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SLOVAK LAW STIPULATES LEGAL ADVICE MUST BE PROVIDED BY INDIVIDUALS, NOT COMPANIES

Foreign law firms accused of illegal activities

THROUGHOUT the last decade, local branches of foreign legal offices have provided legal counselling on some of the country's largest business transactions. Critics now claim that their activities have all this time been breaking Slovak law.
Experts say that foreign law firms are not entitled to practise law in Slovakia because the law prohibits any company from offering legal advice. Legal services must be provided by individuals only, and those people have to be members of the Slovak Bar Association (SAK).
"Foreign law firms do not meet statutory requirements for the provision of legal services prescribed by [Slovak law]," Pavol Erben, a member of the board of the SAK, confirmed to The Slovak Spectator, citing regulations laid down in two separate acts: the Legal Advocates Act and Commercial Lawyers Act.

THROUGHOUT the last decade, local branches of foreign legal offices have provided legal counselling on some of the country's largest business transactions. Critics now claim that their activities have all this time been breaking Slovak law.

Experts say that foreign law firms are not entitled to practise law in Slovakia because the law prohibits any company from offering legal advice. Legal services must be provided by individuals only, and those people have to be members of the Slovak Bar Association (SAK).

"Foreign law firms do not meet statutory requirements for the provision of legal services prescribed by [Slovak law]," Pavol Erben, a member of the board of the SAK, confirmed to The Slovak Spectator, citing regulations laid down in two separate acts: the Legal Advocates Act and Commercial Lawyers Act.

When asked if he could specify which foreign firms were violating the law, Erben replied: "These law firms are listed as operating in Slovakia in several international law firm directories."

Local lawyers say they are well aware that some of their colleagues are working in breach of the law.

"Attorneys working for foreign legal firms are definitely breaking the law, which says that the work of an attorney is an independent profession. These lawyers are more or less employees, because they cannot freely decide about the cases they work on and they do their work according to instructions from these firms," said a Slovak attorney who wished to remain anonymous.

"They are also violating ethical principles of the profession by being paid by these firms, and the SAK should have dealt with this problem a very long time ago by striking them off the list of attorneys," the lawyer added.

While punishing the attorneys falls within the SAK's responsibilities, Erben said that his organisation cannot punish the companies involved.

"That is a question for the competent authorities standing outside the legal profession, whose role it is to make sure that the laws of the Slovak Republic are being observed," he said.

Several lawyers experienced in working for foreign legal firms said that they realised they were breaking the law, but had thus far used various loopholes that made it difficult to prove.

A look at the Slovak business register shows that some international law firms working in Slovakia list providing "organisational and economic advice" as their only activity. Others also name this activity but as part of a longer list. The particular wording chosen hides the fact that the advice offered is legal in nature.

According to experts, clients of these foreign firms may be at risk because of the precarious legal position the companies are in.

"Liability and indemnification for loss or damage, caused by the provision of improper legal services, is [one of the dangers clients could face]," said Erben, pointing out that only independent attorneys can be held liable for losses resulting from bad legal advice.

The Slovak Spectator contacted four foreign law firms operating in Slovakia, all of which were unable to comment before the paper went to press.

But despite their objections, many critics are ready to admit that the activities of these firms have been beneficial for the Slovak legal environment.

"[Foreign law firms] have brought experience with international agendas, the possibility of collaboration with foreign experts, and they have trained their employees. So in this respect they have played a positive role," said one of the local lawyers.

Regardless of the rights and wrongs of the situation, it may be resolved before too long, as the Justice Ministry says it has already started preparing new legislation governing the activities of foreign law firms in Slovakia.

"Our ministry is preparing an amendment of the Legal Advocates Act. The draft will probably be submitted to the governmental legislative council in March. Nothing definite can be said about the content of this amendment," said Justice Ministry spokesman Richard Fides.

"According to my information, the SAK agrees with the draft amendment to the Legal Advocates Act, which regulates the activities of foreign law firms. It seems we are very close to a solution," said Erben.

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