Legal Profession (Amendment) Bill

Order for Second Reading read.

3.02 pm

The Minister for Law (Mr K Shanmugam): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, the Bill makes three key amendments to the Legal Profession Act, to strengthen the legal industry in Singapore. Let me explain the changes.

The first of these changes makes it slightly easier for foreign expert counsel to appear in our Courts. The policy on the admission of foreign counsels to appear in our courts has evolved over time. Prior to1991, more QCs appeared in our courts. Many of us benefited from working with them, watching them in action, and pitting ourselves against them in Court. As our Bar developed, the conditions for admitting QCs were tightened. In 1991, admission was restricted to cases which were, in the view of the Court, of "sufficient" complexity and difficulty. In 1997, the first batch of Senior Counsel was appointed. Over the years, the Courts have gradually restricted ad hoc admissions of QC. This was in line with the 1991 Amendments. Meanwhile, Singapore has grown exponentially as a business and financial centre with a corresponding growth in the demand for top-tier legal representation. This has thrown up a different set of challenges. One of the key challenges has been that in several cases, litigants had difficulties getting a Senior Counsel (SC) in Singapore of their choice when they are up against a bank or a large corporate.

We have several SCs. The majority of them practise in large firms. These firms have extensive corporate practices serving a wide range of clients. As a result, many of our SCs from the big law firms often find themselves unable or unwilling to act for a client when a large bank or corporate is on the other side. The larger firms would have had some relationship with such banks and corporates. Thus, even if the bank or corporate does not instruct them in the specific case in question, the SCs will decline to accept instructions from the other side. The Courts have observed this to be quite a serious problem over the years. When he opened the Legal Year in 2010, the Chief Justice (CJ) said:

"€¦ there is another area of practice we might want to revisit – litigation, and the availability of top counsels to appear in our courts. Currently, we have a provision in the Legal Profession Act for the ad hoc admission of Queen's Counsel and Senior Counsel from other Commonwealth jurisdictions, in cases where legal expertise is not available. Fortunately, it is rare that we cannot find the necessary expertise since we have built up a pool of first class litigation counsel under our Senior Counsel scheme. However, many of them are no longer in active practice and not many appear frequently in our Courts, especially the Court of Appeal. In Opening of Legal Year 2002, I spoke on this topic and pointed out that a major corporate client with a court case could immobilise all the litigators in the large law firms, including our best Senior Counsel. [This is a point that the Chief Justice when he was Attorney-General thought about 10 years ago.] To maintain our eminence as an international business and financial centre, we should make available to litigants in important commercial and financial disputes a greater diversity of legal representation in our courts. I have discussed this with the Minister for Law. He agrees with me that this is an issue that needs looking into, and he intends to consult the Law Society on it."

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The CJ was very clear in what he has said and he did speak with me on several occasions on this matter. The CJ reiterated his point during the Opening of the Legal Year in 2011. Again I quote:

"This year will see the revival of the Singapore Circuit – not the Singapore Grand Prix – but something older which was sidelined by the need to grow our own pool of expert advocates. We now have a sizeable pool of Senior Counsel who provides advisory, arbitral and litigation services to offshore and onshore clients. However, experience has shown that their services may not be available to the general public in times of need. We have a very large financial and business sector in terms of contributions to our GDP – it grew from 24.4% out of a nominal GDP of S$158.1 billion in 2002 to 25.9% out of a nominal GDP of S$303.7 billion in 2010. But, the legal services provided to these sectors are dominated by a small number of large law firms. The result is that the best litigation counsel are usually conflicted out of advising or acting for claimants against big business as they are mainly concentrated in the large firms. So we need a greater diversity of expert counsel to advise, negotiate and pursue legitimate claims in court. This is not a new problem. The Ministry of Law has consulted the Law Society and the Senior Counsel Forum on the best way forward. We can expect amending legislation to be enacted this year. The Bar can rest assured that this will not be a free for all. The courts will admit ad hoc expert counsel on the basis of need, and not simply because a litigant can afford to pay. We do not want to disadvantage litigants who cannot afford equivalent representation, nor do we want to impede the nurturing of our own Senior Counsel. So, ad hoc admission will be on a case-by-case basis, with the court doing a judicious balancing of competing interests in each case."

Sir, clause 4 amends section 15 to deal with this situation. The amendments were made after frank and intensive consultations with the Law Society, the Forum of Senior Counsel and the Bar at large. The Bar was generally supportive of this proposal. Lawyers from mid-sized and small firms, in particular, were very supportive. There can now be a less restrictive approach to the ad hoc admission of QCs and foreign counsel holding appointments of equivalent distinction to QCs. Greater discretion will be given to the Courts. Nevertheless, the Chief Justice has stated during his address during the Opening of the Legal Year in 2012: that ad hoc counsel will only be admitted on the basis of need, and it will not be a free for all. The CJ will, before the amendments come into force, gazette the matters that the Court may consider in deciding whether to admit foreign counsel, and the Amendments give him the power to do so. There will remain prescribed areas of law, where ad hoc admissions need to be justified by special reasons. These are: constitutional and administrative law; criminal law; and family law areas.

The next key amendment relates to Singapore law practices. Sir, the legal services market today is a globalised one and increasingly competitive. Size, international presence and economies of scale matter. Consolidation is the trend. The international market is dominated by a handful of large international practices which secure the most lucrative transactional work. Singapore law practices realise this, and many of them are moving to embrace the new paradigm.

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To this end, my Ministry has been in consultation with the Law Society and a diverse range of Singapore law practices on the regulatory framework that will be needed for us. The thrust of the feedback that we have received is that Singapore law practices need more flexibility to collaborate with foreign law practices. One area which has been raised is the sharing of profits and the holding of shares in Singapore law firms by foreign entities. Currently, foreign lawyers can take profit or equity shares in Singapore law practices up to a maximum of 25%. Clause 10 amends section 130L, to clarify that foreign law practices may participate in such equity and profit sharing. At the same time, we will change our policies and rules to give greater flexibility to Singapore firms on how they collaborate with foreign law practices. Some of these changes are:

(i) Singapore law firms will be allowed to give an increased share of profit and equity in their practices to foreign lawyers, up from the current 25%;

(ii) When there is collaboration between a Singapore and foreign law practice, a lawyer will be allowed to be a partner in both practices;

(iii) A significantly greater degree of collaboration within Formal Law Alliances will be allowed;

(iv) Qualifying Foreign Law Practices (QFLPs) will be allowed to enter into Formal Law Alliances as well as Joint Law Ventures with Singapore law practices while retaining their QFLP licences.

There will be conditions imposed to ensure that the Singapore law practice remains in effective control of Singapore lawyers. Within these limits, we will allow Singapore law practices significant freedom and flexibility to tie up with foreign partners. The details of these changes will be put up on the Ministry of Law website after my speech.

I had earlier asked the Attorney-General to chair a Committee to undertake a comprehensive review of the framework regulating lawyers and law firms. The review will also put in place a systematic and clear framework for the future. We are also giving Singapore law practices more flexibility to expand their practices. First, Singapore law practices will be allowed to set up a related law corporation. That will give them more flexibility to structure their operations. They can also take advantage of corporate tax incentives. Second, Singapore lawyers will be able to hold executive appointments in companies set up by the Singapore law practice for related activities, such as patent agent services.

The third key area concerns mandatory continuing professional development. Last year, the Singapore Institute of Legal Education was set up. It was set up to administer legal education in Singapore. One of the Institute's functions is to oversee mandatory continuing professional development for the legal profession and that will be implemented later this year. Clauses 2, 5, 8(a) and (b) amend the Act to provide for the means to enforce mandatory continuing professional development obligations. The annual application by a lawyer for practising certificate will now need to be accompanied by a declaration in writing on matters to be prescribed by the Institute. This will include a statement that the applicant has fulfilled his continuing professional development obligations. If a lawyer fails to fulfil these obligations, the Institute can refer the case to the Law Society for disciplinary action.

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The remaining clauses make ancillary, consequential minor amendments to the Act. Sir, I beg to move.

Question proposed.

3.14 pm

Mr Hri Kumar Nair (Bishan-Toa Payoh): I declare my interest as a lawyer and a Senior Counsel. I will deal with the proposed amendments on the admission of foreign advocates and to allow a foreign law practice to become a shareholder in any Singapore law practice which is a law corporation or to share in the profits of any Singapore law practice. These amendments, like all Government policies, are born out of good intentions. However, the success of a policy is not determined by its intentions, but by its implementation and effect.

At the heart of the amendments is the desire to grow and add diversity to the legal market, and to give individuals and corporations greater freedom of choice. That is a good thing. However, free-market economics, while important, is not the only principle which should apply to the legal profession. In fact, hardly any country around the world, including those which practise free market economics, is completely free when it comes to legal services.

Let me touch on some relevant considerations. First, on foreign advocates. Not too many years ago, Queen's Counsels (QCs) were easily and readily admitted to argue cases in Singapore – that is, if you could afford one. The fact of the matter is that if one side appointed a QC, the other would inevitably ask for one as well – even if local Counsel were competent to handle the case. The result was that the larger, more complex cases were argued by QCs. All this was to the detriment of the local bar because it inhibited its development.

So we changed the rules. In 1991, the LPA was amended such that foreign advocates would only be admitted where the court is satisfied that a case is of sufficient difficulty and complexity and the circumstances of the case warrant his appointment. We also put in place a system of appointing our own QCs, or Senior Counsels. In 1992, the High Court had occasion to consider this change. Justice Chan Sek Keong, as he then was, noted that it intended to lay the foundation for the development of a strong local Bar by the imposition of more stringent conditions for the admission of QCs, but at the same time, to continue to allow litigants to avail of their services in appropriate cases, in cases where it is sufficiently complex and difficult. Ten years on, the High Court, in another case, commented that after nearly a decade following the change, it was fair to say that the local Bar had matured and was acquitting itself commendably. The Court also noted that there had been forged and carefully nurtured, particularly over those 10 years, a body of Senior Counsels, potential Senior Counsels and an impressive group of young advocates and solicitors, both in the public service and in the private sector, with excellent academic credentials and the right attitude.

A further 10 years on, our legal industry has stepped up further in quality and competency. To date, 68 Senior Counsels have been appointed, most of them from the private sector. Our local law firms have demonstrated that they are more than able to handle complex, high-value disputes. In the arbitration circuit where one crosses swords with law firms worldwide, our local firms have proved more than a match for others. The practice of law also attracts the best young minds in the country, and there remains a good pipeline of hungry, bright and impressive young advocates. What they need most is the experience and opportunities to allow them to become good advocates, as Horace Rumpole puts it, to stand on their hind legs and make an argument. That is because, where litigation is concerned, there is no substitute for arguing a case yourself. A large part of becoming a good counsel is from first-hand experience, dealing with complex issues, making tactical and strategic decisions, many times while on your feet.

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The proposed amendments may undermine all that has been achieved. First, it is unclear what the criteria for admission will be. The Minister says it will be slightly easier to admit foreign advocates. It is unclear what "slightly easier" means. The Honourable Chief Justice will now have the responsibility to specify the matters that the court may consider when deciding whether to admit a foreign lawyer. I am not against giving the Courts more discretion but it is the duty of the House, I feel, to make clear what policy considerations should dictate the exercise of that discretion as it is done under the current regime. Second, while the discretion is wider, the undisputed aim and the effect of the change is to make it easier for foreign advocates to be admitted to argue Singapore cases. It is a reversal of the earlier position. If this is the case, the question arises as to the need for this change, and who it is intended to benefit. Now I would like to make two points.

First, I am concerned that if we relax the criteria for ad hoc admission, we might end up going back to the old days of having many foreign advocates walking the hallways of our Courts, and stifling the development of our local talent. I accept that there may be areas where we lack expertise. But the LPA already allows for ad hoc admission in such cases.

It has been suggested that some litigants find it difficult to appoint local Senior Counsel, particularly when up against a large institution. Such institutions have on their panels the larger law firms and a good number of Senior Counsels is therefore unable or sometimes unwilling to act against them. I accept that happens in practice. I am not sure, however, whether this criticism is entirely sound as there are a number of Senior Counsels who do not practise in large firms. And it is unclear whether the litigant has made reasonable efforts to engage them. However, in cases where the litigant cannot secure a Senior Counsel, then I agree that he should be given more leeway to apply to admit a foreign advocate to argue his case for him.

However, the existing admission requirements can then be modified to allow for admission of foreign advocates in such cases. What I question is whether we need to make such wholesale and drastic changes to deal with that special case. Can we not tweet the current regime as opposed to having one which makes the criteria less clear and more ambiguous?

Parliament struck a balance in 1991 which it felt was appropriate. It allowed our local firms and legal industry to grow, while at the same time ensuring that in areas where we lacked the experience and knowledge, we could import that expertise. The formula has worked and I hope that the balance will continue to be struck under the proposed new regime. Can I ask the Minister to tell the House what considerations will now apply to the admission of foreign advocates? I understand that the Chief Justice will be presenting the considerations but could the Minister tell the House what consideration is being considered before that change is put into effect? More importantly, does the Minister have any concern that the development of the local Bar would be adversely affected and, if so, are there any plans to address this?

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Mr Speaker, on the second amendment of share ownership or profit sharing, the proposed amendments would also allow, for the first time, a foreign law practice to own shares in a Singapore law practice. The foreign law practice would have to comply with conditions which would be prescribed as well as conditions the Attorney-General may think fit to impose in such cases.

We have incrementally allowed foreign law firms to enter our legal industry. We have the Joint Law Venture licence, the Formal Law Alliance licence, the Qualifying Foreign Law Practice licence, the licensed foreign law practice licence and finally the representative office licence. There is no doubt that foreign firms have a role to play in our legal industry, and their presence enhances Singapore's position as an international hub for businesses. By setting up shop in Singapore, the firms provide expertise that may be lacking, increase the breadth of choices for clients and even provide good jobs for Singaporean lawyers. All these are good things.

This new move, however, suggests that the Government believes that the current framework is lacking in some respects. Allowing foreign law firms to hold an equity stake in a local law practice represents a change in the development of our legal landscape, and I think we should be careful as we go down this road. I am concerned about allowing a foreign law practice to own, and more importantly, dictate how a Singapore law practice functions. We must never forget the legal profession is a noble one. A lawyer serves his client but he owes a higher duty to the Court and to society. This requires sensitivity to local conditions and circumstances. By allowing a foreign legal practice to own part of a law firm, there is a serious risk that, with their financial muscle, they will now call the shots from abroad and dictate how the local firm should be run.

This problem was highlighted by one Mr Lindsay Esler, Operations, Managements and Projects Partner of an indigenous Hong Kong firm, who highlighted in an article that promotion decisions in the branch offices of international firms are generally made by the home office. The partners in the home office might have drastically different ideas regarding promotion criteria, and local lawyers would have to bend to the will of their foreign bosses if they wish to be promoted. It is also not uncommon to hear of glass ceilings for local lawyers when it comes to promotions. Furthermore, in a firm where the final decision lies abroad, the bottom line becomes paramount. Obtaining maximum financial returns might not necessarily coincide with what is best for the legal industry and, more importantly, what is best for society. In April 2004, for example, Denton Wilde Sapte axed its entire Asian network and, in January 2012, CMS Cameron McKenna laid off 69 of its 75 staff in Hong Kong. Here at home, when the financial crisis hit in 2009, The Business Times reported that foreign law firms in Singapore started trimming headcount, freezing salaries and asking staff to work fewer hours. In times of crisis, there may be less loyalty to Singapore and Singaporeans.

An increased presence of international firms could also affect the ability of local firms to obtain high quality hires, as they cannot afford to compete with the starting salary often offered by these larger firms. This might appear like free-market economics at its best and it would be so if we were only talking about commercial areas, the mainstay of foreign firms. But this may mean fewer quality graduates entering into domestic disciplines, such as family law and criminal law. These areas tend to be dominated by smaller firms which are already struggling today to find lawyers to hire. There is a serious risk that these practice areas may be hollowed out.

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Could the Minister clarify the gaps in the current regime this move is intended to address? Does the Minister foresee our legal industry heading in the direction of Hong Kong where international law firms dominate nearly every area of the law, and local firms have all but disappeared? Is this a consequence the Government is prepared to accept? I also hope the Minister can clarify the nature of the conditions which will be imposed on the foreign firms to take up equity stakes, whether such conditions will be made public and how his Ministry intends to ensure that these conditions are obeyed. With that, Sir, I support the Bill.

Mr Speaker: Order. I propose to take the break. I suspend the Sitting and will take the Chair again at 3.50 pm.

Sitting accordingly suspended

at 3.26 pm until 3.50 pm.

Sitting resumed at 3.50 pm

[ Mr Speaker in the Chair]

LEGAL PROFESSION (AMENDMENT) BILL

Debate resumed.

Mr Pritam Singh: Thank you, Mr Speaker. Firstly, I would like to thank the Ministry for re-considering the original amendments in light of public feedback and the legal fraternity's reservations to some of the proposed changes to the Legal Profession (Amendment) Bill.

It is noteworthy that the Ministry has decided to delete the proposed amendment to section 35 after public feedback, in light of one of the central pillars of arbitration – party autonomy; in recognition of the fact that clients should be free to choose whoever they believe is best suited to represent them in arbitration proceedings. I understand many in the arbitral community welcome this view, and the Law Ministry should be commended for doing away with this proposed amendment.

Mr Speaker, it leaves me to pass some views on the ad hoc admission of Queen's Counsel. According to the MinLaw public consultation paper on the amendments, the original manifestation of this amendment called for a proposed licensing scheme that would give rights of audience in the local courts to a small number of "independent counsel". The purpose of this licensing scheme, according to the consultation paper, was to address the shortage of Senior Counsel in commercial and financial disputes. However, after feedback, MinLaw noted that preference was for Queen's Counsel to be admitted on an ad hoc basis, rather than through the Licensing Scheme.

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But while the current amendments ostensibly seek to make it easier to admit QCs for commercial disputes, it also statutorily raises the threshold for the admittance of Queen's Counsel from criminal cases to other areas of domestic law, such as family, constitutional and administrative law. What this suggests is that the freedom of Singaporeans to choose the appropriate counsel for legal advice is going to be statutorily curtailed as clause 4 amends section 15(2) to say "any area of law prescribed for the purposes of this section", rather than just criminal matters, as it currently stands. Effectively, the amendments set out two standards, both of which are clearly not spelt out in the Bill, but are understood to be those stated in the consultation papers.

There was some opposition to the amendment to section 15 from the public, I understand, and the Ministry replied noting that the Court still had the discretion to decide whether to admit Queen's Counsel on a case-by-case basis, effectively stating that such Counsel can still be admitted in cases involving domestic areas and that the factors taken into consideration in such an application would be a matter for the court to decide. This position from the Ministry then begs the question: why is there a need to amend section 15, especially since any application to admit a Queen's Counsel remains a matter for the court to decide?

Mr Speaker, Sir, perhaps the desire of the Ministry to open the door to QCs in commercial matters is an opportune time to consider whether the courts should be left to decide whether the admittance of QCs would be necessary or not. It is noteworthy that public confidence in our judicial system is not low. Insofar as the proposed amendment to section 15 is concerned, the changes effectively operate to narrow the scope of the judiciary's flexibility to allow the admittance of QC and statutorily sets an even higher threshold for family, administrative and constitutional matters, amongst others. A more propitious course of action would be to allow the judiciary to assess each case, regardless of area of law – commercial or otherwise – on its own merits, and to assess whether the questions of law or fact necessitate the admittance of a QC.

Mr Speaker, Sir, over the years, albeit in a handful of significant cases, some local lawyers have found it difficult to engage senior local lawyers to act in cases where there were political overtones. Like the admission of Queen's Counsel for complex commercial and financial disputes – which is what this Bill ostensibly seeks to address – in the same vein, there is a concern that the door to entry for QCs should not be restricted for politically-charged cases either because senior local lawyers are reluctant to accept such briefs, or that only very few are willing to do so.

Sir, there are, of course, many pros and cons to keeping the door ajar for a Queen's Counsel. A natural response would be that opening the door to them could take away work for local lawyers. This concern should not be taken lightly. But to mitigate this, any individual or corporate who seeks redress in a local court should expect to make clear to the Bench why he or she needs a foreign lawyer, regardless if the case involves commercial law or local law – my view, Sir, is that it is simply a case of one standard for all, with the courts, not Parliament, determining that standard and applying it equally across all legal practice areas.

This would result in greater consistency insofar as the development of Singapore law as a whole is concerned, rather than the current proposed amendment which could portend a bifurcation in the development of Singapore law in the years to come – a highly up-to-date common law on commercial matters to the benefit of businesses, but a regime that could be behind the curve on local jurisprudential matters to the detriment of Singaporeans, as the brightest international legal brains have many more hoops to negotiate before being allowed to take on a domestic matter. To a lesser extent, the diminished prospects of local lawyers being invited to advise clients in foreign jurisdictions on non-commercial matters or penning cutting-edge academic commentary on local law could also be apparent over time when compared against their commercial colleagues.

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Mr Speaker, Sir, in light of the fundamental changes to the local legal landscape over the past few years, especially with the entry of foreign lawyers and law firms, some local lawyers fear that the Government has gone too far in its drive to liberalise the legal sector, and that the qualified entry of QCs for commercial matters is but evidence of this – an about-turn in view of the judicial impetus to develop Singapore law from the 1990s and the appointment of local Senior Counsels to practically remove the necessity of QCs.

To some Singaporeans, there is a concern that opening the door for QCs in commercial matters is myopically driven by economic interests alone as the international corporates may seek to extract quid pro quo from the Government, that is, if you want us to come and invest, we want to bring our own lawyers. Mr Speaker, this emotive can be quite strong in small and medium-sized firms. Opening the door to QCs, especially in areas of law that are financially lucrative, is perceived by some to further prejudice the prospects of small and medium-sized firms who cannot compete.

To conclude, like the response of the Ministry in cancelling its proposed amendment to section 35 on arbitration issues, perhaps the Minister could review the proposal to admit Queens Counsel, in a holistic manner rather than solely from the perspective of a shortage of Senior Counsel to advise on commercial and financial matters. I am of the view that the judiciary and not Parliament is best placed to decide if any case heard locally warrants the admittance of a QC, regardless of the area of law. Parliament need not over legislate, but allow the judiciary space to shape the contours of Singapore's legal development in an independent way, keeping in mind the interests of local and foreign lawyers, and, of course, the local Bar. With that, Mr Speaker, thank you.

3.59 pm

Mrs Lina Chiam (Non-Constituency Member): Mr Speaker, Sir, at first glance, the replacement of section 15 of the Legal Profession Act seems like a U-turn after the years of the development of our own legal profession. In essence, we are now going to make it easier to admit persons outside Singapore before our courts – this will be the effect of removing the requirement of a case being of "sufficient difficulty and complexity". If there are to be foreign admissions, then it seems reasonable for it to be shown that the expertise is really required in each individual case.

Nevertheless, I am willing to accept the Minister's proposal. I agree with Mr Pritam Singh in inviting this House to consider admitting Queen's Counsels for cases of a political nature, such as defamation suits involving Opposition politicians. I say this because of a number of high-profile defamation cases of complex nature, where these litigants were unable to hire Senior Counsels or their representatives. The ambit of the amended section should also include Queen's Counsels with constitutional law expertise given that the complex arena of constitutional cases, such as the mandatory death sentence legal challenge in Court in 2010, straddled on international law which local lawyers needed the expertise of a Queen's Counsel. Edward Fitzgerald QC of London, an expert on human rights law, was present in court as part of the research team to lend his assistance on a pro bono basis in a capital case before the Court of Appeal but did not argue the case as already the current requirement for ad hoc admission is already too stringent.

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Mr Speaker, there are a number of hon Members in this House who are distinguished Senior Counsels. But would they be willing to take up such political or constitutional cases? Who else in Singapore can tackle such cases of a sufficiently difficult and complex nature, if our Senior Counsels decline to take them up? I therefore urge this House not to impose on a significantly higher threshold for the admission of QCs in areas of constitutional and criminal law which the draft Bill seeks to impose at paragraph 6 of the said Bill. I am making this plea before this House so that Singaporeans and the local lawyers are not denied of such eminent assistance on local issues concerning fundamental liberties which should not be ranked in secondary importance to commercial matters.

This is precisely where I think the admission of a Queen's Counsel is most necessary. But if these cases fall into the category of legal practice for which the courts will not admit foreign legal practitioners, then I question the fundamental rationale behind this Bill. Could I, therefore, seek the Minister's clarification and explanation on this issue?

4.01 pm

Mr Christopher de Souza (Holland-Bukit Timah): Mr Speaker, Sir, thank you for allowing me to join in this debate at the Second Reading of this Bill. I support the Minister's intention to improve Singapore's status as a legal hub in Asia, if not the world. I therefore rise in support of the Bill but I would also like to flag some unintended negative consequences the Bill may bring. Therefore, I would seek the Minister's assurance that the Ministry for Law will deter or prevent these consequences.

At the outset, I wish to declare my interest. I am a member of the Singapore Bar and practise commercial litigation in a local partnership. The concerns I alluded to about are principally surrounding the proposal to widen the scope for the ad hoc admission of Queen's Counsel (QC) in Singapore courts. Under the new Bill, the requirement for a case to be "sufficiently difficult and complex" is removed. This Bill, if passed, may have unprecedented implications for the legal profession in Singapore. The question is whether these implications have been comprehensively thought through and systemically addressed by the Ministry. The proposed amendments have far-reaching consequences that will impact, whether beneficially or adversely, the entire local legal scene. Hence, these suggestions must be carefully reviewed. There must be sound policy reasons in support of them in order to justify these changes.

My understanding is that the main policy reason for giving QCs more scope to appear in Singapore courts is to address what is perceived to be a shortage of elite lawyers in Singapore who can represent opposing parties in high-end commercial and financial disputes before our courts. The Ministry has also added a qualifier to the proposed amendments that certain areas of practice, such as criminal, constitutional, administrative and family law, will remain at least more protected. The fundamental question here is whether or not the policy reason behind the proposed changes is indeed a sound one.

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Let us examine the premise behind the policy rationale and the underlying assumptions. The main assumption is that there is a shortage of sufficiently qualified lawyers in Singapore who are capable of representing parties in certain specialised areas of law, in particular high-end commercial and financial disputes. Allow me to share with this House that this assumption has been met with much disquiet at the local Bar. A case may certainly be made for the appearance of independent counsels for cases involving areas of law that are unfamiliar to Singapore lawyers or where there are potential conflicts of interests should any arise. However, I do not agree with the view that there is an actual shortage of talent who are capable and qualified.

Let us pause and make a balanced and fair analysis that is accurately rooted in factual realities. First, I think the fiction that there is a dearth of experienced and competent lawyers within our local Bar is one that can easily be debunked on the facts. To date, we have a total of 68 appointed Senior Counsels, most of whom have many years of litigation experience. They occupy diverse positions within the legal fraternity and some have accepted judicial positions on the High Court Bench. Do we really lack the breadth and expertise in our Senior Counsels' ranks and other practising litigators to take on complex cases, even those that fall within specialised areas of law? I think not. On the contrary, our local Bar is extremely privileged in terms of its membership. It comprises exceptional luminaries who can clearly hold their ground and more than measure up to some of the best litigators in the Commonwealth.

Perhaps, then, the issue is one of conflict of interest. In essence, the issue here may be that there are insufficient qualified Counsels who will litigate against a big MNC or a bank but this concern is also questionable. The Bar includes stellar litigators who do not necessary hail from the big firms and who will be in a position to take on larger institutions. A few outstanding examples are Mr Kenneth Tan, Mr Michael Hwang and Mr Chelva Rajah. Two of these three litigators were appointed Judicial Commissioners before returning to private practice as leading litigators. So, is there really a need to have QCs to fill a gap that does not seem to exist?

Proponents of the proposed changes have raised attractive arguments for widening the scope of admission of QCs. Yet, these purported benefits should not be allowed to obscure the real question at hand. Is the existing arrangement, which already allows for the ad hoc appointment of QCs to argue cases locally, not an adequate framework within which these objectives can already be fulfilled? I repeat: is the existing arrangement, which already allows for the ad hoc appointment of QCs to argue cases locally, not an adequate framework within which these objectives can already be fulfilled?

It may be prudent, Sir, at this point in time to consider the rationale for the Senior Counsel scheme in Singapore and why it was even implemented in the first place, to take a leaf from the speech of the learned Member, Mr Hri Kumar. The appointment of Senior Counsel was a formal recognition of the emergence of highly specialised litigators in Singapore. The position of Senior Counsel was intended to be analogous to the rank of Queen's Counsel in England. The appointments were precisely intended to encourage home-grown advocates instead of reliance on the ad hoc admission of Queen's Counsels. The selection process is a highly rigorous one, carried out by a selection committee comprising the hon Chief Justice, hon Attorney General, and Judges of Appeal. In appointing a member of the Bar as Senior Counsel, the committee must be of the opinion that by virtue of the person's ability, his standing at the Bar, or special knowledge or experience in law, the person is deserving of such a distinction. Such stringent qualifying criteria, as well as the intention behind the scheme, which is the grooming and nurturing of a slate of Singapore advocates, are compelling counter-arguments to the need to allow more QCs to appear in local courts.

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As stated earlier, by virtue of the qualifying criteria, the quality and capabilities of our current Senior Counsels (SCs) are virtually guaranteed. Even if specialised knowledge is required from foreign sources who may be better versed in specific areas of law, are present demands not sufficiently met within the existing framework which already allows for the ad hoc admission of QCs and their equivalents on a case-by-case basis? It is evident that the courts have, thus far, taken a fair and reasonable approach which enables the special expertise of QCs to be tapped on when needed. Would widening the scope to allow more representation by foreign counsels better serve existing needs? Or are there potential adverse implications to such a move that would render it possibly unfeasible?

Mr Speaker, Sir, if the main rationale underlying the SC scheme is to nurture "home-grown advocates of the highest calibre", then is not the proposed liberalisation an effective reversal of that policy? How will allowing more QCs in to represent parties in local courts enhance the quality our local Bar? To be a high-quality litigator, one has to go to court regularly and fight cases of significance. One of the dangers of over liberalisation, from the perspective of developing a high-quality Bar at least, is the risk of alienating lawyers in the middle and junior ranks who are the very people who need the experience in order to build up their legal skills and expertise. The counter-argument that our younger lawyers would actually benefit from having the guidance and counsel of these elite lawyers is, in reality, a weak one. The truth is that these foreign counsels will likely look out for and work with their own juniors in London in strategising and preparing for their case. Where, then, is there space for a Singapore lawyer to learn in that environment?

Another issue that emerges from the proposed changes is that it could convey the message that the local Bar lacks expertise. The Law Society has rightly expressed concern in a submission that removing the criteria about complexity and circumstances of the case would send the signal that these issues were no longer relevant. Accordingly, QCs should only get admitted if, for some exceptional reason, the expertise they are offering is not available from local lawyers.

The proposed amendment should send a stronger signal in acknowledging the public interest in having a strong and independent local Bar. This leads us to consider our very own legal heritage. There is something unique about the Singapore Bar: its own unique and precious tradition, its own blend of jurisprudence, its own motion of court craft. What will happen to our traditions if we are overly open to foreign QCs arguing cases in our Singapore courts? I am not a protectionist, but we should not be so open as to rock the foundations.

This leads me to my next point. Another important reason why we cannot be overly reliant on foreign talent in the context of our legal profession is because our lawyers are the talent pool that feeds the High Court Bench. Currently, we have an excellent Bench. I am personally grateful to have been trained by many eminent judges when I was a junior judicial officer. Many of them were top litigators in their cohorts. They look at a case, dissect it, decide it through their wealth of knowledge in the law, but also, and importantly, by relying on the reservoir of experiences they accumulated as litigators in private practice. The local Bar is supposed to produce such men and women of top calibre to sit on the Bench. We should pause and recollect that the Bench is an integral institution in the separation of powers our Constitution envisions. It must be staffed with the best and most capable minds, as it is now, who have experienced the marinade of courtroom advocacy over many years. QCs cannot be appointed to our Bench. They are not Singaporeans. So, will an over-reliance on QCs rob Singapore of the talent she continues to require of those who sit on her Bench?

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This Bill is unlike the liberalisation of the accountancy sector, an imperfect analogy which some have attempted to draw, as accounting firms do not feed any institution of government. We must look far ahead and consider who will then sit on the Bench. Ultimately, this ties in with the broader issue, which is: what is the direction in which the Singapore litigation landscape will develop? To answer this question as I near the end of my speech, I quote a reassuring pronouncement of the hon Chief Justice Chan Sek Keong at the Opening of the Legal Year this year. The Chief Justice stated, "We can expect amending legislation to be enacted this year. The Bar can rest assured that this will not be a free for all. The Courts will admit ad hoc expert counsel on the basis of need and not simply because a litigant can afford to pay. We do not want to disadvantage litigants who cannot afford equivalent representation nor do we want to impede the nurturing of our own Senior Counsels, so ad hoc admission will be on a case-by-case basis with the Court doing a judicious balancing of competing interests in each case."

The Chief Justice's words artfully marry the need for liberalisation with the preservation of our legal traditions for the benefit of parties and the profession as a whole. Like I said before, I am not a protectionist and I can fully appreciate the difficult task the Minister for Law has before him: that of a clear realisation that Singapore must remain global and porous to attract the best and to provide the best service the world can offer while at the same time personally realising that fundamentals, which have served our unique legal tradition well, should not be discarded or usurped by untested foreign forces too quickly. It is a fine balance but one I am confident that the Minister will strike very well.

The jury is out whether this Bill will be the Bar's Valentine, but if the Minister gives his assurance that the possible negative effects will be kept in check, this liberalisation may pave a win-win for practitioners, and most importantly, Singapore's legal institutions an evolving heritage. It is with this optimism that I support the Bill.

4.15 pm

Mr K Shanmugam: Sir, let me thank all the Members who have spoken. Let me first deal with the issue of foreign expert counsels.

Mr Hri Kumar, Mr de Souza, Mr Pritam Singh and Mrs Chiam have raised some questions on the amendments relating to the admission of QCs. They have asked about the considerations that will now apply to all ad hoc admissions. Mr Kumar and Mr de Souza are also concerned that the changes will stifle the local Bar.

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Let me clarify, first, why the Amendments allow for counsel of equivalent distinction to QCs.

The Amendments set up the quality requirements while giving flexibility to clients. For example, Australia has its own Senior Counsel scheme and, in some areas, their expertise might well be more relevant in Singapore. I think, more importantly, the question which I think all the speakers have raised in this context is: why are these changes needed?

I spoke at considerable length in my original speech, and I am not sure that the thrusts of my comments have been fully taken in.

In 1991, the concern was with developing the local Bar, and even then, the intention was to allow QCs to be admitted for complex commercial cases. Strict judicial interpretation has helped to build up our local Bar and a core of SCs. Today, the challenge is not so much the quality of our local counsel but the availability of SCs in commercial cases.

Mr Kumar, and, I think, Mr de Souza, if I am not wrong, gave some number of SCs. Actually the number of active SCs is about 40. This figure has to be set in context as to why I said what I said in my opening speech. Out of the 40 active Senior Counsels, 35 come from large or medium-sized firms. I explained why many SCs are often conflicted out of complex commercial and financial cases. It is because their firms are conflicted out, or their firms do not wish to accept instructions by clients who wish to sue a bank even though those firms are not instructed by the bank or a corporate in that particular case. Members who spoke would have listened to the explanations.

Mr Singh kept referring to the "supposed justifications" for these Amendments. They are not supposed, they are the actual justifications.

I will highlight three points. The Chief Justice said in his Opening of the Legal Year speech that he has noticed this issue since 1992. I do not think anyone in this House questions what the Chief Justice says, or that he meant what he said. Second, he made the point quite strongly in 2010 − I do not need to repeat his remarks which I read in my speech just now − that we need to deal with this situation because the Courts have noticed that in a number of cases, the man in the street – the person who wants to sue a large corporation or a bank cannot find the SC of choice. He repeated it in 2011; he made the point that he has been in discussions with me.

So Mr de Souza says he does not think so, that there would be difficulty. I accept that he has this perspective. I have the views of the Chief Justice, distilled not only by his own observations but also from the observations of the entire Judiciary. I have to give some weight to what the Chief Justice says − in fact, considerable weight. Because I proceed on the basis that he is impartial, he does not look at it in the interest of any particular section or segment of lawyers or profession, that he looks at it in the broader interest of Singaporeans as a whole. And the question for this House is not so much whether this Amendment benefits or is to the detriment of a small segment of lawyers. The question for the man in the street, the litigant, is: is this beneficial? For the ordinary Singaporean, is this beneficial? You have the Chief Justice's views.

Mr de Souza would know that I myself have some personal experience in the matter, both in the context of having been a Senior Counsel and having practised in a large firm. On the ground, we know what the facts are. The banks, MAS, responsible stakeholders welcome this move.

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Members will recall that the Chief Justice spoke about this in 2010 and 2011. This Bill is being moved in 2012 because my Ministry took a considerable time in getting feedback and having discussions on the issue. In that context, we wanted feedback from every segment of the legal profession – the Senior Counsel Forum which comprises all the SCs, the major law firms, as well as the medium and small law firms. The clear overwhelming preference among the small and medium law firms was that they wanted this. The Senior Counsel Forum was a little less clear.

What we had put forward originally was the idea that we will have three or four lawyers who would be given a licence to practise. In that way, the numbers are restricted for very much the reasons that Members of this House have articulated − that we should support and nurture the local Bar. And we thought one way of doing it is to have a small number of QCs. But the Senior Counsel Forum was quite decisive. Mr Harry Elias, as coordinator, sent it to me in writing that, not unanimously but overwhelmingly, the SCs preferred the ad hoc admission route to be liberalised rather than having three or four being chosen.

In that context, if I can take Mr Pritam Singh's point that, for some reason, it might disadvantage the small and medium firms. Indeed, it is the reverse, because there are not too many Senior Counsels in small and medium-sized law firms, as I just gave Members the figures. Often, what happens in reality is that many of our banks or large corporations − which is the kind of case we are talking about – will go to a major law firm. They will get an SC and the other side may go, sometimes not infrequently, to a small or medium-sized law firm, something along the lines of Mr Lim Biow Chuan's law firm.

The first thing for the client to ask is – it is human psychology – the other side has an SC, am I going to get an SC? Even if Mr Lim or his peers are entirely competent to handle the case, the psychology is, can I have an SC? And then the problem starts because the firm will hunt around for an SC and, often, and I can only quote what the Chief Justice said, "they will find it difficult to get an SC". It has happened − I am not saying it is 100% − but it has happened frequently enough for the Chief Justice to have noted it and mentioned it twice, and put it in very concrete terms, that there needs to be an amendment.

So, it is in that context and which is why when we consulted the small, medium-sized law firms, they were overwhelmingly in support of this recommendation. It benefits the small man – small, as in the individual – but you do need to pay for a QC obviously; so I do not mean financial means. But for the individual or person who is prepared to fight, it benefits that person. At the same time, MAS and the banks also welcome this because it gives them greater flexibility. So, on different ends of the scale, people welcome this approach.

As for the Members' queries on the criteria for admission, the changes give the discretion to the Court to admit foreign counsel on a case-by-case basis. Mr Hri Kumar asked if I can set out the criteria. I think what is being done is not radical. If you look at clause 4, the original provision, section 15, reads: "Notwithstanding anything to the contrary in this Act, the court may, for the purpose of any one case where the court is satisfied that it is of sufficient difficulty and complexity and having regard to the circumstances of the case, admit to practise as an advocate and solicitor ...". We have proposed to remove the phrase, "where the court is satisfied that it is of sufficient difficulty and complexity and having regard to the circumstances of the case", basically, reverting to the 1991 position, which is the subject of a case law. There are criteria and guidance on what sort of factors the courts would have to take into account and, going further, bearing in mind the Chief Justice's remarks in the Opening of the Legal Year this year, that it is not to be a free-for-all. And the courts want to be very careful about admissions, precisely for the kind of reasons that Mr de Souza spoke about.

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We are amending the section to have an additional provision which gives the courts greater flexibility in identifying the factors and gazette it so that it is transparent. And the Chief Justice has made it clear that it would be a fairly strict approach and that is an indication that has been given. The Chief Justice has given guidance, in his speech, on the approach the courts will take.

For the balance between Parliament, the Legislature and the courts, Mr Singh feels that we should give more discretion to the courts; others here feel that we should set it out. I agree it is a question of getting the right balance. It is a question of judgement in these matters because each case can turn on its own facts. My own preference is to tilt more towards giving discretion to the courts with the general guidance of setting up the framework in the legislation, and that is what we seek to do, by removing the phrase "of sufficient difficulty and complexity".

Mr Singh also made a number of other points on this area. I think his first point was, why amend section 15 because it already gives the courts discretion? I went through clause 4 of the Bill – what it does is that it removes some phrases, and as a result of that, it gives the courts greater discretion. So I am not sure that we are on different wavelengths. I think the purpose of the amendments is actually to give the courts greater discretion in complex civil matters.

The second point that Mr Singh made was that there may be, as a result of these amendments, a bifurcation – I think this is what he said – where in commercial law cases, the quality of the lawyers would be much higher and would be international, whereas in criminal cases, the quality would be lower because it is more difficult to admit foreign lawyers in that area. Bearing in mind the courts continue to retain the discretion to admit QCs or foreign counsel even for those cases – I think we accept that the bar is different − would it result in this bifurcation? That argument proceeds from an assumption that I do not share, which is that local lawyers are simply not good enough. I do not agree because − of course, in any profession, there will be a gradation − if we can accept that the best of the local lawyers will be equal to the best anywhere in the world, then there should be no bifurcation.

The real rationale for the approach here is that in complex civil cases, for the reasons that I have given, we frequently find that the litigants are unable to engage the best of the SCs that they do want to engage. That is the problem. If we accept that to be a problem -- and I have quoted the Chief Justice a number of times and I accept what he says -- then we will see immediately why a distinction can be drawn between criminal cases and civil cases, because in criminal cases, we do not have that problem. There is no difficulty for any top SC accepting a brief in a criminal, constitutional, or public case because there is no real issue of conflict. Or even if there is no direct conflict, it is not as if the law firm is on a retainer which prevents any particular SC from taking up a case on a public or constitutional criminal matter.

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Underlying Mr Singh's questions was another thread, which is probably his real question: would local lawyers be afraid or unwilling to act in, say – I cannot remember whether it was he or Mrs Chiam who used the words – "political-type cases" or libel cases. I think that suggestion would do local lawyers some injustice because I do believe, at the end of the day, local lawyers will step up to handle any case where they feel that representation is necessary. I am not one to cite my personal experiences frequently, but the fact that I was in a large firm that dealt with many matters for Government-linked corporations did not preclude me from acting in a libel case for The International Herald Tribune (IHT) against the then-Prime Minister, Senior Minister and Deputy Prime Minister. It is really the timbre of the man and not this supposed fear, that matters. There are many lawyers in our profession – and I am certainly not holding myself out as the example – who, I am sure, will be prepared to do the same.

Mr Singh made a further point that international corporations – I think he did not use the word "blackmail" – may say they would not come into Singapore unless they bring their own QCs. I am not sure international corporations will say it in those terms, but the sense of MAS and the banks is that greater flexibility obviously helps us in becoming a more attractive centre for business. Here, again, we have to carefully weigh the advantages. My reasons given earlier on as to why we need to make this move in the context of the learned Chief Justice's remarks are good and independent, and stand by themselves about the representation against large corporates and banks. But independent of that, if the financial services sector would benefit from a slightly more liberal approach to the admission of QCs, then that is in the interests of Singaporeans as a whole, even if it results in a few cases where local lawyers may be employed as the second Counsel. Here, it is a weighing of the interests, and I think we have to go by the judgement of the professionals, that is, the financial services industry and what MAS thinks about the matter.

Mrs Chiam, and Mr Singh as well, suggested, does this represent a U-turn? It does represent going back to the position in 1991. We had the position from 1991 to now. We have built up a corps of SCs. But we cannot stand still even if the situation calls for a review. The situation calls for a review because of the factors that I have highlighted. The changes were asked for by the courts, and we believe those changes are necessary and the point is a legitimate one.

I now turn to Mr Kumar's and Mr de Souza's comments about foreign law practices with share ownership in Singapore law practices. The first point to make in this is that this is not really a fundamental change because section 130(l) of the Act already allows that. It allows foreign lawyers in their personal capacities to hold shares in Singapore law practices. All that this amendment does is, not just foreign lawyers, but also allows law practices to have that sort of ownership. And it gives the Singapore law firms – and that is important to emphasise – the flexibility. Firms may now allow foreign share ownership through allowing lawyers or a structure for firm-to-firm tie-ups.

Another point which I think needs to be emphasised is that these changes do not mandate or direct the Singapore law firm to do anything. What these changes do is to give greater flexibility to the Singapore law firms. The underlying fear in some of the speeches is that once we give that flexibility, Singapore law firms will do these things and, lo and behold, what will happen?

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What is the duty of the Government in this context? Do we try and hold the line when the local law firms come to us and ask for this flexibility because they see the international scene changing and they need to change with that? Or to believe that we know better than them on how they should structure their business relationships? Law firms which believe that this is not the way to go do not need to do these things. This is only a provision that allows such measures to allow law firms to decide what is in their own best interest, rather than we doing it by dicta.

A consistent feedback that we have received from law firms is that the current regime is too constraining. It does not allow them to structure business models and strategies that would allow them to compete effectively with international firms which are increasingly dominating the high-value cross-border transactions. Even our larger and stronger law firms have told my Ministry that they do not have the international presence and network to compete and that they can only acquire such competencies and capabilities through closer partnerships with foreign firms. Mr Kumar asked if we will become like Hong Kong, where international firms dominate several areas of the law. I had earlier said that the international legal services market is an intensely competitive one. In 2007, the Committee to Develop the Singapore Legal Sector issued its report. That report highlighted the importance of helping our Singapore law practices to capture a greater share of the regional market even as we attract more foreign law practices to Singapore as a base for regional work. Among other measures, we amended the Legal Profession Act in 2008 and issued six Qualifying Foreign Law Practice Licences which allowed foreign law firms to practise in the permitted areas of Singapore law, notably commercial, corporate and financial law. That scheme has achieved its objective of bringing in more international legal work to Singapore. About 80% of the revenue of the QFLPs amounting to about $170 million was derived from offshore work in the second year of their licences. At the same time, the QFLPs have provided substantial opportunities for our young Singaporean lawyers. The QFLP scheme was not the first step in the liberalisation of the sector. As the House will note, we have incrementally allowed foreign law firms to enter our industry through various frameworks, beginning with the former Law Alliance in 2000.

The hard reality is that when it comes to liberalising the legal services sector, there are really only two feasible options: one, we could have decided in 2000 to keep the industry closed, and some other jurisdictions have done that. But in the end, we will find that that will only hurt the profession and deprive young Singapore lawyers of opportunities to hone their skills working on complex international deals. Our financial and economic sectors, which are highly international and open, would be limited by the lack of sophisticated legal services support that global financial institutions are familiar with in other financial centres in the world. I do not for a moment suggest that the lawyers here who spoke up do so out of self-interest. That is obviously not so. But there will be a legitimate question that the Government would have to answer as to why do we have opening up in the banking sector, in the accounting sector, in so many sectors, and as a result we get all of them coming into Singapore and employing Singaporeans, providing job opportunities, and why is the legal sector so special that it needs to be protected completely? That is a question that will be asked. Unless Members can offer a compelling answer to that question, I think the answer must be that we have no choice but to open up.

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Second, the only other realistic choice, instead of keeping it completely closed, is to continue to liberalise the practice of law in Singapore, and there are many different approaches. We could have gone for a Big Bang approach and liberalised completely. But we started in 2000; this is 2012. And in a large measure, the profession continues to be protected. We have taken very, very incremental steps. And other Members in this House have spoken up about why we are not liberalising even faster. The reason why we took this incremental step-by-step approach is to give our law firms the opportunity to level up, tie up, bulk up, consolidate, increase their revenues and size so that they can compete, or create a framework which makes it easier for them to tie up with foreign firms on a reasonable basis. That has been our approach.

At each juncture, when we change the law in this area, we have looked at our national imperatives and market needs while keeping as a key prerogative also the interest of the legal profession in Singapore. Can Singapore firms compete? It is a question, Sir, I have dealt with a number of times since I took office as Minister for Law. Looking at the international trends: a jurisdiction like Germany – one of the largest countries in the world and the second top exporting economy in the world – finds it difficult to sustain local home-grown law firms in the context of the internationalised environment. If we look at German industry and German strengths in local business and we compare it with Singapore and our open nature and relatively service-oriented economy, there is simply no comparison. The way the international legal scene is moving is fairly clear. We have to deal with that. In the interest of Singaporeans as a whole, my statements since 2008 have been consistent on the need for firms to collaborate, consolidate because size will allow them the advantage of accessing technology to enhance their ability to compete in the developing international legal market. Survival in this environment depends on ourselves, on our law firms and how flexible and nimble they are. And I speak from experience because from 2000 to 2008, I was in the law firm which had to deal with all these issues and which was in a major tie-up. I know the importance of access to technology, access to the latest legal know-how and the need to bulk up.

Firms which wish to embrace this new environment ought to be allowed to do so, and that is what these provisions provide. The central changes allow our local law firms to enter into closer partnership with foreign firms. The decision about whether to do so lies entirely with our local law firms. If they believe that they do not need to do any of these things and they can survive and can compete, then they may do so. But that is no reason for preventing others from wanting to tie up.

Let me address at this point Mr de Souza's concern that foreign firms are often driven by the balance sheet of their headquarters. He made the point that foreign firms that may lay off people, do so. Every law firm, while it is a professional entity, is also a business operation. That is a reality today. If we do not accept that, I think we are probably not in keeping with modern reality. So whether it is a local or foreign law firm, they would look at business conditions to determine how many lawyers they need. And the practices of foreign law firms on hiring and firing may well be more economically driven, perhaps, than local law firms, I do not want to make a specific comment on that. I note what Mr de Souza says. Surely, that is a matter for local lawyers to decide before they join such law firms. These are market choices, individual choices, and the young lawyer who graduates out of NUS or SMU would like to say, "I join a local law firm. I get an x amount in salaries. That is perhaps a greater certainty of my career path. I join a foreign law firm. It is a little less clear. But on the other hand, I get x percentage more per month, right upfront, and the prospect of working in London, New York, Hong Kong and many Singaporeans have become partners in foreign law firms. So there is no glass ceiling". These are individual choices and I am not sure it is something that the Government should take a fixed view upon and therefore try and shepherd the lawyers into.

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Mr Kumar also spoke about international law practices drawing qualified graduates away from the family and criminal Bar. I am not quite sure that if they were not drawing the graduates away from the family and criminal law Bar that the graduates would necessarily go into these places because Mr Kumar's firm would be drawing them away anyway, as has happened over the last 20 years. But the phenomenon which Mr Kumar mentioned is something that has been happening over a long period of time, well before we began liberalising the sector. Let us face it. Corporate practice is glamorous. Litigation practice in a big law firm is glamorous, financially attractive for the individual lawyer, whereas litigation practice in a smaller firm in domestic area of the law may be seen by many as not as lucrative to do it full time. It does not mean that lawyers in big firms, including SCs, will not be prepared to do these cases on a case-by-case basis when they feel it necessary either pro bono or because of a specific reason.

The underlying concern about strengthening of the criminal Bar, I think, is a valid one. But I am not quite sure that not liberalising is the answer. My Ministry is actively looking at the issue. Our problem is that NUS and SMU now attract the very best of the "A" level cohort. You can close your eyes and if you look at the grades, there are usually three As or four As on average. They have a fairly standard career track. When they have gone through that sort of career path, when they come out, then they want to go into an area of practice which they believe, or many of them believe, will be commensurate or will offer the rewards that they feel justify the kind of records they have. These are generalisations. Obviously, there are exceptions. We can only talk about the general trend which is what Mr Kumar is talking about. Many bright young lawyers do pro bono work. They go to small firms, they say, "I want to focus on family law or criminal law." But we talk about the larger trend. It is a question how do we try and make these areas attractive. What I can tell Mr Kumar is that this is an area that we are seized with. We are looking at it together with the courts, AGC and the Law Society. I cannot tell him that I have a solution because this is the behaviour of young law graduates. I am a believer that we cannot shepherd people or dictate people to go into specific areas. We got to find some other solution, if one exists. Mr Speaker, Sir, I believe I have dealt with most of the questions.

4.54 pm

Mr Christopher de Souza: Mr Speaker, I thank the Minister for Law for taking the time to go through so many of our points. I appreciate that very much. I would like to clarify one point. Prior to the Second Reading of this Bill, the backbenchers, including myself, were presented with a Bill which seemed to actually widen the gate very much, certainly where section 15 was concerned. Hence, the anxieties and concerns raised in my speech. It is reassuring that the Minister agrees with the Chief Justice and especially what the Chief Justice said at the Opening of the Legal Year this year. And I quoted the announcement of the Chief Justice to rely on it as a very well-crafted statement, rich in experience and foresight about how we can achieve a win-win situation, open and yet not so wide, to see a changing of the guards among litigators. Therefore, Mr Speaker, the point that I am trying to make is that until the ventilation of this debate, we were unsure exactly what the Minister's views on the matter were.

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Mr Speaker: Mr de Souza, do you have a clarification?

Mr Christopher de Souza: Yes. I understand that the Minister's views match the Chief Justice's and that there will be a strict and vigorous way forward. In reply to the Minister's request for an argument which distinguishes the accountancy sector, the banking sector and the law sector, may I provide a response? I think the accountancy sector and the banking sector are actually quite different with respect to the litigation sector because –

Mr Speaker: Mr de Souza, I am sorry to interrupt you. You may have a clarification that you want to ask of the Minister, not an opportunity to speak again.

Mr Christopher de Souza: Yes. It is actually in response to the Minister's invitation for a response to his question which I think is –

Mr Speaker: Unless the Minister clarifies, I do not think he was asking you for a response. Can you please then make your point very short?

Mr Christopher de Souza: Yes. In essence, the accountancy and the banking sectors do not have a role of feeding the Bench. The Bench is an institution and, therefore, I think we should be guarded in having an over-reliance on Queen's Counsel because I think that would affect the Bench in due course. My last point, which is a clarification, is: in light of the anxieties and the reasons given by the Minister – which are, I must admit, very reassuring – would the Minister assure the House that notwithstanding the liberalisation, the legal heritage that Singapore has remains and will be preserved?

Mr K Shanmugam: I will take the three points that Mr de Souza made. The first that he is reassured that I agreed with the Chief Justice and that the courts would have the power on how these admissions would be done. I think I would refer him to the proposed subsection 6(a) of section 15, Clause 4 − the amendment clause – "the Chief Justice may after consulting the Judges of the Supreme Court by notification published in the Gazette specify the matters that the court may consider when deciding whether to admit a person under this section". So, if Parliament passes this legislation, it would have given the Chief Justice the power to decide on the factors. In fact, this goes back to Mr Singh's point, which I more or less agreed with, that the courts should have substantial discretion. In fact, Mr Hri Kumar was not comfortable with this. But my own view, on balance, is that the courts should have a greater degree of discretion. What I think about the criteria in this context will become less relevant.

Second, I think Mr de Souza's point about the law being different from banking and accountancy sectors: yes, cynics will point to you that each time those sectors were opened up, they also said they were different. But I accept the point that the legal profession provides people for the Bench. We have top-grade SCs. We have excellent lawyers in the Attorney-General's Chambers and the Legal Service. They will form a good pipeline for the future High Court, and we must continue to nurture the Bar. That is very important, I think. It is a function that is extremely important for us as a Government, in the Ministry of Law, for this House and for the Judiciary and for the system as a whole because a credible, good high-quality Bar is in fact fundamental to a democratic society. And then, it is important and essential for the well-functioning of the resolution of disputes. So there is no difference of opinion on that. And the Courts recognise that. At the same time, where there are gaps − and really what you see from the Chief Justice's speech, are the gaps which need to be filled. And what this amendment seeks to do is to fill those gaps.

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On the third point about legal heritage, and that it ought to be preserved: I think that is pushing at an open door because we all want to see it preserved. But ultimately the responsibility for preserving it will be on the lawyers themselves. It depends on how good, how flexible, how robust, how quick our legal profession is in moving with the times in order to preserve its heritage.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [ Mr K Shanmugam ].

Bill considered in Committee; reported without amendment; read a Third time and passed.