§ The Lord Chancellor (Lord Mackay of Clashfern) rose to move, That the draft order laid before the House on 18th November be approved [4th Report from the Joint Committee].
§ The noble and learned Lord said: My. Lords, this order comes before your Lordships as a consequence of the Courts and Legal Services Act 1990. That Act 100 removed the statutory bar to solicitors in England and Wales entering into partnership with persons who are not themselves solicitors.
§ Section 89 of the 1990 Act paves the way for solicitors in England and Wales to enter into partnership with practising members of any legal profession that is regulated within a jurisdiction outside England and Wales. With effect from 1st January 1992 Law Society rules will be amended to allow these multi-national partnerships of lawyers to be created. The ability of foreign lawyers to practise in partnership with solicitors will enable firms to provide a wider range of services to clients, especially in matters having an international element.
§ Any foreign lawyer who wishes to enter into partnership with a solicitor must apply to the Law Society to be registered. Once he is practising in partnership with a solicitor the foreign lawyer will be subject to the same rules as solicitors as regards professional practice, conduct and discipline. For example, he will have to maintain professional indemnity cover for any claims made against him. He will also be bound by the same accounts rules. However, by virtue of being a member of the partnership he will not be able to undertake areas of work that are by law reserved to solicitors; that is to say, advocacy, litigation, conveyancing and probate. However, if he is a lawyer qualified in an EC member state he will continue to enjoy limited rights to practise in this country in at least some of these areas.
§ The purpose of this draft order coming before your Lordships is not, however, to gain approval of the principle of solicitors entering into partnership with overseas lawyers. That is a matter which the law already permits. The purpose of this draft order is to secure that two legislative provisions can apply to registered foreign lawyers as they do to solicitors. In other words, in order to facilitate the running of these new partnerships one should be able to treat references to solicitors in these two provisions as including references to registered foreign lawyers.
§ The first of the two is at paragraph 2 of the draft order and relates to Section 85 of the Solicitors Act 1974. The effect of this section is that, where a solicitor has an account with a bank or building society, the bank or building society does not face a claim from a client if money in the account is misapplied by the solicitor. Furthermore, the money in the account is not to be taken by the bank or building society to meet personal liabilities of the solicitor.
§ The second provision is at paragraph 3 of the draft order and relates to regulation 8 of the Banking Act 1987 (Exempt Transactions) Regulations 1988. This exempts a solicitor with whom client money is deposited in the course of his profession from being regulated as if he were a bank.
§ I hope that your Lordships will agree that both these provisions should apply to registered foreign lawyers in the same way as they apply at present to solicitors. I beg to move.
§ Moved, That the draft order laid before the House on 18th November be approved [4th Report from the Joint Committee]. —(The Lord Chancellor.)
101§ Lord MishconMy Lords, the noble and learned Lord the Lord Chancellor, with his usual clarity, has indicated that a particular stage has been reached in a revolutionary process. That process was initiated by the Courts and Legal Services Act 1990 which the noble and learned Lord piloted through this House. I know that he will not regard it as an impertinence if I bring to the attention of the House the fact that the ability to enter into partnership with foreign lawyers led to a definition of "foreign lawyers" in the Courts and Legal Services Act. Included in that definition are Scottish lawyers.
It is a revolutionary process and one in which the House will be interested. The order will result in a broader service to the people of this country by allowing an international element of speciality to enter into legal practice. However, I am hoping, as is the Law Society, that in addition it will ensure that London is the major centre for international dealings in law. The order will take effect from 1st January 1992 but 1st January 1993 is a more familiar date to members of the EC. In giving permission for such merged partnerships of foreign and English lawyers we shall have acted ahead of that significant date.
We have a law and a language which are common in a large part of the world. It may be as true in the future as it is now that our Commercial Court is the envy of almost every other system of law. Furthermore, London is the seat of arbitration because its courts are so adept in carrying out those arbitrations in accordance with English law or any foreign law which may be applicable.
The Law Society is anxious that your Lordships should know of the great appreciation felt within the profession towards the noble and learned Lord the Lord Chancellor. It is grateful for his personal interest in the matter and for the way in which he and his department have speeded up complex procedure. It is estimated that by the end of 1992 more than 1,000 foreign lawyers will have registered. I convey to the noble and learned Lord the thanks of my profession and the thanks of the House.
§ Lord Hailsham of Saint MaryleboneMy Lords, when my noble and learned friend replies—and perhaps I missed this—will he explain what is the situation as regards the profession of the English barrister in this country, the faculty in Scotland and the Bar in Northern Ireland and in the Republic of Ireland?
§ The Lord ChancellorMy Lords, this provision is intended to allow partnership with solicitors in England. Members of the profession who are regarded by the Law Society as properly to be in partnership with English solicitors will be able to register in this matter.
The present situation in Scotland is that the rules of the Law Society of Scotland would not permit Scottish solicitors to form such partnerships, and the rules of the Bar would have a bearing on that too. Therefore, the idea of the provision is to allow solicitors in England to be in partnership with those from other jurisdictions who could appropriately be in partnership with them.
102 I thank the noble Lord, Lord Mishcon, for his kind remarks and his support for this measure. It is an extremely important development, vital to the standing of this country in the field of international law, and in particular as regards London.
§ Lord MishconMy Lords, in the reply which the noble and learned Lord gave to the noble and learned Lord, Lord Hailsham, he mentioned English solicitors. I know that he will wish it to be pointed out that the measure covers Wales as well.
§ The Lord ChancellorMy Lords, I am grateful for the correction, particularly with the noble Lord the Leader of the Opposition sitting there. It would be inappropriate for me not to acknowledge the great debt which our law owes to those who come to serve it from the Principality.
§ On Question, Motion agreed to.