CILPA has no authority to fine, claim lawyers

| 29/06/2020 | 50 Comments
Anthony Akiwumi and Vaughan Carter, partners at Etienne Blake

(CNS): A local law firm is challenging a fine issued by the Cayman Islands Legal Practitioners Association (CILPA) and its sub-committee, Cayman Attorneys Regulation Authority (CARA), for not registering with the association. Etienne Blake, a small firm owned by partners Vaughan Carter and Anthony Akiwumi, has appealed to the courts over a fine of $78,000 on the basis that these entities have no legal authority or jurisdiction to make them register or sanction them.

In an action filed in Grand Court, the local lawyers have argued that because CILPA and CARA have no jurisdiction over them, the hefty registration and discretionary fine they have issued is legally void and they should not have to pay. The partners claim that neither of these entities has any legal authority to supervise, regulate or to issue fines or other penal sanction or take any form of enforcement action and the court should quash the fine.

CILPA was created after the Law Society merged with the Cayman Bar Association. It was then recognised as the industry’s self-regulator under the The Legal Associations Law, passed last year. In turn, CARA was formed to supervise and build a regulatory framework to address concerns raised by the Caribbean Financial Action Task Force (CFATF) over the absence of a functioning regulator for the legal profession here.

All law firms were directed to register with CILPA before the end of August last year but the lawyers at Etienne Blake claim that it did not have the “legal authority to create” CARA “as a separate supervisory authority”. They also argue that the supervision of attorneys-at-law by CARA is unlawful and in breach of section 19 and section 24 of the Bill of Rights.

In the legal action, the lawyers state that both bodies are “bereft of any legal capacity to regulate non-members”, largely as a result of the way Cabinet exercised its power under the Proceeds of Crime Law to make CILPA a regulator. Etienne Blake contends that there are no legal grounds in the existing Legal Practitioners Law to compel attorneys to join an association.

The lawyers have therefore appealed to the court to, among other things, quash the fine notices, make declarations that CILPA and CARA acted unlawfully and that they have no legal authority to supervise, regulate or to issue fines or other penal sanction.

The decision to designate CILPA as self-regulator comes out of the continued failure of government to get a Legal Practitioners Bill passed because of constant opposition to every bill drafted for the last decade or more.

The opposition has come from some quarters of the legal profession and from politicians and are largely based on disagreements about how local attorneys are treated and the ability of non-Caymanian lawyers to practice Cayman law in other jurisdictions.

The Legal Associations Bill was a way of formalising CILPA and addressing the significant problem for Cayman that the existing Legal Practitioners Bill falls far short of meeting the requirements over the supervision and compliance of lawyers regarding issues of money laundering and other financial crimes.

See the full appeal in the CNS Library

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Category: Business, Law

Comments (50)

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  1. Anonymous says:

    CNS – find it strange that the like / dislike count on all of these comments have been taken down.

    This due to requests from authorities in Cayman due to the fact that (while true) it paints the jurisdiction in a bad light?

    CNS: Good grief! It is truly mind-boggling how people see conspiracy theories everywhere. Utter madness. I changed the thumb system and the data was not carried over. That’s it.

    • Anonymous says:

      Odd that you would immediately jump to the conclusion that I think this a “conspiracy”.

      Wouldn’t you ask questions if all of a sudden like / dislike numbers disappeared on comments / articles you knew were there previously?

      Moreso on subject matter as sensitive for the jurisdiction as this.. ?

      I would if I was a journalist.

      CNS: I would look at other articles of the same time period. Then, seeing that all of the historical thumb data had disappeared, I would look for a reasonable explanation rather than one involving shadowy figures bullying the media. The fact that the thumbs look different might be a clue.

      • Anonymous says:

        Perhaps a read through section 88 (4) and section 90 of the Information and Communications Technology Law (2019 Revision) is in order.

        That said, it is quite conceivable that government could order this article/comments/likes to be taken down, citing their “annoyance” of the subject matter.

        CNS: Wrong.

  2. Anonymous says:

    Not only are there UNQUALIFIED people practicing Cayman Law in other jurisdictions, but there are now UNQUALIFIED people sitting in Mauritius and India, calling themselves experts in Cayman law and Cayman corporate services, providing corporate services to Cayman entities! They are using VPNs to make filings in CAPS and REEFS, completely eliminating the need to have corporate services professionals here on the island, thereby killing financial services jobs for Caymanians!

    CIG, WTF are you doing allowing the Big Law Firms and financial services providers here in Cayman to circumvent having to hire people HERE IN CAYMAN?? Why are you destroying our economy by allowing these practices to happen? Clamp down and stop allowing overseas service providers to make filings ON YOUR ONLINE PLATFORMS from overseas!! Keep those jobs in CAYMAN!

    • Anonymous says:

      We already have multiple laws designed to prevent these practices. As usual we simply do not enforce them.

      Most galling is that some of the people facilitating this are so called “officers of the court” and the so called regulators are running around fining small local players for refusing to be members of their club, whilst doing nothing about significant breaches by some of those who are members, on everything from breaches of the immigration law, local companies (control) law, and legal practitioners (incorporated practice) regulations.

  3. Anonymous says:

    They say they don’t have authority but didn’t the Premier say they do and hasn’t the government passed a law making them the supervisor?

  4. Anonymous says:

    Bring back the Caymanian Bar Association.

    • Anonymous says:

      When will the private sector get its act together.

      Can we please have the civil service regulate the lawyers.

      • Anonymous says:

        Why? Does the Civil Service do a good job of regulating other parts of the economy?

        • Anonymous says:

          Depends on what department you are talking about. If it’s the auditor general…they don’t hold back on pointing out the filth they find. Did you see the report on OfReg? I’d love to see investigations of Cayman law firms and their shady practices.

      • Anonymous says:

        Ummm, the civil service (through the court) is supposed to be regulating lawyers.

    • Anonymous says:

      It had principles and integrity. It sought to require that standard to all law firms in Cayman. That proved unpopular in the corridors of power.

    • Anonymous says:

      There is no point to having the Caymanian Bar association. Who is a Caymanian now and moving forward has been and will be dictated by wealth. Those with money are guaranteed to make it through the point system and will get status. Those with wealth can circumvent the process of time and get PR immediately and move towards being Caymanian. The social differences will now increasingly become obvious and as real Caymanians become out numbered and driven to the bottom of the social system social unrest is certain. In a short while these new super wealthy Caymanians who already dictate to the Government will be able to run in the elections with sufficient wealth to carry off a strong campaign and their own will vote them in by their strong numbers. Persons waiting in the wings to get PR are already voicing their concerns that if they dont get PR in time they will miss an opportunity to vote in the elections. It sounds as if I say this with malice but really the only point I make is that soon Cayman will no longer be Cayman but the same place that the expats so desperately ran away from when they found Cayman a more viable alternative. And as for the local Caymanians, whatever you think of them now think what they will be like when they feel marginalized, unequal and impoverished in their own home. Social strife and hardship for most will be sadly our future and Caymanians will lose their seat at the table. But it will be no picnic for the expats either. Start building gated communities and hire more security, we will go the way of Jamaica and the Bahamas. I made my wealth and enjoyed Cayman when all Caymanians and expats interacted well and there was no social strife. I saw the best of Cayman. It looks as if financially it was thriving but the underbelly of Cayman said a different story. Caymanians can no longer afford to live here or even think about retiring. The outrageous remarks from the head of Fidelity demonstrated a complete lack of understanding of the plight of many Caymanians and lower income workers on the Island. I know Brent and he is not racist just disconnected to what really happens in Cayman).

      • Anonymous says:

        The Caymanian Bar Association never limited itself to the protection of Caymanians. It took a high level approach that included the interests of the Islands and the entire legal profession. It also challenged the government (publicly and privately) when there was a need to do so.

        • Anonymous says:

          Thats somewhat true. In the days when the CBA functioned as it should, you had to be Caymanian to participate. The reason it existed was to protect the Caymanian Lawyer and their unique perspective in the profession. thats what distinguished it from the CI Law Society. Then the CBA got ambushed not only by the new super Caymanian but also by the larger firms which instructed their Caymanian lawyers how to vote and bussed their lawyers to vote and orchestrated the elections of the CBA. It no longer functioned as it should and then when there was no purpose in continuing on with the farce we ended up with CILPA. We now have firms that were once Caymanian firms promoting other jurisdictions right here from within the Cayman Islands because they have offices and more boots on the ground in other jurisdictions. Is there any wonder….

  5. Anonymous says:

    The regulation of Cayman law firms has to be taken out of the hands of Cayman law firms. CIG should commission the The Law Society of England & Wales to draw up a code of conduct and set up a body similar to the Solicitors Regulatory Authority. It is time the lawyers here started to act ethically.

    • Anonymous says:

      Most of those who behave least ethically are already supposed to be regulated by the Law Society of England’s and Wales. Not too impressed by them, frankly. How many of their members are openly practicing Cayman Law in places like Hong Kong, without Cayman Islands Practicing Certificates?

    • Anonymous says:

      The SRA don’t know their ar$es from their elbows I’m afraid.

  6. Anonymous says:

    Another consequence of not having a properly constituted and independent legal services regulator on this island is the issue of mingling legal and fiduciary services. As with the audit firms, there should be a ban on law firms providing fiduciary services. Such relationships create a clear conflict with the law firms acting as de facto shadow fiduciaries.

    The current model does the reputation of the Cayman Islands no good at all. Effectively you have law firms hiring cheap labour to put on boards (100+) with such persons having no ability other than being able to take directions from the law firm and act as cyphers. The lawyers / partners take all the profits generated, but take no risk associated with the fiduciary role. This is the very definition of moral hazard.

    It is only a matter of time before this blows-up, at which the US, UK, EU and Asian regulators will point the finger at the Cayman government and say the risk was obvious, so why did you do nothing about it?

    • Anonymous says:

      Want a job?

      Seems there are only a few people that have realized that it’s time to shake things up and do things right!

  7. Anonymous says:

    CARA needs more teeth.

    From what I’ve seen of smaller local law firms, a number need to be disbanded. Most of these small shops are willing to take on clients from any jurisdiction, regardless of confirmed money laundering ties – just to make that quick $1,500 in RO fees

    They have zero in the form of KYC and risk management policy, laugh at the law, regulations and regulators and are exactly what give Cayman a bad rep on the international stage.

    #regulatetheattorneys #timeforfines

    • Anonymous says:

      Are you kidding? The small firms are terrified of getting in trouble because they have no huge cartel firm to hide behind- I don’t think the small firms are the ones taking on shady clients! I presume that’s what the unregulated, unqualified overseas “cayman” lawyers are for!

      • Anonymous says:

        There are some reputable firms on island.

        Others not so much.

        All I will say is that you’d be surprised at some of the dodgeyness that goes on in these small law firms.

        No ethics at all.

        • Anonymous says:

          I haven’t found those yet- every small firm I’ve dealt with have been much stricter with kyc before taking on new matters and the fees are so much more reasonable!

    • Anonymous says:

      Law firms don’t provide ROs. Entities with licences from CIMA do. And they need to get KYC.

      If anything forcing law firms to get the same kind of KYC that a provider of fiduciary services needs to get is a waste of time. Accused money launderers need legal representation too. Innocent until proven guilty is still a thing in court even though it’s not in the world of public opinion.

      • Anonymous says:

        Lest not forget that most law firm partners are shareholders of the trust companies that provide RO and their bad practices move across to their trust companies as well.

        So… if law firms can form and advise on financial structures (which can be used for a host of nefarious activities – which they do) of course they should be doing KYC to the level of fiduciary service providers.

        Seems unfair to make everyone else in the financial industry conform to AML legislation and comply with international AML standards.. but not the lawyers?

        Not for much longer.

        The CFATF will soon have its way, and I for one am looking forward to the weeds being plucked so that proper business, which adds to Caymans reputation as a top international financial center, can be allowed to fluorish.


  8. Anonymous says:

    Lawyers in the Cayman Islands are not adequately regulated. Has anyone tried to lodge a complaint against a practitioner? It is a joke! Cayman lawyers operate like thugs.

  9. Anonymous says:

    The courts have jurisdiction over those admitted to the bar, they just avoid it.

  10. Anonymous says:

    And right they are! I am glad there are a few brave lawyers here and they they are putting cilpa to task. Again and again the big firms try to pull the wool over Caymanians eyes. Enough is enough!

    • Anonymous says:

      I thank you Anthony and Vaughan. They have tried to rail road attorneys and no guidance on this is being provided by the Portfolio of Legal Affairs. I wish you a positive outcome gentlemen.

  11. Anonymous says:

    Well done Anthony and Vaughn we owe you both a debt of gratitude to challenge this mockery of self regulation.

    Thank you

    • Anonymous says:

      All this was predictable when the thing was set up. It was a obviously just a fig leaf for FATF purposes.

  12. Local Lawyer says:

    CARA was created by the big firms to give jobs to their friends and former colleagues. Looking at the funding and the persons that are employed by CARA. Yet CIG is subsiding CARA which has no legal standing. The objective is to crush all small and mid sized practices.

    CIG will be facing several civil actions and applications for judicial review because again they only listened to three our four big firms that are also breaking laws by having their satellite offices in other jurisdictions including Hong Kong practice Cayman laws. The big firms are not Cayman focused on what’s best for Cayman they are global entities that as the equity partners get their earnings and bonuses as a result of the clusters that they manage and control in various jurisdictions .

    This is about economics and Cayman being deprived of any economic benefits, regulation and oversight of attorneys in other jurisdiction not licensed to practice Cayman law. CIG should be charging all firms with overseas practitioners an annual fee of KYD100,000 payable to CIG because the reality and risks are too great whilst Cayman gets no economic benefits.

    Any Caymanian attorney not at the partnership level in a big firm that does not agree with the directions of partners and management will be dealt with accordingly. Work place intimidation is real in Cayman. We are told to comply or suffer the consequences.

    • Anonymous says:

      You have zero chance of collecting fees from overseas lawyers. No more than the US could collect fees for all the lawyers here advising on the avoidance of US taxes. And if you can’t take management direction you definitely have no business in a major firm.

      • Anonymous says:

        You are describing criminal conduct by lawyers practicing Cayman law without being licensed. It is being done with the tacit and even express approval of some Cayman firms. .You seem to acknowledge it is widespread. The conduct is unlawful and the proceeds of it appear to constitute money laundering under our Proceeds of Crime Law.

        CILPA and CARA refuse to do anything about it. The issue has been well known for more than a decade. They do nothing. If they are to turn a repeated blind eye to such flagrant breaches effecting the profession, they can hardly claim any moral authority to regulate anyone. It is a farce.

        • Anonymous says:


          • Anonymous says:

            True. They refuse to do anything about all manner of illegality by those they contend to regulate.

        • Anonymous says:

          Sorry, it doesn’t matter if it is a widespread crime. Cayman’s authority does not reach into other countries.

          • Anonymous says:

            Ummm, it does. In exactly the same way that the Law Society would come down on anyone here purporting to practice English law. In any event it is an offense, often facilitated by persons here.

    • Anonymous says:

      After everything that happened and was reviewed last time with the Wayne Panton Bill, I cant believe the CIG are allowing the cartel to dare try all this again. Will they ever learn? Will they ever put Cayman first?

      • Anonymous says:

        No they won’t learn. The large firms are now known to be agnostic with regards to jurisdiction and where the work goes, on the basis that they have offices in pretty much all the options! And that comes straight from the horses mouth. The current Private Funds Law situation is one such current example of their attitude towards Cayman.

        • Anonymous says:

          Which horse? You think it doesn’t matter which country the money was made in for how much profit you get? You will get more of it if the money was made in your country because you will be a higher-ranked partner, most likely. To say nothing of the ego-driven-only competition between partners and anyone trying to become one about client attribution. Who claims credit for a big client when every partner knows every principal at the client and everyone has lunch with everyone else on the same marketing trip? Oops. If the ‘large firms are now agnostic with regards to jurisdiction’ that will come as a surprise to many of their senior lawyers. That sounds like a management-board level view, said board being made up of senior equity partners all.

  13. Anonymous says:

    There are a number of law suits by various attorneys against CILPA!

  14. Anonymous says:

    CNS, the problem is not only about non-Caymanian lawyers practicing overseas. The problem is NON QUALIFIED lawyers holding themselves out as being permitted to practice Cayman Islands law. There are lawyers in foreign jurisdictions working for big Cayman firms who call themselves Cayman attorneys but do not hold practicing certificates from the Cayman Islands court and have never set foot here. It is insanity.

    • Anonymous says:

      There is really nothing you can do about lawyers overseas unless they are part of a Cayman firm. At best you could report to their overseas bar association.

      • Anonymous says:

        OK. Who wants to report possibly 500+ lawyers to the law society of England and Wales, and others to the South African and Australian Regulators. . CILPA and CARA perhaps? Until they do and actually try to regulate those in open breach of Cayman Law , they will have little respect from or authority to sanction local attorneys who have been asking for proper regulation for many years.

        Are those advising CARA entitled to practice Cayman Law?

      • Anonymous says:

        That is exactly why it is entirely inappropriate for “CARA” or CILPA to regulate anyone!

      • Anonymous says:

        Penalising the local firms who employee these people would be good enough.

        If the government was smart they would say – no problem, you want to have lawyers in Hong Kong practicing Cayman Islands law? In order to do so they have to come here on a permit first, get admitted and pay the annual fee for a practicing certificate, and then the local office of the law firm employing them would have to pay a fee (perhaps equivalent to the work permit fee) for every lawyer outside of Cayman practicing Cayman law.

        Then, the number of lawyers allowed to practice in foreign offices should be tied to how many local lawyers are employed. In theory, if the immigration law was properly enforced you wouldn’t even need to mandate a specific number of local Caymaninan lawyers because in theory all the qualified Caymanian lawyers should be employed. Yes there are a few who are perpetually unemployed but that’s another story.

        Not perfect but better than now where these firms can just load up their London, Dubai, Hong Kong and Singapore offices with cheaper labour doing the work that should be done in Cayman. To the extent it still happens at least CIG is getting a fair cut.

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