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Articles

Legal analysis by Harneys lawyers

At what costs? Court of Appeal ruling raises questions about BVI Legal Profession Act

Authors:
Publication Date:
9 June 2016



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.

Decision

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.

Commentary

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that the Judgment relies heavily on section 2(2) of the Act, which has never been brought into force and was then later repealed by the Legal Profession (Amendment) Act 2016.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.