Lawyer Regulations in Saudi Arabia - Essay Example

?I. Lawyer Regulations in Saudi Arabia Partnerships between Lawyers under the Saudi of Law Practice The lawyer profession of lawyer that exists in what is today calledtoday Saudi Arabia existed hundreds of years ago in the Islamic empires Ottoman and Abbasid and there is evidence to suggest that lawyers existed before that.1 Before 1932, Saudi Arabia was known as the Arab Peninsula. until The Kingdom of Saudi Arabia was founded by the King Abdul-Aziz bin Saud in 1932.2 Before that timeack in time,he Islamic law was themain source that governed lawyers in the Arab Peninsula. In Islamic law, lawyers used to be called Litigation Agents (Wakel Blkosomah).and There are many Islamic books that discuss the rights and obligations of Litigation Agents and other issues related to the lawyer profession.3 In the modern history of the Kingdom of Saudi Arabia, there has been many events, whether economic, social, or political, that have affected lawyers and lawyer’s regulations. The result of those events has made it necessary for the Saudi legal market to find ways to develop the profession and promote it. One such method was to create a law that discussed professional partnerships, which included all kinds of professions, whether it was lawyers, doctors, or engineers. In an explanatory note for the laws of professional companies, 4 issued by the Bureau of Experts, the Council of Ministers stated: “the difficulties surrounding individual professionals are many.” As such, it’s better for clients to deal with a group of professionals than to find themselves in front of a team of specialists at a high level of achievement.5 However, the legal profession and lawyer’s regulations in Saudi Arabia have gone through many stages 6 until the law has evolved into in the form that we see today.7 The present Saudi Code of law practice was released under the Royal Decree No. M/38, dated 15 October, 2001, and under the Council of Ministers Resolution, No. 199, dated 1 October, 2001. This law includes the definition of the law practice profession and its conditions, lawyer’s duties and rights, disciplinary measures for lawyers, and general and transitional provisions. However, the law does not discuss directly issues related to professional partnerships; the law refers to Law of professional partnerships as this is the law that regulates lawyers’ partnerships. tThe Saudi Code of Law practice, article 10, states: “a professional partnership for practicing law may be formed by two or more of the lawyers whose names are registered in the list,8 but is subject to the requirements of the professional partnerships law.” The legislature here did not refer to the company law as the law that governs the relationships between partners, but points out the law of professional partnerships. The legislature made the differences very clear by stating that “it is appropriate to subject professional firms to the provisions of the General Partnership, organized by Title II of the Companies Law, where professional firms are “civilian companies” in their nature, as working in liberal professions does not make them merchants.” Thus, the differences are obvious between civil companies and commercial companies, either in their formality or substantively standards.9 So, a law firm partnership is governed by the Law of Professional Partnership and not the Company Law. Thus, the next topic will be devoted to discussing the Law of Professional Partnerships in regards to the provision of professional partnerships legality. 2. The Saudi law of Professional Partnerships a. General The law of Professional Partnerships considers a partnership between lawyers to be a civil company. Therefore, it is necessary to discuss what a civil company is before covering the partnership legalitypersonality under the Saudi law of Professional Partnerships. b. What is a Civil Company? i. Terminology: The best English translation for a civil company is a “Professional Partnership.” In French it is known as “societe civile professionnelle” (SCP). The reason why I used this term is because I couldn’t find any corporate structure in the United State that matched or at least had similarities to the idea of a civil company that is used by civil law countries. ii. The Idea of a Civil Company? Saudi law makes an important distinction between corporate bodies with commercial objects and those with so-called “civil” objects. Basically, a company with a civil objects clause is precluded from carrying on business with a view to profit. Civil companies do not put limited liability onto their owners. Shareholders have unlimited liability in proportion to their respective percentage ownership of the company. A civil company is a normal legal person, subject to the provisions of the Civil Transactions, and Shari’a Law shall be applied to financial transactions carried out by partners and any third parties. The civil company shall not be subject to the law of Commercial Transactions or Company Law, except in rare cases. Article 24 of the Law of Professional Partnerships provides: “Company law shall not apply to professional firms unless in the absence of a particular provision discussing the issue in question, to the extent that it is not inconsistent with the nature of these companies.” On the contrary, with a civil company approach, the commercial company engages in business and is therefore subjected to the provisions of the law of Commercial Transactions in general and the provisions of the Company Law in particular. They are committed to professional duties, such as registration in the commercial register and business bookkeeping. These are subject to the provisions of company bankruptcy law, or any other duties provided by Company Law or any other law that relates to it. 3. Professional Partnership (Civil Company) Legal Personality under the Law of Professional Partnerships in Saudi Arabia: As described previously, Saudi Arabia makes a distinction between civil and commercial companies. Article 1 of the Law of Professional Partnership states: “people who are licensed to practice any profession have the right to establish a civil company that has a legal personality in accordance with the provisions of these regulations.”10 So, they are proper companies with statutes, capital, a manager, a company name, and a registered office. They have their own legal personality and must be registered with the local professional company’s registry. The civil company legal personality is, in theory,n same way is similar to the General Partnership11 under the Saudi Company Law, part two, partnership.12 Article 22 states: “Partners have a personal responsibility and solidarity responsibility with other partners against third parties, and the company shall not be required to pay its debts before receiving notice from a third party. The third party shall give the company sufficient time to pay its debts, and the partner may state in the company contract, under the provision of partner’s relationship, the ratio borne by each partner of the company’s debt.” This article consists of two parts. The first is related to partners’ responsibility against the third party. The second deliberates the relationship between the partners. In brief, the partners have unlimited liability. Each partner is personally liable for all of the debts of the partnership. This includes any debts incurred by any of the other partners on behalf of the partnership. The partners in a civil company are jointly liable against third party, the third party is completely free to sue all partners together to compensate for damages, or choose any partner alone even if this partner was not the one who caused the damage. where Each partner is liable for the negligence or malpractice of any other partner against third party. hen tThe partner who has a case brought against him has the legal right to sue the other partners in order to pay their share of the compensation according to their share in the company. Furthermore, Article 6 of Professional Partnership Law states: “a professional partnership shall not be turned into any other type of company set forth under the Saudi Company Law.” Thus, a civil company can be a very dangerous form of a law firm. The legislature here limits the partners’ right to convert the professional partnership into any other type of company, as listed by Saudi Company Law. This confirms that the only way for a lawyer to establish a company is by establishing a civil company, which is a company governed by the rules of the Professional Partnership Law. Read More