KwaZulu-Natal Law Society OFFICE OF THE ACTING DIRECTOR

Transcription

1 KwaZulu-Natal Law Society OFFICE OF THE ACTING DIRECTOR YOUR REF : OUR REF : 11/9/06 Please Quote Our Reference 15 September ST Floor, 200 Hoosen Haffejee Street P.O. BOX 1454 PIETERMARITZBURG 3200 FAX: (033) DX: 25 TELEPHONE: (033) info@lawsoc.co.za Website: CIRCULAR 9/2006 ALL PRACTISING MEMBERS OF THE SOCIETY Dear Member 1. THE ATTORNEYS FIDELITY FUND PROFESSIONAL INDEMNITY INSURANCE SCHEME: THE ATTORNEYS INSURANCE INDEMNITY FUND: CORRECT PROCEDURE; AND EX-GRATIA PAYMENTS POLICY Mrs A. Bertelsmann, the Legal Adviser of the Attorneys insurance Indemnity Fund (AIIF) requested assurance that members of the public should be made aware of the correct procedure, which they should follow in order to make a claim for negligence against an attorney. Any member of the public, who believes that she/he has a claim for negligence against an attorney, should approach another attorney who can, if appropriate, send a Letter of Demand to, alternatively, issue Summons against the allegedly negligent attorney. In turn, the allegedly negligent attorney may advise Glenrand MIB (on behalf of the AIIF) of the claim and request indemnity in the matter. In terms of the AIIF's Scheme Policy, (which can be found on their website at a third party has no right to claim directly from the insurer. Claims may only be referred to the AIIF by the insured attorney concerned. However, earlier this year, the Board of the AIIF made a decision to allow claims for ex-gratia payments, in certain special circumstances, to be made by the claimants themselves, which was set out to the Society as follows: "We have pleasure in announcing that the Board of Directors of the Attorneys Insurance Indemnity Fund ( AIIF ) has resolved that the Company will in future deal with a limited number of claims on an exgratia basis.

2 CIRCULAR 9/2006 Page 2 We have already notified the profession of this decision in the Risk Alert Bulletin for May 2006 (Number 2/2006) but would be pleased if you would kindly inform your members of the Board's decision. We also published an explanatory note, which we reproduce below, and which we hope will be of assistance. Explanatory Note 1. The policy issued by the AIIF provides indemnity (on a claims made basis) in respect of an insured's legal liability to any third party arising out of the conduct of the profession by the insured. Only an insured (as defined in the policy) may claim indemnity under the policy. There are rare cases where an insured has absconded and cannot be located after diligent search, thereby preventing a third party with a claim from proceeding against the insured who accordingly does not seek indemnity in terms of the policy. 2. The Fund has decided that in those circumstances it may, in its sole and absolute discretion and without conferring any rights on third parties, make an ex-gratia payment to the third party in regard to any claim that such third party may have had against an insured arising out of the conduct of the profession. 3. Any third party who seeks the assistance of the Fund in this regard will be required at the third party's own cost to provide the Fund with all such information, documentation and assistance as the Fund may require in order to assess the claim, the quantification thereof and what steps the third party has taken to attempt to locate the insured. 4. The Fund may impose such terms and conditions on the grant of any ex-gratia payment as it thinks fit and may in its sole and absolute discretion limit or restrict such ex-gratia payment or decline altogether to grant such payment. The exercise of such discretion or imposition of conditions shall be final and binding. 5. Any ex-gratia payment will always be subject to the limits of indemnity of the policy and the deductible which would have applied, had the claim been dealt with in the ordinary course of events. Kindly note that all requests for ex-gratia payments by members of the public (or their legal representatives) and all requests for indemnity by attorneys, against whom claims have been made, should be directed to Mrs A Bertelsmann at:

3 CIRCULAR 9/2006 Page 3 Glenrand MIB Docex 343 JOHANNESBURG Glenrand MIB P.O. Box 2544 RANDBURG 2125 Tel No: (011) Fax No: (011) abertelsmann@glenrandmib.co.za Ref. DIR 80/2 2. RULINGS OF THE KZNLS COUNCIL: RULE 14(a) - AMENDMENTS At its meeting held on 25 August 2006 the Council approved changes to its following Rulings: Explanatory Note - [ ] Words in bold type in square brackets indicate deletions from the Rulings as they existed prior to the amendments on 25 August Words underlined with a solid line indicate insertions in the Rulings as they existed prior to the amendments on 25 August Ruling 2(2)(i) Conflict of Interests Amend Ruling 2(2)(i) as follows: "A member who handles a [transfer of property is acting for both] conveyancing transaction owes a duty of care to all parties in regard to the conveyancing and should therefore not represent either of them in the event of a dispute where there is a conflict of interest." Members are advised that, should they require consideration of this amended Ruling at the AGM, the President may in terms of Rule 3(d)(viii) allow it to be raised for discussion at the AGM, provided that it shall not be voted upon at the meeting.

4 CIRCULAR 9/2006 Page Ruling 9(2) Amend Ruling 9(2) as follows: "9. (2) (a) Attorneys, who are not members of the Society but [who] are employed by a [such] Law Clinic shall be liable to pay subscriptions for the period of their employment at the Clinic. [may be declared to be members of the Society by the Council in terms of section 57(2) of the Attorneys Act.] [(b) An attorney, who has been declared to be a member of the Society in the circumstances referred to in Ruling 9(2)(a), will not be required to pay subscriptions for so long as he (i) (ii) remains in the employ of such Law Clinic; and does not practise on his own, or as a partner or employee of any firm as defined in the Rules]." 1.3 Ruling 1(11) Add the following new sub-ruling 1(11)(b): "1(11) (a) A member who, without just cause, fails to pay a fine imposed by the Council within the limit set by the Council in a notice advising him of the fine, shall be guilty of unprofessional conduct. (b) Where the Council has cause to instruct attorneys to institute Court proceedings against a member, e.g. strike off or suspension proceedings or the collection of fines or subscriptions, then the member shall, in the absence of an agreement or Court order to the contrary, be liable for all costs incurred by the Society on such proceedings." 1.4 Ruling 2(5)(d) Add the following new sub-ruling 2(5)(d): "In conveyancing matters members may not (i) debit conveyancing fees prior to registration of transactions in the Deeds Office, and/or

5 CIRCULAR 9/2006 Page 5 (ii) come to any arrangements with their clients permitting them to debit such fees prior to such registration save in respect of wasted costs when the transaction is cancelled or the transaction is not being proceeded with." 3. COURT TERM DATES FOR 2007 Notice was given by the Judge President of the Natal Provincial Division of the High Court of South Africa who has, in accordance with Rule 2(1) of the rules regulating the conduct of the proceedings of the Natal Provincial Division and Durban and Coast Local Division of the High Court of South Africa, fixed the term dates for the year 2007 as follows: (1) Terms (a) (b) (c) (d) The first term shall be from 29 January to 1 April The second term shall be from 16 April to 1 July The third term shall be from 30 July to 30 September The fourth term shall be from 15 October to 16 December (2) Administrative recesses The administrative recesses for 2007 shall be as follows: (a) 2 April to 15 April (b) 2 July to 29 July (c) 1 October to 14 October (d) 17 December to 27 January 2008 The splits in the term dates will be as follows: 29 January to 25 February February to 1 April April to 20 May May to 1 July July to 2 September September to 30 September October to 18 November November to 16 December 2007 Ref. DIR 29/1/4

6 CIRCULAR 9/2006 Page 6 4. RASS: PILOT PROJECT: KZNLS BOOKKEEPING TRAINING FOR TRUST ACCOUNT PARTNERS & BOOKKEEPERS Enclosed is the registration form for the Bookkeeping training for trust account partners & bookkeepers to be held on 10 and 11 October 2006 at the Society s Durban Conference Centre. 5. SARS-KZN: TRANSFER DUTY IMPLEMENTATION OF RISK PROFILING Enclosed is a SARS-KZN letter to all conveyancing attorneys regarding procedural changes in the processing of transfer duty applications from 1 September PRACTICE SUPPORT WORKSHOPS We cordially invited you in the previous Circular to attend in substantial numbers at our series of eight practice support workshops, which commenced on 2 September Full details were contained in the enclosed application form. 119 members enrolled as at 8 September We repeat our previous invitation. Additional or replacement application forms can be obtained from Patty Forbes-Milne at patty@lawsoc.co.za ( (tel.), (vax)) or the fax number or postal/docex address on our letterhead). We further invite you to four additional workshops. The enclosed application form contains full details. Introductory courses for new practitioners and time management workshops have been arranged for between 30 October and 30 November The enclosed application forms contain full details. We will supply members with a questionnaire before the end of the year to establish members needs and preferences for 2007 courses/ workshops, e.g. format (i.e. direct educational methods or distance education), nature (i.e. continued education/professional development, introductory courses, time management workshops or bookkeeping courses), topics, presenters, venues, weekdays vis-à-vis Saturdays, duration and times.

7 CIRCULAR 9/2006 Page 7 7. SARS-KZN: DURBAN ESTATES DEPARTMENT We enclose the contact details of the SARS employees for information. 8. LSSA LEGAL EDUCATION AND DEVELOPMENT MATTERS: 8.1 ASSESSOR TRAINING An invitation to attend assessor training, accompanied by an application form, was distributed with the previous Circular. From LEAD s subsequent discussions with members it became apparent that the purpose of the training seems unclear. LEAD request the Society to convey to members that: The purpose is to qualify members for the assessment programme known as learnerships* and as assessors of candidate attorneys at the schools for legal practice and at training courses. It will be offered on two consecutive Friday afternoons and Saturdays to ensure that members are not out of the office for a long time. The members will be trained with regard to the principles, purpose and methods of assessment. Only members with appropriate qualifications, law degrees and admissions will be able to assess unless in certain other aspects such as computer literacy and bookkeeping, persons from other occupations may be used as assessors. *As contemplated in the Skills Development Act under the auspices of the SASSETA the Society will provide further information thereon in a future Circular. 8.2 QUALIFIED LAWYERS TRANSFER TEST (QLTT) The QLTT is a conversion test that enables members to qualify as solicitors in England and Wales. BPP Professional Education will offer courses and exams in October and December 2006 in Pretoria and Cape Town respectively, involving the LSNP and LEAD respectively.

8 CIRCULAR 9/2006 Page 8 The costs of the QLTT in South Africa are significantly less than in England and Wales. A booking form can be obtained from engela@lawsoc.co.za ( (tel.), (vax)) or the fax number or postal/docex address on our letterhead). 8.3 R1 MILLION SASSETA GRANT SASSETA approved the grant to be applied for this financial year. The offer creates an enormous opportunity to address the strengthening and/or development of skills that are required at various levels of the profession. It seems that there might be substantially different needs in the different regions, which will have to be addressed in different ways, either by way of direct educational methods or distance methods, e.g. through the use of DVD recordings and workshops. It is important that these programmes be launched on an inclusive basis to benefit as many attorneys nationally as possible, although the emphasis is to redress historical imbalances and strengthening small firms who do not have access to advanced training or to the funding thereof. The LSSA needs to be advised of topics, the particular focus pertaining to these topics, method, etc. and regards it as essential that clarity be obtained with regard to the needs in different regions. A LEAD appointee will co-ordinate the programme. In order to develop an implementation plan and to make use of the grant as soon as possible, LEAD will appreciate it if the Society will provide them with our views before 31 October Members are invited to provide our BDM, Dirk Vercuil, with their views by 27 October 2006, to enable us to co-ordinate the KZN views before the deadline, i.e. 30 October BUSINESS DEVELOPMENT Members owe a duty towards their profession to manage their firms trust accounts to the best of their ability*. The Fund s cumulative application of its resources in 2005 was R18, per member. The enclosed table contains full details. The maximisation of trust interest and minimisation of trust bank charges (and accountants fees) has become an integral part of practitioners financial management.

9 CIRCULAR 9/2006 Page 9 See 2002 (March) DR 40 and 2003 (May) DR 33 Trust interest is the primary source of income of the Attorneys Fidelity Fund (the Fund) (79% in 2005 and 74% for the first half of 2006) and the related 14.25% agency fee of your Society (60% in the 2005/6 financial year and 71% for July and August 2006). *We thus request members to please: Ensure compliance with the special arrangements in respect of interest rates and service fee structures or negotiate more beneficial arrangements, if possible. See Consider retrospective claims in instances of non-compliance with advice and encouragement from our BDM, who will provide you with Fund guidelines upon request. The cost of trust account bank charges refunded to practitioners increased substantially in 2005, and was the largest expenditure category in the financial statements. (R67, 234, 032). See the July 2006 edition of the Fund newsletter (2006 (July) DR insert). Make an effort to minimise bank charges by, among others: o o o Pending the proposed Regulation 8(1) amendment (see next bullet point) making it compulsory for members to pay over Section 78(1) interest monthly, ensure value-added tax, if applicable, is recovered from SARS as input credits. In addition, pending the proposed amendment, ensure that non-recoverable charges are not set off or claimed from the Fund. See the July 2005 edition of the Fund newsletter (2005 (July) DR insert). Introduce electronic banking if suitable to your firm s requirements, if you have not done so as yet. Ensure that proper accounting procedures are followed relating thereto. Bear in mind that in the event of your bank not having established a common platform for all its activities, these charges cannot be incorporated in the monthly transfer system below and will have to be recovered by completing an annual claim form.

10 CIRCULAR 9/2006 Page 10 Embrace the enhancements developed to the preferential banking arrangements in order to provide for monthly-automated transfers of trust interest to nominated law society banking accounts. See 2006 (January/February) DR 33 and the July 2006 edition of the Fund newsletter. Compliance by attorneys with the monthly transfer system is not yet compulsory, although the Fund and our BDM encourage members to comply. The Fund's Board of Control has requested a change to the regulations to the Attorneys Act to provide for compulsory monthly transfers of trust interest, but has resolved that it will not make the system compulsory until such time as it is available at all "big 4" banks. The system is already available at ABSA, FNB and Nedbank. Standard Bank is in the course of development and expects to go live in January Consider investing surplus trust moneys for the Fund s benefit in terms of Section 78(2) if it is practical to do so. See 2001 (October) DR 35 nba/z3yca 10. GUIDELINES FOR CONDUCT OF PROPERTY LAW MATTERS Enclosed is a document Guidelines for conduct of property law matters, intended to serve the needs of the experienced conveyancer and as an introduction to conveyancing practice for newly qualified practitioners, who may not have had sufficient exposure to the practical and ethical aspects of conveyancing. 11. MISCONDUCT OF MEMBERS The schedule of disciplinary action which has been taken against certain members, appear below for information: 1. MR F M MCHUNU (KUNENE MCHUNU MADONDO) (PINETOWN) Fined R2 000,00 for failing to lodge his 2004 Trust Audit Report.

11 CIRCULAR 9/2006 Page MR B K KUBHEKA (DAN DLODLO & CO.) (VRYHEID) Fined R1 500,00 for having failed to inform his client in a civil matter of the date of trial and for having agreed that his client would bear the costs of the adjournment without having had a mandate from his client to do so. 3. MR T C KUZWAYO (T C KUZWAYO ATTORNEYS) (NEWCASTLE) Mr Kuzwayo was in terms of a High Court Order dated 9 March 2006 suspended from practising as an attorney because of his failure to submit his 2005 Trust Audit Report. 4. MR S PILLAY (SAM PILLAY & CO.) (CHATSWORTH) Mr Samendran Pillay was in terms of a High Court Order dated 12 May 2006 suspended from practising as an attorney because of his failure to submit his 2005 Trust Audit Report. 5. MR N JAYLAL (NEETESH JAYLAL & ASSOCIATES) (DURBAN) Fined R2 000,00 for the late submission of his 2005 Trust Audit Report. 6. MR S N W TSHABALALA (N W TSHABALALA ATTORNEYS) (PIETERMARITZBURG) Mr Tshabalala was in terms of a High Court Order dated 26 May 2006 suspended from practising as an attorney because of his failure to submit his 2004 and 2005 Trust Audit Reports. 7. MR R N COLLETT (COLLETT ATTORNEYS) (MARGATE) Fined R10 000,00 for in attending to third party claims having engaged a private investigator to tout for third party work at an agreed fee of R1 500,00 per file, for having taken out insurance on the lives of his clients and having debited his clients with the premiums when the policies were merely an arrangement to ensure that he was covered for his fees in case the clients died before the claims were finalised and for having failed to comply with the Contingency Fees Act in that he did not give his clients copies of the contingency fee agreements, failed to consult with his clients regarding the offers made by the RAF and did not file affidavits recording the details of the settlements. 8. MS M GHUGROO (FORMERLY A CANDIDATE ATTORNEY AT I C MEER MOTALA & CO.) (DURBAN) Fined R2 000,00 for having been in possession of crib notes during the Court Procedure Examination of the Practice & Procedure Examination on 22 February 2006.

12 CIRCULAR 9/2006 Page MR C S KUZWAYO (CANDIDATE ATTORNEY AT A P SHANGASE & ASSOCIATES) (DURBAN) Fined R2 000,00 for having taken into the Bookkeeping Examination of the Practice & Procedure Examination on 23 February 2006 a ruler on which crib notes were written. 10. MR LAVENTHRAN MAGIMEYNATHAN PILLAY (L M PILLAY ATTORNEYS) (CHATSWORTH) Mr Pillay was in terms of a High Court Order dated 11 July 2006 suspended from practising as an attorney because of his failure to lodge his 2005 Audit Report. 11. MR G C STEWART (EASTON BERRY INC.) (DURBAN) Fined R10 000,00 for, in attending to the transfer of an immovable property, having amended the deed of sale so as to delete the first co-purchaser s name from the deed of sale and for thereafter having arranged for the property to be transferred into the second co-purchaser s name only. In doing so he had not acted with the first co-purchaser s knowledge or consent. 12. RULES OF THE KZN LAW SOCIETY: AMENDMENTS Members are advised that the amendments to the Rules of the Society, approved by members at the AGM on 7 October 2005, have been approved by the Chief Justice of South Africa and appeared in Government Gazette No dated 8 September Encl. G.M. JOHN ACTING DIRECTOR