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Law
Making a judgment on cases for expansion to maintain progress
Worldwide tax transparency measures are causing a slow down in Gibraltar’s traditional legal work, prompting firms to consider other areas to demonstrate professional excellence, writes Ray Spencer
suggest that it will,” Triay, immediate past chairman of the Bar Council, declares.
Overcoming threats
The legal profession in Gibraltar is used to changes that could hit business - introduction of the 4th and 7th EU Directive on Company Accounts and the repeal of the exempt company tax regime – and Triay says, “in both cases Gibraltar has not been affected; thus these new changes although threatening, will be overcome”.
There’s no doubt the number of lawyers locally has continued to blossom. There are 300 or more people providing legal services in Gibraltar; 216 are lawyers – solicitors and barristers – listed in a fused profession by the Gibraltar Courts Service and the Bar Council has some 170 subscribing members.
Keith Azopardi, Bar Council chairman for the past year and one of four QCs at Triay, Stagnetto, Neish, Azopardi, explains: “In the 1980’s there were a tenth of the lawyers practicing here today; 60% of the economy then was defence driven, but today it accounts for 2-3% of Gross Domestic Product.
“Today there is not only private practice; we now also have dozens of corporate in-house lawyers in gaming and financial services for example – maybe 20-30 people.”
Government spending more
The government has become a big employer of lawyers. “In 2011 it was 18, but now the number of our lawyers in four years has just about doubled to reach 35”, Gilbert Licudi QC, Gibraltar’s Minister for Justice, notes. The cost grew from £1m in 2011 to £2.8m now from higher fee scales, as well as more lawyers.
Reasons cited include more employed in the Crown Prosecution & Litigation Office – advisory work in relation to government, apart from criminal prosecution work. “The number of lawyers in international legislation has grown significantly, because of our EU [legislation] obligations and arising from treaties and bi-lateral arrangements for mutual legal assistance, for example.
“We normally engage local firms and
sometimes specialist counsel. Last year there were some important pieces of legislation – the new Companies Act and European [insurance] legislation such as Solvency II; a lot has been EU driven”, he said.
Government spending on external fees last year at almost £600,000 was double that in both 2011 and 2012. Of the eight external law firms engaged last year, Hassans – Gibraltar’s largest firm with 84 lawyers and 8 QCs – captured 45% of this work, and 82% of the £289,000 billed by five firms in 2014!
Overall, Hassans reports its business grew 3.7% in 2015 and expects the same in 2016, significantly less than, for example, the 10% growth claim of ISOLAS law firm. Marcus Killick, ISOLAS chief executive, reasons: “Litigation was one of the areas with very strong growth previously, but now it has lessened. These cycles of work are not unusual.
“Company and trust business is seeing a decline, partially because new international requirements mean more exposure of clients’ affairs ... and this has increased costs; also as tax regimes have changed, tax mitigation opportunities have declined.”
Targeting UK and Europe
Gibraltar firm, Ramparts Law, has seen quite spectacular business growth: in 2012 Peter Howitt made the unusual step of leaving BwinParty, the giant Gibraltar-based gaming concern where he was in-house counsel, and started on his own; today there are 18 staff, 13 being lawyers.
Ramparts was profitable from day one, reports Howitt, who set up Gibraltar’s only limited company (rather than partnership) law practice. Ramparts has also become the only Gibraltar firm to open in its own name a UK law office, where he and two others work from Manchester, a strong centre for eCommerce, digital companies and crowd funding. The aim is to establish a mini- European chain that could include offices elsewhere in England, Amsterdam and Stockholm.
Hassans, ISOLAS and T&T all have long-established offices in nearby Spain, largely servicing the ex-pat community.
Restored Coat of Arms above Gibraltar Supreme Court No. 2.
The Gibraltar legal profession has historically been fed work from its close association with the trust and company management industry or the fiduciary business that helped give birth to the finance centre. It remains a significant part of Gibraltar legal work generally.
The legal profession is involved in the establishment of the trust and company structure below the trust at the onset and then, following disputes between the beneficiaries as between themselves or with their trustees, the legal profession is involved in litigation that ensues.
“This type of work has kept the legal profession busy for many years”, points out Melo Triay, great grandson of the founder of Triay & Triay (T&T). “But with the advent of FATCA (US and Europe wide) and the OECD Common Reporting Standard (CRS), [obligatory international initiatives designed to develop a single global standard for the automatic exchange of information between tax authorities] and the transparency that these standards bring could well result in less use of the fiduciary industry in Gibraltar, and with that goes the litigation that followed”, he notes.
CRS began in January and the first reporting will be from the end of this year. “It’s too early to tell whether these measures will adversely affect the trust and company industry, although the money appears to
Aaron Carpenter, a Ramparts director
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