Act puts lawyers on leashes
CLIENTS HAVE MORE PROTECTION FROM MONEY THEFT Legal Practitioners Fidelity Fund can institute private prosecutions.
Clients who have been defrauded or whose money has been stolen from trust funds by attorneys will soon have more protection with the introduction of new legislation.
The almost revolutionary Legal Practice Act (Act No.28) of 2014 provides for tighter regulation of transactions or payments of such funds to and by clients. Its provisions have been welcomed by the legal fratenity.
“There will be more and tighter accountability by professional legal advisors under the new set-up,” said Motlatsi Molefe, CEO of the Attorneys Fidelity Fund, which is soon to be renamed the Legal Practitioners Fidelity Fund.
Molefe expressed jubilation at the changes coming into effect from November 1. The act provides for the dissolution of the four existing law societies. These will be replaced by a centralised Legal Practitioners Council. It will have provincial councils in all nine provinces.
The main thrust of the changes was to strictly regulate trans- actions of money kept in trust accounts in the custody of lawyers to prevent misappropriation of the funds by legal practitioners.
The new law empowers the Legal Practitioners Fidelity Fund to investigate and conduct private prosecutions against individual lawyers if the National Prosecuting Authority either refuses to or fails to prosecute in opposition to the opinion of the fund.
Private prosecutions would be restricted to theft or misappropriation of trust money by legal practitioners.
Molefe said wrong-doers would be penalised for misconduct after probes by the Legal Practitioners Fidelity Fund and the regulators. The fund’s original objective, which was to settle claims by the public against attorneys involved in theft, would remain. A secondary objective was to provide indemnity cover to attorneys against negligence and other conduct, excluding theft. “For the first time we will be able to focus on public protection more fully, with the necessary powers to ameliorate theft,” Molefe said.
“Where there was a valid transaction but the money was stolen or misappropriated, the fund has always compensated the claimant. Under the new law, we want to ensure a client does not experience prejudice because of misappropriation by a lawyer.”
The new legislation would give the Legal Practitioners Fidelity Fund the power to investigate a legal practitioner suspected of misconduct who has been referred to the fund by a client, but only in relation to trust money.
The legislation also gives the fund the power to inspect an attorney’s books of account to ensure compliance.
“We are allowed, as the Legal Practitioners Fidelity Fund, to appoint a curator in the case of a complaint regarding money meant to be deposited into a trust account, but that was unaccounted for. If it was stolen we will investigate that,” Molefe said.
“The fund will also cater for advocates with fidelity fund certificates, hence the names Legal Practitioners Fidelity Fund and the Legal Practice Council,” Molefe said.
Attorneys have to obtain a fidelity fund certificate as a condition of receiving payment for work. An attorney who does not have a fidelity fund certificate cannot receive fees. The new Act also allows advocates to receive fees directly from the public if they have fidelity fund certificates. They would be subject to the same rules of inspection and compliance as attorneys and their practices would be subject to the rules governing trust accounts.
Molefe said people with a financial complaint against an attorney or advocate under the new dispensation could approach the Legal Practitioners Fidelity Fund. A complaint regarding legal conduct would be the jurisdiction of the Legal Practice Council. –
Fund can probe lawyer referred by client