We submit part 2 of our report. Our Law Reform views are not random and are also based on research made by the Law Reform itself.
PART 2. The Legal Services Bill 2020
5.2. We understand that at the time there was a general discussion with regard to regulation and admission of overseas lawyers in different jurisdictions. It was confirmed by Mr. Robertson, former president of the Law Society and still a Maples’ partner, that lawyers working in the London office are not regulated by any regulatory body. Although the firm is registered with the UK Law Society, the lawyers employed there are not regulated by the UK Law Society and did not have, and are not required to have UK practising certificates. Mr. Robertson confirmed that there were not, other than to register as foreign firms in each jurisdiction. He confirmed that the firms were unregulated in or by their host jurisdictions.
5.3. We further understand that Mr. Paget-Brown (the chairman of the Commission at the time) asked if there were any of the other jurisdiction in which they had satellite offices had liberal rules with regard to the issue of practising certificates and residency. Mr. Robertson and Mr. Panton (former president of the Bar Association) could not confirm that any did have. Mr. Paget-Brown used the example of Jersey where a two year residency is required before a practising certificate could be issued. He pointed out that the proposals by the Law Society and Bar Association would mean that the Cayman Islands would be the only or one of the few jurisdictions with such a liberal regime.
Like the Attorney General, the Cabinet in 2008 was and in 2020 are aware of this position.
5.4. The mounting conflict between Caymanian and non-Caymanian lawyers and the abortive outcome from the October 2010 Meeting led the Premier at the time, the Hon. McKeeva Bush along with the Attorney General to establish a small committee led including Mrs. Sherri Bodden, Mrs. Theresa Pitcairn and Mr. Sammy Jackson to ‘take all steps to prepare a written report setting out all allegations made by Caymanian professionals about their collective employment experiences’ and to ‘make a sensible proposals and recommendations to revise the LPB (Legal Practitioners Bill) and Immigration Law and strategies to initiate dialogue to move this issue forward’. The Premier at the time hoped to ‘find the right balance to bring about unity and reconciliation within the profession’. Mr. Ian Paget Brown QC as chairman of the Commission was also invited to form part of this committee (together the 2010 Committee).
6. The Legal Practitioners Bill and its Impact on local Revenue
6.1. Please find attached a copy of an Excel spreadsheet prepared by the Law Society to show the "New Revenue" that could be expected should the legislature pass its proposed Legal Practitioners Bill to allow non-residents to obtain practicing certificates. The Excel spreadsheet shows that at as of August 31, 2009 there were at least 132 "Attorneys in Foreign Offices practicing Cayman Law" with 3 "Caymanian Attorneys in Foreign Offices." The 2010 Committee requested a current spreadsheet from the CILS and the CBA to enable them to provide Premier Bush and the Attorney General with the current numbers.
6.2. The 2010 Committee observed that if average salaries for an associate totaled US$200,000 (a comparatively modest salary for lawyers in this field) firms would have to at least generate some US$500,000-US$ 700,000 in income per annum from one associate. Which meant that if there were 132 associates practicing Cayman Islands law overseas, one would easily be looking at US$66,000,000- US$ 92,400,000 being generated annually overseas by the local law firms through the practice of Cayman Islands law.
ALPA is currently updating this Excel record based on information that it has.
However a major concern arising out of the fact that there are foreign partners, senior associates and associates that practice of Cayman Islands law without the requisite practicing certificate alerted senior persons in the profession of the jurisdictional risk posed by this practice. The 2010 Committee asked the CBA and CILS to provide them with a summary of how firms have mitigated this risk and they never responded to the 2010 Committee, Premier Bush nor the Attorney General.
ALPA is currently updating this Excel based on information that it has.
6.3. The 2010 Committee worked for two years drafting legislation with different ‘Options’ providing the Law Society with varying degrees of flexibility to reach a compromise. The 2010 Committee also reached out to the Chief Justice to secure a measured fair and well-rounded legislation. This exercise after two years turned out to be futile.
6.4. Please find a copy of Mr. Paget Brown QC’s Letter dated 16th January 2013 having been instructed by the Attorney General to address the Grand Court on issues relating to the Legal Practitioners Bill in his capacity as Chairman of the Law Reform Commission which summed up the experience.
7. The Garlick Opinion March 2017 and Criminal Offences under the Legal Practitioners Law and Penal Code
7.1. If partners of a Cayman Islands Law firm (persons A and B) employ a person who is overseas (person C) and who has not been properly admitted to practice as an ‘attorney-at-law’ in compliance with section 3 of the Legal Practitioners Law (2015 Revision) (the “LPL 2015”) to provide services as an ‘attorney at law’ in the Cayman Islands, then persons A and B commit a criminal offence either as a substantive criminal offence under section 10 of the LPL 2015 or a conspiracy to commit such a criminal offence.
This was Mr. Paul Garlick QC’s conclusion after a review of the LPL 2015, the Penal Code (2013 Revision) and a number of reported cases which provided insights into common law rules regarding our jurisdiction, set out in his opinion March 2017 (the “Garlick Opinion”).
7.2. In his penultimate paragraph Mr. Garlick QC advised that the ‘conduct which would amount to a violation of section 12(3) of the LPL 2015 is much wider in scope than the conduct required to amount to the offence under section 10. The proscribed conduct under section 12(3) extends to any conduct which amounts to practicing or attempting to practice as an attorney at law without being in possession of a current annual practicing certificate. Accordingly a conspiracy to prevent or defeat the execution or enforcement of section 12(3) extends to all activities amounting to practicing or attempting to practice as an attorney at law.
7.3. If the Garlick Opinion is accurate, the 2020 Bill is asking Parliament to sanction all criminal offences arising under the LPL 2015 and the Penal Code, and if Parliament complies it will knowingly absolve persons of the criminal offences. And this does not take into account the amounts that firms may now owe these islands for non-compliance with the Legal Practitioners Law.
7.4. It should be noted that the Attorney General disagreed with the garlick Opinion. In the Legislative Assembly on 15 March 2017 (see Hansard page 59), stated that “the practice of Cayman Islands Law overseas is not in of itself an offence;” In his contribution to the debate he stated “But, Madam Speaker, I am not the final arbiter of whether criminal offences are committed or not. I am just giving you my opinion on the issue,...” (see Hansard page 60).
8. Some Additional Concerns- The Legal Services Bill 2020
8.1. These are some of reasons why ALPA continues to hold the view that no reasonable and informed government could proceed with any of the provisions in the 2020 Bill relating to:
• The creation of a special class of law firms, namely the “recognized firm” which remains in the 2020 Bill, without being held to a much higher standard of compliance and regulation and a fitness a propriety test, including a requirement that such firms must be Caymanian owned and controlled;
• The creation of a special class of overseas legal practitioner, which presents significant regulatory challenges and without there being proper evaluation processes in place to determine whether these professionals are fit and proper persons;
• The grant of any form of licence to operate as a Cayman legal practitioner overseas, unless such person is a duly licensed Caymanian attorney whose principal place of business is within the Cayman jurisdiction;
• Parliament knowingly sanctioning criminal offences under the Legal Practitioners Law and the Penal Code.
No one has explained why under the new regime firms will only pay CI$4,000.00 for Overseas Practicing Certificates and not pay the CI$2,000.00 paid locally plus the work permit fee for non-Caymanians employed in the firms. On its face there is the creation of two standards: one that is in breach of the Immigration Law and the other that it is unattractive to do business locally. The attorneys we have spoken to are deeply troubled about this position and concerned about being made redundant.
8.2. What follows is not an exhaustive list but queries in relation to certain aspects of the 2020 Bill:
I. The creation of a ‘Board’
The Board will comprise 4 members (and not say 7) namely, the Chief Justice, Attorney General and one person each appointed by the Premier and the Leader of the Opposition. There are a number of anomalies created by the Board in this construct.
For example, the Board is authorised to ’establish committees for the purpose of advising the Board on or performing any of its functions’ under the law. However the power granted to the Board in its current form calls into question whether there is an intention to use the Board to ‘normalise’ the Cayman Islands legal Practitioners Association and its purported ‘Cayman Attorneys Regulation Authority’ (CARA) both entities riddled with constitutional challenges as set out in a matter now before the courts.
Cause No. 116 0f 2020, includes the Attorney General, the Cabinet of the Cayman Islands, CILPA and CARA as Respondents. This matter questions the legitimacy of CILPA to act as a ‘supervisory authority’ as defined under the Anti-Money Laundering (Designated Non-Financial Business and Professions) (No 1) Regulation 2017 for firms of attorneys as law who are also members of CILPA…financed by a suitably financed supervisory executive’; whether CILPA has authority to supervise ‘all’ attorneys, including attorneys who are not members. Not to mention whether such a body infringes on the fundamental rights of attorneys protected under the Bill of Rights, Freedoms and Responsibilities, under the 2009 Constitution, to name a few.
It further calls into question whether these islands are fulfilling its obligations to tackle the scourge of organised crime in compliance with Anti-Money Laundering rules/regulations/guidelines regarding the regulation of lawyers.
The concept of the Board as drafted is also flawed in that it would be inappropriate for any Grand Court Judge, especially person holding the offices of Chief Justice or Attorney General to be subjected to judicial review or any constitutional challenge making the Court of Appeal as the first instance appellate authority. To be frank there are too many seen (and unforeseen) legal and constitutional issues arising with this structure. Further all boards have a fiduciary responsibility and the 2020 Bill would not necessarily relieve either the Chief Justice or the Attorney General of sanctions which may arise, notwithstanding the proposed indemnity under section 16.
II. Cayman Islands legal Practitioners Association
As mentioned at the outset Cabinet agreed to pay CILPA over CI$2,000,000 for the years 2020 and 2021 for CILPA to monitor and supervise CILPA members with practicing certificates and no requirement to monitor or supervise CILPA members employ overseas without practicing certificates. We have no record of Cabinet mandating that this CI$2,000,000 be absorbed by their own membership instead of taking money out of the resources that are meant for the welfare of Cayman Islands residents especially in these pandemic times.
The senior lawyers in the major firms are reputed to make over CI$3-5,000,000.00 a year. Where is the money going to come from to supervise and monitor CILPA’s firms, for example their employees in Hong Kong and other foreign jurisdictions if they are to be granted practicing certificates? What about the reputational risk to the jurisdiction to have people in foreign jurisdictions that claim to be Cayman lawyers but are not and not monitored and supervised by regulator?
III. ‘Affiliate’ Recognised Law Entity’ ‘Practicing Certificates’
Definitions including ‘affiliate’ ‘recognised law entities’, and ‘practicing certificates’ should be deleted from the 2020 Bill, retaining the provisions that currently exist in the Legal Partitioners Law until there has been an opportunity to properly evaluate the social and economic repercussion of the legal profession as envisaged by the 2020 Bill and its impact on these Islands given global economic uncertainties brought to bear by Covid 19 and its likely resurgence.
Besides as mentioned earlier the 2020 Bill continues to mandate that Caymanians cannot work in law firms in other jurisdictions UNLESS they work for an ‘affiliate’. The bill continues to take away the Caymanian lawyer’s right to work as an attorney in a foreign jurisdiction of choice and with whom.
IV. The practice of law
The definition of the practice of law remains too vague for prosecution due to the widely defined exemptions and does not address the concerns that have been raised by the Commission.
V. Part 7 of the 2020 Bill - Recognised Law Entity
The entire Part 7 (and related sections) of the 2020 Bill, ‘Recognised Law Entity’ should be deleted until the questions raised by the Commission have been addressed.
VI. Exemption of the Attorney General and the Director of Public Prosecution from Regulation
Section 27 of the 2020 Bill continues to exempt the Attorney General and the Director of Public Prosecution from regulation. This should be deleted and no lawyer exempted or the implementation of similar legislation that regulates these offices.
VII. The need to regulate non-lawyers carrying out the practice of law
Caymanians contend that the 2020 Bill as with its predecessors does not include regulations for non-lawyers, for example persons and entities in the real estate business that operate as lawyers given the provisions under the Anti-Money Laundering regulations/rules. They contend that this industry and others should also be under proper oversight and sanctions.
Each time this bill has come to Parliament for passage containing the provisions we highlighted it has failed miserably. Why, because it is a consequential bill.
As expressed previously now is not the right time to be considering giving practicing certificates to non-residents living Hong Kong and other foreign jurisdictions for an annual fee of CI$4000.00, which is a pittance, as proposed by the 2020 Bill. That does not benefit the Islands. It is better to rely on getting business from international law firms with duly qualified lawyers in foreign jurisdictions rather than allowing “offshore firms” to compete with those law firms in London, Hong Kong and elsewhere with “pretend Cayman lawyers”. To reiterate, the issue can be revisited when the economy has recovered in a few years.
We are often told and may even take it for granted that a fair and independent court system is essential to the administration of justice, just as we may take it for granted that as officers of the court, we have the obligation to promote justice, that our conduct and the impressions we leave with others matter. In most civilised jurisdictions there is a Code of Professional Ethics which demands that we are fair and impartial, that we are alert to situations that give the impression of a conflict of interest or that give the appearance of partiality or impropriety. The point being, in these islands we don’t even appear to try.
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