Five foreign attorneys refused admission in AHAB litigation

Application highlights issues in Legal Practitioners Law

Five of seven London-based solicitors and barristers were denied admission to practice law in the Cayman Islands for limited purposes following a ruling made by Chief Justice Anthony Smellie earlier this month. 

Justice Smellie denied the majority of the applications citing Grand Court practice directions, or rules, that state limited admission of junior counsel will not be granted in Cayman except in “unusual and special circumstances.” 

“This is for the well-recognized policy and practical reasons that the services of attorneys-at-law of equivalent experience will be readily available from amongst the local profession,” Mr. Smellie’s ruling on Dec. 10 indicated. 

The admission of the additional non-Caymanian attorneys, sought by local firm HSM Chambers and its partners Huw Moses, Bill Helfrecht and Ian Lambert, emphasized the “highly unusual and complex nature” of the civil court case in which the firm is involved. The matter has been ongoing in one form or another in the Cayman Islands and other international courts since 2009 and is expected to go to trial in Cayman in mid-2016. 

The civil case alleges the misappropriation of more than US$5 billion by a defendant named in the case, Maan Al Sanea, from the financial division of Ahmad Hamad Algosaibi & Brothers Co., also known as AHAB. 

The particular case against what are referred to as the AWAL Companies, including the bank Mr. Al Sanea owned, is that they assisted Mr. Al Sanea in the alleged misappropriation. The AWAL Companies, in what the chief justice refers to as a “correspondingly complex defense,” have denied AHAB’s claim. 

Mr. Al Sanea has consistently denied all allegations related to the matter, which prompted lawsuits in several countries, including the Cayman Islands, where a number of companies in which he was involved were registered. HSM Chambers, in particular Messrs. Helfrecht and Lambert, have been representing the AWAL Companies interests in the litigation. 

“The litigation has indeed become both complex and work-intensive, involving … the tracing of significant sums through many bank accounts in various jurisdictions,” Mr. Justice Smellie stated in his ruling. “The resources required to fight litigation on this scale are significant, both in terms of money and personnel.” 

According to the ruling, the seven London-based attorneys were all granted work permits allowing them to be present in the Cayman Islands to work on the case, but fees for their services can only be recovered as costs from the litigation if they are granted admission to the local attorneys Bar. In other words, if the AWAL Companies are successful in the litigation and manage to recover costs from the other parties, the attorneys could not be paid out of those costs unless they are granted admission to practice in the Cayman Islands. 

Although the London-based attorneys working on the case with HSM Chambers are charging less than Cayman-based attorneys would for the same work, Chief Justice Smellie stated there were “equally significant policy concerns” that needed to be addressed with this application for their admission to the local Bar. 

“[These] include the fact that the many law firms and practitioners within the islands are usually quite able to provide the kind of professional services needed even for the most complex kinds of civil and commercial litigation,” Mr. Smellie wrote. “Their continued ability to do so would be significantly impaired if they had generally to compete with foreign lawyers as well. “The routine granting of applications such as these would therefore be injurious to the interests of the local profession.” 

Section 4 of the Cayman Islands Legal Practitioners Law sets out the ways in which applications for limited admission of foreign lawyers can be made, but Justice Smellie said it must be “construed as intended” to “protect the local profession from undue foreign competition.” 

While the law and the Grand Court practice rules will “more liberally” allow requests for senior overseas counsel, such as Queen’s Counsel, “a different view must be taken of a desire to bring in junior counsel and solicitors from overseas,” Justice Smellie indicated. 

According to the submissions of behalf of HSM Chambers, the admission applications were urgently needed to prepare for a trial set for July 2016. Mr. Moses argued that HSM Chambers is a small local firm that had no choice but to enlist overseas lawyers in order to properly represent their clients in this complex and difficult case. 

Justice Smellie states that the HSM litigation team in this matter, led by Messrs. Helfrecht and Lambert, may have been made up of at least a dozen lawyers, only two of which – the partners – were based in Cayman. Most of the work, the chief justice stated, appears to have been done in London. 

Mr. Moses stated that at this stage of the case, a number of other leading Caymanian law firms are involved in the matter, and that it would likely not have been possible to find anyone “who is not conflicted.” Mr. Moses also indicated that his firm would not have recruited new attorneys for this single case, not knowing whether they could keep them on following its completion. 

The chief justice did not accept this argument: “Other firms in Cayman have recruited for bit litigation and in some instances, for this very case as well.” 

In conclusion, the application of two of the seven overseas lawyers was accepted by the court, which left it up to the employer to determine which two will come to work in Cayman for the remainder of the litigation. 

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  1. The work permits ought not to have been granted either UNTIL their application(s) were approved by the CJ to practice law locally.
    Immigration is all about collecting fees for Govt it seems.
    Little interest in the protection of Caymanian jobs!