LPFF-Apps_by_Carl_Holliday

A few notes on the annual Legal Practitioners Fidelity Fund Certificate application process. The 2019 process has been considerably streamlined and automatically imports certain bank information. The entire process benefits from the Automated Monthly Transfer System (AMTS). Introductory and statutory information is available from the Legal Practitioners Fidelity Fund home page.

Before we start…

  • Registration – The Login requires access to the registered email. address. Registration takes approximately 24 hours. Contact the local Law Society for support.
  • 2019 Audit figures.
  • Client Balance List broken down by Practice Area required.
  • Current FIC Registration details.
  • R345 paid for the issue of the certificate.
  • In the event of an Associated Firm since closed, proof of Closing Audit is required.
  • In the event of a Trust Banking account since closed, proof of close is required.
  • Deceased Estate or Insolvency Practices dealing with Estates require additional documentation.
  • The three main sections, Firm Financials, Firm Questionnaire and LPIIF Questionnaire may be completed in any sequence.
  • Keep a current firm Letterhead handy for general information.

1. Application Checklist

Click here to access the LPFF Application portal

Tick the box before clicking the Next button.

  • An Associated Firm is associated with the attorney.
  • Each such Associated Firm is listed.
  • Closed firms need to be removed by the Fund, final Closing Audits are required.
  • The sections to complete are Firm Financials, Firm Questionnaire, LPIIF Risk Questionnaire. The Audit Report status is preloaded.

2. Firm Financials

Once this section is completed, it cannot be edited. Take care to enter accurate information.

Section 86(2) refers to the firms’ current trust account. Each such account is listed. The balance is pre-populated from information supplied by the AMTS. If incorrect, update the values in the the Revised Balance box.

Section 86(3) refers to an investment by the the firm, where the interest accrues to the benefit of the Fidelity Fund. Formerly Section 78(2)(a).

Section 86(4) refers to investments on behalf of a client, where the client benefits from interest accrued. A busy conveyancing practice will have an extensive list. 5% of interest payable to the Fidelity Fund. Formerly Section 78(2A).

  • Investments are intended for an Investments Practice. See Rule 55.
  • Estates refer to Deceased/Insolvent Estates. This requires substantial additional information.
  • Other Entrusted Property is a container for other items not accurately reflected in or provided for in the preceding categories.
  • The additional cumulative workload should not be under-estimated.

NOTICE that once the Next button is clicked, the information submitted cannot be edited.

3. Firm Questionnaire

Questions follow a familiar pattern from year to year. Required information should be readily available. Most questions typically required Yes/No answers.

Client Balance List broken down by Practice Area is required in order to complete this section.

  • Note that no guidelines are provided to the completion of this section.
  • The inclusion of administrators in the Estates section indicates that Section 74 Administration Orders should be included in this section.
  • Matrimonal may refer to Family Law matters: ANC, Divorce, Paternity, Custody and Adoption

4. Legal Practitioners Indemnity Insurance Fund Questionnaire

More information on the LPIIF may be found here.
Questions follow a familiar pattern from year to year. Required information should be readily available. Most questions typically required Yes/No answers.
For more information or assistance in completing this portion of the application, please send email to Risk.Queries@LPIIF.co.za

An extract of some of the questions appear below.

2.1.1 Do you have a dedicated risk management resource/ a person responsible for risk management and/or quality control?

Yes
No

2.1.2 Are all instructions recorded in a letter of engagement?

Yes
No

2.1.3 Does your practice screen prospective clients?

Yes
No

2.1.4 Do you assess whether or not you have the appetite, the resources and the expertise to carry out the mandate within the required time?

Yes
No

2.1.5 Has your firm registered all time barred matters with the LPIIF’s Prescription Alert unit?

Yes
No

2.1.6 Are regular file audits conducted?

Yes
No

2.1.7 Is the proximity of the prescription date taken into account when accepting new instructions and is it explained to clients?

Yes
No

2.1.8 Is a peer review system implemented in the firm?

Yes
No

2.1.9 Is advice to clients always signed off by a partner/ director?

Yes
No

2.1.10 Do you have a dual diary system in place for professionals and support staff?

Yes
No

2.1.11 Do you have a formal handover process when a file is transferred from one person to another within the firm?

Yes
No

2.1.12 Is more than one contact number obtained for clients?

Yes
No

2.1.13 Are instructions, consultations and telephone discussions confirmed in writing?

Yes
No

2.1.14 Does your firm have documented minimum operating standards/ standard operating procedures?

Yes
No

2.1.15 Does your practice have effective policies on uniform file order?

Yes
No

2.1.16 Is there a formal structure and process for supervision of staff and delegation of duties?

Yes
No

2.1.17 Do you have a formal training program in place?

Yes
No

2.1.18 Does the training program include risk management training?

Yes
No

2.1.19 Do you have any executor bonds of security issued by the LPIIF?

Yes
No

2.1.20 Are background checks (including criminal records and professional history) conducted on new employees?

Yes
No

2.1.21 In respect of the financial functions, has an adequate system been implemented which addresses
2.1.21.1 Segregation of duties?

Yes
No

2.1.21.2 Checks and balances?

Yes
No

2.1.21.3 The internal controls prescribed by Rule 54.14.7 with regards to the safeguarding of trust funds?

Yes
No

2.1.21.4 Compliance with FICA and the investment rules?

Yes
No

2.1.21.5 The verification of the payee banking details and any purported changes as required by Rule 54.13?

Yes
No

2.2. What other insurance policies does your firm have in place?

2.3. Are you aware of the risks associated with cybercrime in general and risks associated with phishing/cyber scams and the scams involving fraudulent instructions relating to the purported change of beneficiary banking details?

Yes
No

2.4. Does your practice have appropriate insurance in place to cover cyber related claims (Cybercrime related claims are excluded from the Master Policy- see clause 16(o)?

Yes
No

2.5. Does your practice have regular meetings of professional staff to discuss problem matters?

Yes
No

2.6. Does your practice have formal policies on file storage and retrieval? (Procedures to ensure that files are not lost or misplaced or overlooked)

Yes
No

2.7. Have you read the Master Policy and are you (and all others in your practice) aware of the exclusions (including the cybercrime exclusion)? 

Yes
No

2.8. Have you and your staff had regard to the risk management information published on the LPIIF website (https://lpiif.co.za/risk-management-2/risk-management-tips/)?

Yes
No

2.9. Would your firm like to receive risk management training?

Yes
No

Should you require a risk management training session for the professional and/or support staff in your firm, please contact

Email: Risk.Queries@LPIIF.co.za

Acknowledgements: The application process concludes with a series of acknowledgements concerning the accuracy of information submitted. Item 5.2.2 specifically refers to Deficits Reported: certain banks are well known for debiting bank charges and crediting accrued interest in overlapping calendar months, resulting in rolling deficits.

Upon successful completion of all sections, green circled ticks should appear – and the Fidelity Fund Certificate application process is complete!

Composed during December 2019. Content may be updated without prior notice.

Contributed and Compiled by:
Carl Holliday
carl@zabiz.co.za
www.ZABiz.co.za

LinkedIn: https://www.linkedin.com/in/carl-holliday-69023b5b/

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