Lawyers beware!

Februarie 5, 2012 in Sonder kategorie

The unhealthy relationship between attorneys and banks was raised in

_Noseweek_ back in January 2008: “Banks keep lapdog lawyers well fed

but firmly muzzled” (_nose_99 [3]).


Conveyancing – the transferring of property ownership on the Deeds

Office Register (which is not exactly rocket science and could be

handled by a variety of people) is reserved exclusively for attorneys,

many of whom depend on conveyancing to put food on the table

(prosciutto, not pap, of course).


As the providers of the bond finance needed by most people to purchase

property, banks control where most conveyancing work goes by

appointing panels of attorneys throughout South Africa and then

dishing out conveyancing work to those firms. Part of the panel deal

is that the attorney agrees not to act against the bank in any matter,

even where there’s no conflict of interest. (Some banks have more

subtle ways of doing this, but the effect is the same.)


Great for the many attorneys who are on the panels; it means a

constant stream of easy and lucrative work. Great for the banks; no

half-decent lawyer ever acts against them. But not so great for the

man-in-the-street who is not only paying inflated fees for

conveyancing but also finds it just about impossible to find a

competent lawyer when they have a dispute with a bank.


When Noseweek approached the banks for comment, we received absurd

answers like “We don’t impose restrictions on our panellists” and even

“We don’t have panels”.


As for the major law firms, well, they pretty much ignored our



_Noseweek_ revisited the issue last year in the article “Banks keep

lawyers on a tight lead” (_nose_138 [4]) and pointed out that the

practice raises serious issues of competition law and constitutional

law. We also commented on the fact that the profession had been very

slow to respond; some two-and-a-half years after our original article,

the Law Society raised the issue in its magazine De Rebus, and then

only because a member of the public had lodged an official complaint.


In his editorial, the editor of _De Rebus_ showed uncanny insight into

the issue: “Clearly… the bank simply wants to discourage attorneys

from acting for those who have claims against it. There is… at least

anecdotal evidence that some banks… have deliberately disempowered

the residents of certain towns from conveniently bringing claims

against it by simply putting all the local attorneys’ firms on its

panel and subjecting them to similar conditions.


“Not only is such behaviour possibly anti-competitive but it also

amounts to a form of denial of access to justice.”


The editor went on to savagely attack such terms and conditions,

describing them as “inappropriate”, and even “a matter for concern”.

He ended with a chilling warning to the banks: “It does seem time to

have another word with the banks.” Scary!


But now, it seems, the attorneys themselves have had enough. Needless

to say, their problem with the system is not one of principle; it’s a

decline in profits that has them up in arms. The revolt was started by

an Alberton attorney called Jack Sherman, who in a letter in the

October edition of _De Rebus_ said: “I have recently removed myself

from the panel of two of South Africa’s leading banks after an

association in excess of 35 years. When I started acting for these

banks/building societies in the 1970s the relationship was that of a

professional attorney and client. Since the 1990s the relationship has

changed. The professional basis was replaced with that of a

‘partnership’ and with the advent of electronic communication, quickly

became that of ‘master and servant’ and has now deteriorated to that

of ‘master and slave’.


“Conveyancers are no longer of any value other than as a conduit to

provide the banks and their surrogate vendors a service on terms and

conditions dictated by them – even to the extent of what fees to

charge. We are told to obey and pay, and failure to meet the bank’s

software provider’s terms and conditions is sanctioned by suspensions

or banishment. This is an intolerable situation… It begs the

question: How did we allow ourselves to be put in this position?’

Surely the time has come for the ‘slaves’ to revolt and to revert back

to our original status quo. Comments from my colleagues would be



Comments there were aplenty. In the December’s _De Rebus_, new editor

Kim Hawkey referred to “an overwhelming response” and went on to say:

“It is clear that some attorneys have long been unhappy with this

relationship and that the recession has, no doubt, exacerbated the



She posed the questions: “Can… attorneys afford not to be on the

banking panels? However, if one looks at the bigger picture, can

attorneys afford to bow down to the pressure placed on them by some of

the banks in order to remain on their panels? Should attorneys’

professional standards be compromised in order to ‘please’ the banks,

this could be the catalyst for doing away with the reservation of

conveyancing work for attorneys.”


With the recession biting, there are fewer house sales and less

conveyancing work to be dished out, yet attorneys on bank panels still

have to buy the banks’ software and must turn down instructions to act

against banks.


 “I agree completely with Jack Sherman’s letter,” said attorney Andrew

Cox in a letter. “We are being held to ransom by software providers

who have marketed their unique products to banks. Every month there is

new software… that we are required to purchase.”


The advent of the bond originator, had added a new dimension, said

attorney John Gilchrist: “Mortgage originators surfaced in the boom

years and, playing banks off against each other not only demanded high

commissions for bond business but [banks] also insisted on appointing

conveyancers of their choice on each panel to do their bonds. They

effectively created their own panels… the bottom line was always

that bond business would only go to conveyancers willing to give the

originator a referral fee (a nice way of describing a kickback).


The banks knew that conveyancers were doing this and concluded that

conveyancers were no longer marketing themselves professionally but



So it’s economic pressure that’s driving the attorneys’ revolt

(nothing like a bit of financial pain to bring on a bout of the

principles!). Yet, despite the fact that not one attorney actually

mentions the issue of banks stopping attorneys from acting against

them, it is clear from the letters that some attorneys are simply

tired of being abused and desperately crave independence.


Attorney Alan McLoughlin said: “I would like to congratulate Jack

Sherman on removing himself from the panel of attorneys of two

banks… having experienced the same frustrations and ‘slave’

status… I decided when I opened a practice for my own account some

20 years ago that I would not, on principle, accept any instructions

from any bank and, in so doing, risk compromising my independence and

integrity… I am sure that I am a poorer attorney for my decision,

but it is a comfortable place to be. Well done Mr Sherman! I fully

support the revolt.”


Attorney Mark Yazbek said: “I would like to associate myself without

any qualification or apology to the adequately expressed sentiments of

Jack Sherman.


“These points can be extended to:

*The duty placed on attorneys by local authorities to collect



* The onus placed on attorneys by the South African Revenue Services

to collect taxes…


“I dare say other people… can add to this list of where we’re no

more than servants but indeed slaves for others.”


And attorney Tom Swanepoel said: “I wholeheartedly agree with my

colleague Jack Sherman’s letter… We, as attorneys and conveyancers,

have become the punching bags of the banks. I wonder what would happen

if we as a profession took Mr Sherman’s example and removed ourselves

from these oppressive panels? What then will the ‘master’ do without

his ‘slaves’?”

Blikskottel..knows that people are waking up

11 antwoorde op Lawyers beware!

  1. TS het gesê op Februarie 5, 2012

    Lekker week!

  2. As Tom Swanepoel dink hy is ‘n slaansak, dan moet hy kom kyk hoe lyk vuisvoos landbouers.’n Goeie vriend van my, het onlangs my gevra om asseblief nie na hom toe te kom met my geskil met my bank nie – in ‘n klein dorpie sal dit blykbaar vir hom selfmoord beteken! Goeie vriend? Se moer.

  3. Dankie, by die huis is maar die beste.

  4. Verseker.

  5. Serves them right. The day that lawyers get back to working for the people and not their own evil system or evil customers such as banks and governments, things will not get better.

  6. Ek weet presies waardeer boere gaan…dis nie grappies nie.

  7. Lisaman het gesê op Februarie 7, 2012

    Hated my conveyancer. He was aweful!!

  8. Ja en toe die ekonomie die huismark sink toe sit baie van hierdie vetgevoerde prokureurtjies sonder werk!

  9. Daai ouens sal altyd ander maniere kry om hulelf te verryk, maak geen fout nie.

  10. They are part of an evil system and you should hate it.

Los ’n antwoord vir Madhatter. Kanselleer antwoord

Jou e-posadres sal nie gepubliseer word nie.