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LSSA strongly opposes Debt Collectors Amendment Bill

01 Feb 2016
Download the LSSA Comments on the Debt Collectors Amendment Bill, 2016
View the Debt Collectors Amendment Bill, 2016

The LSSA has expressed strong opposition to the Debt Collectors Amendment Bill, 2016, which proposes making attorneys and their staff subject to the jurisdiction of the Council of Debt Collectors and the provisions of the Debt Collectors Act 114 of 1998. It says the attorneys’ profession is unfairly being blamed for ambiguities in the legislation governing emolument attachment orders and for the conduct of a relatively few attorneys.
The LSSA is, in particular, concerned that the measures introduced by the Bill:

  • will not contribute towards a solution; instead it will create more setbacks than solutions;
  • are premised on flawed interpretations of court cases and media reports with regard to the
  • abuses regarding the collection of debts;
  • will make significant inroads into the independence of the legal profession;
  • will result in the overwhelming majority of attorneys, if not all, together with their staff members having to register as debt collectors, including those attorneys who do not primarily engage in debt collection;
  • are based upon misconceptions as to the extent of abuses by attorneys. We submit that there are relatively few attorneys that are guilty of such abuses;
  • completely disregard existing legislation regulating attorneys and duplicate the regulation of attorneys;
  • disregard proposed amendments to the Magistrates’ Courts Act 32 of 1944 to remedy the abuse of emolument attachment orders and jurisdictional matters, which are due to be promulgated in early 2016;
  • completely disregard the firmly established principle of legal privilege which is an inherent part of the South African and global legal profession;
  • will render invalid, in terms of s 8(3) of the Debt Collectors Act, any agreement (or parts thereof) entered into between an attorney and his or her client (which involves debt collection) before or after the Bill becomes law - if the attorney is not registered with the Council for Debt Collectors. This will have far-reaching implications for the overwhelming majority of law firms and their clients;
  • may result in a situation where a legal practitioner, who has been reprimanded by a law society for a relatively minor transgression such as not having answered correspondence timeously, is considered not to be competent to be registered as a debt collector and will effectively be prevented from operating a legal practice; and
  • endeavour to compare fees between attorneys in litigious matters and debt collectors in non-litigious matters, even though there is virtually no comparison between the academic qualifications of debt collectors and attorneys.

It is evident that a number of ambiguities exist within the legislation governing emolument attachment orders. This has contributed towards the lack of understanding of the law.
The LSSA submits that the attorneys’ profession is unfairly being blamed for such ambiguities and the conduct of a relatively few attorneys.

Read the full submissions.
 

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