Attorneys’ Trust Accounts changes
We draw your attention to the following notices from the Legal Practitioners Fidelity Fund (LPFF) relating to:
- The implementation of the remaining chapters of the Legal Practice Act No. 28 of 2014 (the Legal Practice Act). These chapters were implemented on 1 November 2018 and they affect all legal practitioners.
- The new process for the manual payment of Sections 86(2) and (3) of the Legal Practice Act trust interest to the LPFF and related reporting templates.
We draw your attention specifically to the following:
- From 1 November 2018, Trust interest which has always been paid to the Law Society will now be payable directly to the Legal Practitioners Fidelity Fund (LPFF) previously known as the Attorneys Fidelity Fund (AFF).
- The following sections in the Attorneys Act are replaced by the following sections in the Legal Practice Act (LPA) and there is a new requirement relating to the previous Section 78(2A) interest that has always been paid to the client in full:
- Section 78(1) of the Attorneys Act was replaced by Section 86(2) of the LPA. (100% of trust interest earned, less approved recoverable bank charges, will be paid monthly to the LPFF.
- Section 78(2)(a) of the Attorneys Act was replaced by Section 86(3) of the LPA. (100% of trust interest earned will be paid on an annual basis to the LPFF).
- Section 78(2A) of the Attorneys Act was replaced by Section 86(4) of the LPA. (With effect from 1 March 2019, 5% of the trust interest earned will be paid monthly to the LPFF in terms of section 86(5)).
Whilst the LPFF is in the process of signing a banking arrangement with all the major banks, we urge you to contact your bank and ensure that the previous Section 78(1) interest less bank charges is now being correctly paid to the LPFF and not the Law Society.
This is effective from 1 November 2018. The LPFF will also arrange for the automatic sweeping of the 5% on the previous Section 78 (2A) accounts from 1 March 2019.
Click on the icons below for the Legal Practice Act No. 28 and the LPFF Communication to Practitioners for payment of manual interest 1 November 2018 respectively:
All material subject to our Legal Disclaimers.