MLS challenges RBM on legal regulations

The Malawi Law Society (MLS) has obtained an injunction that effectively stops the Reserve Bank of Malawi (RBM) from implementing a law aimed at regulating matters of legal practitioners.

A gazetted directive in the Insurance (Claims Management) of August 15 2014 by the Registrar of Financial Institutions, under the RBM, requires lawyers to submit to RBM’s licencees at the commencement of a claim settlement process a letter of appointment signed by a claimant.

The gazetted directive further required RBM’s licencees when settling claims to issue cheques in the following manner: A cheque in the name of the Claim Settling Agent or any other person who provides insurance claims management services providing for his fees and a cheque in the name of the claimant also being settlement of the claim.

But MLS, through lawyer Frank Mbeta, argues that by issuing a directive to the extent that the decision has the effect of regulating lawyer-client relationship in insurance claims ultra vires and is, therefore, null and void.

Mbeta argued that it was unreasonable for the respondent under the Financial Services Act, the Insurance Act and the Legal Education and Legal Practitioners Act for the respondent as Registrar of Financial Institutions to make the decisions to effectively regulate the manner and conduct of the legal profession in the management of insurance related claims.

The High Court in Blantyre granted the injunction on Tuesday, stopping the directive and further granted leave for a judicial review for the matter to be heard by both parties. n