At the last legislative sitting before the May 24 elections, the Cayman Islands government abandoned efforts to pass its proposed Legal Practitioners Bill, which the territory’s financial services industry believes is necessary to comply with international regulatory standards.

The failed attempt on March 27 delays efforts to update a nearly 50-year-old legal framework for Cayman attorneys until the next government takes power.

Loopholes in the current legislation, according to the Cayman Law Society, include the fact that it does not provide for sanctions on law firms that do not meet industry requirements. There are also no provisions to stop law firms outside the islands from “profiting from the practice of Cayman Islands law,” the Cayman Compass reported.

According to the Compass, the bill contained regulatory updates that need to be implemented before the territory undergoes a review of its anti-money laundering and anti-terrorism safeguards in September by the Caribbean Financial Action Task Force.

“I am painfully aware … that following the elections the government will be under considerably more time pressure to pass legislation governing legal practitioners,” Cayman Premier Alden McLaughlin reportedly said when he announced that his government was abandoning efforts to pass the bill.

Amendments

The Compass reported that the bill initially seemed to have widespread support from the financial services industry, and was approved by legislators on its first and second readings.

However, some 200 proposed amendments were added to the bill going into its third reading, leaving government without enough time to pass a bill to its liking, the Compass stated.

“Unfortunately, we have not yet been able to agree on the details of those amendments,” Mr. McLaughlin said, according to the Compass. “Given the seminal importance of this legislation, … this government would prefer to pass a bill with the overwhelming support of this honourable House.”

Though the latest version of the stalled bill was reportedly not made public, criticism about it largely focused on its alleged lack of protections for Caymanian attorneys.

“Opponents of the legislation, which included a number of local lawyers, said the current version of the bill merely cemented the ‘status quo’ that had prevented Caymanian attorneys from advancing in the profession,” the Compass reported.

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