By Advocate John Simpson
The National Consumer Tribunal has significantly streamlined debt rearrangement applications to benefit South Africans.
Advocate John Simpson, a full-time Tribunal member with the National Consumer Tribunal (NCT/Tribunal) recently discussed debt rearrangement applications at the Tribunal.
In a similar way to a court, the Tribunal (which is an agency of the Department of Trade, Industry and Competition) adjudicates consumer law issues, such as complaints in terms of the National Credit Act and the Consumer Protection Act.
One of the types of cases that the Tribunal hears is debt rearrangement/review applications (DRA).
If a consumer is in financial trouble and cannot repay their debts, they can approach a debt counsellor for assistance. The counsellor can restructure the consumer’s monthly debt repayments in a way that allows the consumer enough to live on. If all the credit providers agree to the restructuring plan, the debt counsellor can apply to the Tribunal to have the agreement made an order.
Soon after the Tribunal’s inception in 2007, debt counsellors started filing numerous applications to confirm DRA’s as orders of the Tribunal. The volume of DRA’s grew rapidly over the years, and the Tribunal now adjudicates on tens of thousands of these applications every year.
Every DRA matter must be individually assessed and adjudicated by a Tribunal member for the order to be confirmed and issued. Finalising these matters as efficiently and effectively as possible, has always presented a significant challenge for the Tribunal.
As these were new applications that had never been adjudicated before, the applications were initially heard in an open court forum with all the parties appearing before the Tribunal. When the Tribunal started in 2007, three DRA cases were received and four were received in 2008.
Once the Tribunal’s approach was established, more cases were heard per day.
In 2010, the Tribunal started hearing the matters “in chambers”, which meant that the parties did not appear before the Tribunal.
Each Tribunal member had to adjudicate and manually prepare the order for eight DRA matters over three days. The case files were manually prepared and couriered to the Tribunal members weekly. In the 2012/13 reporting year, the number of DRA applications had increased to 4,070 cases. By 2015/16, the cases had increased to 18,266. The high number of applications being filed soon required a far more efficient process.
The year 2015 saw the introduction of “Motion Courts” and Tribunal members and staff travelled to the various provinces every month to adjudicate on DRA cases.
Debt counsellors would prepare their applications manually and submit them for immediate adjudication at the motion court. The “Motion Court” process resulted in a substantial improvement in case numbers but at a high budget cost. Research and consultations were undertaken to find a way for DRA matters to be filed and adjudicated electronically.
By 2018/19, the number of DRA matters had increased to 24,717 cases. A case management system (CMS) was designed and implemented by the Tribunal’s information technology department. The CMS allowed counsellors to file their applications and Tribunal Members to adjudicate on an electronic platform. The CMS enabled Tribunal members to adjudicate on forty cases each per day.
Over the years, the CMS was refined and improved to cater for the ever-increasing number of debt rearrangement/review applications.
The orders for DRA cases filed on the CMS are now confirmed by the Tribunal member and issued to all the parties electronically with cases adjudicated remotely.
In 2020, a new format for the DRA order was designed and implemented. This required debt counsellors to enter minimal information on the CMS and substantially reduced the number of checks that a Tribunal Member needs to conduct when adjudicating and issuing the order.
The new format order and process has resulted in Tribunal members adjudicating on 80 matters per day per member, at no additional cost to the Tribunal.
Ongoing efforts to improve efficiencies has resulted in a reduction of the pending DRA case-load from an initial high of over 20 000 in 2016 to approximately 4000 currently. The vast majority of the Tribunal’s pending cases are now less than 70 days old from the date of filing. The Tribunal receives approximately 2,000 new DRA cases every month.
The Tribunal is encouraging debt counsellors to use the CMS and not file manually, as it is mostly the manually filed cases that take longer to process and adjudicate.
In addition, the Tribunal will continually aim to improve efficiencies and deliver an excellent service to the public and stakeholders.