SA Law Reform Commission on Admin Orders
Independent Online’s Xolani Mbanjwa:
The recommendations, to be considered by parliament, were handed to Justice Minister Brigitte Mabandla recently.
They are based on research conducted by the SALRC into anomalies in the debt collection and recovery industry.
Senior SALRC researcher Tienie Cronje said administration orders were carried out under the Magistrates’ Courts Act, but the industry nevertheless had been left largely unregulated.
In its review, the SALRC said there were several “abuses and practical problems” in the administration order system.
As a result, many poor people were left in debt forever.
“In the course of the review of administration orders it became clear that many people are caught up in administration indefinitely because payments do not cover costs and interest on claims.
“A provision is proposed that the orders should not lapse only when costs and creditors have been paid in full, but should lapse after a specified number of years,” said the SALRC.
The problem is that there must be a viable alternative to Administration orders in place before this form of debtor relief can be replaced. It was envisaged that the Debt Relief/Debt Counselling in terms of the National Credit Act would be this alternative and in fact should be.
However the poor drafting, conceptualisation and implementation of the debt counselling have left debt counselling with a number of problems of its own that we have pointed to previously, coupled with the number of the very same problems that the SALRC point to as being problems with Admin orders.
This is not to say that the National Credit Regulators office is not alive to these problems and looking for solutions.Projects such as voluntary debt-mediation company being created by creditors is an attempt as find such a solution. However again this is an solution that not governed by legislation when such a solution should have in terms of the NCA’s goals have fallen under the NCA.
[...] March 2008 we pointed out that South African Law had proposed abolition of administration orders under Section 74 of the Magistrates Court Act, in light of the introduction of debt counselling [...]
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