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Law
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Also coming into effect under the Law Services Act 2017, being progressively enacted, is a new Code of Conduct for lawyers based on the New Zealand model (where there is also a fused profession allowing solicitors and barristers to attend the Supreme Court). He declared: “Why reinvent the wheel”?
The LSRA chairman, explained: “The new Code will more clearly and explicitly set out what most prudent lawyers probably would be adhering to already. It’s not that lawyers have to behave to a different standard. It is a more robust, tighter and better system for the legal profession and for consumers in the sense that it is resourced, with a dedicated, properly funded regulator that should respond more quickly and efficiently.”
Melo Triay, senior partner of Triay & Triay (T&T), first promoted changes to lawyers’ regulation in 2012 when chairman of the former Bar Council. “It is something that we have needed since the profession became so big”, he said. “Under the old system, law firms had to, interalia, comply with the Solicitors Accounts Rules and file an annual report certified by an auditor that said the client account was properly managed with client money kept separate from the firm’s. Complying with these rules and obtaining professional Indemnity insurance cover would result in the issue of practicing certificates; it was the minimum form of regulation”, Triay explained.
“Now we expect the Regulator to be more ‘hands on’ and not so dependent on whether a client makes a complaint or not. Previously, when complaints were made they were dealt with by the Admissions and Disciplinary Committee, which operated on a pro bono voluntary basis; it was inherently cumbersome and a little slow – hopefully, under the new system complaints will be dealt with effectively and expeditiously!”
Marcus Killick, chief executive officer at ISOLAS, noted: “The LSRA changes will be evolutionary and incremental. Bringing the legal profession into the same standing as auditors, financial services and gaming companies, with a degree of regulatory oversight, is beneficial to the jurisdiction. It will give clients a greater feeling of protection and encourage law firms to move further in the direction of treating their clients fairly.”
Changing status
He suggested all regulators spend 80% of time dealing with 10% of licence holders, “who may occasionally lapse”. However, the importance of a regulator to in-house counsel was less clear- cut, Killick felt, “because they effectively acted
for a single client, rather than a multiplicity of clients as with law firms”.
ISOLAS morphed in 2017 from a traditional partnership into a Limited Liability Partnership (LLP), mirroring the set-up at most English law firms, which “has been good for us: the business discipline and feel that being a limited partnership brings to a legal practice” tended to draw the 13 partners more closely together, he maintained.
T&T last summer became one of very few law firms locally to transform its partnership into a limited company as allowed under new LSRA rules, which bought welcome limited liability and taxation benefits, Triay observed.
Hassans, Gibraltar’s largest law firm celebrates its 80th anniversary this year and has also formed a limited company, but is delaying
implementing changes to its organizational structure until the LSRA comes fully into force.
Ian Felice, a Hassans partner in the corporate and commercial team, confirmed: “Limited liability is a strong driver when you have joint and several liability personally under a partnership, because the larger one gets the greater the potential exposure.” The firm, with 92 fee earners, including 38 active partners, in September consolidated four offices around the Rock into over 5,000 m2 on seven floors at Madison, part of the new Midtown development.
Felice revealed his firm’s business “grew around 5.5% in 2018-19, despite seeing the bubble of excitement in the fintech field reversing the expected big growth seen a year earlier. Yet there remains a solid workflow from that sector and we are advising on four new Distributed Ledger Technology (DLT) enterprises and four token sales projects, making 17 Initial Coin Offering (ICO) enterprises handled so far.”
Felice who recently assisted Vietnamese- based, Rooke Investments, to purchase the
Gibraltar interests of Danish-owned, Jyske Bank, reported: “Probably over two thirds of our work has an international dimension - working with clients that are international in nature and on work that doesn’t have a Gibraltar element.”
Commercial and residential real estate work had been “very busy and remains our bedrock, as well as private client and commercial structuring work.” Fellow tax partner, Grahame Jackson, disclosed: “We have seen a substantial increase in queries from private clients in relation to their tax position since the introduction of the Spanish/UK (including Gibraltar) Tax Treaty and also the Double Taxation Agreement with UK and we have held seven seminars on this subject attended by over 500 people.”
Work widening
Income at ISOLAS in 2018-19 had seen “low double digit growth - 10-15% up in a year” - with strongest areas being in DLT and commercial transaction-based work, “including gaming, where there has been considerable activity, and in property which shows no sign of abating”, Killick declared.
He detected that despite warnings from government, industry and trade bodies a number of firms did not recognise exactly what was required under EU-wide GDPR (General Data Protection Regulation), which became law a year ago. “For some firms it has increased costs – people did not want to spend the money, or decided to put it off for as long as possible.”
Michael Nahon, Hassans’ GDPR expert, recounted a surge in work and was “beginning to see bigger fines across the board for privacy failures, which only serves to emphasise the importance of compliance with GDPR. It is especially true in a digital market where trust is an essential component of doing business electronically.”
T&T business is “steady year on year and very similar to the past 3-4 years”, declared Triay, adding: “Business is tough in these uncertain times, so I regard maintenance of last year’s levels as acceptable and in some cases might be actual growth. Commercial, property and private client work play “a significant part, but also litigation is a big aspect. There is always litigation in Gibraltar and there are big trust, commercial and negligence cases currently going on”, Triay intimated.
Andrew Cardona, a specialist personal injury and medical negligence barrister at Phillips, a medium-sized nine-lawyer firm, concurs. “We are growing steadily, adding one lawyer each year to the team,” he said.
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16 Gibraltar International
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