limpopo were 58% black and 42% white.

Mr Mabunda in his capacity as a LSSA official added that there were contrasting views on term of office for Council Members - some were of the view that defined tenures be included, while others suggested that perpetuity in the office was allowed.

Attorneys Fidelity Fund (AFF) submission
The AFF submission began with initial introductory remarks by the AFF Chairperson Mr Silas Nkanunu.

Mr Motlatsi Molefe, AFF Chief Executive Officer, provided detail and background on the nature of the fund held in custody by the AFF, the beneficiaries of the fund, the custodian of the funds and business model of the funds (see document).

On the Bill, the first area of concern for the AFF was that the funds in question did not belong to the profession - they were public funds. However, over the years the fund had become the cash cow of the profession because the custodians of the funds were attorneys themselves and this was an anomaly. The Bill had not done anything to rectify this. Further, if these were public funds, then members of the public should have a say in the governance of the funds. Attorneys should not sit on the board as provided for in the Bill, as they were potential defaulters - it was a conflict of interest. On the constitution of the board of the AFF, the Bill provided that five members (a majority) were to be nominated by attorneys to the Board. The AFF was concerned that a majority of five legal practitioners appointed to the board by attorneys created a conflict of interest with funding law societies being prioritised over the core functions of the AFF. In the 2012 financial year, 60% of the AFF’s expenditure went in to propping up the profession while a mere 23% was utilized for its core function of reimbursement.

It was of great concern for the AFF that nothing in the Bill addressed the sustainability of the AFF and its protection against disaster claims. The fund faced considerable risk from recent mergers with international practices. There was a need to cap individual claims against the fund. If this was not done, the government inadvertently became the guarantor of theft by practitioners.

In response to the law societies' objections to the powers granted to the AFF by Clause 64(1)(e), it was pertinent to note that the AFF was the risk taker and hence it was imperative that these powers remained, subject to consultation but not necessarily consent, of the attorneys. While colleagues should not be treated as thieves, it was necessary to take into account that theft was growing exponentially. Theft was growing because of the lack of timeous response by the law societies. None of the law societies had a risk matrix yet they resisted inspection of trust accounts. Only the party who was at risk was entitled to look after his risk. The fund should not be held hostage to the law societies. The AFF had strong objections to the provisions requiring the Minister to consult the Council on matters of the Fund such Clause 95 - this was ill advised and a disconnect because the Fund should ordinarily determine such issues in consultation with the Minister. The Council had no idea of the AFF’s investment strategies. Through the Bill, the AFF desired the powers to assert its independence as an institution from the profession and to put the public interest first.

Mr Andrew Stansfield, Finance Director: AFF, added that trust interests were the life blood of the Fund and the largest component of its income stream. The present Act was unclear about where trust interests were vested and the Bill in its current form had not clarified the issue either. The present income stream was derived from the overnight balance interest from attorney general trust accounts. Doe to the advancement in technology and interest rates which were dramatically reduced, the income of the AFF had been severely affected. The AFF needed to start considering other income generation streams such as levying a percentage of the interest earned on client investments.

Discussion on Competition Commission submission
Ms M Smuts (DA) noted that access to legal services seemed to be the underlying theme of the Commission’s submission. What possible measures were available to address the observations made on the proposed fee structure?

Mr Bonakale responded that as far as the function of price regulation remained with the Council, this could not be regulated by a Council made up predominantly of lawyers. A separate and distinct structure was essential for the regulation of fee setting functions.

Ms Smuts proposed on behalf of the DA the insertion of the promotion of competition in the Bill.

Ms Smuts suggested that a case for a unified profession had not been made in the Commission’s submission. She asked what other mechanism or entity could be considered.

Ms Smuts remarked that it seemed the expectations about reflective demography were unrealistic. The provisions of the constitutions mandated only matters of public administration to be broadly representative. In every other instance, the Constitution only required that it must be considered.

Mr S Swart (ACDP) asked what the Commission’s concerns were about the law societies and the regulation of fees. The fee structure of the Council as provided for in the Bill was market driven – did this not in fact encourage competition?

Mr Bonakele responded that fees of legal practitioners impacted a lot on access to justice. Rather than prescribing fees, it was more desirable to ensure that access was allowed and practitioners had briefs. There should be improved transparency on briefing patterns on ‘super users’ of the profession such as the state, financial institutions and other blue chip companies. It was also desirable that practitioners adopted the system of disclosure or report on briefing patterns.

Mr Swart asked why the Commission had objections to contingency fees plan. Were contingency fees not a desirable plan especially for indigent applicants who could not afford to pay upfront?

Mr Bonakele responded that the Commission had no objections to the principle of contingency fees, however in its application, uncapped contingency fees were a problem.

Ms Schӓfer (DA) asked for clarity on the ‘transformation’ which the Commission desired to be reflected in the Bill. Prof L Ndabandaba (ANC) also asked what the Commission meant by transformation.

Mr Bonakele responded that transformation in the view of the Commission was the admission of more black persons and women into the profession.

Ms Schӓfer questioned whether it was the Commission’s intent to determine what kind of work was prescribed and given to legal practitioners.

Ms Schӓfer questioned whether lifting the bar on reserved work such as conveyancing would not reduce the quality of service to the public.

Mr Bonakele responded that conveyancing was just an example. Wills which used to be reserved work for legal practitioners could now be done online. The principal concern of the Commission was that certain areas which were underserviced by the legal profession and this in turn created expensive services. It was more desirable to regulate paralegals in a bid to protect the public and still allow others besides legal practitioners to provide these services.

Mr J Jeffery (ANC) noted with discontent that the submission of the Commission had been addressed to the Department of Justice and Constitutional Development (the Department) rather than to the Committee. It seemed the Commission was unaware of the correct legislative processes.

Mr Bonakele replied that the Commission had worked closely with the government on the Bill, hence the preference for its engagement with the Department as regards a submission. It however valued the process of engagement with Parliament.

The Chairperson retorted that in spite of previous engagement the Commission had with the Department, Parliament was jealous of its role as a regulator and that role could not be usurped by any other arm of government.

Mr Jeffery remarked that it was obvious officials of the Commission were ignorant of the proper legislative procedures. He asked whether the Commission had engaged with the Department before the Bill was introduced to Parliament and if not, why the engagement had not occurred. He suggested that it was useful that the Commission assigned a person to work with the Committee on the Bill.

Mr Jeffery asked how the Commission regulated the tariffs of the medical profession.

Mr Bonakele responded that attempts by the Minister to intervene and tone down prices in the health sector had been met with resistance by litigation. Other avenues were currently being explored.

Mr Jeffery asked what suggestions the Commission had on the skewed briefing patterns. He asked the Commission who else should be represented on the Council besides legal practitioners.

Mr Bonakele responded that the Commission had decided to stay away from the discussion on the composition of the Council.

Discussion on Independent Association of Advocates of South Africa Competition submission
Mr J Sibanyoni (ANC) remarked that IASA espoused the vision of the voice of the voiceless and asked what IASA’s response was to persons who believed the broader community, that is, the clients, should have been part of the public hearings.

Mr Jeffery asked for an estimated number of advocates in practice.

Mr Hawyes responded that there were approximately 2,000.

Mr Jeffery replied that in contrast there were 80,000 practicing attorneys and yet the IASA requested equal representation on the Council. Should representation not be proportional to membership?

Mr Hawyes responded that it was not necessary that representation be proportional to membership.

Mr Jeffery asked whether IASA supported the capping of fees for attorneys.

Mr Hawyes responded that IASA did not support the capping of fees either for attorneys or advocates, except in State matters.

Mr Jeffery asked whether IASA believed that advocates fees were too high.

Mr Hawyes replied in the affirmative.

Mr Jeffery asked what could be done to address the exorbitant fees.

Mr Hawyes responded that better guidelines should be put in place to provide indications of what kind of fees can be charged by practitioners, not necessarily caps.

Mr Jeffery asked what the point of having guidelines was if fees were not capped. How then would the fees be reduced?

Mr Hawyes replied that while he understood the public concern about exorbitant fees, but if left to the public alone, it would be unworkable.

Mr Jeffery remarked that there was no access to justice where citizens could not pay for services.

Mr Jeffery remarked on the desire for transformation of the legal profession and ensuring inclusion. He asked what IASA had done to promote the entrance and sustenance of black persons and women into the profession

Mr Hawyes replied that IASA had strived over the years to maintain the balance between avoiding the entrance of under qualified persons into the profession and ensuring the inclusion of all. IASA ran a pupillage programme via correspondence, amongst many of its other initiatives. IASA’s limitations were not a result of numerical strength but more of financial capacity.

Ms Schӓfer noted with displeasure that the delegation of IASA represented before the Committee was not representative of diversity as there were no women on the team.

Mr Hawyes explained that the female members of the team had to be released to attend other pressing engagements. The board and management composition of IASA was in fact reflective of gender diversity.

Ms Schӓfer stated that she supported the fusion of the profession. She asked what criteria IASA used to determine the capabilities of new entrants.

Mr Hawyes responded that new entrants had to complete 15 assignments and sit for eight hours of examination.

Ms Schӓfer asked how the IASA dealt with disciplinary matters of its members.

Mr Hawyes responded that disciplinary matters were handled by the national executive. One member of the national executive received and compiled the complaints. Initially, the General Council of the Bar (GCB) handled directly complaints against IASA members. However, recently, the GCB had allowed IASA to handle disciplinary matters of its members itself.

Ms Schӓfer asked what procedures were followed when an IASA member needed to be disbarred.

Mr Hawyes replied that although it had not had any cases of disbarment, the procedure would be for IASA to bring an application for disbarment before the GCB.

The Chairperson asked for clarification on Paragraph 9 of IASA’s submission which read ‘ That in the event any person/s deem that a section/s of the Bill should face constitutional muster, same can be subsequently dealt with by the Transitional South Africa Legal Practice Council’.

Mr Hawyes responded that the submission envisaged that the Bill be passed and if there were sections in the Bill that needed further amendments, they could be dealt with along the way.

The Chairperson asked how IASA hoped to prevent persons from going to the Constitutional Court.

Mr Hawyes replied that it was not possible to do so.

Prof L Ndabandaba (ANC) asked what IASA’s views were on referring to magistrates as judges in the fusion of the profession.

Mr Hawyes responded there was no objection to this. Magistrates performed functions materially the same as judges.

Mr Swart questioned whether capping of fees for practitioners rendering services to the State would not be construed as inequality and a disincentive to working for the State.

Mr Hawyes responded that there was no anomaly in this and it was an attempt to reduce the fiscal burden of the State which was of national interest. The Legal Aid Board had successfully implemented this model.

Mr Swart remarked that it was not entirely correct that South Africa had a free market economy - it was more of a mixed economy.

Mr Hawyes responded that although South Africa may not fully be a free market economy, capping fees gave the impression that the independence of the profession was being impinged upon.

Mr Swart asked if IASA thought the Bill in its present state threatened the independence of the profession.

Mr Hawyes responded in the affirmative. There was potential for undue interference from the clauses mentioned in the submission of IASA, so yes, the independence of the profession was threatened and there must be no interference on the governance of the profession by government.

Ms Smuts referred to the observations made on substitutes for Trust accounts. These were an attempt to circumvent the peculiarities and problems of South Africa’s Law of Trust so was there a need to amend the Law of Trust?

Mr Hawyes replied that it was a creative suggestion. IASA preferred a situation where the same principles that applied in relation to trust, applied to advocates.

Ms Smuts remarked to the Chairperson that the Committee could draw from the suggestion if it decided to incorporate it.

Ms Smuts said that while IASA’s view on capping of fees was respected, the committee members as representatives of the citizenry had concerns. Rights were worth nothing if citizens could not access these rights because of exorbitant legal fees. Legislators thus had the duty to ensure access to justice. What was important was the mechanisms on how it ensured this.

Ms S Sithole (ANC) expressed displeasure on the absence of women in the delegation of the IASA. She requested that at its next appearance before the Committee, IASA worked towards a 50% female representation on its team.

Mr Hawyes thanked Ms Sithole for her comments and stated that IASA was equally concerned. However, IASA was the first professional body to appoint a black person as its chairperson; the current secretary of the IASA was a female Indian. It was still important to balance demographics with competency and ability to perform duties.

Mr Jeffery queried Mr Hawyes last statement and asked if the IASA had more women on its team, they would not be competent.

Ms C Pilane-Majake (ANC) remarked that legal services in the county were extremely expensive and this indicated that there was something grossly wrong. There was a need to ensure the public could easily access justice and if there was to be a change, there must be a commitment by all, including IASA. Representation of demographics and gender should be reflected at all levels.

Discussion on Legal Resource Centre submission
Prof Ndabandaba asked how much cooperation and overlap existed between the LRC and Legal Aid South Africa (LASA).

Ms Janet Love, LRC National Director, responded that LASA had a mandate to support indigent persons both on criminal and civil matters. At times, the experience in LASA was inadequate to deal with civil matters or the complexity of the matters was a burden on the finances of LASA. In these instances, LASA worked with a number of law clinics either by providing support to the clinics to take on the case, or working in tandem with the clinics. Further, at all law clinics, LASA got on-going support from law clinics, including in areas of training.

Ms Smuts, in response to the proposal by Adv Bizos, stated that Parliament was the legislative authority in South Africa and given that the Bill was now before it for consideration, it could not hand out the Bill to others. However, Parliament welcomed persons of expertise to advise it on the Bill. Mr Jeffery added that the Committee needed to keep the bill in its purview while working with interested parties. The Committee would endeavour to produce a Bill which would be supported by most factions.

Mr Bizos in response stated that while he accepted the Parliament’s sovereignty in the matter, it was advised the Committee asked each of the main contestants to the Bill to appoint a person to act as a mediator between proposals. Personal fears, real or imagined, should not prevent all concerned from doing a good job on the Bill.

Ms Smuts remarked that on the definitions of ‘advocate’ and ‘attorney’, the GCB had made a strong stand in the past on the basic regulatory divide between the one party who takes money directly from the public and the other which does not. The professional lives of both parties differed fundamentally. It was therefore imperative that new definitions be coined.

On the Legal Services Charter, Ms Smuts agreed with the position of the LRC that it was not in order to simply incorporate the charter and give it the status of law. Across all professions and with the exception of the Black Economic Empowerment (BEE) Charter, no other charters had the status of law or were derived from governing Acts of the professions. They were mostly deals struck between the executive and the departments.

Mr Jeffery advised that this issue be referred to the Law Society for a better picture.

Mr Jeffery remarked that although the process has been a long route, it was necessary to acknowledge that there have been shifts from unbending standpoints from years ago; this should be exploited.

Discussion on Black Lawyers Association submission
Ms Schӓfer remarked that there was an urgent need for a change in the demographics within the legal profession.

Mr Mabunda responded that it had never been envisaged that with balancing the demographics, entry of others should be limited. The main issue was how to cure social ills and ensure the entry of the underrepresented.

Ms Schӓfer referred to Paragraph 1.1.4 of the BLA’s written submission and asked how the BLA proposed the funding of an established Regional Council per province.

Mr Mabunda replied that this was an imperative and instructive with respect to political oversight. It also touched on access to justice.

A BLA representative added that there was no evidence that the current structures proposed in the Bill had assets or funding models. The BLA believed that upon their establishment, institutions would be funded through the existing models of funding -  the already existing societies such as through the Law Society of the Northern Province (LSNP). Funding of the structures that emanate from the Bill was not being discussed by any of the interested parties to the Bill - it was premature therefore to worry about the funding of the Regional Councils as against the funding of the Council itself; it was an ongoing discussion on the basis of the outcome of the eventual bill.

Ms Schӓfer referred to Paragraph 1.3.2 of the BLA’s written submission and asked why the BLA proposed community service should not recur - given it would be more beneficial.

Mr Mabunda responded that the BLA was not opposed to the proposed community service. However, it found it offensive that where lawyers had not performed community service, they were not entitled to receive their practice certificates.

Ms Smuts, referring to the arguments on the legitimacy of the ministerial role, stated that it was true ministerial representation on the Council was only three out of 21 seats and indeed there were instances where the State could step in such as in fixing of fees. The objections that emanated from this provision was that the legal profession was not like other professions and it functioned with an independent bench. An independent bench could not function effectively without an independent profession.

A BLA representative stated that it was important the view of the Late Chief Justice Arthur Chalkason be viewed only as "his view", and where necessary departure be made to fulfil present day obligations.

Ms Smuts asked the BLA what its position would be if the judiciary took over the roles assigned to the Minister in the Bill or if an administrative body with policy formulation functions were given the same roles.

Mr Mabunda responded that this was an option which the BLA would put in view. The BLA must not be construed as ‘pro-minister’ in its position; rather it was taking a more balanced approach.

Ms Philane-Majake remarked that it was fascinating to listen to the debate on independence by the BLA. Independence of the profession was a good notion but it was not in the best interest of all without a referee. Indeed, political oversight with a view to healing was very important. However, the interest of the Council had to be balanced against the interest of the legal profession.

Mr Mabunda replied that the BLA submission had outlined the issues which must be taken up and this was a great opportunity to cure the legal profession.

Ms Sithole appreciated the speaker’s differential point of view on the need for the presence of the Minister - she suggested this would ensure balance on gender representation.

Discussion on Law Society of South Africa submission
Mr Jeffery noted that on the delegation of the LSSA there was only one female delegate - who was in fact an employee of the LSSA - this amounted to window dressing.

Mr Jeffery in reference to LSSA as a statutory body for attorneys asked for details on the changes in the profession over the last five years. He requested that information on racial and gender demographics and on the size of firms over a five year period be forwarded to the Committee.

Ms Barbara Whittle, Communication Manager LSSA, responded that when forwarded to the Committee it would find the statistics useful, as the statistics did not only contain information on gender and race, but also on: Law graduates at 1st year entry leve and Law graduates leaving the University, Candidates entering the Profession, the number of Articles registered etc.

Mr Jeffery noted that there was a perception that the LSSA excelled in pursuing disciplinary matters in relation to the theft of trust funds but for other disciplinary issues, it was slack and that inside the interest of members was often protected. He requested that a report on disciplinary matters be forwarded to the Committee. Ms Schӓfer also asked for the various reasons why attorneys were not prosecuted.

Mr Boqwana responded that the perception that LSSA was soft on its members was simply a perception that arose from not managing communications properly, because LSSA members, on the other hand, believed the law society was always after them. Details on disciplinary matters would be forwarded to the Committee as requested. However, it was true that some of the process on disciplinary matters were slow. On theft, lawyers who stole used sophisticated schemes where it became more difficult to indict them - the LSSA recognised this as a problem and had been considering a number of drastic intervention measures. The LSSA was also working in conjunction with National Prosecuting Authority and other related bodies on the issue.

Mr Krish Govender, LSSA Co-Chairperson, added that the inability to discipline members of LSSA was indeed a reality, not because of unwillingness but more out of a lack of capacity. Lawyers serving on disciplinary committees were constrained by time and funds to pursue many of the cases to their  logical conclusion.

Mr Jeffery asked how much was charged when an attorney briefed an advocate and what the attorneys did for the briefs.

Mr Boqwana responded that no advocate had ever been successfully sued in South Africa for negligence. Advocates gave instructions to attorneys and part of the cost of the attorneys was the risk he took on from the opinion given by the advocate which lay with the attorneys when passed on to clients. Further, there was a bigger responsibility on the convenyancer; technical expertise and protecting members of the public were critical. It was an area of the law where money changed hands and an important issue.

Mr Govender added that where an attorney attended directly to a member of the public, the interaction and sifting to decide if the person had a case, involved time on the part of the attorney and automatically led to a rise in cost. It was possible that the shared work between an attorney and advocate could be done by a singular person, however, it also meant that whichever one of them executed the job, was entitled to charge the same amount as it would have cost if both of them had executed the job. There were checks and balances in place in relation to accessing a practitioner’s fees; these needed to be brought into the public domain so that the citizenry was aware of their rights. Lawyers did not police themselves well which was why the Bill, with intervention by the State, was absolutely necessary. Competition laws could not be discussed in isolation - South Africa was in a developmental stage of its democracy, therefore, the checks and balances in the Bill were desirable to ensure the provisions of the Bill worked. Insisting on no State interference in the legal profession was taking things out of context and disingenuous.

Ms Schӓfer asked whether LSSA has any idea of the cost of running the existing law society and how much it might cost to run the proposed Council and regional councils. How would this impact on the profession if costs were to be borne by practitioners through levies.

Mr Stemmett responded that the budget for the current financial year to run the LSNP (law societies of Mpumalanga, the North West and Gauteng) was R60 million. It was not advisable that the State took up the cost of running the societies.

The Chairperson, referring to the proposal by LSSA that the Ombud be appointed by the Chief Justice, asked what process was suggested for the Ombud.

Mr Stemmett responded that the decision on the process should lie with Chief Justice, taking into cognisance a transparent and fair process.

Mr Govender, in his final remarks, noted that in considering the Bill, consideration should be had for the largely poor lawyers and the diminished base for their access to clients because of the rise in unemployment and failing economic system. The Bill must deliver more than sorting out the legal profession - it must be a tool in rectifying the ills of society, hence the need for buy in by all stakeholders into the solutions proffered in the Bill. These solutions must be driven through Parliament and not necessarily through the profession. Mr Govender also supported the argument about capping fees for State service providers.

Discussion on Attorney’s Fidelity Fund submission
Mr Jeffrey remarked that the submission had been a very informative submission and asked that the AFF send the Committee a list of its proposed specific amendments on the areas in the Bill it wanted changed.

Ms Schӓfer expressed concern over the provision in the Bill that granted the Minister powers to prescribe where the funds of the AFF were invested.

Ms Schӓfer asked the AFF whether there was any legislation currently governing its investments? She asked if the AFF proposal meant the AFF was asking for leave to take the client’s investment.

Mr Molefe replied the AFF was seeking to levy only a portion of the interest on client investments. The fund was exposed to the risks of client interest and on this basis sought to levy the interest.

Ms Schӓfer responded that it was the same effect as the interest made on client’s investments that belonged to the client.

Ms Philane-Majake remarked that it was important to take note of the proposals raised by the AFF. She implored the AFF to send the Committee the amendments it desired based on its suggestions.

Ms Sithole agreed with the suggestion that the AFF list provide its proposed amendments in writing to the Committee, including the percentage on client investment interest which it sought leave to levy.

The Chairperson commended the submission by the AFF.

The Chairperson thanked all for their presence. The meeting was adjourned.


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