Recent reports of the Chief Minister's reference to the requirement to regulate the legal profession have not only given an incorrect account of the regulatory and supervisory obligations imposed on the legal profession but have also implicitly cast the blame on the profession itself The perceptions created have the potential to make the whole legal profession the scapegoats for recent events (yet to be proven) involving the law firm, Marrache & Co. Whether this is due to inaccurate reporting or not is unknown but one can only comment based on what has been made public. What can be criticised is that the Chief Minister chose, inappropriately, to do this at a conference organised by the Gibraltar Association of Compliance Officers, which has nothing to do with lawyers.
According to the Chronic (19th and 20th May 2010) the Chief Minister has said that there needs to be greater regulation on business conducted by lawyers in the field of financial services and that lawyers who are involved with financial services will have to move to compliance as have other sectors. The Chronic emphasised that the Chief Minister made a distinction in relation to their need to retain independence of the legal profession when undertaking their judicial and advocacy roles.
Additionally, in his editorial (Chronic 20th May 2010) Dominique Searle writes "That the Chief Minister, himself an experiences lawyer, should signal to the profession, in what were rather gentle terms, that they should look towards having more modern compliance standards, can hardly come as a surprise in the context of recent events... Here, the Government is only ruminating on issues that might well have come better as a dynamic from within the profession itself". Such a statement is disingenuous, because the Bar Council has for years been advocating better implementation and enforcement, or, at least, an ill informed criticism of lawyers. It is also a wrong exposition of the position in law. Unsurprisingly it comes from the quarter that has shown his bias against the legal profession by having coined the expression "barristocracy".
The conclusion that most readers of the Chronic cannot be blamed for having reached is that the legal profession operates without laws or rules and in a privileged environment even when competing within the field of financial services, in which field all others need licensing and are regulated.
When undertaking any financial services business that requires a licence under any financial services laws or regulations, lawyers require EXACTLY the same licence as anyone else. This means that all laws and regulations that apply to licensed persons and entities apply equally to lawyers. lawyers licensed in this way are regulated and supervised to the same extent as any other person or entity. In truth few, if any, lawyers are engaged in a business that requires to be licensed. The reality is that law firms usually structure these activities by the use of limited liability companies that are licensed entities. it is these entities that fall to be regulated and supervised.
Turning to the legal profession itself and the practice of law. The profession in Gibraltar has been licensed and regulated throughout living memory. Licensed because only properly qualified person can join it and then only after being called, admitted or enrolled in England (in the main), which requires certain due diligence to be overcome. A candidate also has to be interviewed and certified fit in Gibraltar by the Admissions and Disciplinary Committee. It is a committee, chaired by the Attorney General with two other senior lawyers appointed by the Chief Justice, this committee advises the Chief Justice, as the name suggests on admissions and DISCIPLINE.
The ultimate responsibility to discipline lawyers rests with the Chief Justice who acts on advice from the Admissions and Disciplinary Committee. The laws and regulations that govern the profession are those either made in Gibraltar (which are few) or, where none are made, those that govern the legal profession in England. In shorthand lawyers in Gibraltar are by law required to behave to exactly the same standards and principles of conduct as lawyers in England.
What about client accounts? These are governed by local rules, the Solicitors' Accounts Rules. These rules are very closely modelled on rules that govern client's accounts of Solicitors in England and Wales. The Admissions and Disciplinary Committee are the persons who have extensive powers of inquiry and investigation. These rules also regulate what money can and cannot be paid into and out of client accounts. These requirements were strengthened in 2005 with the introduction of a requirement that client's accounts be audited before lawyers would have their annual practising certificates renewed, without which a lawyer cannot practice.
It is clearly not right to say that the legal profession falls outside the reach of regulation and supervision. To this extent the impression created by the Chronic's report of what the Chief Minister said is false. It is imperative that the public should not only understand that a regulatory and supervisory regime exists but that they should not be misinformed in a manner that might be used to support a system of regulation and supervision that undermines the independence of lawyers and the principle of professional secrecy. An independent judicial system can only exist in an environment where the legal profession itself remains independent. A legal profession that falls under the control of a government is another step towards undemocratic rule.
There can be no democracy without an independent judicial system and no independent judicial system without an independent legal profession.
The causes of recent events (yet to be proved) involving the firm of Marrache & Co will need to be analysed and determined. Undoubtedly there seem to have been failures. One of these is not that the legal profession is not governed by laws and rules. It may be that lack of proactive application of these and of supervision may have contributed, namely failure of implementation. Undoubtedly the system of supervision of lawyers will need to be revamped and resourced, if not completely overhauled but with great care taken not to transgress the boundary of independence from government.
What is clearly not true is that it is the legal profession as a whole that has failed. . Perhaps the intervention into the law firm would have been better and given a better impression and been better perceived if it had been undertaken by persons from outside Gibraltar and outside the legal profession of Gibraltar as was proposed to the Chief Justice by certain senior members of the profession. .