Government and opposition are negotiating once again over the reform of the Legal Practitioners Law. The Legal Services Bill seeks to replace the law and introduce a Legal Services Council to regulate the practice of Cayman Islands law.
The bill is going to proceed to the committee stage this week when various amendments proposed by both government and opposition will have to be addressed.
Shortly before all lawmakers approved the bill’s second reading Friday evening, Premier Alden McLaughlin said government is hoping to meet with opposition to discuss the proposed committee stage amendments.
He said, “It is clear from the debate thus far that we have more in common, more that we agree on, than we actually have differences.
“I believe that based on the way we went about addressing the concerns about the Defence Bill, which we passed at the last meeting of the House, that it is well within the competence and capacity of members of this House for us to narrow the differences on this particular bill.”
There have many unsuccessful attempts to reform the more than 50-year-old Legal Practitioners Law over the past two decades.
The previous administration brought a bill to Parliament but withdrew it after a lengthy debate.
Ostensibly the Legal Practitioners Law should be a law to regulate the profession, ensure supervision and provide a mechanism to sanction professional misconduct by lawyers.
There are around 900 licensed attorneys in Cayman.
But proposed past amendments to the law have attempted to also promote Caymanians in the profession and achieve greater local control over the practice of Cayman law. This in turn had to be balanced against commercial and competitive factors impacting the delivery of legal services in the global market through satellite offices worldwide.
Introducing the new bill in Parliament on Wednesday, Premier Alden McLaughlin said both the number of practicing attorneys and the nature of law practice in Cayman had changed so much in recent decades that the current law regulating the profession is obsolete and harms rather than helps the practice of Cayman law.
Various interest groups within the legal fraternity had never been able to give previous iterations of reform bills the full backing of the legal community, McLaughlin said.
“This bill represents the closest I have ever seen us come to a point where the large majority of lawyers in these islands have been prepared to get behind the bill to improve what needs improvement.”
The premier conceded that the bill would not be able to address “the myriad concerns” that exist with the current legislation.
“I do not profess that this bill is perfect, or that it meets all of the concerns that have been turned up, and that everyone is satisfied. But I say that it is more than a good start,” he said.
Without reform, McLaughlin warned that Cayman would “wind up on another blacklist”.
The legal profession is the only area of the financial services industry that is not adequately regulated, he said.
The bill aims to regulate the legal profession under a Legal Services Council and introduce a code of conduct for attorneys together with a disciplinary regime.
The composition of the Council is currently one of the contentious topics. The opposition seeks fairer representation of all types of lawyers on the Council and objects to the inclusion of the chief justice and attorney general.
Government argues that because the lawyers themselves cannot agree who should be on the Council, it needs “safe pairs of hands” to ensure the bill is implemented correctly.
Another contentious issue has been the practice of Cayman law by overseas offices of Cayman firms and lawyers outside of Cayman.
Some view the practice as illegal. Others have argued that the overseas practice of Cayman law would amount to outsourcing, contributing to the loss of control over the practice of Cayman law by Cayman firms.
The bill tries to address this by providing a 1-to-1 ratio to ensure that the number of a firm’s lawyers who are practicing Cayman law abroad cannot collectively exceed the number of the firm’s attorneys practicing it in Cayman.
“This is an important enhancement, and one that everyone must hopefully agree is useful and necessary to help ensure that the control of Cayman law firms remains within these islands,” the premier said.
Another feature of the bill is that through the Legal Services Professional Development Regulations, Caymanian attorneys would be considered first for roles that require the practice of Cayman law in overseas offices.
The bill stipulates that every lawyer practicing Cayman law overseas will now have to be admitted in Cayman, fall within the supervisory remit of the Cayman Islands Legal Services Council, and will be required to pay an admission fee and a practicing certificate fee.
Premier McLaughlin said there was no evidence to suggest that the presence and growth of Cayman law firms’ overseas offices had taken work away from Caymanian lawyers. Instead, the majority of the business of larger law firms in Cayman was generated by overseas lawyers practicing Cayman law.
As far as non-Caymanian lawyers practicing Cayman law locally is concerned, the premier said, “We are of the opinion that entry level positions must be reserved for young Caymanian entrants into the profession, who should be properly trained up to ensure their upward progression.”
To achieve that, lawyers with less than five years of post-qualification experience will no longer be permitted to be hired in the Cayman Islands.
Only a Caymanian or the holder of a residency employment rights certificate will be allowed to be admitted as an attorney at law, if they have less than five years post-qualification experience.
In addition, the bill proposes Legal Services Professional Development Regulations and a new continuing professional development regime to support access to the legal profession, as well as the training, development and progression of Caymanian attorneys.
Ownership and control of Cayman law firms is another key issue, because the usual 60%-Caymanian ownership rules or local company control licenses do not apply.
The bill requires that every law firm in Cayman has at least one Caymanian attorney who is a partner or member depending on the type of practice.
While opposition politicians believe this does not go far enough, the government argues going further could hurt the industry.
However, the premier agreed that upward mobility has long been one of the main complaints about the legal profession and industry.
“Frankly, law firms have not done anywhere near enough over the years to provide opportunities for Caymanian lawyers to be able to move to the highest echelons within the law firms and to share in the equity of those law firms,” he said.