Re: ABA Section on International Law and Practice Responsive Testimony on Multi-Jurisdictional Practice Attorney Conduct Rules - Center for Professional Responsibility

June 29, 2001

 

MJP Commission on Multi-Jurisdictional Practice
c/o John A. Holtaway
ABA Center for Professional Responsibility
541 No. Fairbanks Ct.
14 th Floor
Chicago, Illinois 60611

Re: ABA Section on International Law and Practice Responsive Testimony on
Multi-Jurisdictional Practice Attorney Conduct Rules

Dear Members of the MJP Commission:

At the Miami Roundtable meeting of the MJP Commission, held on June 1, 2001, the Section of International Law and Practice ("SILP") of the American Bar Association gave oral testimony in elaboration of some of the points raised in its June 1, 2001, written submission to the MJP Commission. The MJP Commission raised two questions as to which it sought further comments from SILP. These questions, presented below, relate primarily to international practitioners advising clients in the United States on a temporary basis. SILP has requested that its Transnational Legal Practice Committee provide the following commentary on its behalf.

  1. Questions Presented
    1. If a foreign lawyer practicing law in the United States on a transitory basis should violate rules of professional conduct in the host jurisdiction, should the disciplinary rules of the host jurisdiction or those of the foreign home jurisdiction be applied in the first instance?
    2. If the host jurisdiction's rules apply, how are those rules enforced against a lawyer who is only in the host jurisdiction on a transient basis, neither registered nor licensed in the host jurisdiction?
  2. Responses from SILP

Summary Response to Question 1:

SILP recommends that the MJP Commission endorse an approach similar to the ABA Ethics 2000 Commission’s approach for U.S. lawyers. SILP recommends that foreign lawyers who practice law in the United States on a transitory basis, like U.S. lawyers, be subject to the rules of professional conduct in the Host Jurisdiction even if the foreign lawyer is not admitted in the Host Jurisdiction. In the context of a disciplinary matter, the Host Jurisdiction should apply the same "choice of law" principles to the foreign lawyer that the Host Jurisdiction would apply to a U.S. lawyer, unless a contravening international treaty, agreement or law provides otherwise.

Explanation for SILP’s Proposed Answer to Question 1:

The Ethics 2000 Commission recently revised its Proposed Rule 8.5 to recommend that lawyers who practice law on a transitory basis in a U.S. jurisdiction are subject to the rules of professional conduct in the host jurisdiction even if the lawyer is not admitted in that jurisdiction:

A lawyer not admitted in this jurisdiction is also subject to the disciplinary authority of this jurisdiction if the lawyer renders or offers to render any legal services in this jurisdiction. A lawyer may be subject to the disciplinary authority of both this jurisdiction and another jurisdiction where the lawyer is admitted for the same conduct.

The Ethics 2000 Commission also recommended changes to the "choice of law" provisions in Rule 8.5(b). In a nutshell, Proposed Rule 8.5 uses a three pronged approach. If a lawyer is subject to multiple professional conduct rules, then the disciplinary authority is advised to apply: 1) the rules of conduct of the jurisdiction in which the tribunal sits, if the lawyer is involved in litigation; 2) the rules of the jurisdiction in which the lawyer’s conduct occurred; or 3) if the predominant effect of the conduct is in a different jurisdiction, the rules of that jurisdiction.

SILP recommends that the MJP Commission use a similar approach for foreign lawyers practicing in the U.S. on a transitory basis unless a contravening international treaty, agreement or law provides otherwise.

In SILP’s view, it is unclear whether foreign lawyers currently would be covered by the Ethics 2000 Commission’s Proposed Rule 8.5 if adopted. At SILP's urging, the Ethics 2000 Commission has recommended that Comment 7 to Proposed Rule 8.5 be amended as follows:

[7] The choice of law provision is not intended to apply to applies to lawyers engaged in transnational practice, unless international law, treaties or other agreements between competent regulatory authorities in the affected jurisdictions provide otherwise. Choice of law in this context should be the subject of agreements between jurisdictions or of appropriate international law.

By modifying comment 7, the Ethics 2000 Commission clarified that Proposed Rule 8.5 applies to U.S. lawyers who are practicing in jurisdictions outside the U.S. SILP endorses this change for U.S. lawyers. (See SILP comment letter attached, dated May 9, 2001, addressed to the Ethics 2000 Commission in support of the revisions made to the Proposed Rule). It is less clear, however, whether the Ethics 2000 Commission intended its proposal to apply to foreign lawyers. (The term "lawyer" is not defined in the "Terminology" of the ABA Model Rules nor is it defined in Proposed Rule 8.5). In SILP’s view, the term "lawyer" in Proposed Model Rule 8.5 should be interpreted to include foreign lawyers who practice in the U.S. on a transitory basis.

In sum, SILP believes that it would be useful for the MJP Commission to recommend that foreign lawyers in the U.S. be treated in a manner comparable to the Ethics 2000 Commission’s Proposed Rule 8.5 unless contravening international treaty, agreement or law otherwise applies.

This result is similar but not completely identical to the approach used in the European Union Directive 77/249 which governs the transitory practice of law by one EU lawyer in another EU jurisdiction. Article 4 of that Directive makes the transient foreign lawyer subject to certain specified Host Jurisdiction ethics rules:

A lawyer pursuing activities other than those referred to in paragraph 1 [litigation] shall remain subject to the conditions and rules of professional conduct of the Member State from which he comes without prejudice to respect for the rules, whatever their source, which govern the profession in the host Member State, especially those concerning the incompatibility of the exercise of the activities of a lawyer with the exercise of other activities in that State, professional secrecy, relations with other lawyers, the prohibition on the same lawyer acting for parties with mutually conflicting interests, and publicity. The latter rules are applicable only if they are capable of being observed by a lawyer who is not established in the host Member State and to the extent to which their observance is objectively justified to ensure, in that State, the proper exercise of a lawyer's activities, the standing of the profession and respect for the rules concerning incompatibility. (Emphasis added.)

Thus, the basic approach used in the EU is consistent with the Proposed Rule 8.5 approach that SILP recommends for foreign lawyers who practice in the U.S. on a transitory basis.

Summary Response to Question 2:

The Host Jurisdiction’s rules should be enforced against a foreign lawyer in the same manner in which these rules would be enforced against a U.S. lawyer who only practices in the Host Jurisdiction on a transient basis and is neither registered nor licensed in the Host Jurisdiction.

Explanation for SILP’s Proposed Answer to Question 2:

SILP contends that the Host Jurisdiction should enforce its rules against a foreign lawyer in the same manner in which those rules would be enforced against a U.S. lawyer who is not licensed in the Host Jurisdiction. For example, ABA Model Rules of Disciplinary Enforcement, Rule 10(A) identifies the follow possible disciplinary sanctions:

  • Disbarment by the court
  • Suspension by the court for a fixed period of time not in excess of three years
  • Probation by the court not in excess of two years
  • reprimand by the court or disciplinary board
  • admonition by disciplinary counsel
  • restitution to persons injured
  • costs of the proceeding
  • limits on the nature or conditions of future practice

Many of these sanctions could be imposed against a foreign lawyer just as easily as against a U.S. lawyer who is not licensed in the jurisdiction. For example, disciplinary counsel or the board could send an admonition letter to the foreign lawyer; the disciplinary board could reprimand the transient lawyer (in absentia if necessary); and the court could impose conditions on the lawyer’s future practice, probation, suspension or disbarment, such that a violation of the court’s order by the foreign lawyer in the jurisdiction would constitute a per se "unauthorized practice of law" violation (and perhaps contempt of court). A judgment for "costs and restitution" also could be imposed; SILP believes that U.S. courts would find a satisfactory nexus with the lawyer’s conduct in the jurisdiction to support personal jurisdiction. In addition, as contemplated by the ABA Model Rules of Disciplinary Enforcement, Rule 22, the Host Jurisdiction could notify the Home Jurisdiction, which might want to impose reciprocal discipline.

SILP recognizes that it may be more difficult for a disciplinary authority to discipline foreign lawyers who are not admitted to the jurisdiction than it is to discipline domestic lawyers who are admitted in the jurisdiction. On the other hand, SILP does not believe that it will be significantly more difficult to discipline non-admitted foreign transitory lawyers than it will be to discipline non-admitted U.S. transitory lawyers. The Ethics 2000 Commission’s "Reporter’s Explanation of Changes" explains how such enforcement would operate against U.S. lawyers:

1. Paragraph (a): Expand disciplinary enforcement jurisdiction over the lawyer not admitted in adopting jurisdiction "if the lawyer renders or offers to render any legal services" in the jurisdiction.

Several states have adopted a bracketed provision in Rule 6 of the ABA Model Rules for Lawyer Disciplinary Enforcement that provides disciplinary jurisdiction over "any lawyer not admitted in this state who practices law or renders or offers to render any legal services in this state." The Commission believes that this is an appropriate rule to adopt in the Model Rules of Professional Conduct, given that a jurisdiction in which a lawyer is not admitted may be the one most interested in disciplining the lawyer for improper conduct. There are a number of ways in which discipline might be implemented, including making a disciplinary record and sending it to states in which the lawyer is admitted and having those jurisdictions impose reciprocal discipline. (Alternatively, if disciplinary authorities are ever given a broader range of sanctions, e.g., fines, fee forfeiture or an award of damages, the disciplining jurisdiction could act on the lawyer directly.)

SILP submits that most of the same ideas could apply to foreign lawyers in the U.S.

The European Union uses a comparable approach. Article 7(2) of Directive 77/249 governing transitory practice gives the Host Jurisdiction authority to discipline the transient foreign lawyer and requires notification of the Home Jurisdiction:

In the event of non-compliance with the obligations referred to in Article 4 and in force in the host Member State, the competent authority of the latter shall determine in accordance with its own rules and procedures the consequences of such non-compliance, and to this end may obtain any appropriate professional information concerning the person providing services. It shall notify the competent authority of the Member State from which the person comes of any decision taken. Such exchanges shall not affect the confidential nature of the information supplied.

While the disciplinary enforcement situation may not be ideal, SILP believes it will work and is necessary in order to accommodate the needed changes about which the Commission has heard so much.

SILP thanks the MJP Commission for this opportunity to provide further information.

Sincerely,

 

Ellen H. Clark and Timothy E. Powers
Co-Chairs
Transnational Legal Practice Committee
Section of International Law and Practice
American Bar Association

enc.

Daniel Magraw, Chair
Robert Lutz, Chair-Elect
Section of International Law and Practice
American Bar Association

 

To the Members of the Ethics 2000 Commission
c/o ABA Center for Professional Responsibility
14th Floor
541 N. Fairbanks
Chicago, IL 60611 May 9, 2001

Re: Comments to Proposed Rule 8.5

Dear Members of the Ethics 2000 Commission,

The Transnational Legal Practice Committee of the Section of International Law and Practice met last week in Washington DC to discuss, among other things, Proposed Rule 8.5 included in the Ethics 2000 Commission's November 2000 report. As a result of those discussions, the Committee made recommendations to the Section regarding the Proposed Rule 8.5 with particular reference to Comment 7 to that Rule. We endorse the recommendation made, and on behalf of the Section of International Law and Practice, submit to you the following commentary.

Proposed Rule 8.5 addresses the disciplinary authority and choice of law governing attorney conduct:

RULE 8.5: DISCIPLINARY AUTHORITY; CHOICE OF LAW

(a) Disciplinary Authority. A lawyer admitted to practice in this jurisdiction is subject to the disciplinary authority of this jurisdiction, regardless of where the lawyer's conduct occurs. A lawyer not admitted in this jurisdiction is also subject to the disciplinary authority of this jurisdiction if the lawyer renders or offers to render any legal services in this jurisdiction. A lawyer may be subject to the disciplinary authority of both this jurisdiction and another jurisdiction for the same conduct.

(b) Choice of Law. In any exercise of the disciplinary authority of this jurisdiction, the rules of professional conduct to be applied shall be as follows:

(1) for conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction in which the tribunal sits, unless the rules of the tribunal provide otherwise; and

(2) for any other conduct, the rules of the jurisdiction in which the lawyer’s conduct occurred, or, if the predominant effect of the conduct is in a different jurisdiction, the rules of that jurisdiction shall be applied to the conduct. A lawyer is not subject to discipline if the lawyer’s conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer’s conduct will occur.

Comment 7, addressing choice of law in particular, currently reads:

[7] The choice of law provision is not intended to apply to transnational practice. Choice of law in this context should be the subject of agreements between jurisdictions or of appropriate international law. (Emphasis added).

The Section of International Law and Practice is of the view that making the choice of law provision inapplicable to transnational practice is inappropriate. The realities of cross-border law practice today involve transactions, disputes and other matters that are, or may be, affected by the laws of several national jurisdictions. In such cases, international practitioners need some guidance as to how conflicts in conduct rules could be resolved, especially if the home jurisdictional rules are silent or ambiguous as to conduct abroad.

Thus, Comment 7 should be amended to read:

[7] The choice of law provision in Rule 8.5 applies to lawyers engaged in transnational practice, unless international law, treaties or other agreements between competent regulatory authorities in the affected jurisdictions address the issue and provide otherwise.

Comment 7 may have originally been included to avoid creating conflicts with international law for foreign practitioners. However, it is not conflict but rather the lack of clear rules that needs to be addressed by the Comment. Transnational practitioners require more certainty when acting in different countries, whether on a transient or more permanent basis, for clients that may be in the countries of the lawyer’s admission, the location of the lawyer’s service or in third countries. The revised Comment we propose should provide this greater certainty.

Our revisions are intended to provide clearer guidance to the transnational practitioner. In essence, the transnational lawyer should be guided by the "predominant effect" principle unless applicable international agreements depart from that rule. Excepting transnational conduct situations from the scope of Rule 8.5 does not serve a useful purpose or promote any state interest. Rather, applying Rule 8.5's choice of law principles to transnational practice would be helpful to the numerous and growing number of lawyers engaged in that practice.

As an example, assume that a U.S. lawyer practiced in Asia under a strict local confidentiality rule and engaged in a cross-border transaction there involving a company that had committed fraudulent acts in the past. Assume that the lawyer also practiced in one of the many state jurisdictions that permit or require a lawyer to reveal a client’s past fraudulent conduct. If Proposed Rule 8.5 applied to the transaction and the lawyer remained silent, this action probably would be proper under 8.5 because the predominant effect of the lawyer’s conduct would be in Asia. Comment 7 as drafted could, however, be read to mean that this issue is "transnational" and thus, not covered, so that the U.S. lawyer in Asia could be disciplined in the U.S. for his failure to reveal facts, even though the more appropriately applicable Asian rule prohibits disclosure.

Thus, the Section of International Law and Practice recommends that Rule 8.5 apply to lawyers engaged in transnational practice unless international law, treaties or other applicable agreements contravene.

Sincerely yours,

 

Daniel Magraw, Chair
Robert Lutz, Chair-Elect
Section of International Law and Practice
American Bar Association


MJP Home Page | Center's Home Page | ABA Home Page

Advertisement