Opening Remarks by Mr K Shanmugam, Minister for Foreign Affairs and Law, at the Singapore Legal Futures Conference

08 JUL 2015

8 Jul 2015 Posted in Speeches

The Honourable Chief Justice

The Honourable Attorney General

Distinguished speakers, friends of the legal profession and panellists

We have witnessed, and are witnessing, revolutionary changes the world over.
These changes have impacted many aspects of our society, including the legal profession.
Changes in technology, attitudes, financing – these have influenced how law firms are structured, how they are financed, how cases are researched and how they are tried.

Past Transformations
Here in Singapore, we have had to deal with these developments as well. Facing these transformational changes and challenges is never easy.
We have been fortunate in that the legal profession here has been prepared to face up to these changes.
We have worked closely with the profession and the Legal Service to put in place a regulatory framework that embraced the changes, and sometimes, anticipated them.
The fact that we adapted has made our institutions, law firms and lawyers better, stronger and more relevant in the region.
As part of this process, we had to become more international in our outlook; create more opportunities, such as taking steps to become an international dispute resolution centre; adapt to technology; and, for example, change the way we handle some of our domestic areas like family law.
There are other steps we have taken as well. But I will mention these four simply as examples to indicate our approach.
1. Internationalisation
In 2008, on internationalisation, we decided to allow foreign firms and lawyers to advice on Singapore law, in limited areas.
They have what is called a QFLP Licence. This is one model. There are other models as well – joint ventures and FLAs. This was driven by market demand.
It was in fact requested by the Senior Partners of three of our four largest law firms, as well as the commercial sector.
There are now 9 law firms with QFLPs. The QFLPs agree on specific targets — on headcounts, value of offshore work brought into Singapore and so on — a number of metrics.
From our point of view: there was little to be gained if the work simply moved from a local law firm to a foreign law firm. The QFLPs were seen as having the ability to bring in offshore work, and importantly, provide additional employment opportunities, world class opportunities for our young lawyers.
They have done that, by and large, and it has largely been a positive experience. Our legal sector has more depth, more expertise.
1. Dispute resolution
Moving to dispute resolution, we made significant changes to our arbitration sector. Today, we are a leader as a centre for arbitration. Our firms and lawyers rate well internationally, alongside their international peers.
We have now set up the Singapore International Commercial Court and the Singapore International Mediation Centre, to position ourselves to benefit from the continuing changes that we see around Asia.
I believe in the next few years, these institutions will place us in a very different position from where we are today.
1. Technology
Third, if you look at technology, we have also come a long way in harnessing technology in our Courts.
In 2000, the Electronic Filing System (or EFS) was introduced. It allowed court documents to be prepared and filed electronically. It was revolutionary for its time. The experience quite frankly was mixed. Many felt that they did not find sufficient benefits to justify the inconvenience and cost. And we have the usual occurrence of lawyers turning up with bundles, and so on.
Then in 2013, “e-litigation” was launched in both the Supreme Court and State Courts. That expanded on the capabilities of EFS. It allows parties to access all documents in an active case. It uses dynamic electronic forms, and manages case files proactively, by providing email and SMS updates and reminder alerts. Now feedback from our lawyers on this system is positive.
1. Family Justice System
We also looked at the family justice system. It was taking too long, too costly, and the real interest – in terms of the interest of the children and the interest of the parties to move on with their lives – were not taken care of. Too much time was spent on acrimonious litigation, with cost being racked up because of the affidavits on issues which have no relevance to the actual key issues of the case, which is what do you do for the benefit of the children, and how do you divide the assets. So we took a completely different approach, a judge led approach. We changed the law. Affidavits would be one page, two pages at most. The judges will decide what the issues are, and focus primarily on the children.

Today’s Challenges
We list the changes. We see the results. And then, what do we see? Yet more changes in the international environment.
We face now a whole new set of challenges. Borders are increasingly porous. Legal services may well come to be provided from the most efficient location – rather than being tied to a jurisdiction. This can potentially be anywhere in the world.
Large teams of smart, legally-trained young people in cities from Bangalore to Shanghai (if they adapt to Common Law) can do a lot of the work that we do in Singapore – at much less cost. It is much easier in accounting, and is already happening there.
Clients and law firms here already use these overseas lawyers for support work. More may follow. The law firms here would then have to be leaner, smaller outfits, to check the end product, argue cases in Court and be the face to clients to give advice.
The second challenge, which has been around for some time, is commoditisation. Material can be found online, and more and more people are able to do this. Commoditisation has been a challenge and will continue to be a big challenge, for those who cannot differentiate themselves.
Third, the traditional structure of legal practices is changing globally. Multi-disciplinary practices and virtual law offices are becoming common.
Our traditional law firm structures have to face these challenges. We are perhaps a little behind on this. From a regulatory perspective, we have taken a conservative approach, but it is something we have to review constantly.
And fourth, litigation cost is an increasingly important issue both in terms of the cost of justice, access to justice, and ways in which litigation is financed. The traditional model, regardless of the amount of the dispute, is you go to a lawyer and you get charged for time cost. That model is not going to be possible for a significant number of disputes as we go forward. The courts have already taken a very big step towards this for disputes below $60,000. They take a very different approach. I have asked my ministry officials to relook at this, and see what else we can do. When a client comes in and says that he has got a dispute for $50,000 or $100,000, and the legal cost may be $40,000 or $50,000, it is just not doable. So we have to relook at this, and it is one of my key priorities to do something about it.
In terms of the way litigation is financed, we have been wary of some of the financing models available, for example, champerty. But looking at what is happening around the world, we have to keep reviewing this and some other models as well.
And fifth, clients’ expectations are also changing. Our clients are now well educated. They have access to information online, and these trends will impact the way our law firms deliver their services.

Planning for the Future
So we have, as a country, embraced change to survive and thrive in the region and on the world stage. Our legal sector is no different. We must start planning now to address future challenges.
The Government has been preparing this for some time. We have positioned Singapore’s legal sector to seize emerging opportunities, and mitigate foreseeable risks.
Last year, my ministry engaged the Hague Institute for the Internationalisation of Law to look at trends and advise us on future challenges.
The Hague team identified the driving forces that will shape Singapore’s legal landscape in the next 15 to 20 years. Now by nature, no one can identify what will happen in 15 years. If you can identify what is going to happen in 5 years, you are doing well. But it is useful to try and think about the different directions, and see where we are with reference to what people say about where the world is going towards.
As we celebrate fifty years of independence next month, it is opportune for us to look ahead.
With the Singapore Academy of Law’s support, we have brought together people who can talk about these issues, and challenge us on what issues we should be thinking about.
Whilst change is a constant – there is another constant from my perspective.
In the Singapore Story that has been written over the last 50 years, a strong local Bar played a significant part.
I believe that we must do everything we can to ensure that a strong Singapore Bar remains a vital part of our society.
And our rules, regulations, framework must support that.
What the next chapter of Singapore’s legal landscape will look like depends not only on what the Government does.
It also depends on the profession.
While the Government will do its part, the profession must do its part – in that way we can face the future with confidence.
I wish all of you a good conference. Thank you.

Last updated on 13 Jul 2015