Page 12 - Layout 1

Law
Revolutionary changes coincide with caution over ‘disruptive’ technology Continued from p10
a “super” practitioner by market sources”. Since early last year, the sector has taken off “massively” growing the firm as a result, “but there is not a bank of DLT-trained lawyers in the world, so we have had to switch resources and adapt skill sets for
existing and new staff”, Killick said. Hassans too has seen significant growth in recent months as a result of DLT and crypto business. Its overall income from 100 fee-earners grew 4.7% in 2017-18, (against 3.6% a year earlier), and it attributes 70% to
“the FinTech phenomenon”.
Complacency warning
Generally, local law firms are finding greater competition and tougher markets. “Even though there is no sign of business leaving Gibraltar because of Brexit, we cannot be complacent,” Killick maintained. Issues include new AML requirements since February under the Proceeds of Crime Act and imminent Data Protection Legislation. Later this year clients face MIFID ll and the Insurance Distribution Directive.
Montegriffo pointed out: “The whole business of law – here and in the UK - has been evolving, because clients today are better informed and in-the-know, given information is more open, and that is driving competition. The tendency is for firms to become leaner and meaner; the trend is to downsize as Gibraltar firms, particularly, may be carrying greater overhead costs than are strictly necessary.”
Montegriffo, who remains Gibraltar’s only non-litigating QC after taking Silk in 2014, opined: “Gibraltar’s legal profession is diverse and the majority of practitioners have a range of experience, but there is probably a need for greater specialism in some areas.”
In his Legal Year address Azopardi
perspective of ensuring the continual professional development of local advocates.” David Dumas QC, a Hassans partner and Bar Council chairman since December, added: “One doesn’t know when English solicitors are becoming involved in Gibraltar cases with, say, back office work or drafting of legal documents. This will require registration under the LSA and thus regulation by the LSRA. The Act creates various offences essentially where services are provided where a person is not entitled to do
so, not registered to do so, or not exempt.”
Workload for Silks
Litigation and general contentious work has always been important to lawyers – big cases take a long time to resolve. The crash of the Marrache law firm in 2010 still provides liti- gation in 2018 with appeals by RBS International Bank and Jyske Bank – both cases will have incurred substantial fees. More recently, the failure in 2017 of Enterprise Insurance is on-going. Triay disclosed: “These cases all provide substantial work for Gibraltar lawyers for many years, even though UK QCs have been involved.”
Launched in late 2016 by Elliott Phillips as part of a London-based firm, Signature Litigation (SL) identified a Gibraltar niche market. In July, SL senior associate Steven de Lara became the first litigator to be licensed by the GFSC to handle administrations, liquidations, receiverships and bankruptcies, a role traditionally identified with practitioners in major account- ancy firms.
Formerly an in-house legal counsel at PWC locally and senior associate at Isolas, de Lara explained: “In practice 80% of insolvency appointments, involve legal work, especially when it is a compulsory insolvency. The difficulty for lawyers is valuing businesses as going concerns. In the same way as accountancy firms instruct lawyers, I can instruct accountants to handle the financial side of things – there is complete synergy.”
SL was involved with the two largest value trust and commercial disputes in Gibraltar’s history the latest being a £1.9bn claim brought by a London-based client, who instigated parallel injunctive proceedings against a Gibraltar trust as part of an international divorce case. The firm has also been instructed over substantial insolvency insurance cases – Lemma Insurance, (post administration), Hill Insurance and, currently, Enterprise where SL acts for a subsidiary.
Lawyers’ synergy with accountants: steven de Lara
Gibraltar is not held hostage to fortune by abuse.
“Inevitably some bad eggs will be attracted to the industry because there is an opportunity to make money - we therefore
need to tread carefully.” Some enquiries to Triay’s firm were “not within our risk appetite” and he observed: “Regulation isn’t a cure for everything; even with well-regulated financial services, there are still scams and you are never going to stop that entirely. Regulation of ICO’s will make it better, but there is a risk and Gibraltar is addressing it through this new legislation.”
Peter Montegriffo QC, a Hassans partner, admitted to being excited about DLT developments, but also concerned at potential risks. “I approach the sector with caution. ICOs are disruptive by definition and there are obvious signs of some pushback from the traditional areas affected – banking as an example. Gibraltar, as a jurisdiction must not be seen to be going out too much on a limb: it is a delicate balancing act.”
Howitt was pragmatic: “ICOs, it is fair to say, are a high risk area and for lawyers too. The new DLT law brings high standards and uniformity of approach. The DLT and crypto space is not dissimilar to the dotcom space a few years ago when thousands of businesses were formed and most didn’t survive; most who did progress were regulated entities and some on the Stock Market.”
Isolas, with 114 staff, including 24 lawyers, gets “20-40 Fintech approaches a
‘ Inevitably some bad eggs will be attracted to the industry because there is an opportunity to make money Melo Triay
day from all over the world”, but turns down declared there had been a spate of cases where around 90% as not meeting requirements. “Gibraltar lawyers are being relegated to a “There’s a lot of bulls..t around blockchain. It sometimes nominal role by unregulated
is a nascent market and there are people who do not have defined products, or understand the risk criteria clearly,” commented chief executive, Marcus Killick.
Joey Garcia, an Isola’s partner who has helped form Gibraltar’s new DLT legislation, is listed by Chamber directory as one of 12 world experts on Fintech, saying he is “a pioneering distributed ledger lawyer, hailed as
lawyers physically present in Gibraltar, for Gibraltar cases, on Gibraltar law. English Counsel get called to the Gibraltar Bar and submit to our Code of Conduct. English Solicitors however, do not.”
He noted: “It is important for the litigation Bar to develop and compete against English Counsel that are briefed in cases on Gibraltar. That is positive from the
12
Gibraltar International
www.gibraltarinternational.com
‘