Given todays digital era, the conveyancing industry faces significant challenges in dealing with cyber threats and fraudulent transactions.

Cybercrime cannot undoubtably be avoided within the legal profession at large. The momentous increase in the reliance on technology and electronically facilitated transactions has created a gateway for cybercriminals to exploit procedures used in conveyancing in particular. Professionals within the conveyancing industry are required to equip themselves with the knowledge and tools required to adapt and protect their business, clients and third parties from falling victim to fraudulent transactions.

Vulnerabilities in the conveyancing departments require the use and exchange of sensitive personal and financial data, thus making the parties to a conveyancing transaction appealing target for cybercriminals.

It often happens that cybercriminals compromise business related e-mails by accessing, monitoring, expropriating, and replacing the contents of e-mails with that which is similar to the original e-mail the recipient is expecting to receive. This is done with the aim of deceiving the recipient into accepting and acting on the contents of the e-mail, under the impression that the e-mail received is genuine.  

In Fourie v Van de Spuy and De Jongh Inc. and Others,^[1] the conveyancing secretary attending to the transfer of the property fell victim to cybercrime, as proceeds of the purchase price of the property in respect of the transfer, was erroneously paid to a third party and not the seller of said property. The transferring attorneys were instructed to retain all funds due to the seller in their trust account until given further instruction on what to do with the funds. The court held that the transferring attorneys was negligent in that they failed to uphold their fiduciary duty owed to the client by failing to have measures in place to ensure that neither party fell victim to cybercrime. 

In Hawarden V Edward Nathan Sonnerberg (ENS) Incorporated^[2], banking details were provided to the plaintiff in a legal matter. To the client’s surprise, her e-mail account was hacked, and the e-mail sent by ENS Incorporated, which contained payment details, was intercepted and altered to reflect the banking details of a third party. Although the plaintiff was advised to contact ENS prior to payment of any fees to confirm banking details, the court in this matter ruled that ENS Incorporated’s banking details were regarded as financially sensitive information and sending e-mails with banking details in inherently dangerous.

To avoid falling victim to cybercriminals, it is advised that businesses and individuals utilise secure mechanisms such as encrypting e-mails with passwords to protect sensitive information, ensuring that employees receive regular training on changes within the technological space, implement two-stage authentication to provide additional security i.e. password protecting a document and ensuring that the client/ firm is contacted (including telephonically) to confirm banking details. Businesses are also advised to acquire cyber theft insurance and software security such as a firewall and up-to-date anti-virus programs.

Due to the rapid increase in technological advances, new opportunities arise for cybercriminals to exploit. To safeguard conveyancing and other transactions in this digital era, robust security measures must be implemented as the consequences of cybercrimes lead to extreme financial and reputational loss and damage.

[1] Fourie v Van der Spuy and De Jongh Inc. and Others (65609/2019) [2019] ZAGPPHC 449; 2020 (1) SA 560 (GP) (30 August 2019)

[2] Hawarden v Edward Nathan Sonnenbergs Inc (13849/2020) [2023] ZAGPJHC 14; [2023] 1 All SA 675 (GJ); 2023 (4) SA 152 (GJ) (16 January 2023)

By Patricia Morgan (Director) and Thinasha Pillay (Candidate Legal Practitioner) | Conveyancing Department