Speech by DPM Jayakumar during the Committee of Supply Debate 2008

27 Feb 2008 Posted in Speeches

Legal Services Sector

1. I thank the members who have spoken. They have raised several issues. I will respond to the comments made on legal services sector and the Report of the Committee headed by Justice V K Rajah, which includes the points raised by Dr Teo Ho Pin, Mr Alvin Yeo, Mr Hri Kumar and Mr Chris De Souza. I will also touch on the points raised by Professor Thio Li Ann. My colleague, Senior Minister of State Ho Peng Kee, will respond to the other questions.

Why Liberalise the Legal Services Sector

2. First, Dr Teo Ho Pin and Mr Alvin Yeo made some broad comments on the Report of the Committee chaired by Mr Justice VK Rajah.

3. In responding to the suggestions and comments that they made, may I recapitulate why we accepted the recommendations of that Committee. We did so because we considered that it was in our national interest to do so. Why is it in our national interest to do so? Mainly because of three important reasons.

4. The first is that it will help meet the needs and demands of our economy which has become more diversified and broad-based. As more and more international companies establish a presence in Singapore, the demand for corporate legal services in Singapore has continued to grow. In fact, our financial institutions, and even MAS, have fed back to us the need for increased legal services.

5. The second reason is because of the changing nature of the global legal landscape. Globalisation has led to an exponential increase and change in the volume and the types of international cross-border legal work, spearheaded largely by the rise of China and India.

6. So we need to seize the opportunities and position ourselves as a centre for legal services to benefit from these changes. As a focal point between India and China, as well as Europe and US, we are a convenient locale for legal services, including international arbitration.

7. The third reason concerns attracting talent and keeping our own talent. We have to remain attractive for foreign talent and also ensure we do not lose the cream of our own talent. By liberalising, our legal services will be enhanced and be better able to attract legal talent around the world.

8. We have to remain attractive for our own legal talent because, as the Members who have spoken and who are in the legal sector know, quite a number of our legal talent has been lost because they prefer to work in international firms abroad. By liberalising, we offer them the same work opportunities and work exposure which will be available in global cities elsewhere.

9. Dr Teo Ho Pin has asked about our key performance indicators. We will measure ourselves by how well we have achieved our objectives. Now of course, this is not easy to do because some aspects may be measurable, and some not. For example, in 2007 our legal sector contribution stood at 0.5% of our GDP. We can do better than this, but of course, growth is always subject to vagaries of the general economic situation. We will regularly monitor feedback from the key economic sectors on how well our legal sector is or is not able to support the development of these sectors. In short, we will look at a combination of quantitative as well as qualitative indicators.

10. How will we implement the Report? We have three Implementation Sub-Committees: one concerning the liberalisation of the legal services sector; the second on legal education and professional training; and third, recommendations concerning the legal profession. They will look into the details of the implementation and, where necessary, propose amendments to the legislation, especially the Legal Profession Act. Some may not require legislation in order to implement. We hope to have the legislation ready sometime later this year.

11. We will be implementing two new schemes: the Enhanced Joint Law Venture (EJLV) scheme and the Qualifying Foreign Law Firm (QFLF) scheme mentioned by Mr Alvin Yeo. The EJLV scheme will be available in the second half of this year, once our legislation has been amended.

12. To offer greater breadth and scope of legal services, we will award 5 QFLF licences by the end of this year through a Request for Proposals process. Some time will be needed of course to consult properly with various stakeholders such as the legal profession as well as the industry; to put the necessary legislation in place; we need time to call for tenders, examine the various tenders and conduct the necessary interviews.

13. Mr Alvin Yeo made several suggestions, for example that the EJLV scheme be targeted at the very large international firms, and the QFLF be aimed at those firms whose main objectives are to follow their clients to Singapore rather than to compete for local and regional clients.

14. Now the Joint Law Ventures scheme has always been a priority for us, since their commencement in year 2000. Some have been successful. On the other hand, many foreign law firms have told us that they do not wish to participate in the joint ventures; they prefer autonomy and independence of action. But joint ventures are an excellent way for local firms to upgrade and acquire new skills. That is why, when we announced the EJLV scheme in December recently, we decided to go a step further than the recommendation in the Report. Potential joint venture parties may in fact propose to the Law Minister and the Attorney-General for permission to shape their EJLV scheme in a way that they prefer, to broker better arrangements for themselves to prosper in the long term. We may be prepared to consider it. I think the local law firms have a key role to negotiate with and offer an attractive enough deal for the international foreign law firms to forge a fruitful win-win partnership.

15. We have yet to firm up the details of the QFLF scheme. But I want to emphasise that the structure will be based on an assessment of what would bring the greatest benefits to Singapore in terms of supporting the needs and demands of our economy - that is why I said the national interest is paramount - and in terms of positioning ourselves to benefit from the tremendous growth in international and cross-border work, and the need to attract and retain top talent in Singapore.

16. We will look at the details of the proposals, but some of the things which we will look at are whether they will increase offshore law work from the region; whether they will increase the legal expertise and transactional skills of Singapore lawyers, especially in areas such as private banking, intellectual property and corporate law; whether these foreign law firms will promote the use of Singapore law in international transactions - just to give you an indication.

17. After the schemes come into operation, we will review them in 18 to 24 months’ time with a view to further liberalisation at that time.

18. It is therefore a calibrated approach - only five firms initially - and several areas of law practice will be ring fenced. Because it is a calibrated approach and the changes will be gradual, I expect our Singapore law firms will be able to rise to the challenges and competition, and I think in the longer term, they will be stronger for it.

Measures Taken to Address Shortage of Lawyers

19. Dr Teo Ho Pin asks for the measures to increase the supply of lawyers.

20. The Government has put in place several measures. These include the recommendations in August 2006 from the Third Committee on the Supply of Lawyers chaired by the former Attorney-General Mr Chan Sek Keong, such as setting up the second law school; increasing the intake of students from the NUS Law Faculty; allowing Singaporeans and PRs who graduated from recognised overseas law schools with 2-2 degrees to practise law upon fulfilling certain conditions; and enabling Singapore law firms to recruit outstanding lawyers from abroad under a special scheme to practise limited Singapore law.

21. We also have the recent broad ranging recommendations in Justice VK Rajah’s Committee Report.

22. The Singapore Management University School of Law has been set up. It has taken off with an intake of 120 students. This, together with the increased intake for the NUS Law Faculty from 220 to 250, will result in an almost 70% increase in the number of law graduates in 2 to 3 years’ time. So, to the question whether we should set up another law school, I would say let us see how this develops because the decision to set up another law school would be premature at this stage.

23. Mr Hri Kumar has asked for more immediate measures to address the current shortages. He was comparing the various steps to our family planning population. But I will ask him to look at it in a different way.

24. The fact that we took incremental steps shows that we were attuned to the changing needs of the marketplace and we made adjustments whenever it was necessary.

25. While we may need more lawyers, I would like to stress that it cannot be at the expense of quality. The 1993 controls have ensured that we have a sound crop of lawyers in this generation. We need to continue to maintain high standards in the admission of lawyers to the Singapore Bar as we adapt to the changing needs of our economy. Mr Hri Kumar makes a fair point. I agree that we must not be too rigid to the extent of denying ourselves exceptional candidates who ought to be admitted to the Singapore Bar, given the need for more numbers of lawyers.

Update on the Scheme to Admit Graduates with Second Class Lower Division Honours Degrees to Practise Law (2-2 Scheme)

26. As he knows, we introduced the 2-2 Scheme less than two years ago where we will give consideration to 2-2 graduates, and under that scheme we have seen a total of 18 applicants who have applied, 14 of whom were admitted last year. Justice VK Rajah’s Committee has recommended shortening the 3 years’ required work experience and we are prepared to consider that. With that change, we anticipate a larger number of entrants to the Bar through this method.

Exemption to be exercised flexibly

27. Going further, the Ministry of Law (MinLaw) has also reviewed our exemption policy. Under our current policy we only recognise law degrees from scheduled universities of UK, Australia, New Zealand and USA. They must be on a full-time basis and must have attained a certain standard in their degree.

28. MinLaw has reviewed this issue, and together with the Board of Legal Education and the Attorney-General’s Chambers, we agreed that there is a further need to review how our current policy could be fine-tuned even further so as to maintain our high standards so as not to exclude deserving candidates.

29. The consensus is that we can treat such candidates in the same way as Singaporean graduates who have come home with 2-2s from scheduled universities. With the same proven work record, the Board of Legal Education may interview outstanding candidates, and we are prepared to consider them for admission to the Singapore Bar under the various exemption schemes

Special Scheme

30. Let me also highlight that the local law firms should take advantage of the special scheme under the Rules and the Legal Profession Act, which allows foreign lawyers who have worked for a local firm for one year practising offshore work, to then practise Singapore law in prescribed areas such as banking, finance, corporate and other areas of legal or regional work after passing a qualifying examination administered by the Board of Legal Education. There is an examination scheduled to take place this June.

31. So, to sum up, we have had many changes to enhance talent within the legal industry. Let us see how these changes work, and refine it as we go along.

Review of the Diploma in Singapore Law Course / Practical Law Course Examination

32. Mr Chris De Souza and Mr Hri Kumar talked about the various requirements including the Diploma in Singapore Law course (DipSing), and Mr Hri Kumar talked about the bar examination. I shall give consideration with the Attorney-General’s Chambers to their suggestions - what they said about the Practice Law Course, the DipSing, and the idea of a local bar examination. I am not able, of course, today to give a firm indication of what the changes will be.

33. Let me say that Solicitor-General Walter Woon is heading the Committee which will implement the recommendations concerning matters affecting the Vocational Training Course and the whole area of professional training.

34. Many operational details are involved in this exercise, and a comprehensive and holistic approach will be taken by Mr Walter Woon’s Committee.

35. On Mr Hri Kumar’s proposal for a bar examination, this was in fact envisaged by Mr Justice VK Rajah’s Committee, which said: “The Committee believes that, eventually, it will become necessary to impose a second gatekeeper to entry into the law profession as the number of law graduates rise.” I also highlighted this long term goal when I announced the Government’s acceptance of the Report last December. Now that we have two law schools, and many routes of entry - scheduled Universities, Australian universities and so on - and more of our students are coming from these Universities from abroad, I think this will be a sensible direction to go in the longer term.

36. For now, since we are restructuring pupillage, rethinking the Board of Legal Education’s structure, bringing in Vocational Training Contracts and so on, let us get these changes in place first, and we will be better placed to move in that direction later.

Conduct of Lawyers

37. Dr Teo Ho Pin talked about the conduct of lawyers and the mechanisms for promoting professionalism.

38. Dr Teo must have had in mind the recent publicity over a few high profile cases of misconduct. The Solicitors’ Accounts Rules were significantly tightened in 2007 by the Law Society. The question one may ask is whether the new cases actually exploited loopholes in the amended rules. Of course, our rules must be practical, workable and adequate. The CJ has pointed out at the Opening of the Legal Year, that one option may be to completely bar lawyers from holding clients’ monies. At the same time, he noted that such a change would radically alter a conveyancing system which may have a serious effect on the efficiency of the property market, and therefore this requires careful thought and he has appointed a Judge of Appeal, Mr V K Rajah to head a working committee to look into this matter and consult various stakeholders and to consider the desirability and the feasibility of introducing this or any other schemes to deal with such problems. He has given him given 3 to 5 months to study the problem and make recommendations. Let us wait for the recommendations of this Committee.

39. I should also say that apropos the discipline of lawyers, it will be enhanced by some changes which have been proposed by Justice VK Rajah’s Report. There will be firm adherence to stipulated timelines at every step of the disciplinary process. The current 4-member Disciplinary Committee will be reduced to a one-man Disciplinary Tribunal. That Tribunal will consist of a Senior Counsel, retired Judge or Judicial Commissioner of the Supreme Court appointed by the Chief Justice. I think all these changes are designed to cut delays and ensure a more effective disciplinary process for lawyers

Developing Local International Law Expertise

40. Let me finally touch on Prof Thio Li Ann’s points on developing international law expertise. Basically, she has urged us to pay attention to developing local international law expertise. Let me say that the Government is paying attention to this. I myself have had discussions with the Attorney-General and officials from the Ministry of Foreign Affairs.

41. Of course, we do so not because of comparisons with Malaysia ie that they have so many Federal Counsel and we have so few lawyers. For that matter, if we compare the Foreign Service, Malaysia has over 100 overseas diplomatic missions and our Foreign Service has only 45. But we are not in a numbers game.

42. When we pay attention to this issue, it is because of the reasons that she mentioned ie that increasingly there is greater and greater involvement of international law. We have more conferences and forums where our delegations have to be sufficiently familiar with issues of international law so as to effectively participate in those conferences and meetings. And of course there are new emerging areas of international law, one being climate change.

43. I would also add, in parenthesis, that we are not developing local international law expertise because otherwise we would have to hire foreign counsel, as in the Pedra Branca case. Nearly every country in the world, as far as I know, which has a case before the ICJ or another international tribunal hires foreign counsel, not because of any aspersions on their local lawyers but for the simple reason that these foreign counsel have appeared before these tribunals regularly and have pleaded before these courts. And therefore it is important to use their services. Let me say that, for example, in the Pedra Branca case, much of the legal work ie the getting up and the drafting, was done by the Singapore legal team.

44. Of course the International Affairs Division (IAD) in the AG’s Chambers is a lean outfit. But let me say that having worked with them on many issues, I can say that they are a very dedicated and competent group, able to address issues of international law of immediate concern to us by prioritizing and optimizing their resources.

45. I have spoken to the Attorney-General and he has informed me that the IAD will be expanded and given more resources. And also, it will develop its expertise further and form pools or clusters of expertise in different areas of international law and practice. And there is a programme to emplace them and work closely with other agencies especially the Ministry of Foreign Affairs. Indeed, a scheme of attachment of IAD officers to MFA was already initiated a few years ago.

46. On her point regarding academia, our talent pool is small. We should be prepared to enlist the services of legal luminaries in the academia, as well as in the private sector. I know that the Attorney-General and the Solicitor-General are fully supportive of this. I am also glad to say that the Ministries and the statutory boards have also recruited officers who are lawyers, many of whom have background or training in international law. In fact, MFA has some 30 or so foreign service officers who are law graduates.

47. Finally, let me say that the Law Faculty of NUS, the Attorney-General’s Chambers and the Ministry of Foreign Affairs are working together to set up a Centre for International Law. This Centre will be the focal point of our common efforts to build a hub in international law. And hopefully it will bring together academics, legal service officers, diplomats and private sector lawyers to leverage on the experience and expertise already available in Singapore. I hope that the teaching and research will not just be wholly theoretical, but will contain a substantial dose of practical experience. We envisage that the Centre will concentrate initially on areas where we have some comparative advantage, eg, law of the sea, aviation law, international trade law and ASEAN law. But this is just an indicative list. We will have more details later on. Thank you.

Last updated on 19 Nov 2012