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"Letter of the Law": Shall Belarusian lawyers preserve the right to appear in court?

6 Apr 2011

The Belarusian Association of Commercial Lawyers has obtained for discussion a new draft of the Law of the Republic of Belarus On Advocacy and Legal Practice in the Republic of Belarus. The point of the draft is to exclude the right of the licensed lawyers (lawyers working for business) to represent their clients’ interests in the economic courts of the country.

The issues on how reasonable such a legislator’s approach is and what consequences for the state, society and business it may cause were discussed within the frames of “Letter of the Law”, the author program of Denis Aleinikov, Senior Partner of Law Group “Argument” by Liliya Vlasova, Chairman of the Board of the Belarusian Association of Commercial Lawyers, Vladimir Koryagin, Chairman of the Republican Confederation of Entrepreneurship, Chairman of the Capital Union of Entrepreneurs and Employers, Valery Fadeyev, honored lawyer of the Republic of Belarus, senior adviser on legal issues of the International Financial Corporation.

Who is entitled to represent the interests of the parties in courts today?

Liliya Vlasova: If the party cannot represent its interests on its own for any reason, it may take legal advice of the professional lawyers. Currently commercial lawyers or an attorney may represent interests in court. Attorneys have right to represent the party’s interests in any court, either in the ordinary or in the economic court. The commercial lawyers are entitled to represent the interests of the parties only in the economic court.

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I have read that the goal of development and adoption of this draft law is, first of all, the necessity to improve the quality and professional competence of the legal assistance in the Republic of Belarus. As we may see one of the methods is exemption of the licensed lawyers’ right to represent their clients in the economic court. Relatively speaking this is establishment of the attorneys’ “monopoly” in regard to this type of services. What has resulted in such an approach of the legislator? May be you have any statistic data showing that the licensed lawyers are less experienced in business law than attorneys are? Has there been any evidence that the quality of the legal aid provided by the licensed lawyers in economic courts is lower than that of the attorneys’?

Liliya Vlasova: I don’t dispose of such information. I certainly don’t want to put the competence of our colleagues - attorneys in question. Nevertheless, a clear differentiation has been formed during the 20 year- existence of the legal services market. It has been based upon dualism of the court system. We have got two court systems: the ordinary and the economic courts. People working in such courts on professional basis are also split in accordance with their specialization. Attorneys basically work in ordinary courts and are engaged in issues connected with criminal, labour, housing and family relations. They are engaged in problems that are primarily faced by the citizens.
Commercial lawyers have been specialized in representing interests of the economic entities in the economic court for 20 years. We have gained rich experience working in this sphere and this experience is very valuable as such. Specialization of the lawyers, being the aim of all countries with one court system, has become precious product in the market. Apparently, people specializing in anything (case categories) are having great experience in this sphere. Consequently, development of specialization that we already have, shall be valued and supported.

Well, we do have specialization already. But still, the project developers make such a decision. May be, the Ministry of Justice or Supreme Economic Court or any other state authorities have expressed their complaints in respect of the quality of work of the institute of commercial lawyers, haven’t they?

Liliya Vlasova: No, there have never been any complaints like that. Even more, the Ministry of Justice, the Lawyers’ Association and the economic courts are favorable in respect of the activity of commercial lawyers and they recognized their place and their role in the system of administration of economic justice.

In what way has they been recognized?

Liliya Vlasova: the Ministry of Justice holds competition of the best law firms and the best entrepreneur in the sphere of business law every year. The Lawyers’ Association has “Themes” competition. Within the frames of this competition there is a special award devoted to the lawyer engaged in business issues. Our representatives, commercial lawyers, take part in this competition and get this high award for many years running. These are the ways by which the state authorities and the professional community recognize and promote the activity of the commercial lawyers.
Valery Fadeyev: I would like to draw your attention to the point that the commercial lawyers are to be licensed now. Consequently, the Ministry of Justice has a precise control system for the activities of the commercial lawyers. There are requirements and conditions which are to be complied with by them. I am personally not aware of the cases when the license has been annulled for the bad quality of work.

What is the procedure for obtaining the legal services license today?

Liliya Vlasova: The person shall be the citizen of the Republic of Belarus, have higher legal education degree and the work experience. The key thing is to pass the professional written exam on commercial law issues at the Ministry of Justice. There is a number of requirements in connection with legal services. If you have passed the exam and comply with the requirements, you shall be granted the license.

Plus I would add that constant monitoring of the quality of legal aid of the licensees as well as advanced training is conducted by the Ministry of Justice.

Liliya Vlasova: Yes, there is a constant professional development of commercial lawyers.

Valery Fadeyev: Actually, it is not easy to pass an exam for the right to practice law. I and Vladimir Koryagin have one mutual acquainted lawyer who tried to pass an exam three times to get the license but failed. And we know that he is a good lawyer. But out of 16 obligatory questions he fails to get 2. So, the requirements are extremely high.
Having the license means that the state always has a possibility to control the activity of the commercial lawyers. The quality and ethics are being examined. The issuing body can at any time annul or suspend the license for bad work.

What is the assessment of foreign investors in regard to the activity of the commercial lawyers?

Valery Fadeyev: I am a judge in the International Arbitration Court at the Belarusian Chamber of Commerce. Basically, disputes with the non-residents are being considered there. As a rule, interests of the non-residents shall be represented by the commercial lawyers. In terms of my experience I would like to say that they always work at a high level of qualification and quality. Being a judge, I personally have no any claims to them.

Liliya Vlasova: About 10-12 law companies in Belarus have been favorably presented by the leading international rating of lawyers, such as Chambers Europe, Legal 500, Вest Lawyers International. If our Belarusian law companies are present at such ratings, it is the evidence of high level of professionalism and training of the lawyers from our country.

Vladimir Karyagin: That is true; there is a community of the professional commercial lawyers. There are names known outside Belarus. The Investors often come to the country due to namely good legal services, as far as the projects are supported by famous professionals.

Are there any attorney communities presented in such ratings?

 Liliya Vlasova: No, attorney associations do not participate in such ratings because the have nothing to participate with.

Why do they have noting?

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Liliya Vlasova: Due to the fact that they are not engaged in this sphere. In order to have the possibility to participate it is necessary to present for the assessment of international experts the projects made and the clients you have worked with. Attorneys do not participate as far as there haven’t been any such cases which could be of interest to the international ratings. The international customer support is the exclusive sphere of the commercial lawyers. All large investment projects of the last decade are transactions provided under specific support of the commercial lawyers.

Taking the side of the business customer, how can the proposal of the developers of the draft law affect the quality of the legal aid in this regard?

Valery Fadeyev: We shall have a broken cycle then. The commercial lawyers shall provide support in regard of the entire activity of the economic entity, develop the constituent instruments, and participate in preparing and entering into any agreements. And when the case shall come to the court the client shall involve an outside person, an attorney who is to examine the matter, but it is not as fast and simple as it may seem. In effect, we break the chain of the systematic legal aid provided to the economic entity. And I am absolutely confident that it won’t make the quality of work better.

Liliya Vlasova: Currently the attorneys represent the interests of the economic entities to rather a small extent. The commercial lawyers rendered 10 thousand services in terms of representing their interests in the economic court last year. In order to work in the economic courts at such a high level that the commercial lawyers have reached by today, the attorneys need to pass this long way and gain this experience. The commercial lawyers have already passed it. It is not as simple. By depriving the commercial lawyers of the right to represent the interests in the economic court, we generate vacuum. Certainly, you may not speak of any quality of legal services in this case.

Let’s assume that if such a draft shall be adopted by the Parliament, what effects will it have on administration of the economic justice in terms of practice?

Liliya Vlasova: No doubts, in case this approach shall be implemented, it will bring down the quality of the judicial proceeding.

Valery Fadeyev: Mastering of any new business requires a lot of time and efforts. When I became a judge of the International Arbitration Court, I had to master this new profession. The same is in this very case. We already have y the established system, and the lawyers who have gained some experience and knowledge, who act in accordance with the standard rules and regulations, and promptly prepare the documents for the courts. And suddenly the people are coming who have to master all that anew. Actually it will make the work of the economic courts and that of their judges more complicated. One thing is when the person went to the court dozens of times and perfectly knows the procedure, so he is easy to deal with. Another thing is when an attorney comes, even if he is rather an experiences one, but he doesn’t know the system and the procedure. Naturally, everything shall be got known during the work. You may learn, you may read, but if don’t have enough practice, so you can not say that you are a professional lawyer. It will certainly be a problem for the economic courts. The judges will have to spend more time for preparing and considering the cases.
I would like to note one more thing. If I work at an enterprise, I am entitled to go to the economic court in accordance with the law, although I haven’t been licensed at the enterprise (the state has not checked the quality of work). And otherwise, being a licensed lawyer I am not entitled to go to the court.

Liliya Vlasova: Let anybody show the figures why the advocacy shall have monopoly on this. Let’s have the developers of the draft who have submitted this regulation, substantiate the latter. We don’t have the rule to give arguments for anything. Why has this regulation emerged, what is the base for the figures and data? I don’t have any such figures. Let’s make the developers show the data to substantiate the point that only attorneys shall go to the economic courts. The commercial lawyers shall not be entitled to do that. Why can’t professionals do their work?

It’s like this: here is your diploma of a doctor, but you may not treat patients. Or here is your diploma of a teacher, but you may not teach pupils or teach any discipline. We have come to an absurd situation: here is your diploma of a lawyer, here is your license, but you may not go to a court.

Liliya Vlasova: I would like to add that Russia has already gone through this way which they want to impose on us. Russian attorneys lobbied for their monopoly to represent interests in court 5 years ago. And after half a year the Constitutional Court recognized this regulation as unconstitutional. The attorneys as well as the commercial lawyers continue working in the legal services market there.

The key basic normative act of this year for today is Directive No.4. According to its preamble, the directive has put trends in the sphere of entrepreneurship legislation development not for just a year, but even for five years. Vladimir, you actively participated in preparing the draft directive. Valery was also engaged in it. Let’s have a look; we have two competing institutions rendering legal services in respect of court representation on professional basis today. According to the proposal introduced by the draft law, we may have just one of them tomorrow. What is your assessment of such an approach from the standpoint of the principles set forth in the directive?

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Vladimir Karyagin: I would like to underline that the state is worried about the improvement of legal services quality. The advocacy institute is to be developed. It has been in outdated legal forms. This is quite correct that this law is being under consideration.

On the other hand, the spirit and the letter of directive No.4 is aiming at creation of the competition environment. Remember that the preamble stipulates the following: competition where possible, but regulation is only there where it has been of critical necessity. This service, as any other service in the society, shall be rendered in conditions of competition. So we need to promote the manifold legal services institutions.

Monopoly will always contradict the spirit and the letter of directive No.4. By the way, the directive has just started to be implemented. I assume that we will follow its spirit and the letter during the next 15-20 years. All new legal acts shall be certainly developed and adopted only under the conditions of consistency of positions and provisions put in the directive.
I consider it to be highly valuable to discuss the regulations, acts and the draft laws publicly in the directive.

That’s what we are doing now...

Vladimir Karyagin: Yes, note that the draft law is being issued to the hands of the public now. Actually, what we are discussing now is implementation of the directive: this draft law has been discussed publicly. We have the possibility to express our opinion. And the consumer has the opportunity to express his opinion too.
The huge role is being played by the professional organizations, unions, associations of entrepreneurs, manufacturers and commercial lawyers. They are in the same line of professional organizations. The entire draft laws shall be considered only with their participation.
I am acting in two capacities. I am a leader of a number of business associations, the Minsk Capital Union and the Confederation of Entrepreneurship. The entrepreneurs often come there to get the orientation, to get to know whom to apply to get legal services. The number of the economic entities is growing today. About 310 thousand small business enterprises work in the market today.

Who, do you think, is rendering services to them now?

Vladimir Karyagin: I believe, over 90% of services are rendered by the commercial lawyers. Entrepreneurs who apply us often come from the attorneys. The attorneys themselves are sending them to us, saying that the issue is too insignificant for them and is out of their competence. Actually, the main amount of services rendered to the small business enterprises are provided by the commercial lawyers.

Small business enterprises are not the foreign investors, they are of modest means. They can not afford paying much for the legal aid. Why is it the commercial lawyers whom they apply for assistance?

Vladimir Karyagin: Indeed, the average salary of the small business representative is twice lower than that over the country on the whole. Each ruble is being earned with great efforts. Just a little part of them becomes rich and successful. People say, for the most of the entrepreneurs working in the market or for any small manufacturing companies, the tariffs and the services of the attorneys are just beyond the budget possibilities.

You think that the services of commercial lawyers are cheaper than that of the attorneys, don’t you?

Vladimir Karyagin: To a large extent cheaper. It is very expensive to apply to the advocacy. As far as it comes to the unions and associations we do render such services to the members of our society free of charge. Our legal department rendered over a thousand of consulting services to the members of our union last year, naturally, having not taken a penny for that.

I know that many commercial lawyers work with you as volunteers free of charge with the purpose of rendering legal assistance to the small business…

Vladimir Karyagin: Yes, a lot of famous lawyers came to us being a second-year students. I won’t disclose their names without their consent. These people work for the Chamber of Commerce and Industry and for associations today; they have also established famous law companies.

I would address a lot of good words to the commercial lawyers who participate in arranging various seminars and work with the population in small companies. Most of them work at utmost bottom rates. They take into account the individual peculiarities of those companies. A lot of good words may be said to this institution which is being developed along with the entire market economy. That is why each of the development stages should be taken good care of. One shall be very cautious with reformation of the institutions that have already been established and fully formed during several decades.

What else can you say in respect of the draft law?

Vladimir Karyagin: We have already made our proposals in respect of this draft law. I personally signed them. I know that all business-associations, the Belarusian Entrepreneur Association and the Confederation of Entrepreneurship, Business Union named after professor Kunyavsky definitely see eye to eye in regard to the point that the activity of the commercial lawyers shall not be infringed. We shall certainly apply the Administration of the President and the Ministry of Justice. All our proposals are carefully examined there. I believe that the nature of the draft discussion shall be most optimally chosen.

I absolutely agree with you. We have discussed this draft in our legal community (Belarusian Association of Commercial Lawyers). We do appreciate the intention of the state to improve the quality of the legal aid provided to the economic entities and to the citizens including carrying out the structural reform. And we are ready to render any feasible assistance to the developers of the draft to achieve the draft goals in an optimal way. Colleagues, what to your opinion, shall promote higher quality: the monopoly or the competition between the institutions?

Valery Fadeyev: According to my experience, I had to stay together with Mr. Karyagin at the fundament of creation of the market economy, when I was working at the Council of Ministers of the Republic of Belarus. Certainly, competition is always better than monopoly. We had monopoly in the Soviet Union and we saw what it resulted in. So, if we go on with the line of monopoly, we won’t form any market economy and won’t improve the quality. The essential condition for the quality is first of all, competition.

Vladimir Karyagin: Economy has a more or less open character. We have great ambitions to attract foreign investments. Availability of this competitive environment in the sphere of legal aid, professional advocacy and the institute of the commercial lawyers, as everywhere in the world, is the attractive side of our economy. If we lose it, it will directly affect the amount of investments, the trust in our state and the institutes of development of the civil society.

Liliya Vlasova: I completely agree with the colleagues. I would just add that availability of the competitive environment shall make the attorneys improve themselves and master the new directions of the activity – representation in the economic courts. They have right to represent the interest of their clients in the ordinary courts as well as in the economic courts. If you are willing to be engaged in this sphere, you are welcome, the doors are open. Do it and develop these directions. And this will do the whole society good. The more offers you have in the legal services market, the lower the prices will be and the more shall we struggle for the client. This will be beneficial for our customers and our society, because the prices shall be competitive and there will be no monopoly.

Valery Fadeyev: I would like to underline just one idea. Actually no one has deprived the attorneys of the right to work in the economic courts. Why don’t they work there? This is the competition. That means that they will lose that competitive game. The law will remove the competitor, so they will be on the top.

Liliya Vlasova: And they want to do it by administrative means again.

Valery Fadeyev: Indeed, we remove the competitor through prohibition and by administrative means. So, here is the answer to the question.

Vladimir, as you have correctly mentioned, one of the basic principles of the directive is the possibility to openly discuss the legal normative acts to be adopted by the entrepreneurial communities. Summarizing our conversation, tell me please, what if the business and the legal communities were given the option to discuss this legal normative act, in what way the answer to the public would have been given? Discussed and what shall be done then? In the long run, expressing its standpoint the legal community is trying, to work out the best mechanism of regulation by cooperation, and not by competition. For the purpose that the chosen approach could improve the quality of the legal aid in the country. How shall the people applying the legal knowledge, work out an optimal solution to help the state institutions?

Vladimir Karyagin: The offer shall be made in writing. Such appeals and offers are to be examined by the public advisory councils. We have a Council for Development of Entrepreneurship in the Republic of Belarus. According to the Edict of the President and the law on support of the small and medium businesses, it works with the unions and associations. It helps to inform the administration of the President and the Government about the appeals, problems and offers which the business community currently comes across. There are about 500 Public Advisory Councils at all the ministries and agencies of the country today. I suppose, there should be similar public advisory councils created at the Ministry of Justice too.

Vladimir Karyagin: I am a member of the Public Advisory Council at the Administration of the President. It’s quite efficient for the members of the council to have the opportunity to address the Head of the Administration of the President. Judging by my personal experience I can say that these appeals are always very carefully examined and discussed. There is a corridor there, a dialogue and expression of the professional position. That is why I suppose that we shall meet the association of commercial lawyers at our republican confederation for entrepreneurship in the near future. We shall examine these positions and together appeal to the platforms created by the state in order not just to conduct discussions of such draft laws, but to implement optimal decisions from the standpoint of the state, society and the business environment.

Liliya Vlasova: Within the scope of this issue, the sitting of the Advisory Legal Council will be held on March 29. This is a social structure at the President of the Republic of Belarus. This council includes the most famous lawyers of the country. The deputy head of the administration of the President is in charge of the legal issues. The draft law on advocacy shall be examined there. Our organization has already addressed each member of that council with a letter with explanation of our institute’s position. We hope those respected people to whom the community trusts the destiny of development of the legal services market and legal aid in general in our country, will come to the optimal solution, which shall promote development of public relations in the sphere of legal services.

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