Cayman Finance defends law firms, says MLAs threaten financial sector

Cayman Finance, the primary organization representing the financial services industry in the Cayman Islands, has raised concerns that allegations from independent legislators of potentially criminal wrongdoing by the island’s law firms could do significant damage to the territory’s core industry.

In a public statement, printed in full in today’s Cayman Compass, the organization took issue with the private members’ motion, tabled by East End legislator Arden McLean, seconded by George Town MLA Winston Connolly and supported by fellow independent members Alva Suckoo, Anthony Eden and Ezzard Miller.

The motion accuses law firms of illegal activity by practicing Cayman law off-island through their international offices and suggests there is a “prima facie case” for criminal prosecution against them for allegedly conspiring to defeat previous drafts of the Legal Practitioners Bill which sought to regulate that practice.

RELATED EDITORIAL: Cayman Finance: A loud and clear message to Arden and Winston 

RELATED: The complete text of Cayman Finance statement

Cayman Finance, in its statement, said there has never been any prohibition of practicing law outside the jurisdiction and suggested this was a necessary part of the success of Cayman’s international finance industry. Law firms have been operating international offices for decades without any suggestion from anyone that this was in any way illegal, the statement said. The group warns that the allegations could have an adverse impact on the financial services industry and on the reputation of the Cayman Islands.

“The private members’ motion asserts that the partners of Cayman firms may be guilty of criminal conduct for allowing attorneys who are not admitted under Cayman law to practice Cayman law in the foreign offices of such law firms, and suggests that steps should be taken to investigate their conduct and if necessary bring charges against them for breaching Cayman law in this regard.

“These are very serious allegations, which have not been made before, to the best of our knowledge, in the long history of the existence of foreign offices. These allegations bring adverse publicity to the legal profession, which in itself could have an adverse impact on the jurisdiction. If proceedings were actually to be brought against the partners in the law firms which have foreign offices the results would be disastrous for the jurisdiction as a whole.”

The statement also questioned the claim in the private members’ motion that the practices of Cayman’s law firms had a deleterious impact on the economy of these islands. “The opposite is true,” it said, suggesting the international offices of Cayman’s law firms have been a “critical part of the success” of the financial services industry as well as directly contributing US$32 million to the Cayman Islands Government in annual revenue.

“Cayman Finance strongly urges the movers of the motion and the other members of the House to remain focused on the need to protect the Cayman Islands Financial Services Industry, which is directly responsible for more than half of the islands’ economy, more than half of the government’s revenue and employs more Caymanians than any other industry. In light of its significance to the islands, any damage to this industry could have far reaching implications for the jurisdiction and its people as a whole.”

The independent MLAs have called for a full, independent investigation into their claims before the new draft of the Legal Practitioners Bill is debated in the house. They claim the bill provides a backdoor to legalize lawyers practicing Cayman law from abroad.

“We felt that this jurisdiction cannot simply move forward to ignore these very serious accusations made against some law firms and to blindly license certain practices, which may be, at this point in time, illegal, without at the very least, the various allegations being properly investigated and ventilated in the Legislative Assembly,” the five members said in a joint statement last week. The current draft of the Legal Practitioners Bill and the private members’ motion alleging potential breaches of the law are on the LA’s agenda for its meeting, which resumes Wednesday.

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1 COMMENT

  1. I am not very fond of the words used “Loud and clear message being sent to Arden McLean and Winston Connolly” it sounds too much like a threat. What each and everyone must accept is that if there was not wrong doing, then there is no need to send any “Loud and clear message” You just file a defense with proof that the accusations are unfounded. If Mr. Arden and Mr. Winston has proof of their allegation, then they do the same; file a writ.
    Now the public is all waiting for what’s next. Because we do not want to think that this is all a diversion propaganda to political rhetoric.

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