The council and its disciplinary committee not only failed to act in the public interest but also contributed to injustice, says Judge Siraj Desai
- The Legal Services Ombud has castigated the Legal Practice Council (LPC) for failing to act in the public interest and contributing to an injustice.
- Judge Siraj Desai was scathing of the LPC, its disciplinary committee and its pro forma prosecutor for their handling of charges brought against attorneys Schumann Van Den Heever & Slabbert and its directors.
- The LPC cut a plea bargain deal that involved only a fine and allowed the continued practise of a legal practitioner with serious allegations against him.
Last week, retired Judge Siraj Desai released a report into an investigation carried out by his office into the Legal Practice Council (LPC) and its investigation into the financial affairs of attorneys Schumann Van Den Heever & Slabbert Inc (Schumanns) in Kempton Park, Gauteng. Judge Desai is the country's first Legal Services Ombud.
In March 2020, eight former clients of Schumanns obtained an in camera court order authorising the Sheriff of the Court to arrive unannounced at the firm and to take their files into safe custody. This flowed from information leaked by then candidate attorney William Crichton, who had turned whistleblower.
Crichton had approached and made a protected disclosure to a journalist. Crichton was horrified at what he had observed and told the court that he regarded the legal profession to be honourable and that he "had many restless nights" after coming to the conclusion that the firm was not, at best, operating ethically. He decided he could not turn a blind eye to its wrongdoing.
He also told the court of his concern that he "would bear the mark of Cain simply because of [his] previous association with [Schumanns]".
Following the search and seizure, attorney Stephen May, acting for the eight former clients, laid a complaint with the LPC in 2020.
A forensic audit was also carried out into the affairs of the Road Accident Fund (RAF) claims department of Schumanns. LPC forensic auditor Ashwin Reddy prepared a comprehensive report that found evidence of "fraudulent conduct", "clearly dishonest" practices, inflated bills, and violation of contingency fee rules with RAF claims. The audit also found suspicious "payments" in relation to medical claims, touting for professional work, and a series of other extremely serious allegations.
LPC disciplinary hearing
It was three years and a week after the raid took place that the LPC, on 30 March 2023, convened a disciplinary committee to adjudicate on the complaint laid against Schumanns, Jakkie Supra (the director in charge of the firm's RAF claims department who had been forced to resign) and the three other directors - Izak Bosman, Azelle Kleinen and Jacobus Johannes Slabbert. Based on the forensic audit findings they faced six serious charges, including unprofessional conduct and bringing the legal profession into disrepute.
The Ombud found that the charges did not "capture the most serious of the allegations" which include fraud and misappropriation of trust money.
Plea bargain
When the matter was before the LPC disciplinary committee, its pro forma prosecutor, Kholofelo Masedi, announced to all present that prior to the hearing, Schumanns, Bosman, Kleinan and Slabbert had cut a deal, whereby Schumanns (the corporate entity) would plead guilty to all six charges and pay a once off fine of R120,000 and the three directors would each pay a fine of R60,000 on the sixth "least serious" charge (bringing the profession into disrepute). The Ombud characterised this arrangement as a "quid pro quo".
Once this had been paid there was no requirement that the firm repay (or even notify) the many clients to whom money was owing and on which interest at about 10% per annum was running - and still is running.
None of the complainants had been invited to the disciplinary hearing.
The Ombud noted that attorney May was invited by the panel at a belated stage to comment on the plea agreement. May objected, saying that the conduct of the Schummans' directors did not amount to negligence but was intentional, and that there was adequate evidence that would prove this.
The disciplinary committee, consisting of attorneys Ajay Chagan (chair) and Bobo Makukunzva and advocate Isiah Mureriwa, were dismissive of the submission by May on behalf of his clients, and informed him that he would not be entertained and that he and his clients could explore whatever legal remedies they wished.
After the panel had finished with Schumanns and the three directors it reconvened to hear the matter of the other director, Jakkie Supra, who was not a party to the plea agreement. Supra sought a postponement to the hearing, which was refused. The disciplinary committee recommended in March 2023 that the LPC bring an urgent application to suspend him from practising, something which the Ombud notes has not happened.
Ombud blasts LPC
The Legal Services Ombud was created by the Legal Practice Act in 2018 and can only be occupied by a judge discharged from active service. It has the highest oversight over South Africa's legal profession. Judge Desai, who retired after more than two decades on the Western Cape High Court bench at the end of 2020, is the first incumbent.
The Ombud's report is damning of not only the LPC but also the members of the disciplinary committee and pro forma prosecutor Kholofelo Masedi, noting that none had investigated the complaint.
The report pointed out that the very purpose of a process of adjudication was to determine who was right and who was wrong, a process which the disciplinary committee had ignored. The RAF too had pledged its cooperation in the disciplinary process but was not called to present its evidence.
On the issue of the public perception of the legal profession, the report states: "The delay by the LPC in bringing an application to suspend or remove Supra from the roll of legal practitioners (attorneys) shows how little regard the LPC has for protecting the public interest. The LPC in allowing the continued practise of a legal practitioner with such egregious allegations against him is one of the very reasons the legislature saw it fit to establish an oversight body such as the Ombud. It is to hold the LPC to account for what may be perceived by the public as protecting its kith and kin."
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The Legal Practice Act makes it clear that all the directors of any personal liability company, such as Schumanns, are jointly and severally liable for the financial affairs of the law firm, including "in respect of any theft committed during their period of office".
The Ombud found that the reasonableness of the plea bargain had not been considered in the light of the allegations - a "dereliction" of the disciplinary committee's duties.
The report references the case of GroundUp News and Others v LPC where the court held there was a duty for the LPC to investigate. [To date the LPC has still not implemented the order in this judgment. - GroundUp Editor]
Judge Desai concluded that the failure to properly investigate the complaint -- allegations of embezzlement of clients' awards, inflation of bills of cost, fraudulent bills and pay clients -- may have stymied the investigation. He noted that the future use of any of the LPC officials involved in the Schumanns investigation, including the three named members of the panel "should be approached with circumspection".
Perhaps most damningly, on account of their conduct "the LPC and the disciplinary committee not only failed to act in the public interest but also contributed to the injustice".
