When foreign lawyers practice national law:

Issues for small jurisdictions

With increased globalization, there are increasing issues about the practice of foreign lawyers across jurisdictions.  

This is not a matter only for small jurisdictions, let alone only for IFCs. In large, high capacity, jurisdictions with specialist legal practitioners, the need to license foreign counsel to practice national law before national courts is unlikely to be very great. 

In the U.S., for instance, the ABA Model Rule for Temporary Practice by Foreign Lawyers provides five grounds for temporary licensing, based largely on the assumption that the foreign counsel will contribute their expertise in their national law, rather than that of the licensing state, for instance where the proceedings are “governed primarily by international law or the law of a non-United States jurisdiction” (ABA, 2002).

In the Cayman Islands, the Legal Practitioners Law allows a judge to admit a person to come to the islands to act as an attorney on a limited basis for the purpose of a specific suit or matter. Practice Direction 4/2012 of 2012 notes that “[t]here are concerns that such limited admission has become simply a formality, and that the Judge concerned is not usually being provided with the information necessary to enable a proper exercise of discretion.” The Cayman Islands are not alone in wrestling with when it is appropriate to allow foreign lawyers to temporarily join the national legal profession for a particular case. What is distinctive about small jurisdictions however, is the temporary licensing of foreign lawyers to practice national law.

Small jurisdictions, with small national Bars, face particular problems concerning capacity to practice national law. Small national Bars may simply be running at capacity, or beyond, when a case comes along, the small size meaning a relatively small spike of demand can exhaust spare capacity.

Alternatively, perhaps particularly if the national legal profession is a unified one, individual legal practitioners may experience a similar problem of capacity, with none prepared to take on a case which will dominate their working life to the detriment of other cases and other clients. On a different point, dealing with conflicts of interest within a small professional community is an ongoing problem for small jurisdictions, particular as actors within that community have persistent relationships beyond the particular professional issue being dealt with and, because of the small number of actors, are more likely to have multiple interactions than in a larger Bar. Finally, a small Bar may be too small to support specialist counsel with particular expertise in a particular field of national law.

How significant are temporary licenses in small jurisdictions? The Small Jurisdiction Service is hoping to carry out an extensive comparative study, but at the moment, even the data from the Isle of Man alone is illuminating.

The Manx experience suggests that IFCs may become accustomed to using temporary licenses as a way to deal with the intrinsic problems of a small national legal profession. From the 1960s on, the Isle of Man developed as an IFC. Before 1969, temporary licenses were an insignificant part of the Manx landscape. Since then their use has accelerated dramatically from 141 in 1969-1993, to 322 in 1994-2012. As professionals and the court system became acclimatized to foreign counsel in the IFC and civil law context, they began to make use of them in criminal cases too. Before 1996, less than 20 percent of licenses were used for criminal proceedings; after a crisis in criminal capacity in 2001-2, where the majority of licenses were for criminal cases, the number of licenses for criminal cases has consistently hovered between 40 percent and 50 percent of those issued.

Against this, however, is evidence that a national Bar will respond to a high volume of licenses issued in a particular area as an indication of unmet client needs. In the Manx decision of Arquebus Limited (2004), for instance, a license had been requested on the basis that the case required knowledge and experience not ordinarily available on the island. Deemster Doyle was unconvinced:

“In advancing the argument that the proceedings require knowledge and experience of a nature not ordinarily available on the island the applicants refer to the high value of the interim order, the allegation of fraud, complex commercial transactions, specialist knowledge of fiduciary duties, conflict of laws and jurisdictional matters. All these matters are matters which are regularly before the courts in the Isle of Man and competently dealt with by Manx advocates. Indeed the island’s independent Manx Bar, whose members practice in a jurisdiction which holds itself out as a first class international finance centre, has built up an impressive degree of specialization in these areas of law.”

Why do temporary licenses matter? There are a wide range of issues posed by temporary counsel, from professional regulation through to fees structure, but I would like to select two. Firstly, use of temporary counsel can shape the national Bar. In 1995, the Manx Bar was constructed by one legislator reflecting on temporary licenses as “a general practitioner service.”

This may not match the aspirations of ambitious lawyers, and pose problems of recruitment, retention and development to the national Bar. This is particularly pointed when the national government allocates national resources to these foreign lawyers practicing national law – there is after all an argument for use of public procurement to develop national capacity.

Secondly, use of temporary counsel can raise issues of authenticity in relation to national law. The Manx experience is that temporary counsel is normally licensed for both sides. Between 1996 and 2012, for instance, 73 percent of all licenses were issued in proceedings where another license was being issued.

Add in the possibility of these foreign counsel arguing before foreign counsel temporarily licensed as a national judge, and the further possibility of proceedings taking place out of the physical territory of the jurisdiction, and the extent to which the proceedings are distinctively national must be open for debate. This constitutional problem is particularly important in the small jurisdictions, typically operating in a post-colonial or dependent context.