The Iron Chancellor, Otto Von Bismarck, is reputed to have once said: “Laws are like sausages, it is better not to see them being made”. Whilst that might portray a somewhat dystopian view of society and its legal landscape, there is much that is unseen in the law making process in a modern democratic jurisdiction.
There has also been more than enough said over time about lawyers (typically uncomplimentary) but often likely out of a lack of awareness of the unseen contribution the legal profession makes, including towards lawmaking. Jersey is no exception. There is a wealth of very positive work and effort behind the scenes from lawyers in Jersey in this area.
The vision that Jersey Finance has in promoting Jersey as a global leader in financial services is very much shared within the Jersey legal profession and none more so than those whose practices are international in nature. Jersey law has developed over time from its Norman customary roots and consistently adapts to cater for the 21st century global financial services industry. The process of development in the law is unceasing, be it through the Court process, where statutes and regulations are carefully construed and applied, or in the adoption of new or improved versions of them.
The Law Society of Jersey currently has more than 350 members and is going from strength to strength. Within the Law Society’s membership, there is a wealth of expertise and experience, plus an ever-growing body of advocates and écrivains who not only have a deep understanding of the areas in which they practice but also a keen interest to ensure that the legislative and regulatory framework in Jersey continues to evolve and improve. That knowledge base in the Island is yet further enhanced by the many highly trained lawyers qualified in other jurisdictions, with significant experience from working in major financial centres around the world but who now live and work for firms in Jersey.
In addition to individuals personally, or via their firms making contributions to the lawmaking process in Jersey − through suggesting areas for review, taking part in working groups and in Government consultations − for many years within the Law Society there have been a number of specialist Sub-Committees whose members look to coordinate views from practitioners in relevant areas and advise Government and stakeholders where Jersey law might be updated and improved. That work is done with a number of aims in mind, including:
- to help Jersey as a jurisdiction maintain its position as a financial centre that meets modern standards and expectations
- to ensure Jersey law and regulations run smoothly by suggesting revisions to provisions where experience of applying them in practice has revealed a need for adjustments to be made or gaps to be filled
- to ensure Jersey stays ahead of other financial centres by adopting novel legislative innovations to make the jurisdiction an ever more attractive place to do business.
The past 12 months have seen a number of initiatives in Jersey law to which members of the profession have contributed significantly. One of the most active of our Sub-Committees − and perhaps the most relevant to Jersey’s financial services industry − is the Financial and Commercial Law Sub-Committee. The Financial and Commercial Law Sub-Committee has been actively involved alongside other trade organisations and in conjunction with Jersey Finance Limited, in promoting legislative updates in areas of financial and commercial law as well as responding to consultation papers and legislative initiatives promoted by the Government of Jersey, the Jersey Financial Services Commission (JFSC) and other stakeholders.
In particular, members of the Sub-Committee have recently been involved in industry meetings and discussions concerning proposed amendments to the Companies (Jersey) Law 1991 and the Security Interests (Jersey) Law 2012. It is expected that there will be public consultation on these projects in the near future and they will lead to significant enhancement of Jersey’s corporate and security laws, both of which are central to keeping Jersey an attractive jurisdiction and choice of law for financial transactions.
Further, members of the Sub-Committee have been providing views in relation to the proposed regulation of consumer finance in Jersey, with a view to ensuring that the proposed regime is fit for purpose and appropriate for Jersey. The Government of Jersey’s consultation paper in this area was published in July 2023, with the aim of bringing consumer lending (in the broad sense, so to include advising on and arranging lending agreements, credit broking and other debt related activities) within Jersey’s legislative and regulatory framework and anti-money laundering regime. The consultation feedback was published in May 2024 and notes the close work the Government would be continuing with the Law Society, particularly in the area of dégrèvement, which has long been the subject of debate with regard to its fairness to borrowers. The feedback records the many views and comments made by the legal community (not only the Law Society but individual lawyers) on many of the questions included in the consultation paper.
Looking through a wider lens and the prominence Jersey continues to have as a go to jurisdiction for private wealth structuring, I was very much encouraged by feedback I received when travelling on business in Singapore and Hong Kong earlier this year. The work that Jersey Finance has done on the ground in the Far East cannot be underestimated, nor can that of the professional service providers working there day to day with Jersey structures or visiting the jurisdictions to promote not only their own businesses but Jersey plc. Whilst both Singapore and Hong Kong have their own trust legislation, from the conversations I had, Jersey trusts stood out as being the private wealth structuring vehicle of choice. The principal reasons for that being the attraction of Jersey’s trust legislation, the reliability and quality of its courts and the depth of expertise and experience held by its services industry.
On 8th July 2024 the Government of Jersey published a consultation paper seeking input on further amendments to the Trusts (Jersey) Law 1984. The topics under consultation have been distilled from recent important decisions of the Jersey Courts (including not only the Royal Court but the Jersey Court of Appeal and the Privy Council) and of the Guernsey Court (in cases where the relevant Guernsey law provisions are materially identical to those in Jersey or where Jersey law was applied in the decision). The proposals, which have drawn on the work of a Trust Law Working Group made up of leading practitioners in the industry, include:
- addressing the priority of claims between a former and current trustee in circumstances of ‘insolvent’ trusts
- the ability of beneficiaries to call for a trust to be brought to an end
- raising the concept of a ‘data trust’.
It is telling that those issues have emerged from complex and detailed legal proceedings and judgments in our jurisdiction, were identified swiftly by practitioners in the field as warranting statutory attention and are already out for consultation. It is that interplay between the legislature, practising lawyers looking to test the boundaries of the law and the strength of independence, knowledge and understanding of the judiciary in Jersey, that bolsters the Island’s reputation as a first class jurisdiction and leads to the high regard in which it is held.
The inclusion in the Trusts (Jersey) Law consultation of the concept of a ‘data trust’ − which came from the efforts of a Digital Jersey working group and is envisaged could be a means by which data might be pooled and shared to allow more effective analysis, administered by experts in asset stewardship and where governance, security, confidentiality and appropriate regulation are maintained − is of itself noteworthy as an example of long existing legal structures being considered and adapted for future uses. That consultation will inevitably draw much commentary and thought from members of the Jersey legal profession.
The ability and knowledge which the profession brings to the table to assist Jersey Finance in developing its reputation as a fintech centre is exceptional. Recent landmark developments in the fintech space, in great part helped by the work of the legal profession, include the example of a Swiss company forming a tokenisation platform involving a Jersey issuer of virtual tokens, having selected Jersey for all the good reasons we look to promote as a jurisdiction, including not least the quality of its service providers, as well as the economic advantages of tax neutrality and close nexus to the UK and the EU.
I remain confident that the Jersey legal profession will continue to help with all stages of the development and implementation of new legislation in the Island. Whilst things have moved on since the sausage machines of the 19th Century, much of the legal profession’s contribution will remain unseen but nevertheless represents a vital component in Jersey’s progress.
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