On 18 June 2018 California Governor Jerry Brown signed into law Senate Bill (SB) 766, Representation by Foreign and Out-of-State Attorneys. The bill, which was passed 69-to-zero by the legislature, clarifies that foreign (ie, not licensed in the United States) and out-of-state (ie, licensed in a US jurisdiction, but not in California) attorneys can represent parties in international arbitrations in California, subject to certain conditions.
SB 766 will take effect on 1 January 2019.
SB 766 states that "a qualified attorney [as defined] may provide legal services in an international commercial arbitration or related conciliation, mediation, or alternative dispute resolution proceeding" if any one of five conditions is satisfied:
- a California-licensed attorney actively participates in the matter;
- the services arise out of, or reasonably relate to, the attorney's practice in the jurisdiction in which they are licensed;
- the services are performed for a client based in the jurisdiction in which the attorney is licensed;
- the services arise out of, or reasonably relate to, a matter that has a substantial connection to the jurisdiction in which the attorney is licensed; or
- the services arise out of a dispute governed primarily by international law or the law of a foreign or out-of-state jurisdiction.
Under SB 766, a 'qualified attorney' is defined as an individual who is not licensed to practice in California, but who is licensed to practice law in another jurisdiction in the United States or is "a member of a recognized legal profession in a foreign jurisdiction, the members of which are admitted or otherwise authorized to practice as attorneys or counselors at law or the equivalent".
Qualified attorneys must also be subject to effective regulation and discipline in the jurisdiction in which they are licensed and must be in good standing in every jurisdiction in which they are admitted or otherwise authorised to practice.
California's new law is broader than American Bar Association (ABA) Model Rule 5.5 on the Unauthorized Practice of Law; Multijurisdictional Practice of Law. Model Rule 5.5 permits out-of-state attorneys to provide legal services in an arbitration on a temporary basis if the legal services:
(1) are undertaken in association with a lawyer who is admitted to practice in this jurisdiction and who actively participates in the matter… (3)… arise out of or are reasonably related to the lawyer's practice in a jurisdiction in which the lawyer is admitted to practice…; or (4)… arise out of or are reasonably related to the lawyer's practice in a jurisdiction in which the lawyer is admitted to practice.
Unlike SB 766, Model Rule 5.5 does not extend such representation to foreign attorneys and does not provide exceptions for services that have a substantial connection to the jurisdiction in which the attorney is licensed or for those that are governed primarily by international law or the law of a foreign or out-of-state jurisdiction.
Florida, like California, has adopted a modified version of ABA Model Rule 5.5. Florida Rule 1-3.11 provides that an out-of-state or foreign attorney may appear in an arbitration proceeding in Florida if the appearance:
- is for a client who resides in the jurisdiction in which the attorney is licensed; or
- arises out of, or reasonably relates to, the jurisdiction in which the attorney is licensed.
However, out-of-state and foreign attorneys providing legal services in arbitrations in Florida must still file a verified statement in the arbitration (accompanied by a $250 filing fee) and may file only up to three demands for arbitration or responses to arbitration in separate arbitration proceedings in a 365-day period.
For further information on this topic please contact Katie Connolly at Norton Rose Fulbright LLP by telephone (+1 202 662 0200) or email (firstname.lastname@example.org). The Norton Rose Fulbright website can be accessed at www.nortonrosefulbright.com.
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