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28 June 2016
In Garkusha v Yegiazaryan (BVIHCMAP 2015/0010) the full Court of Appeal recently held that the fees of foreign lawyers not licensed under the Legal Profession Act 2015 are not recoverable in a costs assessment. However, in seeking to settle the law in this area, the decision has opened up further questions.
The court was asked to adjudicate on the costs of a firm operating from Russia and London that had assisted BVI practitioners in an application for security for costs. The respondents objected to these costs being recovered, on the basis that the firm's lawyers were not licensed to practise BVI law under the Legal Profession Act.
Delivering the leading judgment, Justice Webster summarised the English and BVI position before the act came into force, concluding that by established common law principle, foreign lawyers' fees were recoverable as a disbursement of the local practitioner.
However, the court held that the act intended to move away from the common law position. At Paragraph 70 of the judgment, Webster stated 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."
The court held that in assisting the BVI practitioners from their Russian and London offices, the overseas solicitors were 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 some difficulties with the decision. The most striking is that the judgment relies heavily on Section 2(2) of the Legal Profession Act, which was never brought into force and was later repealed by the Legal Profession (Amendment) Act 2016. That fact was not brought to the court's attention by the parties, it seems. Nor does it seem that the court's attention was drawn to Section 15(1), which provides that "no person may practise law in the Virgin Islands unless he or she is the holder of a valid practising certificate".
Consequently, it is doubtful whether the foreign lawyers were acting unlawfully in assisting their BVI lawyers, since the section of the Legal Profession Act 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. It will be interesting to see whether the decision is appealed.
For further information on this topic please contact Phillip Kite at Harney Westwood & Riegels' Tortola office by telephone (+1 284 494 2233) or email (firstname.lastname@example.org). Alternatively, contact Vicky Lord at Harney Westwood & Riegels' London office by telephone (+44 20 7842 6080) or email (email@example.com). The Harney Westwood & Riegels website can be accessed at www.harneys.com.
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