Proposed legislation on Legal Professionals - A back-door, but welcome, entry for foreign lawyers?

The proposed legislation

The Ministry of Law and Justice has published a draft Legal Practitioners (Regulation and Maintenance of Standards in Profession, Protecting the Interest of Clients and Promoting the Rule of Law) Act, 2010. The ministry invites comments from the public on the same.

By way of background, it may be noted that the National Consumer Disputes Redressal Commission had ruled in D.K. Gandhi v M. Mathias that despite the existence of separate regulatory regime for lawyers under the Advocates Act, 1961, the legal services rendered by Advocates are "services" and hence clients could initiate proceedings against their lawyer under the Consumer Protection Act, 1986. Though the decision has been appealed before the Supreme Court, the matter is yet to be conclusively decided.

The newly proposed legislation creates institutional mechanisms to protect the interests of clients of 'Legal Professionals'. The phrase 'Legal Professionals' has been defined as “Legal Professionals” means the Advocates as defined in the Advocates Act, 1961 and includes the qualified lawyers engaged in legal practice confined to their chamber, engaged in drafting and conveyancing, practitioner of income tax and sale tax and those appearing before the relevant authorities, giving advise to the clients for a fee, gain or reward in the areas of customs, immigrations, trademark and patent services and all other professional services where legal issues are involved. The institutional framework under the Act consists of Legal Services Board and the Ombudsman.

Section 27 of the proposed legislation casts a duty upon the Legal Professionals to extend free legal assistance to "the financially weaker consumers/clients who fall just above the income levels prescribed under Section 12(h) of the Legal Services Authorities Act, 1987". Section 28 mandates that the Legal Professionals "shall provide full information regarding the legal position to consumer / client relating his case" and that "[t]he services of the legal professional shall be in such a manner as to give an opportunity to the consumer / client to make informed choices about the quality, access and value of the legal services he requires". 

What does it have to do with foreign lawyers?

I had discussed in a post on Lex Arbitri - The Indian Arbitration Blog and Critical Twenties how the decision of the Bombay High Court in Lawyers Collective v Bar Council of India held both litigious and non-litigious practices of law (including functions discharged by liaison offices of foreign law firms) to be covered by the Advocates Act and hence to be exclusive domains of 'advocates' registered under the Act. As foreigners cannot be registered as advocates under the Act at present, any form of 'practice of law' by them is prohibited.

Section 35 of the proposed legislation may have a clarificatory effect on the coverage of the Advocates Act. It states: "Until competent regulatory bodies are established by the Central Government or State Government as the case may be, the Legal Services Board shall function as the regulator for the regulatory objectives under this act for legal professionals other than those covered by the Advocates Act, 1961 as enumerated in Schedule I". Schedule I, in turn, contains the following entries among others: "1. Qualified lawyers who are not practicing advocates, doing legal services in their Chambers; 2.Qualified lawyers engaged in drafting and conveyancing."

Thus the proposed legislation, unlike the Bombay High Court, endorses the view that there are aspects of rendering legal service which are not covered by the Advocates Act. Moreover, it expressly spells out work within chambers and drafting and conveyancing as matters outside the purview of the Advocates Act. 

If the Honourable Supreme Court has this legislative clarification before it while deciding the appeal in Lawyers Collective, it is highly likely that the Bombay High Court decision would be reversed.

Thus, this legislation, if passed in the present form will grant a back-door, nevertheless welcome (on why welcome, see my earlier post), entry to foreign lawyers and law firms. 

However, this mode of entry if made available is unlikely to last long as the Board under the Act may be entitled to create licensing requirements for those aspects of legal profession it governs. Therefore, it is likely that the Board will impose licensing requirements similar to those that apply to Advocates.