BRIEFING TO NCOP SELECT COMMITTEE ON SECURITY AND JUSTICE ON THE ATTORNEYS AMENDMENT BILL, 2014

1. BRIEFING TO NCOP SELECT COMMITTEE ON SECURITY AND JUSTICE ON THE ATTORNEYS AMENDMENT BILL, 2014 [B 9B-2014]

2. BACKGROUND • The attorneys’ profession is currently regulated by the Attorneys Act, 1979 (Act 53 of 1979)(the Act). • The Attorneys Amendment Bill (the Bill) is intended to address inconsistencies which have arisen as a result of challenges being experienced in some areas which previously formed part of the former homeland dispensation. • The Bill aims to amend the Act, as an interim measure, pending the implementation of the Legal Practice Act. • It addresses problems which have arisen in the areas of the former Republics of Transkei, Bophuthatswana(Bop), Venda and Ciskei which enacted their own legislation regulating attorneys in these territories. • The Bill was approved by the National Assembly on 30 October 2014.

3. BACKGROUND (Continued) • The laws of the former homelands regulating the attorneys’ profession are still applicable in the areas for which they were enacted. • In 1998, the Act was amended in order to extend insurance cover under the Attorneys Fidelity Fund to the areas of the former Republics Bophuthatswana and Venda in order to protect the public interest with regard to trust funds as an interim measure, pending the rationalisation of the attorneys profession by means of the Legal practice legislation. • The amendment also gave the Law Society of the Northern Provinces(the LSNP) concurrent disciplinary jurisdiction over attorneys practising in the former Republics Bophuthatswana and Venda because the LSNP had to issue Fund certificates and exercise conduct audits over trust funds.

4. BACKGROUND (Continued) . • The LSNP has experienced challenges on a regular basis as a result of the continued existence of separate homeland legislation, particularly in the former Bop. • The Bophuthatswana Attorneys, Notaries and Conveyancers Act, 1984 (Act No. 29 of 1984), still applies. • Some of the challenges experienced, among others, include the • following: • Lack of disciplinary and regulatory control by the Law Society of Bophuthatswana. • Candidate attorneys in the area of the former Republic of Bophuthatswana are not required to attend an approved practical legal training which is considered essential under the Act. • This results in service by candidate attorneys in the former Bop under articles of clerkship not being recognised as proper service under the Act. • These problems were highlighted by the Supreme Court of Appeal, in the case of Law Society of the Northern Provinces v Mogami and Others, giving an indication of the seriousness of the problem

5. BACKGROUND (continued) • Candidate attorneys who serve articles of clerkship and who attend the six months’ practical legal training course under the auspices of the Law Society of South Africa (“the LSSA”) are eligible to claim a reduction of the six months from their two years of articles of clerkship. • This benefit is not available to candidate attorneys in the area of the former Republic of Transkei where the Attorneys, Notaries and Conveyancers Admission Act, 1934 (Act No. 23 of 1934), still applies. • The SCA has even questioned whether the Law Society of Bophuthatswana serves any useful purpose. • The Department has been reluctant to promote amendments to the Act on an ad hoc basis, pending the enactment of the Legal Practice legislation, which will address the rationalisation of the legal profession comprehensively, including the above-mentioned challenges. • It is becoming increasingly urgent to promote the amendments contained in the Bill in the interest of the public and of the legal profession, especially since the final implementation of the Legal Practice Act, which adopts an incremental approach, might still take some time. Thus the Attorneys Amendmend Bill (the Bill) is to be considered by the National Assembly for approval.

6. Background continued: • Most of the clauses of the Bill therefore aim to terminate the continued existence of those law societies still operating in the former homelands and incorporate them into the mainstream law societies.

7. CLAUSE 3 • Section 3 of the Act sets out the categories of attorneys who may engage or retain candidate attorneys for purposes of articles of clerkship. • Professional assistants are attorneys admitted to practice the profession of attorney in a private law firm. • Currently, section 3 does not include professional assistants in the categories of attorneys who may engage or retain candidate attorneys for purposes of articles of clerkship. • Attorneys of similar status in the State Attorney’s Office, Legal Aid South Africa and Law Clinics are entitled to engage candidate attorneys. The Bill is intended to ensure that, similar to their counterparts in the State Attorney’s Office, Legal Aid South Africa and Law Clinics, professional assistants are entitled to engage candidate attorneys. • This will broaden the pool of persons who can engage and train candidate attorneys, thereby increasing the number of persons who are able to gain access to the legal profession.

8. CLAUSE 14: • Section 19 of the Act provides that a person who intends applying to the High Court for admission as an attorney must give notice of such intended admission to the secretary of the relevant law society. • Currently, the Act does not make a distinction in notice periods between new application and applications for readmission as an attorney. • Although a shorter period may be justified for processing new applications, a longer period is required to process applications for readmission to the profession. • One month’s notice is regarded as insufficient as there may be issues that the law society may need to investigate before it can support and process the application. • Clause 14 of the Bill therefore increases the notice period for applications for readmission to three months.

9. CLAUSE 15(a): • Clause 15(a): • Section 20 of the Act provides that a person who was admitted and enrolled as an attorney, notary or conveyancer “under this Act” may apply to the registrar of any court other than where he or she was admitted to have his or her name placed on the roll of that court so that he or she can also appear at that court. • The Constitutional Court, in the case of Mabaso vs the Law Society of the Northern Provinces and the Minister of Justice and Constitutional Development held that the words “under this Act” discriminate unfairly against attorneys admitted in the former TBVC states and struck them out. These words have the effect that attorneys admitted under the former homeland legislation could not appear in courts other than where they had been admitted. • The clause therefore gives effect to this judgement by including attorneys in the former TBVC states.

10. CLAUSE 16: • Section 23(1)(a) of the Act authorises attorneys to practise as incorporated companies. • Section 8(3) of the new Companies Act, 2008 (Act 7 of 2008)(the Companies Act) prohibits any association of persons from carrying on any business that has for its objects the acquisition of gain, unless that business is registered under the Companies Act. • Section 8(2) of the Companies Act defines a profit company, among others, as a personal liability company if it meets the criteria for a private company and its memorandum of incorporation states that it is a personal liability company. • A private company is defined in section 8(2)(b) of the Companies Act as a company that is not state-owned and its memorandum of incorporation prohibits it from offering any of its securities to the public and restricts the transferability of its securities. • An incorporated company as provided for in the Act is not recognised by the Companies Act.

11. (CONT) • Clause 16 aims to do away with the requirement that the memorandum of incorporation of a practice registered as a company must state that all past and present directors of the company shall be jointly and severally liable for its debts and liabilities. • The proposed amendment will also ensure that such a practice is registered as a personal liability company. • Section 23(1)(c) of Act provides that the name of an incorporated firm of attorneys can only consist of the names of former or current directors of that firm. According to the LNSP, some of the largest firms in its area of jurisdiction have entered into arrangements with overseas firms, in terms of which the name of the foreign firm is used as a trade name. This arrangement is in conflict with the provisions of section 23(1)(c) of the Act as the overseas firms do not have past or current directors in the local firm. • The legal profession is of the view that use of the name of the foreign firm as a trade name by local firms is justified as it allows its members to gain experience and compete in the global arena. The amendment contained in clause 16 will also allow the council of a law society to approve the use of any name as a trade name which could include the name of an overseas law firm.

12. Clause 16 cont/ Clause 19 • The word “membership” is only used in the context of a not for profit company or close corporation. The Act uses the term “member” instead of a “shareholder”. Proposed amendments in clause 16 also aim to correct this terminology. • Clause 19: • Section 49 of the Act requires any action against the Attorneys Fidelity Fund to be instituted in the High Court. • Litigating in the High Court is expensive and if a matter can be brought in a lower court, which is less expensive than in the High Court, the question is raised why litigants should be forced to approach the High Court. • clause 20 amends this section by allowing actions against the Attorneys Fidelity Fund to be instituted in any court having jurisdiction and not necessarily in the High Court, as is currently the case.

13. CLAUSE 21: • Clause 21: • Aims to amend section 56 of the Act which deals with the existing four provincial law societies. • Clause 21 provides that the names of the four existing law societies, namely the Law Society of the Cape of Good Hope, the Law Society of the Orange Free State, the Law Society of the Transvaal and the Natal Law Society be changed in accordance with current realities, namely to the Cape Law Society, the Law Society of the Free State, the Law Society of the Northern Provinces and KwaZulu-Natal Law Society. • The Bill also provides that these societies have jurisdiction over all attorneys practising in their respective areas of jurisdiction as follows: • (a) The Cape Law Society has jurisdiction over all attorneys practising in the Western Cape, the Eastern Cape (including the areas of the former Republics of the Transkei and Ciskei) and the Northern Cape. • (b) The Law Society of the Free State has jurisdiction over all attorneys practising in the Free State. • (c) The Law Society of the Northern Provinces has jurisdiction over all attorneys practising in Gauteng, Mpumalanga, the North West (including the area of the former Republic of Bophuthatswana) and Limpopo (including the area of the former Republic of Venda).

14. CLAUSE 21:(CONT) • The KwaZulu-Natal Law Society has jurisdiction over all attorneys practising in KwaZulu-Natal. • The clause further provides that any law society not mentioned or that falls outside the four law societies mentioned above will dissolve in accordance with regulations made under section 81 of the Act. • The clause also allows for transitional arrangements, by providing that any pending legal proceedings, disciplinary inquiries, rights and obligations of any law society which is dissolved will transfer to the law society having jurisdiction, for example, the rights and obligations of Law Societies of Bophuthatswana and Venda will be transferred to the Law Society of Northern Provinces, and in the case of Law Societies of Transkei and Ciskei, shall be to the Cape Law Society.

15. CLAUSE 22: • Clause 22: • The amalgamation of the former homeland societies law societies into the four former RSA law societies will result in attorneys becoming members of different law societies to the ones of which they are currently members. This will require the “new” law societies to have proper and updated records of practitioners in their areas of jurisdiction. Therefore, clause 22 amends section 57 of the Act to make it obligatory for practitioners who become members of a law society for the first time to provide that law society with information as may be required. It affords the law societies to keep the updated records of all practitioners in their respective regions.

16. CLAUSE 24: • Clause 24: • Section 71 of the Act deals with the right of the council of a law society to enquire into alleged unprofessional or dishonest or unworthy conduct of attorneys. • Section 15(1) of the Act provides for a court to admit or enroll any person as an attorney if, among others, that person is fit and proper to be so admitted or enrolled. • Clause 24 aims to amend section 71of the Act in order to make provision for the council of a law society to enquire into the alleged unprofessional or dishonest or unworthy conduct of an attorney irrespective of where or when the alleged conduct took place or whether the alleged conduct occurred before or after that attorney became a member of its society or not. • It provides for a court to admit or enrol any person as an attorney if, among others, that person is fit and proper to be so admitted or enrolled.

17. CLAUSE 26: Clause 26: • Section 75 of the Act limits the liability of law societies in respect of anything done in good faith under the Act. • Section 59 of the Act gives law societies the power to conclude an agreement with any person for the performance of any work or to render services. • Clause 26 of the Bill aims to extend the limitation of liability to agreements which were concluded under any law repealed in terms of clause 35 of the Bill.

18. CLAUSE 35: Other clauses: • Clauses 1, 3 to10,12 -18, 22 to 25, 28 and 30 give effect to the view that law societies are not necessarily bound to specific provinces. • Clauses 1, 2, 7, 11,19, 25, 28 and 29 aim to amend the provisions of the Act which still refer to concepts such as the Supreme Court,provincial divisions and local divisions” and the like in order to bring them in line with current realities. • Clauses 20, 27,31,32 and 34 repeal sections 55, 77,84 and 84A of the Act which have become obsolete since they contain interim measures relating to former homelands. • Clause 33 aims to permit candidate attorneys in the areas of the former Bop, who before the coming into operation of the Bill were entitled to be admitted and enrolled as attorneys to continue to be so entitled. • Clause 34 extends the application of the Act to the entire country. • Clause 7 of the Bill is aimed at protecting the rights of candidate attorneys whose rights of appearance were issued by law societies which will be amalgamated as a result of the Bill

19. (CONT) Clause 35: • This clause repeals the legislation of former homelands indicated on Schedule.