Lawyers who steal: R1.4bn trust fund theft ignored

The Citizen

22-04-2025

Unscrupulous lawyers have plundered their clients' trust funds to the tune of R1.4 billion with more than 500 cases documented – but only 59 convictions were made in seven years and just 25 resulted in jail time.
More than 500 cases in which lawyers are accused of stealing more than R1.4 billion of their clients' money from trust funds have not been prosecuted.
This was revealed by statistics recently released by the Legal Practice Fidelity Fund.
The figures show that 561 trust fund theft cases, in which lawyers allegedly stole R1.4 billion from clients, remain unprosecuted. They also revealed that only 59 convictions were made in seven years and just 25 resulted in jail time.
Concern about integrity of legal profession
Wayne Duvenage, CEO of corruption fighting group Organisation Undoing Tax Abuse (Outa), said lack of accountability in trust fund theft cases in South Africa, was not taken seriously by the National Prosecution Authority (NPA) or the Legal Practice Council (LPC), which raises serious concerns about the integrity of the legal profession and the effectiveness of regulatory oversight.
'A reason often given is that the NPA is stretched thin and lacks the forensic capacity to investigate these complex financial crimes, but this excuse must come to an end,' said Duvenage. 'A matter of more serious concern is that the LPC internal disciplinary actions are often opaque, and weak and complainants are rarely updated on outcomes.
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'There appears to be a lack of leadership and political will to address this matter. Theft or misconduct in the legal profession appears to be far more lenient compared to lower-level financial crimes.
'It would appear that regulators may be reluctant to aggressively pursue cases that could further erode public confidence in the legal system.'
Trust fund theft: Corrupt lawyers protected?
Duvenage said before the establishment of the LPC in 2018, the provincial law societies failed to maintain proper oversight or respond robustly to growing reports of trust fund abuse. He said the entity's provincial offices were often accused of protecting corrupt lawyers.
'Even now, many former law society structures and personnel still influence current regulatory culture, slowing down the pace of reform.
'Until the LPC takes a more aggressive stance and works closely with the NPA, the SA Police Service and Treasury to criminally prosecute trust fund theft, and until parliament holds regulators accountable, this pattern will persist. A major overhaul of legal oversight and the urgent recapitalisation of the Fidelity Fund are long overdue.'
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LPC defends itself
LPC spokesperson Kabelo Letebele defended his organisation, saying the delay of the cases was not their fault and that the LPC was doing its best to address reported complaints.
Letebele said on average, the LPC dealt with over 1 000 complaints per month and in the past two years, complaints had exceeded 14 000 each year. He said over 90% of the complaints were finalised each year and the serious cases of misconduct have resulted in suspensions or striking off of more than 150 legal practitioners in 2024 alone.
'The law restricts the role of the LPC in investigating complaints and initiating disciplinary processes.
'In other words, we investigate complaints of misconduct or subject a legal practitioner to an investigation and can subject them to a disciplinary hearing.
'Once our independent investigations committee and independent disciplinary committee have concluded their work, they recommend that the LPC should apply to court for a suspension or strike off.
'This recommendation, together with all the details on the matter, including evidence presented, is then considered by the council, which makes the final decision on the matter.'
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He said that once a lawyer has been struck off by the high court, the LPC's involvement ends. In the event criminal proceedings were initiated against lawyers by the South African Police Service or the NPA, the process is not under oversight of the LPC, although a number of times the LPC has been called in to testify or give information in support of the court process.
Dodgy lawyers 'disappointing'
President of the Law Society of South Africa Nkosana Mvundlela said the growing number of lawyers reported to the LPC was concerning.
'While the overwhelming majority of legal practitioners uphold the highest standards of ethics and professionalism, the conduct of a few continues to cast a shadow over the entire profession.
'As a voluntary association committed to promoting the integrity and excellence of the legal profession, the LSSA is deeply disappointed by these numbers.
'They represent not only a breach of legal ethics but a loss of trust by members of the public, who rely on attorneys to act with honour and accountability.'
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Mvundlela said with approximately 6 000 candidate attorneys entering the system each year and thousands more in active practice, the number of practitioners who face serious disciplinary action remains relatively small by proportion.
'However, even one instance of serious misconduct is one too many.'
Terrence Manase, spokesperson for Minister of Justice and Constitutional Development Mmamoloko Kubayi, said the department acknowledged the reported statistics and took the matter with the utmost seriousness.
'We want to assure the public that decisive steps are being taken to strengthen accountability and restore trust.'
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