Lawyers and Sanctions – A Question of “Feel”?

On 26 March 2021, the Ministry of Foreign Affairs (MOFA) of the People’s Republic of China announced sanctions against certain individuals and entities in the United Kingdom. In the current geopolitical climate, sanctions (of themselves) are not a particularly surprising phenomenon. However, what made the announcement of particular interest to the legal profession is that the list of nine individuals and four entities sanctioned included a set of barristers’ chambers in London.

The MOFA’s announcement states that – “… the individuals concerned and their immediate family members are prohibited from entering the mainland, Hong Kong and Macau, … and Chinese citizens and institutions will be prohibited from doing business with them”. As far as the authors are aware (at the time of writing), no other details of the sanctions have been released.

During a press conference on the same day as the announcement, a spokesperson for the MOFA was asked whether the sanctions against the barristers’ chambers also applied to all of its members. This question elicited the following response from the spokesperson:

“As to who the sanctions apply to, I believe they can feel it”.

This response (whatever one might think about its diplomatic niceties) may be somewhat closer to the mark than at first appears to be the case.

In the current environment, and generally with such developments, it is important for practitioners (and, in particular, for law firm managing partners) not to make any rash judgements. The MOFA announcement suggests that the sanctions are a “reaction”, the rationale for which is to safeguard China’s “national sovereignty, security and development interests” – for fear of stating the obvious, the reference to “security” is not a reference to the national security law in Hong Kong.

Many law firms in Hong Kong regularly instruct barristers practising in London to advise with respect to (for example) matters of private or public international law or offshore work. Such instructions may arise out of contentious or non-contentious matters and, as regards the former, in connection with litigation or arbitration. With this in mind, it is worth considering some basic points.

  • Lawyers’ clients in Hong Kong are entitled to a choice of legal representation as a fundamental right. This choice is not absolute and in selecting a barrister there is often more than one individual barrister or chambers to consider.
  • A barristers’ chambers is not a law firm or, for that matter, an “entity” and it has no separate legal identity. Individual barristers are self-employed sole practitioners and each barrister is regulated in his or her own capacity. The MOFA announcement refers to sanctions against “the individuals concerned” and the prohibition is against “doing business with them”. In contrast, similar MOFA announcements regarding recent sanctions against individuals and entities based in other jurisdictions have specifically referred to (for example) “entity”, “entities”, “companies” or “institutions” where this was intended.
  • As things stand, the safer course of action in Hong Kong (for now) is not to instruct an individual barrister who is specifically named in the MOFA announcement. There appears to be no prohibition against instructing a barrister (in connection with advisory work) who is not specifically named in the announcement – although, their ability to visit Hong Kong once COVID-19 travel restrictions are eased needs to be considered on a case by case basis. In some instances, an instructing law firm might take the view (for example) that a contested ad hoc admission application or a difficult visa process are matters that are probably best avoided (for the time being).
  • The prohibition against doing business with the individuals named in the MOFA announcement is directed at “Chinese citizens and institutions”. This appears to refer to Chinese nationals and Mainland institutions, although there is no definition of these terms. In any event, the prohibition does not refer to law firms in Hong Kong and it is the firm (and not its individual lawyers) who are on the record when instructing a barrister. If a lawyer within a law firm has any concern about the ambit of the sanctions in this regard, his or her employer should be prepared to accommodate that concern.
  • Law firms in Hong Kong with overseas offices might choose to deliver their instructions to a barrister in another jurisdiction via an overseas office. By way of example, there are plenty of dual-qualified practising Hong Kong solicitors who are based in and around London.

It is important for law firms in Hong Kong to keep their relevant working practices under review; particularly, in the current environment. Despite some initial concerns (not helped by certain media coverage) for the time being not much appears to have changed as regards whether and, if so, how law firms in Hong Kong should instruct barristers in London.

Editorial Note: Both authors write in their personal capacity and the views expressed represent their personal views at the time of writing.

 

 

Jurisdictions

Senior Consultant and Accredited Mediator, RPC

A commercial disputes lawyer with over 35 years' experience, David has extensive experience in handling the defence of professional indemnity, financial lines and other special risks claims as well as advising insurers in relation to such claims.

David has worked on the defence of claims in various jurisdictions including England, Hong Kong, Singapore, Malaysia, the PRC, Taiwan, Bermuda and the BVI.  He also has significant experience in handling regulatory and disciplinary matters.

He has considerable experience providing general risk management advice to professionals such as accountants, solicitors, insurance brokers, surveyors and stock-brokers. 

Most recently, he has been developing a practice as a commercial mediator. David is accredited as a mediator by both the Centre for Effective Dispute Resolution (CEDR) and the Hong Kong Mediation Accreditation Association Limited (HKMAAL).

Senior Consultant, RPC