Legal Practice Amendment Act to ensure smooth handover to new Legal Practice Council dispensation

Legal Practice Amendment Act 16 of 2017

Section 1 of the Legal Practice Amendment Act 16 of 2017 (LPAA) amends s 4 of the Legal Practice Act 28 of 2014 (LPA) which provides for the establishment of the South African Legal Practice Council (LPC), in order to provide that the LPC begins to exercise jurisdiction over legal practitioners and candidate legal practitioners only when s 120(4) comes into operation, to avoid conflicting jurisdiction between the LPC and the statutory provincial law societies.

Section 2 of the LPAA amends s 6 of the LPA which provides for the powers and functions of the LPC, in order to add as functions of the LPC that it must establish, promote, administer or assist in the establishment, promotion or administration of insurance schemes, medical aid schemes, medical benefit schemes, pension funds, provident funds, pension schemes or benevolent schemes for legal practitioners, for employees of legal practitioners, and for officials and employees of the Council.

Section 3 amends s 23 of the LPA which provides for the establishment of Provincial Councils. Section 3(a) amends s 23(1) to provide that the LPC must 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, from time to time, in terms of the Superior Courts Act, 2013. The LPC may delegate to the Provincial Councils such powers and functions which, in the interests of the legal profession, are better performed at provincial level.

Section 4 amends s 33 of the Act which provides for the authority to render legal services. Section 4 amends s 33(1) and (3) of the LPA to provide that only practising legal practitioners may perform certain acts or render certain services by inserting the word ‘practising’.

Section 5 amends s 62(3) of the Act to ensure a smooth transfer from the ‘outgoing’ Board of the Attorneys Fidelity Fund, to the ‘new’’ Board of the 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 LPA.

Section 6 amends s 91 of the LPA which provides for the right of banks in respect of trust accounts. Section 6 amends s 91(4) to provide that the Legal Practitioners’ Fidelity Fund Board may also determine the period for which a bank statement must be issued. It also replaces the word ‘statement’ with the words ‘transaction history’. This is deemed necessary because a statement sometimes only reflects the bank balance and details of the transaction history of the trust account may be required in certain circumstances, for instance for purposes of an inspection of the trust account by the LPC or the Board.

Section 8 amends s 96 of the LPA which provides for the establishment of the National Forum (NF) to provide that the NF ceases to exist on the date of the meeting with the LPC as envisaged in s 105(3), which may not be later than 31 October 2018.

Section 9 amends s 97 of the LPA which sets out the terms of reference of the NF. The mandate of the NF 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 permanent regulatory structures contemplated in the LPA. However, it became clear that the mandate of the NF 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 NF in terms of s 97 was 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 LPA become operational. The mandate of the NF has been broadened to advise the Minister on the first set of regulations that must be made in terms of s 94 and to make the first set of rules in terms of s 95. This will ensure that the rules and regulations are in harmony and will avoid a period during which there are no regulations while the Minister would have needed to make the regulations in consultation with the LPC, once the latter had been established and functional. Section 95(1) provided for the LPC to make rules relating to a number of issues, many of them relating to the regulation of legal practitioners. The amendment ensures that, when the LPC takes office on a particular day, there will be rules governing a number of issues for which rules are required. The amendment now places the responsibility for making the first set of rules contemplated in s 95 on the NF. Section 9(e), which amends section 97(2)(a), read with clause 11, is a consequential amendment to s 117, as a result of s 9(e), empowers the NF to negotiate a date on which the law societies will dissolve. The date may not be later than six months after the commencement of Chapter 2 of the LPA.

Section 10 –  s 109 of the LPA sets out the role and responsibilities of NF regarding the promulgation of provisional or interim rules and regulations in preparation for the establishment of the permanent regulatory structures. Since the role of the NF was limited in terms of making these rules and regulations, s 9 has extended the mandate of the NF to make recommendations for regulations as contemplated in s 94 and to make rules as contemplated in s 95(1) and (3) of the LPA. Legal Practice Amendment Act 16 of 2017 10 confirms and gives effect to the extension of the mandate of the NF as contemplated in s 9.

Section 11 amends s 114 of the LPA which regulates the position of existing advocates, attorneys, conveyancers and notaries. It looks after vested interests. S 11 provides that attorneys who had the right of appearance in the High Court of South Africa, the Supreme Court of Appeal or the Constitutional Court in terms of any law before the commencement of the Act, will retain that right after the commencement of the Act.

Section 12 amends s 117 of the LPA which contains transitional provisions relating to the existing statutory law societies. This amendment stipulates 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 LPC or Provincial Councils. This will 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.

Section 13 amends s 120(3) of the LPA to address practical realities and contribute to a smoother transition and commencement of the LPA.
See the envisaged timeframes here.

Download the Legal Practice Amendment Act here.

(Adapted from the Department of Justice and Constitutional Development’s notes to the Legal Practice Amendment Bill.)