Langa Bodlani launches review of JUSTICE legislation that affects small business

Langa Bodlani launches review of JUSTICE legislation that affects small business

On 15 November 2022, the Free Market Foundation (FMF) presented its seventh booklet in a series of eight titled Laws Affecting Small Business. Advocate Langa Bodlani outlined the problems caused by a prevalence of legislation governing the administration and access to justice, and recommended solutions. Bodlani is a member of the Johannesburg Bar, a former researcher at the FMF, and a member of the FMF’s Rule of Law Board of Advisors.

Red tape abounds even in the lowest court, the Magistrate’s Court. Small business litigants are encouraged not to forego prolix procedures, pleadings, interlocutory procedures, delays, reviews, appeals, and more. Time and cost constraints make it difficult for small businesses to access justice.

Incorporated small businesses, which are usually short of the funds necessary for extended formal litigation, are barred from suing in the Small Claims Court, which would be less costly. In addition, the Small Claims Court jurisdiction is too limited and is under-funded. Professional job reservation in the legal profession means that litigants are forced to use costly lawyers to assist or represent them.

Laws Affecting Small Business – Justice proposes solutions to the problems which affect small businesses, especially in the administration of and access to justice.

The FMF makes the following recommendations, and more:

Companies (and other juristic or artificial persona) should have access to small claims courts.

The monetary jurisdiction of the small claims court should be increased from R20,000 to R150,000, or such greater amount as might be agreed by the parties.

To provide sufficient funds for an expanded role for small claims courts, and to ensure adequate funding for courts in general, the principle of user-charging should be introduced.

Provision for mediation should be introduced with a view to the settling of disputes between litigants in small claims courts.

The Minister should establish short-process courts and make rules of procedure and appoint adjudicators for such courts.

The short-process court option should then be publicised, and lawyers and judicial officers should be encouraged to draw it to the attention of litigants.

Litigants in any court should have the right to assistance of their choice.

The requirement of security by close corporations for costs should be scrapped.

Legislation along the lines of the Regulatory Flexibility Act 1980 combined with the Small Business Regulatory Enforcement Fairness Act 1996 and Small Business Paperwork Relief Act 2002 of the United States should be adopted in South Africa in order to minimise the economic impact of legislation on small business by subjecting the law-making process to judicial review.

Bodlani echoed the sentiments of the booklet, saying: “What is clear from this proposition is that the space, socially and economically within which individuals plan their affairs must be maximized. In the regulation of that space, there must be little or no room for ad hoc government decisions, and to that we add red tape and inaccessible, expensive, and time-consuming dispute resolution forums. The primary business of any business is doing business, and nothing more. The book aims to introduce recommendations to maximize that space and from this point of view, is a welcomed initiative.”

This was the seventh in a series of eight mini launches to introduce recommendations to reduce the laws negatively affecting small business across a range of issues: tax, land, licensing, justice, labour, finance, health, schooling. Small businesses are the engine of the South African economy, and therefore the legislative instruments governing them are integral to ensuring an environment of growth and job-creation.

Laws Affecting Small Business – JUSTICE can be accessed HERE
22.11 | 1100-1130 – Darlene Menzies – FINANCE
04.10 – Dawie Roodt – TAX
The TAX booklet and presentation can be accessed HERE
11.10 – Terence Corrigan – LAND
The LAND booklet and presentation can be accessed HERE
18.10 – Neil Emerick – LICENSING
The LICENSING booklet and presentation can be accessed HERE
18.10 – Michael Bagraim – LABOUR
The LABOUR booklet and presentation can be accessed HERE
02.11 – Gary Moore – HEALTH
The HEALTH booklet and presentation can be accessed HERE
08.11 – Bouwe van der Eems – SCHOOLING
The SCHOOLING booklet and presentation can be accessed HERE


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