This item has been updated since initial publication.
Upholding the integrity of the legal profession
The Legal Profession Committee (“LPC”) continues its function to address and deliberate upon a variety of enquiries raised by Members of the Bar as well as the public, on issues relating to the professional conduct and practice of lawyers in Peninsular Malaysia. LPC also renders its views relating to the application of the provisions of the Legal Profession Act 1976 (“LPA”) and the various rules and rulings issued under section 57 of the LPA.
LPC met seven times between 3 May and 15 Nov 2013, and worked on, amongst others, the following matters:
(1) Bar Council rulings
Pursuant to section 57(a) of the LPA, Bar Council issued the following rulings, based on LPC’s recommendation:
(a) Ruling 14.27: No Charging of Additional Fees for Affirming Affidavits to Support Application for Probate
Where an affidavit has to be filed in Court for the purpose of an application for grant of probate, a solicitor who has been paid legal fees for preparing the will for attesting the testator’s signature, is not entitled to claim any further legal fees for signing such affidavit.
This ruling, which is applicable to applications for probate matters, is to prevent lawyers from charging fees just for the signing of an affidavit as the act of signing an affidavit to support an application for probate, is one which is envisaged at the time the will is being prepared.
Members of the Bar were notified of the ruling via
Circular No 136/2013
dated 14 June 2013, which took effect immediately, and a corrective circular dated 19 June 2013.Several Members of the Bar subsequently provided their views on the ruling. LPC has referred the issues raised to the Court Liaison Committee so that they can be taken up with the Court Registrar at their next meeting.
(b) Ruling 14.28: Prohibition of Providing Guarantee in Favour of Clients or Third Parties
A law firm had enquired whether it is appropriate and ethical for an advocate and solicitor to execute a joint and several guarantee in favour of his or her client so as to indemnify the client against any loss suffered attributed to his or her fault.
When the insurers’ views were sought on this issue, they replied as follows:
(i) The scope of cover provided under the Professional Indemnity Insurance (“PII”) policy is per the terms and conditions laid out in the Certificate of Insurance;(ii) The insurers of the schedule will indemnify the firm against civil liability for a claim that arises from the legal practice or is first made against the firm during the period of insurance;(iii) Whether a particular claim falls within the ambit of the policy cover will be determined by the insurers based on the information and documents provided by the firm; and(iv) Clause 33 of the Certificate of Insurance, which deals with exclusions under the cover, provides, in particular, the following exclusions:
• Any claim in respect of any personal financial guarantee or undertaking given by lawyers otherwise than in good faith in the course of the conduct of the firm or as required by law or order of the courts (clause 33(f)); and• The giving of any express or implied warranty or guarantee relating to the financial return of any investment (clause 33(k)).
Bar Council alerted Members of the Bar to this exclusion clause via
Circular No 023/2013
on 23 Jan 2013. In connection with this, Bar Council decided to put in place Ruling 14.28 to protect the interest of advocates and solicitors by prohibiting them from providing guarantee in favour of clients or third parties as it may void the PII policy:
An Advocate and Solicitor practising as such, shall not sign any document nor give any undertaking that has the effect of guaranteeing or of indemnifying clients or third parties, as a form of indemnity, against any loss suffered.
Members of the Bar were notified of the ruling, which took effect immediately, via
Circular No 247/2013
dated 19 Nov 2013. (2) Enquiries considered by LPC
(a) Whether it is permissible for a law firm to assign its office manager to be one of the signatories to the firm’s client accounts
LPC considered rule 11(6) of the Solicitors’ Account Rules 1990, which gives Bar Council the discretion to allow an unauthorised person to withdraw from a firm’s client account. The reason given by the firm was that its lawyer was contesting in the general election. Bar Council concurred with LPC’s views that the firm should not be allowed to assign its office manager to be a signatory to its client accounts as the reason given by the firm was not acceptable.
(b) An advocate and solicitor, who applied for Singapore citizenship and intended to renounce his Malaysian citizenship, enquired whether:
(i) renunciation would affect his existing membership with the Malaysian Bar; and(ii) Bar Council would issue him a Sijil Annual if he secures an employment pass to work in Malaysia in the future.
Having deliberated and sought legal opinions on the matter, Bar Council concluded that a Sijil Annual and Practising Certificate may be issued to him even after he has renounced his citizenship. LPC has been further tasked to look into amending the relevant provisions in the LPA to plug the loophole whereby non–citizens such as these could still practise but do not come under the liberalisation regime.
(c) Whether encashment from client accounts is permissible for purposes of court filing fees, land office registration and other disbursements
LPC is of the view that rules 7 and 8 of the Solicitors’ Account Rules 1990 in effect allow cash monies to be drawn from client accounts for the purpose of making payment of disbursements on behalf of clients.
(d) Whether a Singapore law firm is permitted to advertise their practice in a Malaysian newspaper
LPC is of the view that there is no objection to the firm advertising its Singapore practice in a Malaysian newspaper so long as it does not advertise or represent in the advertisement that it renders legal advice on, or practises, Malaysian law.
However, the firm was also informed that advocates and solicitors of Peninsular Malaysia are regulated by the Legal Profession (Publicity) Rules 2001 insofar as publicity or advertisement of the firm itself is concerned. In light of this, the Singapore law firm was advised to take cognisance of the spirit and intent of the rules applicable to all Peninsular Malaysian advocates and solicitors, so as to assure that Peninsular Malaysian practitioners are on a level playing field in respect of all advertisements and publicity.
(e) Whether it is permissible for an advocate and solicitor to display his or her photograph in his or her call card
LPC is of the view that it is permissible for an advocate and solicitor to display his or her photograph in his or her call card, so long as the photograph is not incompatible with the dignity of the legal profession.
(g) Whether it is permissible for a law firm to have a service office in a setting whereby each office will be a separate private room but share a reception area and main entrance
LPC is of the view that the above is not permissible pursuant to ruling 7.03 of the Rules and Rulings of the Bar Council Malaysia.
(h) Whether an advocate and solicitor can charge fees for preparing audit verification reports for auditors of a client
LPC is of the view that an advocate and solicitor may charge reasonable fees for preparing audit verification reports for auditors of a client.
(3) Specimen letter of engagement of legal services and “Step–By–Step Guide on How to Appoint a Lawyer”
At Bar Council’s request, LPC prepared a
specimen letter of engagement of legal services
which Members of the Bar may find useful as a guide. LPC also prepared a “
Step–By–Step Guide on How to Appoint a Lawyer
”, to assist members of the public.Members of the Bar were informed of these documents, which are accessible on the Malaysian Bar’s website, via
Circular No 212/2013
dated 2 Oct 2013.(4) LPC considered the following scenarios frequently faced by the Membership Department of the Bar Council Secretariat:
(a) Scenario 1A Member of the Bar goes to court on 4 January. He subsequently applies for his Sijil Annual/Practising Certificate (“SA/PC”) on 10 January. His documents are in order and the SA/PC is issued. Is there a problem with his appearance in court on 4 January?(b) Scenario 2A Member of the Bar submits his SA/PC application on 2 January, but his documents are not in order. He goes to court on 4 January. He submits the required additional documents on 10 January. This time his documents are in order and the SA/PC is issued. Is there a problem with his appearance in court on 4 January?(c) Scenario 3A Member of the Bar who is a Bar Council member attends a Bar Council meeting on 5 January. He subsequently applies for his SA/PC on 10 January. His documents are in order and the SA/PC is issued. Is there a problem with his attendance at the Bar Council meeting on 5 January?Having considered the foregoing scenarios, LPC is of the view that there is nothing objectionable so long as the Members had applied for their SA/PC before 31 January of the year.
(5) Answers–in–Law: Summary of actions taken by Bar Council
On 22 July 2013, a
summary of actions taken by Bar Council
in respect of Answers–in–Law (“AIL”) was posted on the Malaysian Bar website for the information of Members of the Bar as well as the general public. The following salient points were noted in the report:
(a) Bar Council has taken note of the news reports appearing in the Business Times on 13 Apr 2013 and The Star on 18 June 2013, together with the radio interview on BFM 89.9, pertaining to AIL and its service model;(b) AIL’s operations have been of grave concern to the Malaysian Bar since 2010, and Bar Council has been taking active steps to address the matter over the last two years;(c) AIL operates under a company named Index Continent Sdn Bhd (“Index Continent”). In November 2010, Bar Council had deemed Index Continent to be an “unauthorised person” under section 37 of the LPA, and the arrangement proposed by AIL was not sanctioned by the Bar Council;(d) The Malaysian Bar has taken the following actions in respect of AIL:
(i) Brought injunction proceedings against Index Continent in July 2011 for a declaration that the company is an “unauthorised person” under section 37 of the LPA; and(ii) Sought an injunction to restrain the company from advertising and carrying on such services.
(e) The High Court granted an interim injunction in November 2011, and the injunction was finally granted in January 2012. Index Continent, through its lawyers, appealed against this decision. The High Court dismissed Index Continent’s argument, but on appeal in June 2012, the Court of Appeal allowed the company its appeal and overturned the High Court’s decision;(f) The Malaysian Bar filed an application for leave to appeal to the Federal Court in July 2012. The application has yet to be disposed of, as it is pending issuance of the written grounds of judgment by the Court of Appeal;(g) In the interim period, Index Continent applied to the High Court to strike out the Malaysian Bar’s suit based on the Court of Appeal’s decision, and the application was allowed by the High Court. However, a stay order was granted pending issuance of the grounds of judgment by the Court of Appeal and the outcome of the Bar’s application for leave to appeal to the Federal Court.(h) Remedial steps are being taken by the Malaysian Bar to address these concerns.
(6) Euro Prestasi & Partners (M) Sdn Bhd (“EPP”)
LPC has received numerous complaints from members of the public as well as Members of the Bar regarding EPP, a debt collection agency that represents itself as a law firm. The complaints revolve particularly on the method employed by EPP to intimidate and/or mislead Members of the Bar and/or members of the public. Bar Council issued
Circular No 010/2013
dated 9 Jan 2013 to seek feedback from Members of the Bar on EPP, in order to determine the next course of action. Having gathered the necessary evidence, Bar Council has decided to take injunction proceedings against EPP.(7) Proposed Group Practice Rules by Small Firms Committee (“SFC”)
At Bar Council’s request, LPC considered these Rules, and has raised concerns on the issues of confidentiality, conflict of interest and the role of the “Manager” as proposed in the Rules. The views of the LPC were conveyed to Bar Council, and SFC is now reviewing the Rules to address the issues raised, before submitting its revised Rules for Bar Council’s adoption.
(8) Duty to communicate and update clients on the progress of matters and respond to reasonable questions
A concern was raised by Bar Council over the numerous complaints that have been lodged with the Advocates and Solicitors Disciplinary Board against Members of the Bar who have failed to carry out their duty to communicate with and keep their clients informed of the progress or development of their cases. It was also highlighted that there are Members of the Bar who do not respond in a timely manner to reasonable questions posed by their clients in respect of their cases.
LPC issued
Circular No 234/2013
dated 30 Oct 2013 to remind Members of the Bar of their basic duty to ensure that their clients are duly and properly informed of the development of their cases, and they are to attend to reasonable questions posed by their clients within a reasonable time. A copy of the case of Law Society of Singapore v Udeh Kumar s/o Sethuraju [2013] 3 SLR 875; [2013] SGHC 121 was attached to the circular for Members’ reference.(9) Reinstatement of advocate and solicitor
LPC was requested to consider the necessity of amendments to section 107 of the LPA, in light of the case of Nathan Edmund v Law Society of Singapore [2012] SGHC 232 (page 10), where the court may impose conditions for reinstatement of an advocate and solicitor.
LPC was of the view that section 107 of the LPA permits the imposition of conditions by the court if it so wishes. In any event, the court is clothed with inherent jurisdiction. As such, there appears to be no necessity to amend section 107 of the LPA.
(10) Logos of firm’s affiliations with law associations are allowed in business cards, letterhead and stationery
Bar Council has adopted LPC’s recommendation to allow logos of a firm’s affiliations with law associations to be displayed on the firm’s business cards, letterhead and stationery.
(11) Prohibition against a sole proprietor signing off or addressing himself or herself as a managing partner
LPC has decided that it is not permissible for an advocate and solicitor to sign off a letter or address himself or herself as a managing partner if the firm is a sole proprietorship, as this may cause confusion among members of the public.
(12) Breach of rules and rulings
During the course of its term, LPC noted that several articles, advertisements in newspapers and websites involving lawyers and/or law firms, firms’ letterheads, signboards and name cards were not in compliance with the Legal Profession (Publicity) Rules 2001, Legal Profession (Practice and Etiquette) 1978 and/or Rules and Rulings of the Bar Council Malaysia.
Bar Council alerted the firms concerned to the relevant provisions and required them to take steps to ensure compliance with the provisions. Most Members of the Bar have been very cooperative and complied with Bar Council’s directions. Complaints have been lodged with the Advocates and Solicitors Disciplinary Board in respect of Members of the Bar who failed to comply with the directions.
(13) Rulings on social media; operation of virtual office
At Bar Council’s request, LPC is still in the midst of drafting rulings on social media so that law firms may be guided accordingly. Presently, LPC has no objections to law firms having a Twitter account as a form of communication, so long as the Rules and Rulings of Bar Council Malaysia (in particular Chapter 17: Websites of Law Firms), Legal Profession (Publicity) Rules 2001 and the Legal Profession (Practice and Etiquette) Rules 1978 are strictly adhered to.
LPC is also considering the feasibility of allowing law firms to operate from a virtual office.
(14) Publication of an updated and revised Rules and Rulings of the Bar Council Malaysia
LPC aims to publish the updated compilation, in collaboration with Malaysian Current Law Journal Sdn Bhd, in the first quarter of 2014.
(15) Management of law firm by third party or another legal firm is not permissible
Since the need to maintain confidentiality between a firm and its client is of utmost importance in the course of a law firm’s operations, LPC wishes to draw the attention of Members of the Bar to ruling 14.12, which provides as follows:
It is not permissible for any law firm to be managed by a third party unless such third party is an employee of the law firm.
(16) Meetings with government bodies
On 29 Aug 2013, LPC met with representatives of Jabatan Perumahan Negara and the National House Buyers Association to discuss matters relating to unlicensed developers. On 23 Sept 2013, LPC together with the Conveyancing Practice Committee, met with the Association of Banks in Malaysia regarding the same matter. During these meetings, LPC raised issues on Bar Council rules and rulings that affect developers/purchasers and banks.
Karen Cheah Yee Lynn
Chairperson
Date: 20 Nov 2013
Karen Cheah Yee Lynn (Chairperson) | Chen Kah Leng (Deputy Chairperson) | Amar Chand Vohrah | Andrew Khoo Chin Hock | Benedict Cheang Chu Yong | C Megalai | Chay Fon Leng, Cathryn | Dennis Appaduray | GK Ganesan | Lee Sook Chin | Lim Kiat Seng, Freddy Victor | Manjit Kaur Gill | Mohd Iqbal b Zainal Abidin | Murad Ali b Abdullah | Natarajan s/o Chinnaswami | Ng Kong Peng | Ng Seng Kiok | Ng Shiow Wen | Nicholas Chang | Paul R Manecksha | Pushpa Ratnam | Rajoo D Moothy | Rejinder Singh | S Gunasegaran | Sarengapani s/o K Rajoo | SS Muker | Teo Kok Vui @ Simon | Trevor George | Marianna Laureen Tan (Officer–in–charge)