Most Read Contributor in British Virgin Islands, February 2017
In Garkusha v Yegiazaryan and Ors (BVIHCMAP 2015/0010),
the full Court of Appeal held that the fees of foreign lawyers not
licensed under the Legal Profession Act 2015 (the
Act) are not recoverable in a costs
assessment. However, in seeking to settle the law in this area, the
decision has in fact opened up further questions.
The Court was asked to adjudicate on the costs of a firm of
overseas solicitors who assisted BVI practitioners from Russia and
London with an application for security for costs. The Respondents
objected to these costs being recovered on the basis that their
lawyers were not licensed to practise BVI law under the Act.
Delivering the leading judgment Webster JA summarised the English
and BVI position before the Act came into force, concluding that
there is an established common law principle in the BVI that
foreign lawyers' fees are recoverable as a disbursement of the
local practitioner. However, the Court went on to hold that the Act
intended to move away from the common law position.
At paragraph 70 of the judgment, Webster J held that "on a
plain reading of sections 2 and 18 [of the Act] I am satisfied that
an overseas lawyer who assists local lawyers with the advice and
conduct in a BVI matter must be regarded, as a matter of BVI law,
as practising BVI law, albeit from outside the BVI. Such practice
is contrary to section 18 of the Act and is unlawful unless he or
she is registered on the Roll."
It was held that in assisting the BVI practitioners from their
Russian and London offices, the overseas solicitors were in fact
practising BVI law, unlawfully. Accordingly, except for fees
related to the preparation of expert evidence of foreign law, the
entirety of the overseas firm's fees were disallowed.
There are, however, some difficulties with the decision. The
most striking is that the Judgment relies heavily on section 2(2)
of the Act, which has never been brought into force and was then
later repealed by the Legal Profession (Amendment) Act 2016. That
fact was, it seems, not brought to the Court's attention by the
parties. Nor does it seem that the Court's attention was drawn
to section 15(1) which provides: "no person may practise law
in the Virgin Islands unless he or she is the holder of a
valid practising certificate" (emphasis added). Consequently
there is some doubt as to whether the foreign lawyers were in fact
acting unlawfully in assisting their BVI lawyers, since the very
sub-section seeking to give extra-territorial effect to the statute
was never operative and the regime otherwise expressly limits the
requirement for practising certificates to practising law within
the jurisdiction. We await with interest to see whether the
decision will be appealed.
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Last year we reported that the DIFC had successfully established itself as a so called ‘conduit' jurisdiction for the enforcement of foreign and domestic arbitral awards as well as foreign money judgements.
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