People & News

Proposed crackdown

Attorneys and property regulators plan to crack down on deals in which conveyancers "buy" lucrative conveyancing work from estate agents, a practice which, critics charge, robs the consumer.

The moves by the various law societies and the Estate Agents Affairs Board include:

  • Obliging attorneys to sign affidavits stating they do not buy conveyancing work when they apply for their annual Fidelity Fund certificates;
  • Reporting crimes of corruption to police under the Anti-Corruption Act;
  • Changing law society rules to allow the investigation of anonymous complaints;
  • Proposed changes to the Estate Agency Affairs Act and the code of conduct for estate agents related to conveyancing;
  • A review of the code of conduct for conveyancers, over and above general law society rules;
  • Asking banks to report cases of attorney interference related to home bonds; and
  • Awareness campaigns to alert consumers to abuses.
Article in the Sunday Times

Reader Comments:

Christa Botha 19/11/2004:

Jy kan maar net lag. Nou wil daar van wolf skaapwagter gemaak word - of is dit nou omgekeerd. Almal van ons wat in die bedryf werksaam is weet dat die eiendomsagente het dit eerste begin dryf en prokureurs het net daarby ingeval want in die proses maak almal mos geld, maak nie saak ten koste van wie nie -eerste die kliënte en daarna in sekere gevalle, die prokureur/s se aktesdames wat die al hoe meer werk moet doen en groter verantwoodelihede moet neem met salaris aanpassings van 5% of selfs minder.

Om te dink dat die Banke gaan aangeleenthede "aanmeld" is net so belaglik want almal wat in die bedryf is weet dat die Bank het die hele situasie ook aangedryf deur hul paneel prokureurs wat hulle aangestel het en toe self die reëls verbreek het deur links en regs ander op die paneel te plaas en toe nog verder te gegaan het om via hul kliënt [voornemende lener] te eis dat die transport na hul paneel prokureurs gaan want dié gee die voornemende koper/lener 'n "goedkoper" tarief.

Ons firma ondervind dit al hoe meer dat jou kliënt [verkoper] skakel en sê dat hy het geen regte meer nie want die koper en sy bank daarop aandring dat die bank se prokureurs die transaksies alles moet behartig andersins gaan die voornemende koper nie voort met die koop nie. Die Prokureursorders landwyd het almal agteroor gesit en niks gedoen om te keer dat hierdie situasie hande uitruk nie. Dit is mos "die waghond met geen tande nie" - die 4 apies [sien, praat, hoor en doen niks] - ons is nie doof of blind nie, ons sien en hoor via die media en ander bronne hoe word daar opgetree teen prokureurs wat regtig alle reëls verbreek en dit ten koste van dié wat werklik eerbaar in hul beroep is.

S 19/11/2004:

As an attorney in the Western Cape and involved in the property market, I applaud the initiative. Our firm is small and depends on conveyeancing work, but not at the expence of buying work. The problem now is that estate agents have become so greedy and indoctrinated by the kickbacks that it is near impossible for them to be impartial and recommend any firm based on good service and turnaround time. Certain established firms with local branches are clearly the culprits here as their actions have ensured they recieve the lions share of conveyancing work not because of good service but because of their unethical move to buy work.

I agree that something needs to be done and I would propose further that one of the more serious sanctions to consider is that if it is found that an attorney or the firm is a party to or knew about kickbacks being made or offered, that whole firm should be severly sanctioned by way of fines, removal from the banks panel and the attorney in question having his conveyancing licence removed/suspended

ANON 19/11/2004:

How can the legal profession in SA reasonably expect that it will be spared the force of change that is taking place in other industries. Call it buying work, call it touting, fee sharing...make it sound devious, dirty and ugly...but what is it if not the payment of a referral fees (as they do for example in the UK, Australia, New Zealand, Hong Kong ) ...are conveyancers too nervous to allow competition? Competition is the very centre of a free economy! Deregulation of the legal profession is a certainty, there is no doubt that law firms will have to conduct themselves as a business, learning how to be more responsive to clients needs and market demands in a dynamic environment affected by regional and global economic trends.

What is unprofessional or unworthy with establishing cross-referral networks? The Chinese Adage "within threats or danger, rests the opportunities" could be the mantra of those who welcome opportunities for growth, innovation and development. The practice of law is a business. Like any other business, law firms are subject to the same pressures in the regional and global economic front. The only way to remain relevant is to rise to the challenges, embrace change instead of resisting it.

The Office of Fair Trade in the UK is of the view that a ban on referral fees is anti-competitive....our Competition Commission may be of the same opinion...should the law societies not rather maintain their relevance by making sure that their rules do not contravene our competition laws and rather try and regulate the manner in which conveyancers compete- regulate the requirements that will apply when a conveyancer enters into a financial arrangement with an introducer...give effect to changes willingly and on their own terms, without government banning it outright and taking away/diminishing the law societies powers. There is a place for law societies but they must stay relevant! Law Societies will not, and should not, be allowed to indefinitely control competition between attorneys.

Gavin Gow - Conveyancers for the Citizens 14/12/2004:

A reply to the anonymous author of the reply dated 19th November 2004 to the article in the Sunday Times dated 7th November 2004.

Presumably he is a practising attorney, if so, he is a rogue colleague who is out of kilter with the march of the profession towards cleaning it out of those who hold these selfish and irresponsible views. We all have included our names on our views. It is frightening what this particular author might have done or contemplate doing to justify hiding behind the “anonymous”. He defames and harms all the conveyancers by saying deregulation is a certainty. The opposite is much more likely as things stand now.

He compares the South African conveyancing situation to that in England which is entirely different. He completely ignores the legislation here in South Africa called the Prevention and Combating of Corrupt Activities Act No.12 of 2004 which was referred to in this Sunday Times Article to which he responds. Possibly that is the reason for writing anonymously in that he or she appears to be happy to risk committing a crime which not only will get himself/herself struck off the roll of attorneys but also could land himself/herself in jail.

Besides these criminal issues, the independence of the conveyancers is inviolate and this is what the Law Society will fight for until the war is won. There can be no independence if referrals are given. Another word for undisclosed referral payments is “bribes”. The attorney's profession must be independent and it is different to commerce in that respect. We do suggest that attorneys like this author radically change their standards or else leave the profession before they damage it further.

At the moment he/she is seriously prejudicing the conveyancers across South Africa by expressing these reckless views without understanding the real issues at stake. We also suggest that he/she liaises with the competition committee of the Association of Law Societies in order to gain some more insight into those issues as well, of which he/she appears to be just as ignorant.

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