Second Reading Speech on Legal Profession (Amendment) Bill 2008 by Law Minister K Shanmugam
26 Aug 2008 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 (LPA) primarily to implement the recommendations of the Committee to Develop the Singapore Legal Sector ("Committee") headed by Justice VK Rajah. The Committee presented its report in September 2007. Specifically the Committee recommended the liberalisation of the legal sector. The Committee stated that the following benefits will accrue as a result of liberalisation:
One, liberalisation will allow the development of legal infrastructure that is able to support an increasingly sophisticated and knowledge-intensive business environment in Singapore. This will in turn help support the growth of important sectors in the economy such as banking, corporate finance and maritime industries;
Two, a liberalised, competitive environment will also lead to an improved level of legal services as Singapore Law Practices (SLPs) will be encouraged to rise to the levels of global legal service standards and raise service standards to domestic and regional corporate clients;
Three, more foreign law firms will bring to Singapore a greater volume of offshore work that will otherwise not be done here, thus increasing the legal services sector's contribution to our GDP;
Allowing more foreign law firms to set up in Singapore and facilitating them to use Singapore law will incentivise the greater use of Singapore law in international transactions. This will further boost the development of our exportable legal industry;
Opening up of our legal services sector will partially reverse or slow down the current legal brain drain of Singapore-qualified lawyers, who will be given a choice to do high quality offshore work in Singapore. There will be greater opportunities for young talented Singaporeans. Liberalisation would lead to the growth of intellectual legal capital of our local lawyers, including in knowledge management, global partnership experience and regional management experience;
Six, the move to liberalise will enhance and entrench Singapore's image and position as a regional legal centre.
Several of the Committee's recommendations were accepted by the Government in December 2007.
3. The Committee also made recommendations to improve the disciplinary process of lawyers.
4. This Bill seeks to (inter alia) effectuate the proposals that have been accepted by the Government.
5. Sir, now let me explain some of the more important amendments that provide a framework for liberalisation of the legal services sector.
A. Liberalisation of the legal services sector
i. Repeal and re-enactment of Part IXA
6. To provide for greater flexibility to respond to changing business needs, clause 53 repeals and re-enacts a substantially amended Part IXA. Part IXA now devolves the details prescribing business conditions from the main Act to the Rules, so that amendments can be more easily made to respond to developments in the legal market.
ii. Three main initiatives to enhance the offshore legal services pie
7. In line with the emphasis on flexibility, and to align the various regimes for foreign legal entities, the registration regime applicable to existing foreign legal practice vehicles, which are the Joint Law Venture ("JLV"), Formal Law Alliance ("FLA"), Foreign Law Practice ("FLP") and Representative Office, has been changed to a licensing regime. For existing registrants, transitional provisions will allow new licences to be issued on terms similar to the current registration.
8. Members may recall three key changes announced last December:
8.1 First, in respect of international commercial arbitration, currently, FLPs are allowed to participate in international commercial arbitration in the context of arbitration proceedings. That is interpreted in practice to refer to the post notice of arbitration period. However, as a result, FLPs which wish to use Singapore as the seat of arbitration or use Singapore law as the governing law for arbitration, may be discouraged from doing so as they are unable to advise on Singapore law matters before the notice of arbitration is issued. This detracts from our objective to promote Singapore as an international arbitration hub. We will now expand the FLPs' scope of Singapore law work by allowing them to participate wherever arbitration is contemplated through Singapore qualified lawyers. Clause 53 introduces a new section 130E under the revamped Part IXA to allow Rules to be prescribed for this purpose.
8.2 Secondly, for the first time, the amendments allow the award of Qualifying Foreign Law Practice ("QFLP") licences to FLPs. Going forward, FLPs awarded the QFLP licences will be allowed to practise Singapore law through Singapore qualified lawyers in "permitted areas of legal practice", defined in section 130A of the revamped Part IXA to refer to all areas of legal practice other than specifically ring-fenced domestic areas to be detailed in the Rules. Traditionally domestic areas such as litigation, conveyancing, family and probate law will be excluded. We hope to award the licences by the end of the year.
8.3 Thirdly, at present, a Singapore Law Practice ("SLP") may work together with an FLP in either an FLA or a JLV. In line with the Government's announcement last year, the Bill allows a substantially enhanced JLV scheme. The Rules will detail the additional privileges of one, allowing the constituent FLP of a JLV to share up to 49% of the constituent SLP's profits in permitted areas of practice; second, allowing the constituent FLP to directly hire Singapore lawyers; and third, allowing partners from the constituent SLP to concurrently hold partnership and administrative positions in the constituent FLP.
8.4 In addition, a new section 130B(11) of the new Part IXA provides for discretion for the Attorney-General, with the approval of the Law Minister, to approve JLV structures that may go beyond the conditions prescribed in the Rules. These enhancements to the scheme will address feedback received on the scheme since the last review in 2005 and make the JLV an even more attractive collaboration between FLPs and SLPs.
iii. Opportunities for Singapore-qualified lawyers
9. These changes will open new opportunities for international commercial arbitration, and within QFLPs and JLVs, offer new avenues for Singapore qualified lawyers. Our lawyers, particularly the younger lawyers, will have far greater opportunities.
10. Traditionally, the Attorney-General has been the regulator for all lawyers working in foreign legal entities. The Law Society has disciplinary oversight of Singapore-qualified lawyers who hold practising certificates ("PCs").
11. The amendments will now create a new category of Singapore-qualified lawyers who will be allowed to retain their PCs and practise Singapore law in foreign legal entities in the areas outlined earlier. In general, the policy intent is for similar regulatory and other requirements to equally apply to PC holders regardless of whether they are in SLPs or FLPs. For this new category of Singapore-qualified lawyers, however, it would be quite onerous to subject them to the overlapping disciplinary jurisdictions of both the Law Society and the Attorney-General. Thus the AG will have the primary oversight in respect of lawyers working solely within a foreign entity, referring matters where relevant to the Law Society. Lawyers in JLVs who are employed by Singapore law practices will continue to be the subject to the Law Society's regulation, in relation to their practice in the Singapore law practice.
B. Enhancement of the Disciplinary Process
12. Sir, the other main category of amendments enhances the disciplinary processes for lawyers.
i. Complaint and Inquiry Procedures
13. There are a range of amendments to streamline the entire disciplinary process. I will only outline the key changes here. Specific timelines are stipulated for each step of the disciplinary process. To deter frivolous complaints, it will be mandated that every complaint against a lawyer be made in writing and be supported by a statutory declaration, except when the complaint is made by a public officer. A limitation period of 6 years, in line with a general limitation in law, will be introduced to prevent stale complaints. The powers of the Inquiry Committee and Disciplinary Tribunal to order costs will be enhanced. Sentencing options will also be enhanced. Judicial review of the Disciplinary Tribunal's decision can only be applied for after the conclusion of the Disciplinary Tribunal's deliberations.
ii. Disciplinary Tribunal
14. There is one change to the recommendations earlier made by the Committee. The Committee found that the average time taken by the Disciplinary Committees to complete their cases doubled from 7.5 months in 2002 to 15.4 months in 2006. To address the serious problem of delays, the Committee proposed to shorten the disciplinary process by replacing the Disciplinary Committee with a Disciplinary Tribunal. The Tribunal was to be appointed by the Chief Justice and comprise only one member - a Senior Counsel, or a retired Judge or a Judicial Commissioner. Clause 34 now revises this to a two-man Disciplinary Tribunal, consisting of a President, who will be a Senior Counsel, a retired Judge or a Judicial Commissioner, and a second member, who will be an advocate and solicitor of at least 12 years' standing. Under clause 35, the President will have the casting vote.
15. This change is in response to strong feedback from the Law Society which had raised concerns about disciplinary matters being decided by only one person, without the element of "judgement by peers" which is in the current process. The Law Society has given the assurance that it will commit to completing the prosecution of disciplinary cases heard before a Disciplinary Tribunal within 9 months, barring any unforeseen circumstances and cases of unusual complexity. We believe this should adequately address the problem of delay. We will however monitor the situation closely.
iii. Mental or Physical Incapacity
16. The Bill will provide for the Attorney-General or the Council of the Law Society to adopt certain measures when they are satisfied that a lawyer is incapacitated by any physical or mental condition to such an extent as to be unable to attend to his practice, or that a lawyer's fitness to practise appears to have been impaired by reason of his physical or mental condition.
C. Other Miscellaneous Amendments
17. The Bill also contains various minor amendments requested by the Law Society and other changes of a technical nature.
18. In conclusion, Sir, the changes to be made through this Bill will, we hope, further develop and enhance the standards of our legal profession and Singapore's position as an international centre for the provision of legal services. But these will not be the only measures that we will need to take. 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.
19. Sir, I beg to move.
Last updated on 26 Nov 2012