LEGAL PRACTICE ACT
16 November 2018
Enter the Legal Practice Act 28 of 2014, the subject of intense scrutiny and discussion over the past few years – the new broom that seeks to sweep clean the legal profession and bring with it certain changes that seek to transform and reconstruct it, as well as to facilitate and enhance an independent legal profession.
This article will highlight some of the significant changes that have, as recently as 31 October 2018, been implemented in South African legal practice.
Establishment of the South African Legal Practice Council
The Act has, by virtue of its implementation, repealed the Attorneys Act 53 of 1979 in its entirety and has also abolished the four statutory provincial Law Societies. The South African Legal Practice Council (LPC) has been established to take over the Law Societies, their assets and staff, and to regulate the profession by exercising jurisdiction over all Legal Practitioners (admitted Advocates and Attorneys) and Candidate Legal Practitioners.
Some of the key functions of the LPC include:
- the publication of Rules governing the South African legal practice;
- the establishment of Provincial Councils and their areas of jurisdiction;
- the structure, powers and functions of the Provincial Councils;
- the practical training requirements for candidate legal practitioners;
- preparing and publishing a code of conduct for legal practitioners, candidate legal practitioners and legal entities
Fidelity Fund Certificates
With the recent introduction of the Act, the application process for the issue of 2019 Fidelity Fund Certificates commenced on 01 November 2018. In terms of section 85 of the Act, the requirements for obtaining a 2019 Fidelity Fund Certificate are:
- payment of the prescribed fee as set out in the Rules;
- for those Legal Practitioners applying for their first Fidelity Fund Certificate, proof of the completion of practical management training, in compliance with section 27 of the Act, must also be lodged;
- the submission of a trust account audit report approved by the Council.
Section 37 of the Act regulates this very contentious issue of our beloved profession.
The Rules Board must take several aspects into consideration when determining tariffs in relation to litigious and non-litigious legal services rendered by Legal Practitioners, juristic entities, law clinics or the Legal Aid. These tariffs are yet to be published.
However, the most significant provision of this section is the duty imposed on a Legal Practitioner to provide a client with a written cost estimate notice specifying all the details relating to the estimated costs of the legal services, including:
- fees, charges, disbursements and other costs;
- the Legal Practitioner’s hourly rate (including the explanation to the client of their right to negotiate the fees payable);
- an outline of the work to be done;
- the likelihood of appointing an advocate (and the associated costs thereof);
- the legal and financial consequences of withdrawal from litigation
Furthermore, the Legal Practitioner must also verbally explain each aspect contained in the notice and must obtain the client’s written agreement to the estimated costs.
Investment of funds
In many ways, the provisions of section 86 of the Act are like those of section 78 of the repealed Attorneys Act.
A significant change worth noting is the payment of 5% of the interest accrued on funds invested on the instructions of any person to the Legal Practitioner’s Fidelity Fund [section 86(5)(b)], effective from 01 March 2019. In contrast, section 78(2A) of the Attorneys Act previously determined that all the interest accumulated would be paid back to the person on whose instruction the funds were invested.
Fashion Empress, Coco Chanel, once said that “good manners of a man are like wearing an exquisite suit – they never go out of style”.
The Code of Conduct that regulates robing, which requires a Legal Practitioner to robe in all superior or lower courts, tribunal and any other legal institution as they would in the superior court was not implemented with the Act on 01 November 2018 and will remain suspended until further notice.
Transitional provisions relating to Candidate Attorneys
As section 27 of the Act has come into operation whilst a great number of candidate attorneys are currently serving their Articles of Clerkship, a detailed Memorandum has been issued by the National Forum on the Legal Profession to address all uncertainties faced by candidate attorneys, especially given the strict requirements regarding Practical Vocational Training and the new obligation regarding Community Service.
The Memorandum can be found in its entirety on the following link:
With the purpose of the Act very clear in its intent to transform and restructure, as well as unify what was once a fragmented and divided legal profession, a new playing field has certainly been created and the players must adapt accordingly.
“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails…” – William Arthur Ward. The Act is our new reality and the time for the Legal Profession to adjust has definitely arrived!