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Corrupt lawyers

Watchdogs have begun to bare their teeth against lawyers who "buy" lucrative conveyancing work. Such practices between attorneys and property agents cheat consumers because:

  • Home buyers lose the freedom to choose their own attorney;
  • Attorneys linked to agents forfeit their independence and compromise their duty to advise their clients impartially;
  • Companies that pay backhanders can't afford to offer discounts to their clients;
  • The huge volumes of work generated for a few law firms by backhanders compromise their work and service standards; and
  • The few law firms that can afford to pay backhanders can corner the conveyancing market.
The Estate Agency Affairs Board is investigating 12 complaints related to kickbacks for which the perpetrators could find themselves facing fines of up to R25 000 per count of misconduct.

Durban attorney Gavin Gow, spokesman for Conveyancers for the Citizens - an anti-corruption pressure group representing 60 law firms across South Africa - said he was pleased with the penalties handed down so far.

Reader Comments:

Aktevervaardiger - George 06/05/2005:

In die eerste plek wil ek net die kommentaar lewer dat die huiskoper nie die reg tot nominasie het nie, maar die verkoper. Die koper kan wel aanvra dat 'n spesifieke prokureur die verband registreer, maar dit help gewoonlik ook nie baie nie aangesien daardie prokureur nie noodwendig op die bank se paneel is nie. Hierdie feit ontneem dus eerder die Koper van sy keuse. Die bank behou in ieder geval vir homself die nominasie reg voor ten opsigte van verbande. Tweedens is ek van oordeel dat die strawwe vir die aankoop vir werk glad nie streng genoeg is nie, en behoort prokureurs wat hulle hieraan skuldig maak van die rol geskrap te word.

KZN Conveyancer 09/05/2005:

Further to "Aktevervaardiger's" comments I submit that the nomination of the conveyancer to attend to the transfer is made at the time of the offer by the Purchaser- it is a term of the offer. Furthermore in Kwazulu Natal if the contract does not stipluate who the conveyancers are, then the Purchaser has the right to nominate the conveyancer.

With regards to the nomination of the bond registering attorney, why should anyone, but the financial institution granting the loan, stipulate who should attend to the registration of its security? To have the mortgagee/debtor nominating who should register the bond is not in the financial institutions interest- unless the proposed bond registering attorney is on the financial institutions panel and is obviously acting for the financial institution- the bond attorney is entrusted by the financial institution to act in its best interests and follow its instruction- that the purchaser pays the conveyancer the fee is a term of the loan between the financial institution and the mortgagee/debtor.

I have not come across any notification or press release from the KZN Law Society as for what the two KZN Attorneys were fined for- it is believed that it was for excessive spending on marketing...and yet there are no guidelines in KZN as to what is, and what is not, acceptable marketing/advertising. I would therefore not be confident enough to make any comment upon the penalty levelled. I wholeheartedly agree that paying for work is unacceptable- because it is a contravention of the rules by which attorneys have chosen to be subjected to. However the rules between the various provinces are different. I can only hope that the Competition Commission's enquiry results in creating uniformity in the profession and levels the playing fields by setting the same rules across the country, and applying some of the rules applicable to a free market economy to the profession. Updating rules to better suit the economy in which we operate will hopefully result in unity within a profession that is divided between those that do not wish to see any change or development in the profession and those that welcome change and embrace the challenges that come with it.

Dave -Durban 12/05/2005:

The Law society is toeing a very fine line with the whole concept of touting for business and seriously needs to relook at it's regulations. A few points for the author of the article.
1. The seller nominates attorneys not the buyer. 2. Clients will always be able to nominate attorneys, it's their right and estate agents will never jeopardize a sale merely to try and sway the client to use "their attorney" . 3. Most clients unless they have bought and sold several properties, do not have attorneys of choice and would then rely on the agent to advise them of a reputable attorney to use. 4. Agents like to align themselves with attorneys who give their clients good service as this ultimatley reflects on the service of the agent to the client. I agree attorneys should not buy work, but if there is a relationship in place between estate agency and attorney, they should be allowed to jointly market themselves to the public (packaged as a complete service provider) and share the costs for such marketing as they see fit without prejudice.

Ultimately it is the estate agency industry that needs a huge shake up to clear out all the unscrupulous agents who would rather make a few extra bucks (on top of the huge commission) by pushing work to an attorney that pays them, regardless of their service abilities. This is the biggest disservice to clients.

If the Estate Agency Affairs Board cleans up it's profession, in conjunction with the prosecution of legitimate cases of touting by the Law Society,(where money is paid to an agent directly for a deal), then we may see clearer piture of how attorneys can function from a business perspective while still maintaining their professional status.

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