Judge slams slow garnishee reform

Court action this week by the University of Stellenbosch's Legal Aid Clinic (LAC) looks set to fast-track changes to the laws dealing with emolument attachment orders (EAOs), which are seen as particularly harsh on poorer borrowers.

This week, the Stellenbosch LAC argued before Judge Siraj Desai in the Western Cape High Court on behalf of 15 consumers that the current law allows credit providers and debt collectors to abuse vulnerable and over-borrowed employees.

The group of 15 includes security guards, cleaners and farm workers from Stellenbosch - but the problem is far wider. Research suggests around 10% of formally employed people have EAOs, which mean deductions are made from their salary every month to repay debt. About 30% of the orders are considered problematic.

What makes the case all the more alarming is that these consumers weren't even aware that they had supposedly "consented" to these EAOs, and weren't aware of the implications.

The court action is aimed at 13 credit providers as well as Flemix & Associates, the law firm that acted on behalf of the credit providers. But the LAC has also cited the ministers of justice and trade and industry and the National Credit Regulator in the court bid.

Denzil Potgieter, counsel for Justice Minister Michael Masutha, told the court there was no urgency to the case, because the department was making amendments to the law aimed at addressing the concerns raised. But he provided no details about the amendments.

The department has apparently been working on amendments since 2012 but has yet to release draft amendments.

Judge Desai described the response of Masutha's department to the LAC's allegations as "limp" and criticised the lack of urgency.

"Emolument attachment orders are having a devastating effect on people's livelihoods, not just the 15 here, but thousands more ... it needs urgent resolution," he said.

The case may add impetus to government's changes to the law, which could see the introduction of a cap on the orders and a national register of EAOs .

The LAC not only wants to change the law, which it argued deprives borrowers of their constitutional rights, it also wants those EAOs served on its clients to be declared unlawful - thus null and void.

If they succeed, there could be serious ramifications for lenders, including the banks. At the heart of the LAC's case is the fact that these orders are issued by clerks of magisterial courts, often hundreds of kilometres from where borrowers live or work.