The Legal Profession Act 2015 was enacted recently in the British Virgin Islands but is not yet in force.

Proposals to introduce legislation to reform the regulation of the legal profession have been around for years but recent concerns about non-BVI law firms practising BVI law, its likely negative impact on the local profession and on the financial services industry in the islands generally (not to mention the obvious risks posed by people who lack the necessary expertise giving legal advice) have put made it a top priority for the islands' government. The result is the Legal Profession Act 2015, which was enacted on 11 May but is not yet in force. The LPA covers the following.

• The fusion of the profession – all former BVI barristers, solicitors and attorneys-at-law will now be known as 'legal practitioners'.
• The establishment of a General Legal Council, whose responsibilities include setting standards for legal qualifications and applications for the admission of legal practitioners;
• The admission, enrolment and status of legal practitioners (with criminal offences for those who practise BVI law without practising certificates, more of which later).
• Disciplinary matters (including the establishment of a disciplinary tribunal).
• Legal education and training.
• Remuneration (which allows the General Legal Council to make rules to govern the remuneration of legal practitioners in respect of non-contentious business).
• A legal aid fund.
• The temporary admission of foreign counsel.
• Pupillage.
• A Code of Ethics.

New offences for the unqualified

It is to be a criminal offence for any person to practise BVI law unless: (i) his name is entered on the roll in accordance with the LPA; and (ii) he holds a valid practising certificate.

There are to be two main offences. The first is that anyone who practises law without a practising certificate (even if his name is on the roll) commits an offence and is liable on summary conviction to a fine of US$10,000 and a further fine of US$1,000 for every day on which the offence continues after conviction. [The BVI's economy is 'dollarised'.] The second is that any person who is not a BVI legal practitioner (i.e. whose name is not on the roll) and who either: (i) practises law; (ii) wilfully pretends to be a legal practitioner; or (iii) makes use of any name, title or description that implies that he or she is entitled to be recognised or to act as a legal practitioner, commits an offence and is liable on summary conviction to a fine of not less than US$15,000 or to imprisonment of a term of not less than three years or both.

There are also criminal penalties – a minimum fine of US$10,000 and a minimum term of imprisonment of two years or both – which apply to anyone who is not a BVI legal practitioner and who practises BVI law in the name of or through the agency of a BVI legal practitioner who is entitled to act.

The meaning of 'practising law'

The definition of 'to practise law' in the Act is slightly circular in that it refers to practising as 'a legal practitioner' or undertaking or performing "the functions of a legal practitioner as recognised by any law whether before or after the commencement of [the LPA]". It is certainly no accident, though, that such a general term has been used. It is thought that it must cover any of the following, at least where it is being done for reward.

• Giving legal advice and opinions.
• Drafting documents intended to have legal effect.
• Representing clients in legal negotiations and court proceedings.

Practising certificates

There are a few transitional provisions: everyone who was entitled to practise as a BVI lawyer immediately before the Act comes into force is deemed to hold a valid practising certificate until 31 January 2016 (assuming it comes into force during 2015). After that date, however, they will need a practising certificate and will only be able to obtain one if they are either: (a) a 'belonger' or resident of the BVI; or (b) practising law in an overseas branch or affiliate of a law firm operating in the BVI, having obtained the prior written permission of the soon-to-be-formed General Legal Council to practise law in that overseas branch or affiliate.

Other consequences of disobeying the Act

The criminal sanctions are not the only consequences of a breach of the LPA. It also provides that anyone who practises BVI law and is not a BVI legal practitioner or does not hold a practising certificate cannot recover his fees for conducting any legal business. Whether that person could sue for his fees in his own jurisdiction depends on the view that jurisdiction's courts would take of that person's breach of the BVI criminal law. Indeed, the contract for the provision of those legal services may not be enforceable on public policy grounds. If a similar question were to arise in the courts of the BVI, it would probably be held unenforceable, so the adviser would not be able to sue to recover his fees.

Conversely, suppose that person negligently drafted a document; if the contract is unenforceable, the client would not be able to sue him for negligence. Even assuming it is enforceable, would he be covered by his professional indemnity insurance? That would depend on the terms of the insurance cover, but insurers might not cover someone for doing something that is a criminal offence in another jurisdiction. At the very least, any doubt on the point could give the insurer an excuse to try not to pay out on the policy.

Problems for fiduciaries

The Act also raises additional interesting questions for fiduciaries. Given the difficulties, is it appropriate for someone in a fiduciary position, such as a trustee or a director, to instruct someone who is not qualified as a matter of BVI law to give BVI-related legal advice or draft legal documents for use in the BVI? It certainly makes it more difficult for him to demonstrate that he reasonably considered the non-BVI lawyer to be the best person to advise him about BVI law. At the very least, the issuance of such an instruction has now become more difficult. Moreover, if the contract for those services is probably unenforceable, it is difficult to see how he is not in dereliction of his duty.

* Arabella di Iorio is the managing partner of Maples and Calder's BVI office. She can be reached on +1 284 852 3016 or at arabella.diiorio@maplesandcalder.com