ISLE OF MAN: LEGAL PROFESSION

On this Page:

- ISLE OF MAN STRUCTURE AND REGULATION OF THE LEGAL PROFESSION
- ISLE OF MAN CODES OF CONDUCT AND DISCIPLINARY PROCEEDINGS
- ISLE OF MAN SOLICITORS 'ACCOUNTS' RULES
- ISLE OF MAN FEES AND DISPUTES
- ISLE OF MAN RECENT TRENDS

Isle of Man Structure and Regulation of the Legal Profession

The Island's High Court judges are the two Deemsters, who have jurisdiction over all the criminal and civil matters that in England would fall under the High Court, Crown Court and County Court.

The Manx Appeal Court, consists of the Deemsters and the Judge of Appeal, a part-time position filled by an English QC. The final court of appeal is the Judicial Committee of the Privy Council in London.

The Island has its own lay magistrates (similar to their English counterparts) and also two stipendiary magistrates (the High Bailiff and Deputy High Bailiff) who also act as coroners of inquest and preside over the licensing court.

Members of the Island's bar are called advocates; they are a fused profession, combining the functions normally carried out by English barristers and solicitors, and following professional standards set by the Isle of Man Law Society.

It has been a long-standing practice for senior English barristers to appear in Manx courts, after being granted a 'temporary advocate's commission', but this trend is now in decline as local expertise in complex litigation cases improves.

To be admitted as a Manx advocate, a person is required to have successfully completed the academic training necessary for admission as a solicitor in England and Wales and the Manx Law Examinations, and to have completed a period of two years' articles (analogous to the English training contract) with a local firm. Manx Advocates may employ, but not enter into partnership with, lawyers qualified in other jurisdictions. The Manx Law Society is, however, currently considering the introduction of multi-qualified partnerships.

Legislation was passed in 1986 allowing law practitioners qualified in other jurisdictions to practice as registered legal practitioners and advise on commercial law and international taxation, but it excludes them from conducting proceedings in Manx courts and certain tribunals or to prepare documents relating to Manx real estate. In effect, local firms have a monopoly on local litigation and property work and as a result only a few foreign law firms have established a presence in the Island, specialising in commercial and offshore private client work.

The admittance and qualifications of lawyers is governed by the Advocates Act 1995 (Part II) which replaces most parts of the Advocates Acts 1826-1976. Further regulations were laid down under the Advocates Regulations 1998, setting out qualification requirements. Sections 15-17 of the 1995 Act allow for the issue of a temporary advocate's licence to non-Manx lawyers provided that:

• he/she is a member of the Bar of England and Wales, Scotland or Northern Ireland;
  
• no Manx advocate is available for the proceedings; or
  
• the proceedings require knowledge and experience of a nature not ordinarily available in the Island.

Law firms are required to be licensed if giving investment advice. As with the offshore jurisdictions, law firms tend to have associate fiduciary companies and therefore it is common for legal advisers to also act as investment advisers.

However, advocates are exempted from the requirement to be separately licensed by the Financial Supervision Commission in the conduct of investment business by virtue of membership of the Isle of Man Law Society, provided they obtain an appropriate certificate from the Law Society and comply with the Law Society's Investment Business Rules 1993.

In 2005 the Manx Law Society consisted of 144 practising Advocates, 22 non-practising Advocates, 5 associate members and 21 student members.

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Isle of Man Codes of Conduct and Disciplinary Proceedings

These are set out in the Advocate Practice Rules. Where the rules are silent, the Isle of Man Law Society will tend to look for guidance from the equivalent English provision. As with the Channel Islands, difficulties may arise where the rules conflict. Additional information can be obtained from the Law Society.

As in other small legal markets, issues of conflict may arise during the course of obtaining legal or investment advice. The rules relating to conflict of interest are essentially the same as those applying to solicitors in England, ie it is not acceptable to have lawyers from the same firm acting for different parties to the same transaction.

With regard to confidentiality, there are no specific statutory provisions. The position in the Isle of Man is basically the same as that pertaining in England:

• codes of practice affirming client confidentiality;
  
• express/implied term of contract between advocate and his client;
  
• equitable duty of confidence;
  
• legal professional privilege.

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Isle of Man Solicitors' Accounts' Rules

Professional indemnity insurance is mandatory in the Isle of Man. There is no client compensation fund.

The holding of client money is regulated by the Isle of Man Law Society's Advocates' (Accounts) Rules 1993, which are similar to the English Solicitors' Accounts Rules and stipulate that client money be held in a designated client account. Rules also cover a client's entitlement to interest.

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Isle of Man Fees and Disputes

Notarial fees, where relevant, are included in the final bill to the client. Neither percentage nor contingency fees apply.

Given the diversity of work and expertise in the Isle of Man, billing rates differ widely depending on the nature of the work undertaken, whether it is domestic or international or which firm is acting. Leading firms advising on international transactions charge approximately GBP225-GBP275 per hour for a partner, and GBP150 per hour for a fee-earner.

The Advocates Act 1995 introduced a new regime for the assessment of Advocate's fees. Under Part III of the 1995 Act, advocates are under a duty to provide all clients with a written estimate of fees likely to be payable on an ongoing basis. Clients are also entitled to a written detailed breakdown of the fees payable. New clients may be asked to give money on account.

General complaints in respect of an advocate's professional conduct are dealt by the Advocates Disciplinary Tribunal, a body set up under the Advocates (Disciplinary) Rules 1997.

The Tribunal is unable to deal with matters of negligence (a matter for the court), compensation claims or disputes as to fees (see below). The Tribunal may dismiss the complaint or, if proved, reprimand the advocate or order the advocate to pay the Treasury a penalty not exceeding GBP2,000. Very serious breaches of professional conduct may be referred to the Lieutenant Governor.

In the case of a dispute as to fees, the client may seek taxation by the Taxing Master. The Taxing Master assesses a bill of costs in accordance with the Advocates' Scale of Fees. Although the Taxing Master acts within the framework of the court system, and the taxation system is primarily used to assess litigation costs, theoretically any bill of costs, contentious or non-contentious, may be taxed. Accordingly, in the areas of international corporate and commercial work, advocates tend to ensure that clients are aware that fees will be charged on a time basis at an hourly rate.

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Isle of Man Recent Trends

The Advocates Act 1995 has not changed the current controversial rule that advocates and registered legal practitioners cannot be partners in the same firm. The rules are in effect contrary to EU equal treatment provisions. Increasingly, local law firms are employing English-qualified lawyers at below partner level.

In terms of the Island's legal market, leading advocates report a continuing healthy domestic and international workload. In particular, there has been an increase in all areas of substantive international financial and corporate work including: