Lawyers ignoring law that protects clients from fraud
Lawyers in this country are supposed to contribute money to a fidelity fund, a form of insurance which is supposed to protect their clients from fraud and theft of funds. The Law Society of Swaziland and the Attorney General have ignored the law that requires this. A recent case where a top lawyer was sent to jail for stealing clients’ money has reminded all of the need to get the fund working.
SIKELELA HLATSHWAYO reports.
It was a double blow for Moses Shongwe, who did not only sustain serious injuries in a motor vehicle accident, but also lost his compensation from the Motor Vehicle Accident Fund (MVA) through his attorneys’ fraudulent act.
Shongwe was over the moon when the MVA compensated him close to E500 000 for his injuries. He agreed that his money be paid through his trusted lawyer, the late Bheki G. Simelane.
However, the law firm defrauded him of all his money.
Much to his disappointment, all his efforts to recover his money through courts have come to nought. Thrown into abject poverty by his disability and loss of compensation, Shongwe wants to sue the Attorney General in court for not ensuring that the Law Society operates a Fidelity Fund.
His planned lawsuit serves as a wake-up call to many Swazi people who have suffered the same fate in the hands of unscrupulous lawyers.
For decades the AG has not enforced the Legal Practitioners Act, 1964 which requires the Law Society of Swaziland (LSS) to set up a Fidelity Fund.
Taking advantage of the AG’s failure to enforce the law, the attorneys embezzle the clients’ funds in the trust accounts and take properties belonging to deceased people’s estates.
The Nation has discovered that the Law Society should be running a Law Society Fidelity Fund to compensate clients for losses arising from dishonesty of legal practitioners, their agents or employees.
Section 43 of the Legal Practitioners Act states that the Law Society must set up such a fund as a business insurance policy invested in either an insurance company or a financial institution.
Its members, who pay the duly premium policy, shall be indemnified in respect of liability arising in the course of legal practice.
Noteworthy is that such policy also covers the liability of the lawyer, his agent or employee. Sub-section 8 provides that all members of the Law Society must pay a contribution towards the fidelity fund except for those who are employed full-time in the public service or such similar service.
According to the roll of attorneys from the LSS, the Law Society has a total of 173 attorneys practising in law firms, 65 in the private companies, 71 in public service, 11 advocates as well as 9 South African advocates.
As a means to ensure compliance with the Act, sub-section 10(a) bars a legal practitioner from practising on his own account or in partnership unless he is in possession of a fidelity fund certificate.
The Nation has discovered that this is not the case in the courts of Swaziland as nobody from both the LSS and AG Office wants to enforce the Legal Practitioners Act.
Section 44(1) spells out the instances in which the Law Society Council may pay out compensation from the fund for the purpose of relieving or mitigating the loss through theft, fraud, forgery or other dishonesty committed by a legal practitioner. One of them is the loss of money or property entrusted to the legal practitioner or his employee in the course of his practice as a legal practitioner.
He is also liable whilst he is acting as executor or administrator in the estate of a deceased person or as trustee in an insolvent estate or in a similar capacity.
Before the Council considers an application for a grant in terms of this section, the Act states, an applicant is required to exhaust all available legal remedies. Worth noting is that a grant may be made in terms of this section whether or not the attorney was in possession of valid compensation fund certificate when the theft, fraud, forgery or other dishonesty occurred.
This is notwithstanding that subsequent to the commission of the theft, fraud, forgery or other dishonesty the concerned lawyer has died or ceased to practise or has been suspended from practice or his name has been struck off the roll.
In terms of this section, no grant shall be made in respect of any loss unless notice of the loss is given by the person who sustained it in such a manner and within such time after the loss first came to his knowledge as may be prescribed.
More importantly, the Council has the same powers and privileges conferred upon commissioners by the Commissions of Inquiry Act, 1963 to investigate the allegations of theft, fraud, forgery or other dishonesty.
Although there is such a law in place to protect the law-abiding citizens against dishonest lawyers, the AG and Law Society have adopted the proverbial attitude of let sleeping dogs lie.
Without the responsible parties lifting a figure, the attorneys are having a field day. The attorneys help themselves to clients’ funds from the trust accounts as well as properties of deceased people’s estates.
A good example is the case involving Bheki G. Simelane & Company which defrauded hundred thousands of emalaneni from funds belonging to the clients.
It was not until the clients discovered themselves the fraud that has landed partner Thembela Simelane behind bars.
After sentencing him to five years imprisonment, Judge Mabel Agyemang told his clients that they would share the little money left in the trustee coffers.
Throughout the trial nobody ever made mention of the Fidelity Fund.
Surprisingly, both the judge and the DPP also overlooked the Legal Practitioners Act which requires attorneys to be in possession of fidelity fund certificates.
It is only now when one of the affected clients, Moses Shongwe, finally remembered the fund as a requirement of the Legal Practitioners Act, 1964 that the issue has come up.
As the saying goes, no man can fairly be expected to be a judge in their own case. Or, as the lawyers themselves would say Nemo iudex in sua cosa.
Nothing inspires public confidence in the justice system because the LSS has become a rallying ground where the legal practitioners close ranks to conceal injustices.
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