Bar Council of India permits foreign lawyers and law firms to practice in India

What’s in today’s article?

• Why in news?
• News Summary: Wagner Group of mercenaries
• What is Bar Council of India (BCI)?
• News Summary: Bar Council of India permits foreign lawyers and law firms to practice in India
• What do the new rules allow?
• How have foreign law firms operated so far?
• What is the significance of recent notification of BCI?

 

Why in news?

• The Bar Council of India (BCI) has allowed foreign lawyers and law firms to practise law in India on a reciprocity basis.
• In this regard, the BCI had notified the Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022.
  • BCI had earlier opposed the move.

 

What is Bar Council of India (BCI)?

• The BCI is a statutory body established under the Advocates Act, 1961, and it regulates legal practice and legal education in India.
• BCI regulates legal education and professional standards in India including directing the state bar councils, standardizing law education, and course the framework at the universities and law colleges in India.
• It also conducts the All India Bar Examination to grant 'Certificate of Practice' to advocates practicing law in India.
• BCI also funds welfare schemes for economically weaker and physically handicapped advocates.

 

News Summary: Bar Council of India permits foreign lawyers and law firms to practice in India

• Recently, the BCI notified in the official gazette the Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022.
• Through this, the BCI allowed foreign lawyers and law firms to practise in India. 
• Although they cannot appear in court, they can advise clients on foreign law and work on corporate transactions.

 

What do the new rules allow?

• According to the Advocates Act, advocates enrolled with the Bar Council alone are entitled to practise law in India. 
• All others, such as a litigant, can appear only with the permission of the court, authority or person before whom the proceedings are pending.
• Foreign lawyers and law firms can practice in India
  • The notification essentially allows foreign lawyers and law firms to register with BCI to practise in India if they are entitled to practise law in their home countries.
• Foreign lawyers and law firms cannot practice India law
  • The foreign lawyers or foreign Law Firms have not been permitted to appear before any courts, tribunals or other statutory or regulatory authorities.
  • They are allowed to practise transactional work /corporate work such as joint ventures, mergers and acquisitions, intellectual property matters, drafting of contracts and other related matters on a reciprocal basis.
• Same restrictions for Indian lawyers working with foreign law firms 
  • Indian lawyers working with foreign law firms will also be subject to the same restriction of engaging only in non-litigious practice.

 

How have foreign law firms operated so far?

• For over a decade, BCI was opposed to allowing foreign law firms in India.
• Issue was raised in Bombay High Court in 2009 (Lawyers Collective v Union of India)
  • The issue of foreign law firms entering the Indian market came to courts with a challenge before the Bombay High Court in 2009.
  • The Bombay High Court held that only Indians holding Indian law degrees can practise law in India.
  • The HC also held that practice would include both litigious and non-litigious practice, so foreign firms can neither advise their clients in India nor appear in court.
• Same issue came up before the Madras High Court in 2012 (AK Balaji v Government of India)
  • The Madras High Court also held that foreign firms cannot practise either on the litigation or non-litigation side unless they meet the requirements and rules laid down by the Advocates Act and the BCI rules.
  • However, the Madras HC created an exception. It said that there would be no ban on temporary visits or advising clients on a fly in and fly out basis.
• Business Process Outsourcing (BPOs) arrived in India
  • By 2012, BPOs had arrived in India on a big scale and did backend work for US-based companies. 
  • In the legal profession, these firms, Legal Process Outsourcing (LPOs), carried support operations for lawyers.
  • They operated in uncertain legal frameworks and the Supreme Court had to intervene to settle the law on the issue.
• SC verdict on the issue
  • In 2018, the Supreme Court upheld both the High Court judgments disallowing foreign law firms and lawyers.
  • It passed the order with some modifications such as holding the expression fly in and fly out to cover only casual visit not amounting to practice.
  • On the issue of LPOs, the SC did not decide on their fate. 
    • They argued that they were essentially BPOs that managed secretarial support, transcription services, proofreading etc.
    • Technically, these activities do not come within the purview of the Advocates Act or the BCI Rules.

 

What is the significance of recent notification of BCI?

• Legal clarity to foreign law firms
  • The rules bring legal clarity to foreign law firms that currently operate in a very limited way in India.
• Flow of Foreign Direct Investment
  • This move will address concerns about the flow of Foreign Direct Investment in the country and make India a hub of International Commercial Arbitration.

 

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Q1) What is Legal Process Outsourcing (LPOs)?

Legal Process Outsourcing (LPO) is a business practice that involves hiring an external service provider or a third-party vendor to perform legal services that would traditionally be performed by in-house legal teams or law firms. The term "outsourcing" means that a company or organization is transferring a specific task or function to an outside provider, which is often located in another country, to perform the service more efficiently and cost-effectively.

 

Q2) What is Advocates Act, 1961?

The Advocates Act, 1961 is an important legislation in India that governs the legal profession and the practice of law in the country. The Act was passed by the Indian Parliament in 1961 and replaced the Indian Bar Councils Act of 1926.

The main objective of the Advocates Act, 1961 is to regulate the legal profession in India and to protect the rights and interests of clients. The Act established the Bar Council of India as the apex regulatory body for the legal profession in the country.

 

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Source: Foreign lawyers can practise in India but not appear in court: What exactly changes now | The Bar Council of India | The Hindu | Indian Express