Legal Practice Bill: Departmental briefings on current costs of organised profession and clauses 25 to 35

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Justice and Correctional Services

24 July 2013
Chairperson: Mr L Landers (ANC)
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Meeting Summary

The Department of Justice and Constitutional Development (the Department) presented a schedule of the approximate costs presently, per year, to run the organised legal profession, noting that after the Attorneys Fidelity Fund (AFF) had reduced its funding, the statutory law societies had increased their levies on their members. They had been urged to consider already, how they might reduce their operations, cut down on duplication of committees, and achieve a more streamlined profession. This costing did not include the advocates’ profession. The Department said that it needed finality on the roles and establishment of regional councils and structure of the Legal Practice Council (the Council) to give a better estimate on costing, but Members insisted that a full costing for the implementation of this Bill was still needed, particularly the Ombud and TC. They urged the Department to get urgent input from the AFF and Bar Council on the estimates and bear in mind the constraints already on the profession.

The Department continued to present the latest draft (dated 24 July) of the Legal Practice Bill, from clauses 25 to 35. Members continued their discussions and reiterated their concerns on the differences in candidate attorneys’ and pupils’ rights of appearance, and urged for uniformity. Minimum qualifications and practical vocational training would be left for later regulation, and references to community service remained flagged, pending further debate on that principle. Under clause 27, it was noted that the Council would determine minimum conditions and procedures for practical vocational training, and clause 97 would be reworded to require the Council to rule on payment of stipends to candidate practitioners (specifically those in pupillage). They agreed that Sector Education and Training Authority (SETA) involvement should not be legislated for, nor could legal practitioners be obliged to take on paid candidates. 

Some Members strongly stated that, in respect of several clauses, their belief that the Council should be empowered to set rules, rather than the Minister prescribing regulations.

DA and ACDP Members had asked for the opportunity to raise their views on the desirability of having “two chambers”. DA Member Smuts said, by way of introduction, that it was necessary to consider what Parliament may or may not do, given the unique situation and the need to fiercely guard the independence of the profession.  She cautioned that the Bill as presently formulated would be challenged by the profession. She disputed that Parliament could not “transform” or “restructure” the profession, and suggested that in fact “rationalise” was a better term. Restructuring meant separation of regulation and representation, not an arbitrary joining of branches of the profession, and she stressed that there was no longer any suggestion of fusion, but merely a proposal for a unified regulator. Within that regulator, however, she proposed that there should be two chambers, each to deal with specific matters for respectively the attorneys’ and advocates’ professions. She did not believe it was necessarily appropriate for Parliament to change rules, (other than something like the referral rule which the Bar failed to change despite the urging of the Court). Instead, she would prefer to see Parliament requiring the statutory regulator, through the appropriate chambers, to enquire into, and take resolutions and action on, rules that had a restrictive effect, or that affected the public interest. Ideally, the regulator should be chaired by a judge, as all practitioners were officers of the court, and the court had inherent powers over the whole profession. She was not in favour of numerical representation of attorneys in the profession being reflected in the composition of the Council, believed that at the very least there should be parity, but still urged that it would be inappropriate for one branch to prescribe what the other should do, particularly in view of the lack of agreement in the past.

ACDP Member Swart agreed that this debate was crucial, and aligned himself with statements on the importance of independence for the profession as well as the judiciary. He shared concerns about any control or management of the profession by the Minister, and believed that a structure which included two chambers would be supported by advocates and attorneys, whose buy-in was crucial to the success of the Bill. These chambers need not necessarily be at top level, but perhaps at regional level. He agreed on the undesirability of proportional representation, urged at least for parity, but said that two chambers would address the practical implementation and take cognisance of the fundamental differences – which were desirable – between the professions’ work, and emphasise the independence of the advocates’ profession. ANC Members outlined the history of the Bill and the move from the previous call for total fusion to what was contained in the current Bill, but did not believe that the two-chamber model would result in substantial change, and feared that it may do no more than patch, rather than fix, the current problems. They urged for a more radical change and perhaps a closer look at what other professions had done in regard to general and specialist practitioners. The Department believed that the present proposals, coupled with the change that advocates should be able to take direct briefs from the public, would accommodate concerns. Members debated the points, and agreed to bear in mind these suggestions during their further debates.

Clause 29, dealt with community service, and Members here emphasised the distinction between community service by legal students during their courses, and compulsory and voluntary pro bono work by, firstly candidate attorneys (with the consideration of how their principals or mentors would have to be involved) and admitted attorneys. If there was to be compulsory service, they insisted also on provisions for exemptions, and the DA indicated its opposition to the present time requirements, and said more detail was required on the real public needs. Again, there was discussion on whether Council or the Minister should deal with the issue, concerns that inexperienced people should not attempt to assist the public, a suggestion that clause 29(2) be deleted. The Department was asked to draft another option, to the effect that the Council would have to make rules providing for pro bono or community service by all practitioners and candidates, possibly linking it to registration requirements. In relation to clause 30, Members asked that the practical procedure for change of status must be included, and agreed that the roll would not be published in the Government Gazette. They agreed with the suggested changes to clauses 31, 32, and 33.

Under clause 34, Members approved most of the changes, but requested deletion of subclause (9) and inclusion of further wording in (11). The Department was asked to report back on the position of the State Attorneys. Members reiterated that they were not in favour of in-house legal advisers being given right of appearance. In relation to penalties, the Department was asked to move the current clause 34(10) to clause 84, but did not support an ANC’s Member’s suggestion for a minimum sentence. Substantial discussion was held around fees, in clause 35. A DA Member suggested, as an option, that the Council should be required to hold an enquiry into the whole economic situation and what was hindering access to justice, including the role of fees, but it was finally agreed that this must be an additional sub-clause, rather than an option. The Committee discussed the possible involvement of the rules Board, whether agreement on higher or lower fees would be allowed, at the instance of both client and practitioner, debated whether the major problem lay with litigious or non-litigious matters, and mooted who should set the final fee structures, and whether they must be tabled before Parliament.

Meeting report

Committee Programme
The Chairperson noted a general request from Members not to meet on the following day.

Mr J Sibanyoni (ANC) noted that Members were committed to the Bill, but there was a clash in dates.

The Chairperson explained that Mr Sibanyoni sat on the South African Judicial Education Institute, and other Members had other commitments, so that few would be able to attend.

Legal Practice Bill: Departmental briefing on likely costing
Mr Raj Daya, Acting Deputy Director General: Legislative Development, Department of Justice and Constitutional Development, said that he would give an overview of the current costs of running the organised attorneys’ profession. He tabled the spreadsheet (see attached document for full figures) and noted that the largest law society was the Law Society of the Northern Provinces, comprising Gauteng, Mpumalanga, Limpopo and North West. This cost R61.million per annum to operate. The Attorneys Fidelity Fund (AFF) currently paid R2 million for the national Law Library, the risk management programmes cost R16 million, trust account audit fees comprised R26.2 million, trust account bank charges came to R37.045 million, and agency fees charged by law societies under an agreement cost R43.9 million. Essentially, the law societies collected the funds and disbursed them on to the AFF. The question was whether this was needed. Enhancement of professional standards, through funding the Law Society of South Africa (LSSA) cost R69.2 million and the premium paid to the Attorneys Indemnity Insurance Fund (AIIF) was R94.7 million. In total, it cost about R490.2 million to run the profession.

The Chairperson asked what the funding model would be under the Bill.

Mr Daya said that this would depend on the roles of the regional councils, how many there would be (four were estimated to cost R100 million), and what else could be saved in the process. Some of the items, such as the structure of the Council, were to be considered in more depth by this Committee. The current structure of the LSSA Council could be mirrored in the new Council and committees. When it came to actuarial determination, the Transitional Council (TC) may well have suggestions on agency fees. There were considerations also about restructuring the Council and regional councils. He noted that currently, the provincial, or statutory councils did not only attend to regulatory affairs, such as discipline and admissions, but also to other work such as seminars, and specialist committee work (which was duplicated across all the provincial societies and replicated at national level). Consideration must be given to how to deal with future processes, and whether it would be necessary to have provincial and national committees, how to limit costs, and how to operate most effectively in future. He believed that the funding amounts could be greatly reduced by those discussions. However, he thought that R100 million was a reasonable suggestion.

He further noted that the statutory law societies had been asked to consider narrowing down how they operated and finding ways to reduce their activities. The Attorneys Fidelity Fund (AFF) had reduced its funding, and the law societies had levied more on their members. The need for scaling down and operating more efficiently must be recognised.

Mr Daya added that the costing for the operation of the advocates’ structures still also needed to be factored in. The meeting costs would depend on numbers attending. Some figures would have to be estimated for matters specific to each branch of the profession. However, the main challenge to date was that the Department did not as yet have a final sense of what this Committee would decide.

The Chairperson asked where the money would come from.

MR Daya responded that the biggest source was the AFF, although and the profession would have to pay for professional development. The Department would fund the Transitional Council (TC) and the Office of the Ombud.

Discussion
Mr S Swart (ACDP) said that the Committee still needed a costing of the Bill; particularly for the Ombud, and the TC which would come from the fiscus. Those items could be worked out by the Department now. The Committee had to ensure whether legislation could be implemented and if funding would be available. He knew that it was not easy to make the estimates, but emphasised that the Committee had to know what the long-term cost implications would be, and the impact on the profession. There had already been submissions that increases in tariffs would put some smaller practitioners out of practice. A lot more work was needed on the costing, to ensure that the legislation could be implemented. Mr Daya had raised some interesting points, but he was not sure that it was correct to assume that the current costs could be reduced. For example, if stipends for pupils did not come from the Sector Education Training Authorities (SETAs), a figure would have to be estimated. He was concerned that some smaller practitioners may not be able to afford additional levies.

Ms D Schäfer (DA) agreed, saying that some were currently unable to afford the R3 000 levy currently imposed, and if they closed their practices, this would place a greater burden on those remaining in practice. She asked what percentage of funding came from the attorneys’ profession, and what percentage from the AFF. She asked if any money was currently coming from the State.

Mr Daya responded that there was no state funding at the moment. The figures for the Transitional Council (TC) C were currently estimated to amount to around R10 million per year. The Ombud was likely to cost R21 million. The Department was interrogating those costs, and trying to reduce them, and was also in the process of making applications to National Treasury, and would submit a breakdown to the Committee. What he had outlined were ballpark figures.

Mr Swart was pleased to hear of the applications being made to National Treasury, but noted that last year, the Department had been substantially under-funded. It was, in his view, necessary to get further input from the AFF and the Bar Council, and their confirmation that the estimates were accurate.

Legal Practice Bill: Version dated 24 July: Continuation of Departmental briefing
Clause 25
Ms D Schäfer (DA) said that she still had concerns on clause 25. She had initially thought that the purpose of the new structure would result in the independent advocates being brought under the same structure as those operating with the GCB. However, she remained concerned about the discrepancy in rights of appearance for graduates who held the same LLB degree. She noted again that those who opted to apply (immediately after completing their degrees) for admission as advocates could appear immediately in any court. However, those opting to sign up for articles of clerkship with a firm of attorneys were only allowed to appear in the magistrates’ court, could only appear in the regional court after serving a full year of articles, and were not permitted, as candidates, or even admitted attorneys with less than three years post-admission experience, to appear in the High Court. Not only was this not correct in principle, but it was also not fair.

Adv L Adams (COPE) said that those entering pupilage with the Bar had to write an exam, and in principle they were not allowed to appear as pupils until they had served six months of pupilage and passed the Bar exam. However, this did not apply to the independent candidates, who could indeed appear in any court immediately they had been admitted.

Ms Schäfer repeated the rights of appearance for candidate attorneys, and felt that the advocacy training should prescribe the rights of appearance.

Mr Bassett stressed that Ms Adams’ comments were related to the GCB, but did not apply to the independent bars. This Bill was changing the situation, and would prescribe a standard training and examinations. Clause 25 was put in as an option, to retain the current statutory arrangement for candidate attorneys and their right of appearance. However, there was no equivalent statutory arrangement for advocates. The Bill as introduced had “thrown open” the situation, and attorneys would be able to appear in all courts (with certain conditions), but the question of candidate attorneys was left to the TC. Later, the Department had been asked to try to write an option that would re-state the current statutory arrangement for candidate attorneys. No statutory arrangements applied to pupils at the moment.

The Chairperson said that Ms Schäfer would need to persuade the Members of the Committee as to what she would like to see included in the Bill.

Clause 26: Minimum qualification and practical vocational training
Mr Bassett said that this clause dealt with the minimum qualifications and practical raining, but it was being left largely to regulation because the Department could not at this stage set out details.

The minimum qualifications were set out in clause 26(1). There was a possibility of inserting a definition of the LLB degree (to cover the four and five years options). In addition, the alternative draft wording referred to satisfying requirements for a law degree in a foreign country which was equivalent to the LLB, and recognised by the South African Qualifications Authority (SAQA). The Bill also set out that the person must have undergone all practical training requirements as a candidate legal practitioner, including community service (which the Committee would consider later) and must have passed a competency-based examination or assessment. That was something similar to the current Attorneys Admission or Bar Exam.

The rest of the provisions had not been amended, and related to admission of conveyancers and notaries.

Ms Schäfer said that the whole subject of community service remained flagged, and would be discussed under clause 29. She was not sure whether it was necessary to include a reference to it in the Bill if it was prescribed by the Minister.

Other Members indicated their agreement on this point.

Clause 27: Practical vocational training
Mr Bassett said that the Council must determine the minimum conditions and procedures for practical vocational training. The Committee had indicated, on the previous day, that the question of stipends for pupils (who were presently not paid) may be better dealt with under clause 97, so the underlined words relating to a mechanism to deal with the payment of stipends may be removed from this clause.

The Chairperson said that he had thought, from a previous discussion, that Members wanted the principle of payment of remuneration to be firmly spelt out, whether under this clause or elsewhere. Clause 27 was saying that the Council must look at the issues, which implied that the principle of payment of pupils was therefore accepted, and that was the important point.

Ms M Smuts (DA) said that a regulator was being created, to gazette rules, which would have the same status as regulations made by the Minister. She thought that there would be few instances where it would be acceptable for the Minister to make regulations. She believed that clause 27 was the more desirable place to deal with this, so that the Council (not the TC) must, by way of rules, determine the minimum conditions. Generally, in principle, she was in favour of the Council making rules, rather than the Minister prescribing regulations for the independent profession.

Mr Bassett asked if the Bill should limit stipends to “pupils”.

Ms Schäfer and Ms Smuts suggested that the mechanism should apply to “candidate legal practitioners” so that there was formal provision for all candidates.

The Chairperson asked if it was necessary to provide further clarity here on the possible involvement of the Sector Education and Training Authorities (SETAs) in helping with the stipends.

Ms Schäfer said that she had attended a meeting on the previous evening, where concern had been expressed that the SETAs were in chaos. She had also heard concerns from advocates that they would be unwilling to take on pupils if they had to pay them. There were problems with the FET colleges and the SETA involvement needed to be interrogated. For this reason, she would be reluctant to include any references to  SETA in the Bill at the moment.

The Chairperson agreed that there was a problem with the SETAs.

Ms Smuts thought it was not appropriate to legislate for the SETA involvement anyway, at this stage.

Mr Daya added that other sources of funding could be investigated.

Ms Smuts noted that, in principle, candidate practitioners needed to be paid.

The Chairperson said that it may be fine for the Committee to agree that they should be paid. However, Ms Schäfer had raised the point that some advocates would simply not accept pupils. The point of discussing the possibility of SETA funding was to offer incentives to the legal practitioners.

Mr Daya said that it was necessary to understand that attorneys did article clerks all the time, and questioned whether the position of advocates was really that different. The minimum amount that candidate attorneys were to be paid was regulated at a paltry sum, around R250, although in practice they were paid more. He wondered if something too onerous was being set up by the Bill, in view of the fact that articles were arranged anyway.

Ms Schäfer said that candidate attorneys were given quite a lot of work to do, and could earn fees for the firm. It was usually the bigger firms who took on most of the candidate attorneys, as they were able to spread the load amongst the partners.

Adv Adams said that the salaries paid to candidate attorneys depended upon the kind of practice where they were articled; the smaller the practice, the less they were likely to be paid. She requested clarity whether it was intended that, whatever minimum amount was set, this should be the same for candidate attorneys and pupils. It was one thing to say they should be paid, and another to determine what they would be paid. If there was a minimum for candidate attorneys, it should in principle be the same as for pupils.

Ms Smuts agreed that all would be regarded as “candidate legal practitioners”. All the existing legislation around attorneys and advocates would be repealed. It was unlikely that the Council would allow one class of trainees to be paid less than others.

The Chairperson asked if the principle should be put in the Bill.

Ms Schäfer said that there was a prescribed minimum already set under the Attorneys Act.

Adv Adams said that the minimum amount for all candidates should be the same, whether they were entering the attorneys or advocates’ profession. That principle should be stated in the Bill.

Mr Daya said that cognisance also had to be taken of the fact that the periods of pupillage and articles were different, and of whether a pupil was capable of generating fees. That principle was good, but the differences in practical application must also be factored in.

Clause 28: Assessment of practical vocational training.
Mr Bassett said there had been no comments on this clause, which reflected what was currently in the Attorneys Act. The purpose was to determine whether an adequate level of competency for admission and enrolment was reached.

Mr Daya asked whether Members wanted to refer to appropriate institutions (in the plural)

The Chairperson said that this was likely to be left in the hands of the Council.

Mr Bassett said that the singular included the plural, in terms of the Interpretation Act.

Clause 29: Community Service
Ms Smuts said that a presentation was still needed on community service, from the Department, and it was decided to hold this over for the moment and allow Ms Smuts and Mr Swart to address the Committee on other concerns.

Discussion on two chambers
Ms Smuts said that she had some legal concerns, as well as practical concerns and arguments in favour of having two chambers. Her view had been informed by earlier discussions. There had been a debate about what the Executive may and may not do – and executive powers. She wanted to question, however, what Parliament could and could not do. She raised this in light of a speech made by Judge Chaskalson (to the Law Society of the Cape of Good Hope on 9 November 2012) in which he had said that dissolution was inconsistent with the independence of the profession. She had no doubt that the legal profession would challenge Parliament if this clause were still to be included in the Bill.

Judge Chaskalson went on to say that, although this was not mentioned in the Constitution, the independence of the judiciary depended on having an independent legal profession to enable the judiciary to perform its constitutional duty, and said that this was one of the results of application of the rule of law in South Africa. This link with the rule of law was affirmed in the common law principles, as well as the International Bar Association standards for independence of the profession. The Latimer principles were also frequently cited, as well as the UN principles on independent self-regulation (that lawyers shall be entitled to form and join self-governing professional bodies). Several arguments had been put up. However, these were “soft” international laws, and their existence had not stopped any comparable jurisdiction from wholesale reform of the legal profession. Australia, after a ten year period of tension, had instituted outright co-regulation by government in the profession, in the Eastern Seaboard.

Ms Smuts said that if Judge Chaskalson said that the independence of the profession was linked to the rule of law, this argument would undoubtedly be cited in support of any challenges that the profession may bring to the Bill. The Committee needed to ask what this meant. She said that she thought that the answer was that the meaning was that Parliament had to comply with the doctrine of legality. Similar to the Executive, Parliament could exercise only such powers as were conferred on it by law, could not exceed those powers, and must exercise them in a rational manner. The powers that Parliament had included law-making, and any limitations that any legislation might impose on the freedom of trade, occupation and profession would have to meet reasonable and justifiable standards for such limitation. She did not think enough attention had been paid to this point yet.

She felt that one example where Parliament could at the moment be accused of not acting rationally was that it could not “transform” or “restructure” an independent profession, when it could not explain what that meant, or why it was necessary. She felt that any references to “transform “ should be substituted with “rationalise”, wherever they appeared in the Bill. This Committee was doing what Schedule 16 of the Constitution said – and it was similar to the rationalisation of the Courts. The old provincial boundaries and law societies were being rationalised, the old borders obliterated, and homeland laws repealed. Even bringing the 4 000 independent advocates under the umbrella of the statutory profession was in compliance with schedule 16(6). “Transformation“, in its ordinary English meaning, was understood and supported by her party, but it was not a word that had a particular statutory meaning, and the Committee should not assume that it had one.

The question was what “restructuring” meant. Ms Smuts believed it was separation of regulation and representation. It could not mean arbitrary lumping together of attorneys and advocates. This then led her to the points that she wanted to make about the two chambers.

The case for a unified profession was not supported, and had been abandoned. Instead, this Bill was now proposing that there be a unified regulator. She thought that although the case for this could well be made, it had not actually been done as yet. The question was: Why create a unified regulator? She was, in essence, in support of the proposal from the General Council of the Bar (GCB) to have two chambers. She disagreed, however, with Adv Isak Smuts, who had resigned from the GCB because he believed that the regulatory functions of the GCB could not be placed on this footing. The UK had established a two chamber system as the next development; and the UK regulator had anticipated a “single, rolled-up regulator for solicitors and barristers”, to be created in the next three years.

She then raised the question of what Parliament could and could not do. Part of the regulatory function of the new body was the creation of practice and conduct rules. In answer to whether Parliament could change practice rules, she noted that in the De Freitas case, two judges said the bars should deal with the rule although the courts were the final arbiter. It would not be appropriate for Parliament to deal with them. Despite the fact that the court had urged the Bars, in 1999, to change the referral rule, they had not done so.

She noted that there were matters involving the profession, where Parliament could and had legislated. She noted that the Law Society of the Northern Province had ignored the contingency fees legislation, but the statute was upheld. [Note: the Department noted a correction of this point later]. She felt that the answer was to create a regulator, by statute, and set a requirement that the regulator must enquire into rules that had a restrictive effect, or that affected the public interest. She did not think it was appropriate for the Minister to make regulations on such points. Furthermore, she felt that there should be, in the regulator, an advocates’ chamber, to deal with advocates’ matters, and an attorneys’ chamber to deal with attorneys’ issues, under the chair of a judge, and she reiterated that this would emphasise that the courts had inherent powers over the whole legal profession.

She did not believe that there was any justification in allowing attorneys, because they were in the majority in the profession, to decide on bar practice and rules. She believed that, at minimum, there should be parity of representation between advocates and attorneys on the regulatory body. Making advocates the “junior partner” with smaller representation would amount to a weakening of that profession.

However, her call was to go a step further than parity and to have two separate chambers. There was no reason to put attorneys and advocates in one body at all. Five Ministers, over the last ten and more years, had tried to bring together bodies that did not belong together. Both branches had baulked at these attempts, because they could not agree on terms. The branches were two symbiotic components of one profession. She questioned why there should be attempts to institutionalise the tension and made the point that even today, the branches could not agree. It made good common sense, therefore, to create two chambers, each to regulate its own conduct and practice rules, and specify the areas on which they must find answers together such as alternative business structures.


She added that it was incorrect for the Bill to have tried to think out the reasons after the fact and said that none of the issues had been clearly thought out before the Bill was drafted.

Mr S Swart (ACDP) agreed that this was a very crucial debate. This Bill had very far-reaching consequences. He aligned himself with the statements that the independence of the profession was a safeguard to the independence of the judiciary. Judge Chaskalson had criticised the structure proposed by the Bill, saying that the proposals said opened the door to important aspects being controlled by the Executive, which would be inconsistent with an independent profession. This Committee had a rich history of bills that it had considered not being contested, or, if they were, of being upheld, and he would not like this Bill to break that trend.

Constitutional arguments related to the composition of Council, dissolution of Council, and arguments that the Bill, as presently framed, did infringe on the independence of the profession, which was, as Judge Chaskalson had said,  a safeguard for the independence of the judiciary.

He first wanted to examine the framework that the Minister could create. The profession had argued strongly that this should not be permitted in relation to governance and management of the legal profession, which was very different from the medical profession and bodies of other professions, with the essential differences related to the independence on the profession and judiciary. If the Minister was to be allowed to do what the Bill currently proposed, that would open up the Bill to attack, and he agreed with Ms Smuts that the profession’s objections would be likely to be sustained insofar as they related to control and management by the Minister.

Proposals had been made, by both advocates and attorneys, to set up a structure where there were two chambers. That would address the constitutional issues. It would be possible, for instance, to have an overall Council, in which either the chambers would be incorporated, or to have the chambers operating at regional level. The professions had been at fault for failing to reach agreement, over so many years, but if the present requirements for how they should work were proceeded with, this would no doubt lead to endless litigation.

The second argument related to desirability. He did not believe that the day-to-day management of the LSSA and GCB could be dealt with by the present structures. He pointed out that the top levels would deal with policy and regulatory issues. At a regional level, attorneys and advocates were currently still being forced to come together. On that point, he felt that it was too simplistic for suggested composition of the regulatory body to reflect proportional numbers. At the least, there should be parity of numbers. He pointed out that most practitioners sitting on these structures did so without remuneration. If a system allowed for different chambers, even at regional level, that would create a sense of buy-in from the professions, and that was crucial to successful implementation of the Bill. This Committee must recognise that it could only legislate so far and much would have to depend on the professions running themselves.

Mr Swart expanded on why he believed it was so important to have separate chambers, pointing out that it had already been recognised that there were fundamental differences between the two chambers, which was why it had been agreed that fusion would not work. The training was different. Adv Bizos had recently quoted Adv Kentridge, who had said that existence of an independent body of advocates, willing and ready to appear for every person in every kind of case, was vital. It made no sense to try to lob the different professions together in a regulatory framework, particularly where advocates were a lesser partner or minority partner, as this would infringe on the essential independence of advocates in taking on and arguing cases that may be unpopular, and their rich legacy of taking on cases where corporate attorneys had not been willing to do so. That went to the heart of that profession. He therefore urged the Committee to consider incorporating a model of two chambers, saying that this would be good for the profession and the future and independence of the judicial system in the country.

Mr Swart added that this suggestion could be seen as offering an olive branch to the profession and may be a viable way to resolve many of the tensions.

Mr Swart noted that although the Bill assumed that the TC would have to resolve the issues, in practice it was unlikely that it would manage to do this, as nobody had been able to resolve them over many years. He reiterated that both attorneys and advocates had expressed support for having two chambers. That did not necessarily have to apply at the top structures, but could be at regional level. This might also resolve some of the problems raised on the previous day, about the assets of the current statutory bodies, and result in better buy-in from the professions.

Mr Sibanyoni noted that one of the objects of the Bill related to restructuring of the profession. Substantial time had already been taken up in trying to resolve many issues, over many years, and to some extent the legal professions had now been overtaken by events. He drew a corollary to what had happened in the past, with a “two sided table” consisting of statutory local government, and residents’ associations, but in 1995 one model of wall-to-wall municipalities was imposed. In the 1980s, when the vision for the future was debated, the National Association of Democratic Lawyers (NADEL) had suggested that fusion was the route to follow, and both the late Pius Langa and Dullah Omar had been involved in those discussions, which had not been resolved. He feared that the suggestion to have two chambers amounted to little more than retaining the original structures of bar and side-bar, and “patching” matters.

He noted that South Africa was originally a colony of Britain. However, other African countries who were also British colonies had not maintained these two structures of bar and side-bar. He said that different South Africans had differing interpretations and understanding of what “transformation” meant. There was a need to move away from the old ways, and have a totally transformed profession. The bar and side-bar had their own history, and this had impacted on the disadvantaged people who entered the profession. Attempts had been made to improve access to the profession, such as attorneys being given rights of appearance in the high courts, but this was not sufficient and he believed that there should be more radical departures. He believed that failing to move forward would show disrespect to the attempts of stalwarts like former Ministers and he noted that not everyone agreed with the views of Judge Chaskalson. South Africa needed to move forward, and he did not believe that the notion of two chambers would achieve that.

Prof L Ndabandaba (ANC) said that he largely agreed with Mr Sibanyoni. He noted that it could take some time to define the concepts of transformation and rationalisation. Perhaps the example of the medical profession could be recognised, where both GPs and specialists regarded themselves as part of one profession.

Ms Schäfer made the point that South Africa was a constitutional democracy, and one of the essential tenets was an independent profession. She was not, personally, convinced either way. She did however feel that the intention and the functions of the two chambers was important. This Bill was about opening up the profession, making it more transparent and accountable. If the advocates and attorneys were allowed to discipline themselves, this was fundamentally in contradiction to transformation. The complainants were not sure what happened, were not always convinced that matters were being dealt with properly, and she did not believe that this should continue.

In relation to day-to-day management, there were functions that should be done by the independent profession. The Council would meet only four times a year and would not be able to attend to everything. She wondered if certain functions would be separated out. She felt, however, that the profession was not so vastly different that it should always deal with all matters separately; there were some common interests and principles. The Council must have the final say and oversight over matters such as discipline. She noted the references in some submissions to the “Budlender” model, and said it was possible to set requirements for different bodies to fulfil in order to be recognised by the regulator, such as submitting reports on what was done on discipline, what was done to enhance access to the profession, and similar matters. She urged that it made no sense to merely have a regulator in name that did not do anything substantial.

Ms Schäfer also made the point that the issue of control was important, but she was satisfied that the Council would not be controlled by the executive if there were two out of 21 Ministerial representatives. She thought that this Committee should unpack the matters further. Certainly, in her view, the present situation could not continue.

Mr Daya wanted to correct Ms Smuts’ point on the contingency fees legislation. In fact, the Law Society of the Northern Provinces had followed the Contingency Fees Act, but an attorney had argued that the common law should apply. The Act was upheld, as the Law Society had asked. However, the matter was being taken on appeal.

Mr Daya noted the comments made about the differences, and said that there had, in the meantime, been a fundamental shift in position, now that the Committee had changed the Bill so that advocates could accept briefs directly from the public. This would have a significant impact on access to legal services, and in allowing advocates to choose how they wished to practice. It was not fusion, but was offering more choice to legal practitioners. He said that the Chairperson of the GCB had made some comments about whether the referral system would fall away. The majority of advocates who operated outside the GCB had directly embraced the principle of direct referral. In regard to entrenched positions, the Committee would have to debate why these were upheld, and what they meant.

Mr Daya said that in relation to the argument for two chambers, the Council already, in terms of the Bill, had the power to set up a range of committees, and may decide whether a particular committee needed to be populated with more advocates or attorneys.

The real difference between advocates and attorneys at the moment was training. Although the attorneys’ training did include a component on trial advocacy (offered by advocates from the Black Lawyers Association), the pupils’ training obviously had more focus on this. That difference, in his view, equaled separation. The cab rank rule was already under review, and its removal was being seriously considered. He struggled to understand what was the major difference between the professions, causing so much friction as to support the argument that the situation should not change. This Bill was trying to make legal services more accessible to the public, by transforming the profession, and that was the intention behind the single regulatory structure, making it simpler for advocates and attorneys to operate in one sphere, where the lines were becoming blurred. In his view, there was no compelling argument to be made out in support of the continued separation, as more advantages were offered by the new model of the Bill.

Mr Bassett said that the Bill did recognise the differences between advocates and attorneys and made provision for that in the committee structure. He questioned whether there was a common desire to have a two-chamber model; this was a view that some attorneys held, but certainly not all, and it would be necessary to find out how strong the support was for this. The Committee’s acceptable that advocates should be allowed to take briefs from the public was an indication of the need for a single body that still recognised the differences, and he believed that the Bill accommodated that.

Mr Sibanyoni felt that the two-chamber idea would perpetuate the current dual system, in relation to admissions, discipline, training and similar matters. The public expected uniform standards, and were still surprised and disappointed to have to pay two sets of fees and hire an attorney in order to brief an advocate. Restructuring would assist in harmonizing the rules of courts, making the system easier. He thought that the final product must contribute to access to justice for society. He wanted to stress that he was not insisting on fusion, as the arguments had moved away from that.

Ms Schäfer thought that there seemed to be some confusion as to what was required. The question of high fees would not be solved by direct instruction; as whilst it may, there was no guarantee that it would save costs, as the amount of work to be done to pursue the matter would not change. This issue was quite separate from the question of the two chambers.

Mr Swart said that the Committee Members seemed to have different understandings of how and why the two chambers would operate. He fully accepted the statutory framework of a Legal Practice Council to set the rules and framework for both professions, which would be a drastic change, and the Bar Council would fall under that framework. However, at some level below that Council, there was an argument to be made out for having separate chambers or committees (and he had noted Mr Daya’s point that nothing in the Bill prevented that) to deal with the separate professions’ issues. He may like to include a specific reference in the Bill to the possibility of chambers at a regional level. These would deal with day-to-day management of the regional bodies. The Committee had accepted that there were changes in the professions, but it was not perpetuating the same model. There would be an Ombud also and if anything was done that was out of line, Council could step in to prevent it. Therefore, what was being proposed was not “business as usual”. This was a way to get buy-in from the profession. He thought that there was merit in putting something in the Bill to give guidance, at the regional level, and said it would also meet desirability and constitutional issues and take the process forward with greater buy-in.

The Chairperson said that Members would bear in mind the considerations raised by Ms Smuts and Mr Swart, as they went through the rest of the Bill and Members could continue to try to convince each other.

The Chairperson said that the Bill was silent on the continued existence or otherwise of the GCB;

Ms Smuts pointed out that it would only remain as a representative body. Another body would be taking the decisions that it used to take.

She reiterated that some fundamental constitutional legal issues had been raised. Mr Sibanyoni had set out the intense and difficult discussions, and she noted his reference to the original trend to fusion, but said that the decision was taken not to follow that, partially because experience elsewhere showed that this resulted in setting up of huge attorneys’ firms, and South Africa needed the smaller firms. There were some classic arguments about the role of the independent advocate, and it was said that justice was better served by having totally independent advocates who would be prepared to accept any briefs, including those unpopular with the government of the day. What remained was a residue of “association” of the two professions with the old South African order. She added that in other countries where fusion had occurred (such as Namibia), there still was, in effect, a separation of the two professions. She did not think that having two chambers would perpetuate dual standards. The rules were different, because the professions were different. If there was recognition of the two professions, it seemed only logical to have two chambers regulating their own standards. She made the point that this differed from the Rules of Court. Form must follow function; the regulator was being created and that should follow the function. She remained concerned that only now was the issue of the cost coming on to the table. In other countries, the main considerations behind the legislation had been consumers and costs, but in South Africa, this was not actually considered at the early stages of drafting this Bill.

Ms Smuts thanked the Chairperson for allowing this discussion, which was very useful. She thought that Mr Swart’s suggestion was also well worth thinking about. She urged that the legal issues must be borne in mind.

The Chairperson maintained that he had never been intimidated by threats of Parliament being taken to court on legislation, and he was quite sure that challenges would be laid. However, the responsibility of this Committee was to ensure that whatever was in the Bill was proper. He said that the discussions on the point would end for the moment, but Members should continue to think about the points raised.

Clause 29: Community Service
Ms Sheetal Roopram, State Law Adviser, Department of Justice and Constitutional Development, noted that she had attended a panel discussion on community service at Wits University. A Community Service organization based at UCT operated for law students. Some universities had already embraced community service as a component of the LLB degree: including Port Elizabeth, KwaZulu Natal and UCT. Many students had embraced the concept, and were doing this community service through street law campaigns, community assistance days, and law clinics. The new Deputy Minister, Mr Jeffery, was asked to consider how community service could be legislated for. He said that a focal encouragement clause could be inserted in the Bill to allow universities to conduct their community service as a formal part of the LLB degree.

Ms Smuts pointed out that it seemed the component at the universities was merely part of the students’ preparation for the degree, as opposed to part of the professional qualification.

Ms Roopram confirmed that this was done by way of a course.

Ms Smuts felt that it was a positive move for the students, but said that it was very different from legislating community service for qualified lawyers, which she still opposed.

Ms Roopram said that ProBono.org was also present, and highlighted the number of hours given by the profession. Both students and professionals indicated that this was not enough, and there were many calls to make this compulsory. Mr Jeffery had noted the Committee’s view that compulsory service might place too great a burden on attorneys, but it emerged that in fact many of the profession saw it as a vital way to give back, and not as a burden.

Ms Schäfer said that if attorneys were not currently doing their 24 hours community service, as they should, then it was possible to legislate for that. She had understood that this was a requirement, certainly for attorneys under the Law Society of the Cape of Good Hope, before getting their Fidelity Fund certificates, and perhaps that could be legislated if there was a problem with compliance. However, she would be opposed to legislating for excessive compulsory community service.

Ms Roopram also noted that it was possible for one-person practitioners to apply for exemptions. The categories of practitioners, in terms of their number of years service, types of practice, and time periods were also discussed.

Ms Smuts said that a need had been identified, but there had been debate on the point in this Committee. She felt that more information was needed on what exactly the publics’ concrete needs were, and what form such service might take.

Ms Roopram emphasised again that the panel discussion focused on students. They were visiting rural communities and advising them on their basic legal rights, directing them to other possible avenues for resolution of any problems. The service was definitely based in under-privileged and under-resourced communities. The needs would differ.

Ms Smuts emphasised that this was different from pro bono work.

Mr Swart said that the key distinction between this kind of community service, and pro bono work as a lawyer, was the type of service. There was a vast difference between, for instance, advising someone how to apply for a pension, or litigating on their behalf. The Law Society of South Africa (LSSA) felt that candidate attorneys did not have sufficient skills, experience or knowledge to act pro bono and deliver legal services, and he shared concerns that inexperienced attorneys and candidate attorneys should not be unleashed on the public. He agreed that it was useful for students to advise people of their rights. However, he also made the point that candidate attorneys had to work closely with and under supervision of their principals, and he thought that having them go out on their own and start litigation was undesirable.

Ms Schäfer said that the students at the law clinics were under supervision of the attorneys heading the clinics, and she agreed that it was dangerous to allow people who were not fully competent to start proffering legal advice. One way in which attorneys currently greatly enhanced access to justice was by acting as Commissioners of the Small Claims Court.

Prof Ndabandaba said that the more senior students from KwaZulu Natal University would go out, under guidance, and the traditional leaders were included.

Adv Adams agreed on the need to draw the distinction between pro bono and community service. She asked why the Bill set out that the Council had to determine the rules for vocational training, but the Minister had to determine the community service. In her view the Council should be dealing with both.

Ms Smuts referred to the alternative option draft, and asked if that would cover the supervision aspects.

The Chairperson said that the services rendered were indicated under (2)(a) to (g).

Mr Bassett noted that the examples of community service would need revision – as, for instance, service as a judicial officer could not to apply to candidate attorneys. However, he suggested that candidate legal practitioners could perhaps give clerical assistance at the Small Claims Court or as Clerks of Civil Court, or maintenance investigators (not maintenance officers). When making regulations, it would be possible to explore these kinds of options, in consultation with the legal profession. There was huge potential for candidates to render services. The Department was well aware that candidates should not be “let loose” on the public, but there were areas where they could play a useful role.

The Chairperson said that Adv Holomisa had noted that he would seriously object to candidate practitioners being unleashed on his rural community, so the mentorship aspect was very important.

Ms Christine Silkstone, Content Advisor to the Committee, made the point that candidate attorneys should be properly supervised, but noted that unfortunately not all of them were, which placed them at a serious disadvantage.

Ms Schäfer fully agreed that there were varying standards and exposure to work during articles.

Ms Smuts suggested that the whole of clause 29(2) be deleted. She felt that clause 29(1) should specify that the Council should make rules.
Adv Adams asked for more detail of how the three months service might be compiled; and whether it would be consecutive days, or case days.

Ms Schäfer thought that clauses 29(a) and (b) were inconsistent.

Ms Smuts did not think that the Minister should be involved.

The Chairperson said that the words “in consultation” required the Council to agree.

Ms Smuts still felt that the Minister should not be regulating on this at all, that it was not necessary to have Ministerial involvement and that the Council should publish the rules to apply.

Ms Schäfer asked what would happen if the Council made a rule saying that no community service was allowed.

Ms Smuts pointed out that Parliament could say, in the Bill, that it wanted the Council to do something, but could stop short of specifying what exactly it should do. For instance, she had already noted that the Council should be obliged to launch an inquiry into tariffs and fees and then take appropriate action. Here, Council could be required to make rules about pro bono and legal training, but the content of the rules should be left to the Council.

Mr Sibanyoni believed that this Committee must look at community service as a way of changing the calibre and mindset of legal practitioners, to ensure that lawyers in future were not so focused on fees, but were mindful of the need to serve the community. Most people in South Africa did not have the means to acquire legal services, or they were not accessible in areas where they lived. The Minister would be in a position to identify where the needs existed, which he could do in consultation with the Council. President Mandela had effectively done uninterrupted community service, and the idea of lawyers doing community service had to be supported.

Ms Schäfer suggested wording to the effect that then the Council must make regulations providing for a period of pro bono or community service by all legal practitioners, and to make their continued registration dependent on that. Candidate attorneys could be included.

Ms Smuts was not sure that she was in favour of linking this to continuance of their registration, but was generally in agreement. She answered Mr Sibanyoni’s point that it was simply not possible to require people to exercise humility, and the purpose of the community service was to genuinely serve the people, rather than to try to change mindsets.

Mr Swart said that it was important to understand the distinction between community service and pro bono. This was different from the concept of medical community service, where practitioners could be sent to service areas of need. He believed that surely the profession or Council should decide how the service should operate. The Minister might have an interest, but of course he was also represented on the Council.

Prof Ndabandaba said that social workers did this kind of work in their third year.

Mr Bassett said that perhaps no time periods should be set. The initial idea was that community service should be part of vocational training, providing there was no potential prejudice. There would have to be allowance for supervision, in which case the time periods might apply intermittently, or for a continuous period, but even two or three months might be too long. However it was applied, the Department felt quite strongly that compulsory community service should be included, for the benefit not only of candidate legal practitioners, but for society. The time periods could be debated when the time came to deal with Council’s rules, and he would favour flexibility. Then it was also important to have other provisions dealing with community service by admitted legal practitioners, and to include the possibility of exemptions only for admitted legal practitioners.

Adv Adams said that community service generally involved direct contact with the community. She questioned if pupils would be included, and, if so, how the referral rule would apply, and whether an instructing attorney or mentor must at all times be present. She was worried about the practicalities.

Mr Bassett agreed that further thought had to be given to the practicalities, but said that would be dealt with in the rules. In some situations, the principal may not have to be present all the time, as, for instance, community service as a maintenance investigator would be done under the supervision of the relevant court official.

Mr Sibanyoni also made the point that this would assist legal practitioners, who often needed to prove that they were advancing their communities.

Ms Schäfer agreed that the pursuit of higher office would be supported by evidence of community service.

The Chairperson noted that the community service would be compulsory, not voluntary. The Department was asked to draft further options for this clause.

Clause 30: Enrolment with Council
Mr Bassett noted that the title had been changed to reflect “enrolment”, but the only other major change was that an advocate must indicate in what form s/he wished to practise. The roll must have details of practising and non-practising practitioners, and whether advocates were practising with or without Fidelity Fund certificates. Attorneys having right of appearance in the High Court should also have their details noted. The roll must be published on the website of the Council, updated each month, and available for inspection. It had been suggested that perhaps the roll should be published in the Government Gazette, but Mr Bassett noted that this cost around R600 per page. The register of debt collectors was published only on its website, for financial reasons.

Mr Swart asked where a change of status would be covered; for instance where an advocate wanted to change from having a fidelity fund certificate to not having one. Whilst publication was covered, there was no provision for the procedure to change the status of the application.

Mr Bassett agreed that this would have to be covered.

Ms Schäfer asked what would happen if a person was to stop practising.

Mr Bassett said that perhaps clause 31(4) would cover this, as the legal practitioner must ask for removal from the roll.

Clause 31: Cancellation and suspension of enrolment
Mr Basset noted that the Council was not obliged to notify the practitioner, other than in the case of paragraph (b), where there had been erroneous enrolment, because the removal would be done by the Court.

The other amendments were consequential.

Clause 32: Conversion of enrolment
Mr Bassett noted that the changes were consequential.

Ms Schäfer thought that clause 32 might cover the concerns raised by Mr Swart, in relation to an advocate converting his practice with or without fidelity fund certificates. However, new wording would have to be added in.

Mr Bassett confirmed that he had made a note on that.

Clause 33: Authority to render legal services
Mr Bassett indicated that there had been comments made about appearance, and that there were some changes in (3). The insertion of the words “directly or indirectly” followed the suggestion by the LSSA. This was perhaps not strictly speaking necessary, but would do no harm.

The Chairperson asked Members if they were satisfied with the two-year penalty, and they indicated that they were.

Clause 34: Forms of legal practice
Mr Bassett said that clause 34(2) had been dealt with on the previous day. The Contingency Fees Act was now covered. Subclause (2) allowed advocates to take briefs from members of the public, and accommodated Legal Aid South Africa (LASA) concerns.

Ms Smuts asked if there was any change on the Ministerial regulations.

Mr Bassett said that the Department would still be doing an audit and would spell out, perhaps in the form of a table, what was to be done by way of rules, and what by way of Ministerial regulation, for further discussion.

Ms Smuts reiterated that in her view, the default position should be that Council should be making rules, rather than the Minister making regulations. In particular, she believed that the relaxation of the referral rule should clearly be made by the Council, because it was a Bar rule that should be changed by the profession.

Ms Schäfer said that the obligation was being created by statute, but the mechanics would be done by making rules.

Ms Smuts cautioned that the Committee must be careful how it changed these matters.

Mr Swart noted that the Supreme Court of Appeal had expressed its reluctance to change Bar rules and had cautioned that even the legislature should be cautious to do so, although he believed that there was nothing actually preventing that from being done where justified.

Mr Swart pointed out that the biggest litigant was the State and asked if thought had been given to the position of the Office of the State Attorney. Ideally, the State Attorney should decide how the State should act, but if direct referrals were allowed, this office might become redundant. Already, many departments were briefing advocates directly, particularly for opinions. He was not sure whether that was desirable, and the whole issues of legal services to the State was under consideration by the Department.

Ms Smuts said that this was a very valid point. Following on from the point made by Mr Swart about the Bar Rules, she said that the Court had said, in the De Freitas case, that it was not for the Court to put a pen through the referral rules “nor would it would be appropriate for the legislature to do so…. It should be left to the profession… “ Although Judge Heever had said that to do this would bring South Africa out of step with the Commonwealth countries, that was actually incorrect as it had happened elsewhere. However, she also noted that the Bar, despite having been urged fifteen years ago to relax the referral rules, had failed to do so, which probably meant that it was fully appropriate for Parliament to tell the Council to do so now.

Mr Bassett answered, in relation to the position of the State Attorney, that perhaps an exemption could be included, similar to LASA. He would give further thought to the desirability of this, and would get more details of what the Department was doing. He was aware that there was a move to try to get all state departments to work through the State Attorney and an exemption might be counter-productive.

Ms Smuts asked if the State Attorney did not always prepare briefs for Counsel.

Mr Bassett said that in practice that should happen, but it did not.

Mr Swart added that often direct briefing was done where there was a conflict of interest between provincial and national government. It often resulted in additional and unnecessary costs.

Mr Bassett said that there was an exception somewhere to deal with conflicts of interest, but the general rule was that the State Attorney should be used.

Mr Swart asked, in relation to (5)(e) whether state attorneys would still be allowed to be advocates as well. He explained that, generally speaking, attorneys wanting to be admitted as advocates would firstly need to have their names removed from the Attorneys’ roll, except in the case of the State Attorneys. He was not sure whether this was in the Admission of Advocates Act or State Attorneys Act.

Mr Bassett said that he would have to check on this; it was a very obscure provision, and he thought that it was contained in the Admission of Advocates Act. If so, it would fall away when that Act was repealed by this Bill, although the State Attorneys Act was not to be repealed.

Adv Adams referred to the alternative wording for (c) and said that the clause spoke of “legal services” which would not be limited to criminal matters. However, footnote 105 noted that this was at the request of LASA, and related to criminal matters. LASA did also attend to civil work. She needed clarity on what was referred to in the Bill.

Mr Bassett noted that this was a valid point, although the request was related to criminal matters. He would consider whether it was necessary to tighten the wording, in conjunction with LASA, who had not yet responded on the proposed changes.

Adv Adams referred to clause 24(2)(b)(iii) and questioned if this should not refer to enrolment rather than notification.

Mr Bassett clarified that the legal practitioner must notify the Council, and the Council must then enrol.

Mr Bassett noted a technical amendment in clause 34(3), which was done to clarify the wording. The provision had been split up, but the initial proposal had come from the GCB that rules were needed to handle briefing directly by members of the public.

Ms Schäfer asked if the words “or justice centres “ or the referral to “Legal Aid South Africa” was needed.

Mr Bassett agreed.

Ms Schäfer also asked for comment on the regulation provisions, in view of the Committee’s debate on whether the Minister or Council should be regulating.

Mr Daya said that there was a reason for this; he wanted, however, to check whether there was a duplication and requested that he be allowed to revert later on this point.

Ms Schäfer thought that perhaps (2) could be taken out. All that was required was to say that there must be compliance with sub-clauses (1) and (3).

Mr Bassett said that he could not recall offhand why this was included. He would come back to the Committee on this point also.

Mr Bassett indicated that clause 34(4) set out the forms of practice, and a reference to a law clinic was also now included, for both attorneys and advocates.

Ms Schäfer asked where Legal Aid was dealt with, and Mr Bassett replied that it was specified separately.

Mr Bassett said that “public interest legal centre” was now also excluded. There was an insertion in relation to a law clinic in (7), to deal with the comments of the Legal Resources Centre (LRC). LRC had asked for wording to state that a clinic may be established by a non-profit juristic entity to conduct a legal practice, provided that its founding documents specified this, and on the composition. He referred Members to the definition of the law clinic, noting that the wording he was now reading out did differ slightly from what was in the draft before Members.

The other issue was that the Committee had raised was in relation to members of the governing body being comprised of legal practitioners, and the new wording had been agreed upon with the LRC. The change related only to non-profit juristic entities. That must be determined by the rules of Council. No relaxation of the requirements for legal practitioner governing body members had been made for other entities.

Mr Swart said that State Law Advisers were admitted as advocates, and wondered if they would be covered by the Bill.

Ms Wilma Louw, State Law Adviser, Department of Justice and Constitutional Development, said that any person wanting to use the appellation “attorney” or “advocate” would have to be admitted under this Act in order to use that name.

Ms Schäfer pointed out that existing rights could not be removed. However, this would affect future use of the title.

Adv Adams questioned subclauses (5)(b) and (c), and asked if any advocates were practising within a non-profit juristic entity. She asked if subclause (7)(c) referred to a person practising as an attorney. This was related to the discussion of in-house legal advisers, and whether they should be allowed to represent their firms. In principle, an advocate should be as independent as possible, representing anyone, and it seemed to be contrary to this principle if they were allowed to represent their employers only.

Mr Daya said that the reference to “an attorney” was inserted to note that these people should have a Fidelity Fund certificate. However, some organisations, such as LRC had applied for exemption from holding this certificate. He confirmed that both attorneys and advocates could represent the clinics.

Adv Adams said that the argument had been raised that there was then no difference, in principle, between a law clinic and a bank, for instance.

Mr Daya responded that the law clinic was a public interest body and therefore took no sides, whereas the bank would be representing its own interests.

Mr Bassett added that the law clinics’ advisers could appear in court, whereas no legal advisers for commercial entities had rights of appearance in court.

Mr Bassett noted that the words “voluntary deregistration” had been added to subclause (7), but this was accommodating what was included in other legislation.

Sub-clause (8) dealt with law clinics, and there were few substantial changes. A new sub-paragraph (h) had been added, but the LSSA noted that the law clinic had to be accredited before being able to engage candidate attorneys. He could not recall whether the Committee had taken a view on that, but thought that it was likely that it would favoured the retention of the current situation, where the law societies would need to accredit for the purposes of taking on candidate attorneys.

Members did not dispute this point.

Mr Bassett said that the Committee had asked for stronger wording around the creation and terms of limited legal liability practices. The word “may” had been changed to “must”, and the prescription of the framework would be done in consultation with the Council.

Mr Daya said that Ms Smuts had suggested that more needed to be done, but he had the impression that this was in relation to alternative business structures. This was a peculiar structure and quite a lot of investigation was needed. The bigger firms were requesting consideration of these structures, in relation to the massive mergers and acquisitions, but this was a very specific situation, and he asked for confirmation from Ms Smuts that her suggestion for “ must” related to alternative business structures.

Mr Bassett conceded that he might have misunderstood Ms Smuts, and apologised if he had. He suggested that perhaps then subclause (11) was the appropriate place to put that the Council was to make recommendations to the Minister on the creation of other forms of legal practice. The footnote noted that this was to empower the Minister to consider new forms of legal practice, including paralegals.

Ms Smuts agreed that Mr Daya was correct that her suggestion did indeed related to alternative business structures. She had noted that further forms of legal practice responsive to international developments and trade instruments were needed. The limited liability provision was an enquiry only. She asked if the Department was suggesting this should be collapsed into (11), and agreed that perhaps it sat better there. Limited liability practice would then not need to be mentioned specifically, but if it was to be named specifically, then multi-disciplinary practices and others would need to be named as well.

Mr Daya added that this could refer to practices where attorneys and advocates were involved.

Ms Smuts agreed, and said that perhaps the Council must, within two or three years, investigate and make recommendations on certain matters, which would then be listed.

Members agreed that subclause (9) would be removed, and the content would be moved to (11) as suggested.

Mr Bassett noted that the Committee had requested a penalty provision for subclause (10), for advocates accepting briefs directly without having a Fidelity Fund certificate. The penalty was presently couched more broadly, although it was not strictly necessary, because there was already wording in clause 84(4), which referred to contraventions of trust money requirements. Perhaps the 34(10) should be included under clause 84(4).

Members formally requested that this be done.

The Chairperson asked Members if they were happy with the two years penalty.

Ms Schäfer was not sure that this was appropriate; the breach could have far-reaching consequences.

The Chairperson pointed out that if there were further problems with the trust money, a charge of theft could also be laid.

Mr Daya asked if this Bill could require the imposition of a certain penalty.

Mr Sibanyoni felt that a stern deterrent was needed and wondered whether a minimum sentence should not be specified.

Mr Swart confirmed that it was likely that there could be a combination of charges. If there was money missing, disciplinary action would be taken, and a charge of theft laid. The courts were still being given a discretion. The advocates in Pretoria who were struck off, after their involvement in Road Accident Fund matters, were left without any income. He was opposed to a minimum sentence, but thought that a maximum of two years was acceptable.

Mr Bassett noted that the current Attorneys Act provided for a fine of R2 000 or six months imprisonment.

Mr Swart noted that there was another penalty clause in clause 33.

Mr Bassett agreed, but said that the penalty clause in 84 dealt with something different. It might be possible to create a specific penalty clause.

Ms Schäfer asked if those not qualified, who were holding themselves out as legal practitioners, were covered.

Mr Bassett noted that this was covered in clause 33(2).

Adv Adams asked if clause 33(3) would exclude paralegals, who were possibly doing this type of work.

Mr Daya referred Members to clause 33. Clause 33(1) related to drawing up of instruments that resulted in a fee, gain or reward.

Ms Louw said that there was originally a definition of “legal services”, but it was removed because there was some work that could be done by others (such as wills).

Clause 35: Fees of legal practitioners
Mr Bassett noted the change of heading. The Department had been asked to look at an alternative option, in terms of which the Rules Board would be used to determine fees. He read it out (see attached document). This noted that any fees must be accordance with the tariffs made by the Rules Board for the Courts of Law, and certain criteria were set out (which were in the original Bill). New wording relating to seniority and experience of the legal practitioner was also included.

The Rules Board already set tariffs for litigious matters, but not for non-litigious matters. It was, however, constrained, because it only determined tariffs for the Magistrate’s Court, High Courts and, Supreme Court of Appeal, but not for the Constitutional Court or Labour Court. There would need to be a consequential amendment to the Rules Board legislation.

Mr Swart said that the question of fees had serious implications for accessibility, demand and supply. He had a major concern around non-litigious matters, such as international mergers and acquisition. He questioned how the Rules Board could decide, for instance, what fees were warranted for arranging a multi-billion dollar merger. He suggested that the tariff should be limited to litigious matters. Legal advice and drafting of complex contracts fell into another field.

Ms Smuts reminded Mr Swart that the Committee had wanted provision made for non-litigious fees and tariffs, and a possible solution of using the Rules Board had been suggested during that discussion. The Committee would still have to decide whether this was ideal. She had argued that apart from the two approaches set out here, a third option was to require the Council to conduct an enquiry into costs, similar to what had been suggested for the alternative business structure in clause 34(11). She reiterated that there was a need to consider more than merely the fee structure as economics in general, the fee regime, legal costs and so on should all be investigated. Economists should be included in that enquiry. Ideally, the Council should then make rules. She would prefer to see a third option set out, requiring the Legal Practice Council to enquire into legal fees and costs and come up with recommendations to enable it to make rules, in order to ensure that South Africans had access to legal services. Whatever phrasing was used must reflect the need for a full scale enquiry.

In relation to litigious and non-litigious work, she reminded Mr Swart that Webber Wentzel had supported the creation of a fee structure. The more she thought about it, the more she believed that a proper enquiry was needed.

There was also another question - whether the regulator should be asked to table the fees before Parliament, to ensure that the public interest was served. She reiterated that Ministerial involvement into fees was problematic.

The Chairperson asked whether firms would be permitted to continue charging the current fees until that enquiry was completed.

Ms Schäfer said that she had an issue with clause 35(1). Her understanding was that fees may not be prescribed. Only maximum fees could be detailed.

Secondly, if there was no definition of legal services, she questioned whether it was possible to say that legal practitioners would be covered by certain fee structures, as that might allow paralegals to charge whatever they wanted.

Ms Schäfer also asked if the purpose of making a specific reference to law clinics and legal aid was to allow them to recover legal costs. She disagreed with Mr Swart’s point that only litigious matters needed to be covered as she felt that the giving of legal advice was one of the most basic aspects of access to justice. She also did not see why there was no scope for differential fees.

Mr Swart said that Adams & Adams had sent in a lengthy submission about costs in the patent sector, and had argued for sector-specific determination. He could understand having one tariff for litigation, but there were difficulties around non-contentious work. He stood by his concern that it would not be easy for the Rules Board to determine what the fee structure should be. At the moment, the market determined that. He still believed that the costs of getting to court and engaging in litigation was most problematic.

Ms Schäfer said that much of the problem was that people were not keen to pay their legal fees, which made it difficult for attorneys to keep their practices up to date and to the proper standards.

Ms Louw said that in general, one of the advantages of involving the Rules Board was that it would comply with the Competition Commission requirement that fees should not be set by competitors. The criteria in the alternative option did take into account the importance, volume of work, and significance, and the Rules Board could use a committee to advise it on sectoral fees. One tariff should not apply to all practitioners.

The Chairperson noted that the Committee had accepted, in principle, that, unlike the current situation, joint attorneys/advocates practices and multi-disciplinary practices could be established. He asked how that would affect what was in clause 35. This would be a complex issue.

Mr Daya responded that the suggestion by Ms Smuts, which she had termed a “third option” could perhaps rather be an add-on than an option. Such an enquiry was very important, and in his view, it should be specified under clause 35, in similar terms to clause 34(11).

Adv Adams noted that Legal Aid South Africa covered a certain group of people. When speaking of access to justice, there was a need to be more specific.

The Chairperson said it was true that legal aid covered the indigent. However, there were difficulties with people who fell outside that category, but were not affluent.

Adv Adams made the point that this would not, as Mr Swart suggested, involve corporates, and mergers and similar work was not perhaps the greatest problem.

Mr Swart said that perhaps the exceptional cases the client should have the right to contract out. That had been recommended by Webber Wentzel. Secondly, the Contingency Act would also need to be considered by the Rules Board,

Members briefly discussed the fee structures and contracting-in and –out, as it applied in the medical profession, making the point that in practice, most doctors ended up contracting out.

Mr Daya said that attorneys should not be able to contract out of fee scales in litigious matters.

Ms Schäfer reverted to Ms Smuts’ suggestion but felt that the Committee should specify what outcomes it wanted to achieve from the investigation.

The Chairperson suggested that there could be specific reference to an investigation into fees for legal services, access to justice, and the reasons why people found it so difficult to afford legal fees.

Mr Bassett suggested that a procedure to assist in making recommendations could be mentioned.

Ms Schäfer said that it must also be remembered often attorneys’ costs rose because of systemic issues outside their control, such as endless postponements, or witnesses not present.

The Chairperson asked who should make the final determination, after the investigation.

Ms Schäfer agreed that the Council could not make that decision, as it would be anti-competitive.

Mr Swart suggested an option along the lines that clients of legal practitioners should be allowed to contract out of the fee structures for non-litigious matters. This would be the choice of the client. The Competition Commission had clearly expressed its opposition to fixed tariffs or fee-setting, and this would enhance competition.

The Chairperson stressed that any contracting-out option must work both ways. Litigious matters were done on a set tariff.

Mr Swart said that there was a difference between recovery of costs and charges to own client. He said that his proposal, if applicable to non-litigious matters, may be that the client should be allowed to contract separately.

The meeting was adjourned.
 

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