Legal Services Bill marginalises Caymanians
Alric Lindsay writes: For decades, Caymanian lawyers requested a set of guidelines that would allow them to play on a level playing field for their hiring, training and promotion within Cayman Islands law firms. However, successive ruling government members (at least two of whom were former partners in Cayman Islands based law firms) were unable to convince the general public and Caymanian lawyers that previous versions of draft legislation (in the form of the Legal Practitioner’s Bill) were in the best interests of Caymanian lawyers and the legal profession.
The Legal Practitioner’s Bill will now be presented again to the Parliament of the Cayman Islands in December 2020, but under a new name, the Legal Services Bill (LSB). However, the LSB (which appeared in the Cayman Islands Gazette dated 27 October 2020) poses the same grave concerns for Caymanian lawyers as its predecessor, the Legal Practitioner’s Bill. Some of these concerns are outlined below.
Admission
Under the proposed LSB, in order to be admitted as an attorney-at-law, a person can be ordinarily resident in another jurisdiction and be a partner, director, member, employee, associate or consultant of a Cayman law firm or an affiliate of a Cayman law firm. The absence of any requirement to be physically present in the Cayman Islands at any time prior to being admitted to practice Cayman Islands law means that hundreds of foreign lawyers may be admitted to practice Cayman Islands law while overseas and immediately transfer to the Cayman Islands’ office. This may displace multi-generational Caymanian persons seeking to be admitted as attorneys-at-law within the Cayman Islands.
In my view, the bases should be loaded with Caymanian trainees ready for admission as attorneys-at-law. I suggest that a compromise be reached where a 1:3 ratio is maintained, whereby a large law firm would have at least one Caymanian trainee in the firm for every three overseas lawyers being admitted to practice Cayman Islands law. Without such a ratio, Caymanian trainees will not be playing on a level playing field as there will be no meaningful infrastructure.
The proposed LSB also states that a person who is otherwise be entitled under the Immigration (Transition) Law, 2018 to reside and work in the Cayman Islands as an attorney-at-law may be admitted to practice Cayman Islands law. As you know, the Cabinet made the Immigration (Transition) (Global Citizen Exemption) Regulations, 2020 under the Immigration (Transition) Law, 2018. This would permit overseas lawyers working for an overseas branch of a Cayman law firm to come to Cayman and work “remotely” from their apartments in Cayman, but supposedly continuing to work for the overseas branch.
Due to the loopholes in the Global Citizen Regulations, such attorneys will come to the Cayman Islands for 90 days, work without a work permit, cancel their Global Citizen Certificate and gain employment in Cayman with any Cayman law firm. Perhaps the inclusion of this loophole was an oversight by Cabinet. If left unchanged, multi-generational Caymanian lawyers will experience a pattern of displacement cemented in this and other provisions of the LSB.
Number of Caymanian partners
On the issue of supplanting multi-generational Caymanian lawyers, the LSB states that, in the case of a law firm that is a partnership practising Cayman Islands law, at least one partner of the partnership shall be an attorney-at-law who is Caymanian. This fatally flawed. On the one hand, the definition of “partner” under the LSB does not include a person employed as a salaried partner or equivalent. It is therefore unclear whether there will be any real substance attached to a Caymanian being a “partner” in a law firm, i.e. is it just a title or will Caymanian partners have the same profit sharing and voting powers of their foreign counterparts who are partners in the same law firm?
The second defect is that only one Caymanian partner is required in any law firm. This means that, in a law firm of 200 lawyers, only one of those lawyers must be a Caymanian partner. The significance of this in practice is that a large law firm may only hire one Caymanian attorney or promote one Caymanian as partner or seek Caymanian status for all foreign lawyers and then promote and brand those persons as the Caymanian partners.
If the law firms are sincere about the substance of the LSB, the final version of the LSB will state that, for firms with five or less partners, at least one must be Caymanian, firms of six to ten partners must have at least three Caymanian partners and so on, with the largest firms of 20 or more partners having at least one third of its partners being Caymanian profit sharing partners, each of these persons being Caymanian for at least ten years. If the wording remains unchanged, then multi-generational Caymanian lawyers will be totally disenfranchised or excluded from partnership in law firms.
Preparation of Cayman law governed documents
Continued alienation of Caymanian lawyers is seen under the LSB where a person is not deemed to be practising Cayman Islands law if if the person is practising non-Cayman law in another jurisdiction and prepares a draft of a document or instrument to be governed by Cayman Islands law, where the document or instrument will be reviewed, settled and finalised for execution purposes by a law firm or an affiliate. The provision allows a lawyer in another jurisdiction who does not hold a Cayman Islands legal practice certificate to draft Cayman Islands law governed documents and make a profit while doing so.
This arrangement also takes work away from Caymanian lawyers who hold a Cayman Islands legal practice certificate. For example, a New York law firm can prepare Cayman legal documents, charge the bulk of the fees to the client and then have a Cayman friendly firm to sign off on the documents as if the Cayman firm prepared the documents. This is money that will not be spent in the Cayman Islands economy and may encourage the “outsourcing” of all Cayman Islands legal work to other jurisdictions. This is a continuation of the pattern of disenfranchisement and displacement of multi-generational Caymanian lawyers.
Possible offences remain unpunished
As a follow-on from the above, the proposed LSB indicates that if a person holds himself or herself as qualified to provide legal services for gain or reward, that person is practising Cayman Islands law and commits an offence and is liable on summary conviction to a fine of one hundred thousand dollars or to imprisonment for a term of two years, or to both. To date, none of the possibly hundreds of persons practising Cayman Islands law overseas without a Cayman Islands legal practice certificate have been fined or otherwise penalised.
This is notwithstanding that the issue has been highlighted by journalists for several decades and even around the 2017 election, where it was noted that a “QC from London chambers claims that local law firms are breaching the existing legislation and conspiring to employ overseas lawyers unlawfully… the law firms are breaking several sections of the current law, which has caused more uncertainty over the passage of the new legislation” (see here). While the government of the day may have taken a different view from the London QC, it is a well-known fact (and I have seen it in practice) that many persons are providing Cayman Islands legal advice and preparing Cayman Islands law governed documents in other jurisdictions without a Cayman Islands legal practice certificate.
Under the LSB, it is now proposed to issue Cayman Islands legal practice certificates to such persons and pretend that they were not practising without Cayman Islands legal practice certificates for decades. No penalty will be applied. No offence will be noted. Turning a blind eye to such an important issue appears to be fine, the same way it is OK to ignore general Caymanian unemployment, the high cost of living, the existing right of the people to a referendum vote on the cruise berthing facility, ongoing harm to our environment, eradication of beach access and a myriad of other daily struggles felt by Caymanians. Governance and acting the interests of the public are clearly not part of the forte of this government.
Governance of the legal profession
The poor approach to governance is further solidified by the structure of the Legal Services Board to be established under the LSB. The Board is expected to consist of four members, being a judge, the attorney general, a non-practising attorney-at-law appointed by the premier and a non-practising attorney-at-law appointed by the leader of the opposition. In my view, it is inappropriate for two sitting politicians, being the premier and the leader of the opposition, to appoint or remove a member of the Legal Services Board.
The primary concern here is that the relevant Board member’s appointment will be subject to the terms and conditions of the premier and the leader of the opposition. Effectively, they will be political appointments where Board members may be of the opinion that they should act in the interests of the premier and the leader of the opposition rather than in the best interests of the legal profession. This is a threat to good governance.
The second concern is that the total number of Board members is four, with the chairperson (being a judge or the attorney general in the judge’s absence) having an additional vote in the case of a tie vote. If political motivations are at play (especially where a politician has a personal grievance with a lawyer who may be subject to disciplinary action by the Board), conflicts of interest will arise, ultimately influencing the way that votes are cast by Board members appointed by politicians.
I suggest that Board members have no conflicts of interest with members of parliament or the judicial system. They should be independent persons, for example, including the chairperson of an anti-fraud commission, chairperson of the Standards in Public Life Commission, auditor general, retired law professors and non-practising attorneys-at-law whose appointment is not connected to any politician. If not, then it will be near impossible for an attorney to be treated fairly at the Board or the court level, especially if that attorney issues a lawsuit against the Board whose composition is expected to include a sitting judge and the attorney general.
The third issue is that one of the stated purposes of the Board is to carry out the functions imposed on the Board under the Proceeds of Crime Law (2020 Revision), in relation to attorneys-at-law, in accordance with the assignment of the Board as the Supervisory Authority under section 4(9) of that law. The only way to achieve independence and fairness in operation of a supervisory function is for it to be carried out by an independent entity such as the Cayman Islands Monetary Authority or the Financial Reporting Authority. Otherwise, conflicts will trump good governance.
The final issue is that, where Cabinet, after consultation with the Board, establishes a code of professional conduct for lawyers, the proposed LSB only requires an attorney-at-law or a recognised law entity to “observe” the code of professional conduct. In other words, if an attorney-at-law has a connection with the Board, he or she may get a slap on the wrist or a Board member connected to the attorney-at-law or a recognised law entity may turn a blind eye to bad acts during disciplinary proceedings where the Board is meant to establish whether professional misconduct by the attorney-at-law or recognised law entity has occurred.
What you should do
If you are a Caymanian lawyer or other stakeholder, you should contact your elected representative and ask him or her their views on the proposed LSB prior to it being discussed in Parliament in December 2020. If the LSB is passed in its current form, Cayman law firms will have no incentive to hire, train or promote any multi-generational Caymanian attorney or to create a level playing field where these possibilities can be visualized. If such a precedent is established, it will find its way into all sectors of our economy, forever and legally marginialise multi-generational Caymanians.
Raise the work permits to 25 thousand a year
And then we see how much caymanians get jobs
This some bs going on down here
LOL. Lawyers WP fees are more than that!
What we need is “The Law of Entitlement” which will apply not only to lawyers, accountants and banks, but to all businesses which guarantees a share of the profits to Caymanians, qualified or not.
A great number of the comments rest on the assumption that advising on Cayman Islands law from outside of the islands, and without being admitted, is a criminal offence.
For the sake of clarity, could someone identity the provision within the current Legal Practitioners Law (or elsewhere) that a) creates such an offence and b) makes it extraterritorial in effect?
s. 10(1) – applies to “any person.” If you are a person, it applies to you. It need not be expressly extraterritorial (any more than English rules prevent non admitted persons acting as a solicitor etc.). Every jurisdiction quite properly controls the practice of its law worldwide. Furthermore, it is usually a breach of codes of conduct to practice the law of another jurisdiction without being authorized.
Wrong. English law allows registered foreign lawyers who do the same work as English solicitors without being admitted. Also, Cayman has no Code. WRITE ABOUT WHAT YOU KNOW BECAUSE THIS ISNT A TOPIC YOU UNDERSTAND. STOP GUESSING AT HOW THIS WORKS.
What makes you an expert? Perhaps you could enlighten us.
It’s much more fun when you search for the answers yourself.
So what would the Law Society of England and Wales do if a Cayman attorney hung up a shingle in Cayman and called themselves a solicitor advising persons around the world on the laws of England? You you saying that would be OK?
Of course it is not. But go on, give it your best shot.
They might well be annoyed. But there wouldn’t be any crime committed as a matter of English law.
They would have the Cayman court and Attorney general shut it down in a heartbeat. You know that. Don’t play dumb.
No. They wouldn’t, and they haven’t when certain local lawyers have held themselves out on the basis of UK admissions where they hold no current practising certificate.
Nonsense. Lots of expatriates held out as being Cayman Law practitioners though, without any necessary qualifications. I feel a letter to insurers and overseas regulators may be in order. It could even have links to the webpages falsely inferring qualification to advise on Cayman Law. Do you think that might focus attention a little?
Back where you started I’m afraid- the law doesn’t stipulate that any qualification is “necessary” to advise on Cayman Islands law from abroad. I agree there would be an issue if anyone was claiming to be admitted in Cayman when they were not, but I think you’ll struggle to find any webpages saying that.
Do you seriously think that insurers and regulators aren’t well aware of the current situation and entirely happy with it?
Actually, extraterritoriality isn’t inferred, it has to be express- as it was in section 3 of the Confidential Relationships Preservation Law. And section 10 of the LPA doesn’t prohibit anyone from advising on Cayman Islands law irrespective of qualification in any- it only deals with the drawing up of certain documents.
The prohibition you want to claim exists, doesn’t.
So why does anyone who does not appear in court need a practicing certificate (or operating license calculated by reference to number of practitioners)?
Principally because if they are inside the jurisdiction, they would be capable of committing a s10 offence, plus they would probably be unable to obtain either a work permit or PII cover.
The point is though, is that the law is in a mess, doesn’t say what a lot of people think it says, and desperately needs to be updated so as to be rooted in reality. It’s more than a little terrifying that people are more worried about limiting who can call themselves a Cayman Islands lawyer than they are about the fact that the legal profession doesn’t even have a formal code of conduct, let alone a workable system of professional discipline.
It also does not authorize the practice of Cayman Law by people without practicing certificates, and expressly confirms that anyone doing so is guilty of an offense.
‘Does not authorise’ is fundamentally different from ‘prohibits’. Which provision says that practising without a certificate is in itself an offence?
s.10. Don’t believe me, ask the CJ. He is the regulator, is he not?
That isn’t what quite section 10 says- it prohibits unqualified people within the jurisdiction from producing legal proceedings or property agreements, not from giving legal advice.
The fact that we’re even able to have this argument shows how important it is to get the LPL sorted out!
I think that’s incorrect. A law is presumed not to have extra territorial effect unless it expressly provides so, or that is a necessary implication. See Cox v Ergo [2014] UKSC 22.
Stop quoting English law as if it is automatically the law of the Cayman Islands. That is is a part of our problem.
Each jurisdiction controls its own territory, not worldwide. You have no power over what people are doing in NY or London.
Then why was I taught in law school (in London) that the UK Parliament can ban smoking in Paris, even if no one in Paris takes any notice?
Please specify which “Caymanians” you are referring to as marginalized for clarity’s sake. They are supposedly many different categories of Caymanians now thanks to certain one-sided parts of our constitution and immigration law. But we all know what this is about.
I support you 100% Mr Lindsay, These so called well to do Caymanians love to Marginalize their own people all the time and this Shit needs to Stop! Collins and Bodden Pleeeese they don’t represent us!
Usual hate, these sorts of comments just show what’s wrong with Cayman. You haven’t said anything about the article or the Bill just bad mind against fellow Caymanians. Bad mind is the biggest disease in Cayman right now
The Cayman Islands are Corporatocracy, not to be confused with Corporatism, is a term used to describe an economic and political system controlled by corporations or corporate interests.
It is a generally pejorative term often used by critics of the current economic situation in a particular country, in this case the Cayman Islands.
I would like to see the definition of a “multi-generational Caymanian” please.
The sooner the author (and some of those commenting) wake up to the fact that they are dealing with a global cross-border financial services industry the better. The simple fact is that most of this business could be done in other jurisdictions, often for lower cost. It is done in Cayman because of the ease of doing business and the quality of professionals supporting it. Any attempts to undermine this will likely be harmful in the long-run. Although some may get the equity partnership they dream of because they are multi-generational Caymanians.
If you would like to see a jurisdiction that has operated a closed shop in the legal profession (i.e. only multi-generational lawyers please) go and take a look at The Bahamas. This is where Cayman will end up if it goes down the path being proposed here. Bermuda is backing away from this model and opening up its legal profession to international ownership and lawyers.
The simple truth is that the legal profession contributes greatly to Cayman, in terms of revenue, spending on-island, employment of support staff and development of Caymanians (scholarships, training contracts, etc.) What Caymanians can’t stand is that the upper echelons of the big firms are controlled by expats or, even worse, “paper Caymanians”.
This article is really about this particular issue and overlooks the bigger picture of the obvious benefits having a world-class legal profession brings to the Cayman Islands.
THIS
This
The entitled are not the ones who need the help of wannabe politicians.
Legal professionals (and everyone else) should get jobs based on qualifications and experience rather than citizenship, I for one would like to be represented by the best I can afford regardless of their nationality.
@10:45 am, “Everyone should get jobs based on qualifications and experience rather than citizenship.” Would you have the same opinion in your own home country? Your own home country has immigration laws that protect its citizens. So does the Cayman Islands. Citizenship or residency status should indeed play a role in any country when it comes to employment, however citizenship should not be the sole qualifying criteria.
This is my home country so yes!
But you don’t live in a country. You live in a British Overseas Territory or a colony.
Can’t believe you don’t understand that simple fact.
Better option is to charge $150K annually for work permits, lets see how incredibly qualified the expatriate attorneys are then?!
My hunch tells me that they wont be in as much demand, and yet all of a sudden Caymanians will be.
try it for a year or 5, prove me wrong. And while your at it, how about doing the same for accountants.
You mis the point. Hundreds of expatriate lawyers are practicing already without any work permits at all. They are not in Cayman, and despite it being an offense, have no practising certificate.
Please tell us which statute creates this extraterritorial criminal offence? Clue- you can’t, because it doesn’t exist.
It is clearly stated in the existing legal practitioners law, and has for half a century.
No it isn’t.
If you can work out how to supply the numbers of accountants and lawyers the financial services profession need from an indigenous population of 35000, go ahead. Oh, and stop the BVI from eating our lunch when their cost of providing company hosting and transaction services becomes a fraction of ours.
Alric Lindsays suggestions are a little more sensible than yours, and would – in applied as against the objections of the major law firms who have long since ceased to be Caymanian firms and our now multinationals looking to maximise profit – ensure there was a positive incentive the hire and develop the limited number of lawyers our jurisdiction can develop without our offshore neighbours stealing our milk cow.
Unfortunately its a bit like Dart – our law firms have become so influential and control so much of the local economy that the prospect of our government standing up to them looks rather limited. Politics in Cayman has become a dance in which the MLAs try to appease the voting pubic with populist gestures whilst pandering to the corporate interests that actually drive the economy (and no doubt pay for election campaigns!)
The only way you could ever fulfill the high supply of Caymanian accountants and lawyers here would be a radical overhaul of the whole public school system, putting in place terrifically high standards. That is a dream only. We all know our public school system is not up to such standards. Doubt it will ever be.
I can assure you as a Caymanian accountant, and not paper for what its worth to differentiate for these purposes, in public practice, any Caymanian worth their salt who wants a career in public practice is snapped up. Completely different issues facing the two different service lines of audit and law. Audit is challenged by the overall cost of doing business, not the favouring of ex-pat professionals over Caymanian.
Only if they get off to a lily-white start. There are no second chances. That is a problem. Talent is being wasted.
Let’s trash our financial services industry on the say so of someone who can’t even spell you’re! There isn’t a population anywhere in the world of 30k people that can supply as many world class lawyers and accountants as we need, let alone anywhere with such a dire public education system.
Why leave your request at “multi-generational “ Caymanians? Surely what you meant was it should be “native” Caymanians! An immigrant is an immigrant is an immigrant regardless of when they came. Get over the point that if the law firm gets citizenship for a lawyer they are not Caymanian, they are. The only argument that would make sense would be if you want status you should give up your other citizenship. Watch how fast openings would come up for your “ generational” Caymanians.
You want status here? Prove how much.
Hi Alric, I’m a new voter in GTS but am not a “multi-generational Caymanian”. My best fiend is similar – her parents came to Cayman and became Caymanian. Are you saying that we are different “Caymanians” to others under the laws in Cayman? Should we have different rights? Please help me to understand what you are saying as it would impact how I vote! Thanks
No, you aren’t different under the laws, but you have an unfair advantage over multi-generational Caymanians…
CNS: The rest of this comment is posted here.
Hi Alric, your article was about the Legal Services Bill. I was born here and have lived here my whole life except for when I went to university. I had no control over my parents coming to Cayman. This is the only home I have ever known. If I have an advantage it isn’t of my making. I also had to go to school, take education seriously and do well. Which I did. I see the rest of you post, but how is it right to address those issues in the Legal Services Bill to make opportunities for multi-generational Caymanians? We would then have to address the issue in every law wouldn’t we? How is that possible? Alric, aren’t these social issues that need to be addressed through educational and social change? I don’t see how these issues are about the Legal Services Bill or how they could really be dealt with there. I hear what you say and don’t disagree with some of your post but I’m still confused as to why splitting Caymanians up into groups based on how many generations they are here is the answer. Doesn’t that cause a lot of problems in other areas and create more social division than we already have? I think there must be a better answer to what you seem to be proposing. I was considering voting for you before but I must say that on this alone I don’t think I can.
Written like someone wanting to run for office.
Have a look at the losers who did this to us Bodden,Collins and Panton destroyers of Cayman opportunity just because they believe they need to limit success to them only . 1 Caymanin only please! Alva you got my Vote bro ain’t voting for No Sellout up ya in Newlands.
Why the personal hate directed at Caymanians who may have a different view to yours? Far as I know they are Caymanians with loads of experience so we may do well to actually listen. What experience do you actually have on the issues, this is just crab in a barrel mentality criticizing our own without any comments on the actual issues
Alric this type of logic guarantees that you will become the most hated Caymanian in the legal profession. Prepare for them to attack your character in their quest for vengence for speaking out and exposing the usual bollocks.
I have worked with Alric and respect him highly, but I think he is (mostly) wrong here.
There are a lot of assumptions in this piece, and it completely disregards the effect of the work permit and business staffing regimes. No law firm would be allowed to get away with the kind of behaviour suggested here.
That said, Cayman’s legal profession has to embrace changing times and the real worls. The financial services industry is fragile, and too valuable and important to be sacrificed on the altar of protectionism.
This would be true- IF the immigration law and the business staffing plans were ever enforced. Trust me, as an insider- ALL of this and more is happening- every single day in all the big law firms here and if you dare to speak out- off with your head!
John Harris
Whilst I must remain anonymous now I am more than prepared to swear on a bible in the Grand Court to confirm the veracity of numerous of the allegations raised by Alric. Elements of your sacred “profession” and holy financial services industry have been nothing short of criminal in their conduct – even though their actions have been carried out in full sight of regulators. You do understand that Canover Watson (for example) maintained a powerful position on the Business Staffing Plan Board that you contend would never “allow” the activities complained of. It is long past time to call Bullshit on this conduct. No one wants to harm the financial services industry. They do however want to promote and protect the rule of law.
The fact is Cayman cannot enforce its laws against people who are elsewhere. It’s silly to even try.
Alric, suggest you leave this one alone Bobo and move on to other things. BTW, while we know what you mean by “multi-generational Caymanian” there’s no such thing under the law and no way in any law to distinguish one Caymanian from another. Do you really want to start your political career by dividing Caymanians into different groups based on how many generations they have been here? I’m sure there are quite a few voters in George Town South who don’t meet your definition of “multi-generational”. Are you suggesting they are a different class or should be treated differently under the law? Seems so to me. Suggest you have a re-think on this one
Well said. He’s babbling on hoping that generational caymanians vote for him because he’s saying all the “right” things. Lip service, no substance. The very fact that he gets most of his messages via CMR says all we need to know about what kind of person he is and what kind of politician he will be.
A lot of this article is false, misrepresents the Bill or makes assumptions about future possible events that can’t be known. I have read the law. When it’s politics time I guess the candidates will say anything to get votes.
They sure will. Shame on Alric.
Laws appear an irrelevance in Cayman. The existing Legal Practitioners Law is widely breached. Raising concerns about apparent those breaches and those of other laws has been career ending for a number of Caymanian practitioners over the last two decades. Parts of the profits of some law firms now seem to arise, quite literally, from the proceeds of crime, as teams of lawyers practice Cayman law without being admitted, all over the world. All credibility is long lost. Alric, please keep pressing this forward. Let those responsible be held to account.
Boo Hoo. Ask Winston how taking up this cause helped his political career.
Winston was not concerned with his political career. He was concerned with integrity. He kept his, and showed many others to be outright scum if not simply undeserving of the title “officer of the court”. That almost half a decade later nothing has been done to right the wrongs is telling, and very sad.
This Bill didn’t hurt Winston. It destroyed Wayne because he showed his true colors and his masters.
Both are fine gentleman. Both approached the issue with integrity from their respective positions and experiences. Neither was wrong. The ultimate division was caused by political forces unwilling to compromise or even engage across the gap, not those gentlemen themselves. We need more leaders like them – willing and able to stand their ground, whatever that ground may be.
Wayne Panton is a sellout along with the Caymanians he left behind to run Walkers
I dont know about whether it hurt Winston but I recall him amongst others admitting what Wayne had done to help them while they were arguing against the legal bill.
Politics is a nasty game. I hope it dont put wayne off because he has much more value than the rest of them
Is Lindsay a real Caymanian last name? Asking for an expat friend who doesn’t understand the spectrum of who is and who isn’t and who can run and who can’t.
Thank you Mr. Lindsay for highlighting key issues with the legal services bill they are desperate to pass into law. The government continues to sell out the country wholesale and Caymanian attorneys.