Second Reading Speech on Legal Profession (Amendment) Bill by DPM Prof S Jayakumar, 12 Apr 2007
12 Apr 2007 Posted in Parliamentary speeches and responses
Mr Speaker, Sir, I beg to move, that the Bill be now read a second time.
Sir, this Bill amends the Legal Profession Act primarily to implement the recommendations of the Review Committee formed to evaluate the Joint Law Venture (JLV) and Formal Law Alliance (FLA) schemes, and the recommendations of the Third Committee on the Supply of Lawyers.
The Review Committee on the JLV and FLA schemes was chaired by former AG Mr Chan Sek Keong and included Justice VK Rajah, Senior Counsel Philip Jeyaretnam, President of the Law Society, and Senior Counsel Mr Michael Hwang. The Committee’s main terms of reference were to review the JLV and FLA schemes, and to consider modifications to the schemes to ensure the required legal support for the strategic service sectors of the economy.
As recommended when the JLV and FLA schemes were set up in the year 2000, the review was carried out 5 years thereafter. Formed in July 2005, the Review Committee presented its report in January 2006.
The Third Committee on the Supply of Lawyers was also chaired by former Attorney-General Mr Chan Sek Keong (who had headed the previous 2 committees). Other members included Senior Counsel Philip Jeyaretnam, Professor Tan Cheng Han, Dean of the NUS Law Faculty, and law practitioners Senior Counsel K Shanmugam and Dr Philip Pillai. The Committee was tasked to review the supply of lawyers (practising Singapore law) to meet the legal and business needs of Singapore. The Committee presented its report in July 2006.
The recommendations of both committees were accepted by the Government and publicly announced last year. The implementation of some of the recommendations require amendments to the Legal Profession Act.
Those recommendations that do not require amendments to the Legal Profession Act have been implemented. For example, the Rules were amended last year to allow, on a discretionary basis, second class lower honours graduates from foreign law schools to qualify for the Singapore Bar. The SMU School of Law has been established as a second law faculty in Singapore, although some amendments to the Legal Profession Act are required as a consequence of the establishment of this new law school.
- Let me explain some of the more important amendments in this Bill.
- Sir, one major recommendation of the Third Committee which this Bill gives effect to is allowing Singapore law firms to hire outstanding foreign lawyers to practise Singapore law in certain prescribed areas like banking, finance and corporate law. This will allow the blending of the expertise of overseas legal talent and the skills of our local lawyers to ensure that Singapore law firms are better able to compete in the global marketplace.
- New section 130J in Clause 23 provides for the registration of foreign lawyers to practise Singapore law in Singapore law firms under a newly established Special Scheme, which will be administered by the Attorney-General. This Special Scheme will enable local law firms to selectively tap on good foreign legal talent, without opening the floodgates suddenly to foreign lawyers in the practice of Singapore law.
- These foreign lawyers must be of good standing in their home countries, and have high academic qualifications from reputable law schools or relevant work experience in areas like banking and finance. They must have at least one year’s offshore legal work experience in Singapore, and thereafter they must pass a stringent Qualifying Examination. Those foreign practitioners may then be registered to practise Singapore law by the AG pursuant to the new section 130J and the rules (which provided the details) made under section 130K.
- Once registered, they will also automatically become foreign practitioner members of the Law Society by virtue of the new section 40A. Foreign practitioners will also be subject to the safeguards instituted for the protection of members of the public such as the requirement for professional indemnity insurance.
- Sir, another recommendation of the Third Committee is to allow a foreign lawyer to own up to 25% of the equity shares in or share of profits of a Singapore law firm. This is provided for in the new section 130L.
- Allowing foreign lawyers to have a stake in a Singapore law firm will help Singapore law firms to possess in-house foreign law expertise and to grow their practices abroad. Whilst it may be relatively easy for a Singapore law firm to employ say lawyers from China to help them in their China practice, it is difficult for the firms to retain these lawyers and secure their commitment unless they are given a direct stake in the performance and growth of the law firm. Moreover, some foreign lawyers with the requisite skills and experience may not find a consultancy relationship with a local law firm to be satisfactory, even if the compensation package is high.
- Hence, to ensure that Singapore law firms can continue attracting and retaining experienced and talented foreign lawyers, they will be permitted to own equity shares in and share profits of a local law firm, subject to an aggregate limit of 25% of the total equity shares in or profits of the local law firm. This will help Singapore law firms to expand their capabilities and to reach out to the region. By giving regional lawyers working in the regional branches of a Singapore law firm a stake in the firm, I think this will also help local law firms to grow their practices in the region.
- Sir, although the Bill prescribes an upper limit of 25%, there is provision for this limit to be revised by subsidiary legislation. Any revision will be carried out only after consultation with the Attorney-General and the Law Society and after a thorough review of how this new scheme works in actual practice.
- Sir, I will now touch on some of the other proposed amendments.
Enhanced penalty for unauthorised practice
- Currently, any person practising law without a valid practising certificate may be fined up to $1,000 or sentenced to imprisonment of up to 6 months or both. This penalty was prescribed in way back 1966 and has never been updated since. In the past 2 years, a few lawyers have been convicted of practising without a valid practising certificate.
- Sir, a maximum penalty of $1,000 is inadequate in today’s context. This is a serious offence. Clause 8 of the Bill increases the maximum fine for a first offence to $25,000, and the penalty for a second offence to a maximum fine of $50,000 or imprisonment of up to 12 months or both. A higher maximum fine will give the court the discretion to impose a deterrent fine proportionate to the seriousness of the offence without having to sentence the errant lawyer to imprisonment.
- Similar increases in penalty are also made for the offence where a body corporate holds itself out to have the capacity or powers of a law corporation or limited liability law partnership when it does not.
- The Bill also provides a fast-track procedure for disciplinary proceedings against such errant lawyers, without the need to go through the Review Committee, Inquiry Committee and Disciplinary Committee hearings.
- The increased penalties are consistent with the punishments for offences of a similar nature in respect of other professions such as those related to the practice of medicine.
- In addition to the enhanced penalties, clause 9 will allow the court to order the person convicted of practising without a valid practising certificate to return to his clients and other persons all remuneration earned while practising without the certificate.
Mandatory Legal Practice Management Course
- Currently, lawyers who have been admitted as solicitors after 1st March 1997 are required to attend the Law Society’s Legal Practice Management Course if they wish to manage a law practice as a partner, director or sole proprietor.
- To ensure that lawyers are equipped with the proper skills to manage a law practice, regardless of when they were admitted as solicitors, the Law Society has proposed that all lawyers be required to undergo the Legal Practice Management Course before they are allowed to manage a law practice as a partner, director or sole proprietor. My Ministry fully supports the proposal. This is provided for in clause 18.
Appointment of AG and SG as Senior Counsel
- Clause 7(b) provides for a holder of the office of Attorney-General or Solicitor-General, if he is already not a Senior Counsel, to be deemed appointed as Senior Counsel. The AG and the SGs are the most senior law officers and by law they rank in precedence in court before all other Senior Counsel (see section 31, LPA). Moreover, the AG is a member of the Selection Committee for appointment of Senior Counsel (section 30(1) LPA). It is thus only logical that they should be deemed to be appointed as Senior Counsel.
- In conclusion, Sir, the changes to be made through this Bill will further develop and grow the legal services sector. But these, I want to add, will not be the only measures that we will need to take. Sir, in this globalised world, the scene in the legal landscape is fast changing. We must be prepared to make further changes to keep up with developments and ensure that our legal services sector remains vibrant and competitive.
- Other countries are also considering making adjustments to their legal sectors to make them more competitive. For example, according to a recent Bernama report, Malaysia is considering further liberalisation of its legal services in view of the increased economic activity in mergers and acquisitions where international legal expertise was sought. We too cannot stand still.
- Currently, a committee headed by Justice VK Rajah is undertaking a comprehensive review of the entire legal services sector. I understand that the committee will make recommendations to enhance Singapore’s position as an international centre for the provision of legal services.
- The committee is expected to submit its Report in the next few months. The committee may make further refinements to existing schemes or the introduction of new schemes. If the proposed measures can enhance the competitiveness of our legal services sector, contribute to our economic growth, and serve the wider national interest, we will consider adopting them. This may entail further amendments to the Legal Profession Act. In the meantime however, we have proceeded with the proposed amendments so as not to hold up the changes which have been decided earlier on.
- Sir, I beg to move.
Last updated on 25 Nov 2012