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Auxilia Katongomara Chronicle Reporter
THE Law Society of Zimbabwe (LSZ) is threatened with claims amounting to $3 million emanating from either theft, fraud, forgery and dishonest practices from its members, with deregistered Bulawayo law firm Cheda and Partners having the highest claim at $1million.

The LSZ administers a fund aimed at compensating members of the public who would have incurred losses due to theft, fraud and other dishonest practices committed either by a registered legal practitioner or their employees.

A report by the legal practitioners regulating body has revealed that Cheda and Partners is the only law firm from Bulawayo out of the nine law firms that are set to cost the LSZ $2, 9 million in claims from its clients.

Seven of the offending law firms are from Harare while one, Chigayo and Partners, with a claim of $16,000, is based in Chiredzi.

In two years, 12 firms have been placed under curatorship.

Cheda and Partners was shut down in April this year after the LSZ detected alleged fraudulent transactions running into hundreds of thousands of dollars.

The law firm’s demise first saw its three senior partners, Sindiso Mazibisa, Mlamuli Ncube and Nqobizitha Ndlovu surrendering their practising certificates.

They were later suspended by the LSZ pending fraud investigations, one of which was the alleged theft of $335,000, held in trust, by Mazibisa.

LSZ Compensation Fund chairman, Promise Ncube, in a report, said the legal profession was at cross roads as it has only $830,000 in its coffers with claims made by clients against law firms amounting to $2,907,000.

He said the development threatens self-regulation within the profession.

“The Compensation Fund is under serious threat and by the same token, the right of the legal profession to self-regulation and independence. Indeed, even the credibility and integrity of this noble profession is at stake,” said Ncube.

“When you therefore compare what the Fund has in its books …one can easily see the dire situation that the Compensation Fund finds itself in. Not only will it be wiped out by these threats, it means that it will not be able to pay off the balance of the threats unless we take drastic measures right away.”

Ncube said such measures should include adequately funding the Fund and at the same time stemming the rise in emblezzment of Trust Funds.

“These threats are truly sounding a knell to the Fund. I may as well add that the actual expenditure (fees) so far on Curatorship stands at $101, 500 against total bills of plus or minus $277, 000,” he added.

Ncube said the Fund represents a covenant with the public on the one hand and the Law Society on the other in which the society undertakes to make good the loss suffered at the hands of one of their own.

“Whilst we’re not obliged to compensate in full and aren’t obliged to pay a grant, persistent failure to do so represents a breach of the said covenant and a threat to our right to self-regulate,” said Ncube.

He said they were seized with over 368 complaints and more than 80 percent of these relate to disputes over money.

Ncube said this year, six law firms were placed under curatorship and three of them — Chigayo and Partners, Cheda and Partners and Machekekeche and Partners have since shut down.

“Embezzlement of funds is caused by among other things, having inadequate capital in a law firm. It may be time that anyone wishing to run a law firm is required to have a minimum capital base before they’re allowed to open a practice. This may ensure that lawyers aren’t tempted to dip into their Trust Funds to fund their operations,” he said.

Ncube proposed a number of short and long term solutions as part of measures aimed at curbing lawlessness in the profession.

These include setting up an ad hoc crack team to conduct spot checks at law firms; compulsory fidelity cover for all law firms and compulsory professional indemnity.

Among the long term solutions, Ncube proposed that all law firms be obliged to have compulsory fidelity cover, introduction of minimum capital requirements for new entrants and introduction of third part holders of Trust Funds in all conveyancing and related matters.

“The current contributions of $100 for each lawyer should be maintained. Unless and until the fund is out of the woods, this is unavoidable. We, however, propose to exempt any law firm contributing more than $1,000 in interest from trust funds from this requirement. Again, this is a way of encouraging firms to continue investing in trust funds as is required by the law,” he said.