Legal Practice Amendment Bill: Department briefing, with Deputy Minister

Meeting report

Briefing by Department of Justice and Constitutional Development (DoJ&CD) on Legal Practice Bill [B11-2017]
The Department stated that the purpose of the Bill was to bring about transformation within the legal profession. The Bill specifically dealt with the transition of the National Forum on the Legal Profession to the provincial councils. It did not deal with aspects of legal practice. It dealt with transitional movement. The National Forum was, among other things, responsible for developing elections procedures and to set out vocational training that a candidate attorney should undertake prior to being admitted as an attorney. These functions would be transferred to provincial councils. The Bill would allow a time for transition.
 
Ms Wilma Louw, State Law Advisor, DoJ&CD, explained that the Legal Practice Amendment Bill, 2017, amended the Legal Practice Act 28 of 2014. The aim of the Bill was to address practical and technical issues of a non–contentious nature that would enhance a smooth transition to the new dispensation. The Legal Practice Act consisted of 10 Chapters. Parts 1 and 2 of Chapter 10 came into operation on 1 February 2015. These Parts dealt with the establishment and mandate of the National Forum. The remainder of the Act was not yet in operation and would not come into operation until the National Forum had completed its mandate. The National Forum had a limited lifespan of three years, during which it ought to do what the provisions of Chapter 10 of the Act required. This deliberate “phasing in” of the Act was to allow the legal profession (the National Forum) the opportunity to attend to unfinished business and prepare for the installation of the new regulatory structures contemplated in the Act. The National Forum had identified certain technical aspects and proposed that the Act be amended to ensure a smooth transition.
 
Ms Louw took the Committee through the Bill clause by clause.
 
Clause 1 of the Bill amended section 4 of the Act which provides for the establishment of the South African Legal Practice Council (''the Council''), in order to provide that the Council only began to exercise jurisdiction over legal practitioners and candidate legal practitioners when section 120(4) comes into operation, to avoid conflicting jurisdiction between the Council and the law societies.
 
 Clause 2 was self-explanatory and amended section 6 of the Act and empowered the South African Legal Practice Council (the Council) to establish, promote, administer or assist in the administration of insurance schemes, medical aid schemes, medical benefit schemes, pension funds, provident funds, pension schemes or benevolent schemes for legal practitioners. There was a similar provision in the Attorneys Act, 1979.
 
Clause 3 amended section 23 of the Act which provided for the establishment of LPCs or Provincial Councils. Clause 3(a) amended section 23(1) to provide that the Council ought to establish Provincial Councils, the areas of jurisdiction of which must correspond with the areas of jurisdiction of the Divisions of the High Court of South Africa, as determined by the Minister in terms of the Superior Courts Act, 2013. The Council might delegate to the Provincial Councils such powers and functions which, in the interests of the legal profession were better performed at provincial level. Clause 3(b) was a consequential amendment.
 
Clause 4 amended section 33(1) and (3) of the Act to provide that only practising legal practitioners might perform certain acts or render certain services for reward, by inserting the word “practising”. This enhanced the protection of the public.
 
Clause 5 amended section 62(3) of the Act to ensure a smooth transfer from the “outgoing” Legal Practitioners’ Fidelity Fund Board (the Board), to the “new” Board of Legal Practitioners’ Fidelity Fund, by allowing members of the outgoing Board to stay in office for a period of 6 months, pending the installation of the new Board in terms of section 62(1) of the Act. Section 91 of the Act regulated the position of banks in respect of trust accounts.
 
Clause 6 amended section 91(4) by allowing the Council or the Board to request a bank for a “transaction history”, rather than a “statement”, of any particular attorney’s trust account. A statement sometimes only reflected the bank balance whereas details of the transaction history of the account might be required.
 
Clause 7 was an amendment to section 94(1)(e), consequential to the proposed amendment to section 23(1) in terms of clause 3.
 
Clause 8 amended Section 96(4) of the Act, which currently provides that the lifespan of the National Forum is three years. The National Forum came into existence on 1 February 2015 and in terms of section 96(4) it would therefore cease to exist on 1 February 2018.
The National Forum would not be in a position to finalise its mandate as set out in Chapter 10 of the Act before that date and requested the Minister in terms of section 97(5) of the Act extend the period within which it was supposed to submit recommendations to the Minister for purposes of making certain regulations. The Minister extended the period until 31 October 2018.
The Bill extended the lifespan of the National Forum in order to allow it to fulfil its current statutory mandate and the extended mandate as proposed in the Bill. It was proposed that the National Forum would cease to exist on the date of the meeting with the Council envisaged in section 105(3), which date might not be later than 31 October 2018.
Section 105(3) provided that the National Forum ought, before its dissolution, meet with the Council for purposes of handing over. On that date the Council and Provincial Councils would become functional, the transfer of the assets and liabilities of the law societies to the Council will take place and the law societies will dissolve.
This extra time was necessary for the National Forum to finalise its statutory mandate and for the Minister to make regulations, on the recommendation of the National Forum, which were to be approved by Parliament.
Clause 8(b) deletes section 96(5) to correspond with the provisions of section 101 of the Act.
 
Clause 9 amended section 97 of the Act which set out the terms of reference of the National Forum. The mandate of the National Forum was originally intended to be limited to what was thought to be absolutely essential for purposes of preparing for the installation of the proposed new regulatory structures contemplated in the Act. It had been suggested that the mandate of the National Forum was not broad enough to ensure a smooth handover of ongoing work carried out by the existing regulatory bodies (the statutory law societies) when the new regulatory bodies come into existence on a particular day. The mandate of the National Forum in terms of section 97 is limited to certain rules and regulations as an interim measure.
 
Sections 94 and 95 envisaged the making of permanent regulations and rules, respectively, once the entire Act becomes operational. It was proposed in clause 9(d) and (f) that the mandate of the National Forum be broadened to advise the Minister on the first set of regulations that ought to be made in terms of section 94 and to make the first set of rules in terms of section 95. This would ensure that the rules and regulations are in harmony and would avoid a period during which there were no regulations while the Minister would need to make the regulations in consultation with the Council, once the latter has been established and functional. If this amendment was not promoted the implication was that, when the Council took office on a particular day, there would be no rules governing a number of issues in respect of which rules would be required. The Council would then not be in a position to carry out all of its regulatory functions until the rules had been made and published. The public interest would be compromised if such a situation arose.
 
Once the Council was fully operational there was nothing that precluded it from later replacing or amending the rules made by the National Forum and requesting the Minister to amend the regulations initiated by the National Forum.
 
Clause 9(a) was consequential to the amendment to section 23 as provided for by clause 3. Clause 9(b) and (c) effected technical corrections and Clause 9(e) empowered the National Forum to negotiate a date on which the law societies would dissolve, a date which might not be later than six months after the commencement of Chapter 2 of the Act. Chapter 2 regulated the establishment and operation of the (permanent) Council.
 
Clause 10 amended section 109. Section 109 of the Act set out the role and responsibilities of the National Forum regarding the promulgation of provisional or interim rules and regulations in preparation for the establishment of the permanent regulatory structures. At present the role of the National Forum was limited in terms of making these rules and regulations. Clause 10 therefore proposed the extension of the mandate of the National Forum to make recommendations for the first set of regulations as contemplated in section 94 and to make the first set of rules as contemplated in section 95 of the Act. Clause 10 proposed consequential amendments to section 109 of the Act which confirmed and gave effect to the extension of the mandate of the National Forum as contemplated in clause 9.
 
Clause 11 amended section 114 of the Act which regulated the position of existing advocates, attorneys, conveyancers and notaries. It looked after vested interests and enhanced the protection of the public. It provided that attorneys who had the right of appearance in the High Court, Supreme Court of Appeal or the Constitutional Court in terms of any law before the commencement of the Act, would retain that right after the commencement of the Act.
 
Clause 12 amended section 117 of the Act, which contained transitional provisions relating to the existing statutory law societies. The amendment proposed that the existing law societies must continue to perform their powers and functions until the date of transfer of assets, rights, liabilities, obligations and staff, from the current law societies to the Council or Provincial Councils as contemplated in section 97(2)(a), as amended by clause 9. This would facilitate a smooth hand-over, particularly in respect of the functions currently carried out by the law societies and the staff of the law societies.
 
Clause 13 amended section 120(3) of the Act to address practical realities and contribute to a smoother transition and commencement of the Act.
 
Clause 14 contained the short title of the Bill.
 
Mr John Jeffrey, Deputy Minister of Justice and Constitutional Development, said that he would like to give a brief background of the Bill. The transformation of legal profession had been something that government had focused on since 1994. The need to transform the legal profession had been there for some time. The approach was to get advocates and attorneys to agree on issues and reach consensus. That process proved very difficult but eventually the Bill was introduced into Parliament. There were a number of issues that prompted a big debate around them. Attorneys were regulated by law societies, including homeland law societies, which existed under statute. On the other hand, advocates had their own regulations from the Bar Councils and independent bars. There had been various views and outlooks. After the big debates, there had been some consensus on certain issues. There were some issues that were not resolved. It was agreed that the National Forum would be established, especially, who would be part of the National Forum. It had a mandate set out in the Legal Practice Act. However, the National Forum came with the request for further amendment to the Act. The substantial amendment was to extend the term of the National Forum. The Legal Practice Council was needed to be established and its elections would be run by the National Forum. The Bill was all about the provision of that and other technical matters. When the Bill was advertised for comments, all people, who came in, wanted to re-open old debates. These debates could not be accommodated because permission should be sought from Parliament first. He was not sure however what would be the position of Parliament on that matter. His plea was to stick to the Bill as it was. The Bill before the Committee was a B version and might be further amended by NCOP. The request was that it should be passed as soon as possible. The political parties supported the Bill included the ANC, EFF, and NFP. The DA was not against the Bill but wanted to state its position after reporting to caucus. It was exercising its right.
 
Discussion
Ms B Engelbrechet (DA, Gauteng) asked the reason behind the establishment of Provincial Councils which did not exist before.
 
Mr Jeffrey responded that the Act did provide for provincial councils. What the Act did not provide was how many there should be. There were four Law Societies. They included Transvaal Law Society, Cape Town Law Society which covered three provinces. The Law Society of Northern Cape which covered three provinces and finally KwaZulu Natal Law Society. Of concern was that there was not enough money to establish a provincial council in each province. In terms of section 23 of the Act, it was not specific how many Councils should be established. It was the National Forum that came up with an idea of establishing a council in each and every province. This progressive realisation of a structure in each province was addressed in the Bill. The reason behind this was because of the existence of a high court in each province.
 
The Chairperson sought clarity on the transition of the Bill and asked why the transition was left open and why it was not closed.
 
Ms Louw responded that the National Forum was busy with issues of transition. The cut-off date was not included in the Act to avoid the possibility of amending the Act in cases such cut-off date was not met. The cut-off date could not be included in the Bill as it was at the final process.

 
The Chairperson said that the Committee would still deliberate on the Bill and suggested that it should be dealt together with International Arbitration Bill. They should be combined and run parallel.
 
Members agreed.
.
Consideration and adoption of minutes
Minutes of 31 September 2017 was considered and adopted as it was.
Minutes of 12 October 2017 adopted as it was
Minutes of 31 October 2017 adopted without further amendments.
Minutes of 1 November 2017 was considered and adopted with minor amendments.
Minutes of 7 November 2017 adopted without further amendments.
 
The meeting was adjourned.