Speech by Senior Minister of State for Law, Indranee Rajah, during the Committee of Supply Debate 2015

10 Mar 2015 Posted in Parliamentary speeches and responses

Madam Chairman,

1. This is an exciting time for the legal profession. Asia’s economic growth will provide opportunities to Singapore lawyers and local law firms.

1. Supporting Law Firms in Singapore

2. I would encourage law practices to take advantage of regional opportunities, build capability, upgrade skills and leverage on technology. The Government will assist.

3. There are various schemes offered by the economic agencies, including those announced recently. These include:
   1. the Double Tax Deduction for Internationalisation (“DTD”) scheme, which has been enhanced to cover salaries for Singaporean personnel posted to new business entities. This will provide greater support to law firms venturing overseas, by co-sharing their risks and initial costs of expansion. This helps Singaporeans to gain international exposure, which is important for future leadership positions.
   2. Then there is the Development and Expansion Incentive for International Legal Services scheme (“DEI Legal”), which has been extended until 31 March 2020. It provides a 10% concessionary tax rate on incremental income derived from the provision of international legal services for five years and is available to approved law practices incorporated as companies.

4. I agree with Mr Hri Kumar that technology has transformed the way law firms provide services. Technology, properly harnessed, increases productivity and innovative delivery of legal services. We are partnering the Law Society to encourage adoption of technology where beneficial.

5. We are also studying how technology will impact the delivery of legal services in the future.

6. Mr Kumar commented on alternative business structures. The Legal Profession Act currently provides a calibrated approach by permitting Legal Disciplinary Practices, where non-lawyers can become partners, for example.

7. Any further extensions will need to be carefully considered. Flexibility has to be weighed against the professional and ethical challenges. We will continue to study these issues in consultation with the industry and stakeholders, and move in tandem with market developments.

2. Maintaining a Quality Legal Profession

8. Mr Kumar and Mr Vikram Nair commented on the supply of lawyers, UniSIM and the list of recognised Overseas Scheduled Universities.

9. MinLaw’s objective is to ensure a sufficient pipeline of quality legal talent to support Singapore’s legal needs. We uphold high standards to maintain quality. We do not try to beat the market mechanism by controlling numbers, but have the responsibility to inform aspiring lawyers of the situation to enable them to make informed choices on whether, and where, to pursue a law degree. On our part, we have already made public the figures that are available. We thank Mr Kumar for his suggestion to make more information available on training contracts, and we will discuss this suggestion with the Law Society and the Singapore Institute of Legal Education (“SILE”).

10. The number of local law graduates has remained fairly constant at less than 400 students per year, over the past three years. The increase arises from the number of law students studying overseas.
    1. The number at UK universities has doubled over four years, to hit around 1140 students in 2013.
    2. The number at Australian universities has increased more than 25%, to hit around 390 between 2011 and 2013;
    3. Taken together, the number of students from UK universities and Australian OSUs has increased by 47% over the past 3 years.

11. There is a distinction between:
    1. law graduates getting training contracts and being subsequently employed as practicing lawyers; and
    2. law graduates being able to find employment more generally.

12. The number of available training contracts and retention of trainees is determined by the law firms, not the Government. It depends on their manpower needs, which in turn are determined by market forces.

13. The industry is generally able to take in local graduates. However, the increase in the number of students studying overseas has intensified the competition for training contracts.

14. The SILE has put in place measures to facilitate more training contracts. Senior lawyers can now supervise up to 4 practice trainees, instead of 2, at any time. The SILE has also set up a Working Party to review the practice training framework. However, it ultimately depends on the number of trainees that senior solicitors can effectively supervise, and which the firms can eventually retain, so aspiring entrants should consider their options carefully and be prepared to compete for training contracts if they wish to practice.

15. However, general employment prospects for law graduates, on the other hand, are good. A law degree provides excellent training for numerous other areas of work besides practice, and law graduates have many other employment options aside from practice.

16. For overseas universities, we maintain a list of Overseas Scheduled Universities (“OSUs”). The Fourth Committee on the Supply of Lawyers (“Fourth Committee”) had recommended that the list of OSUs be reviewed and updated every 5 years to better reflect current rankings of UK Law Schools, as a “qualitative sieve”.
17. The SILE’s recommendations were arrived at after applying the methodology in the Fourth Committee’s report and considering the universities’ representations. The Ministry has accepted these recommendations, which will take effect from Academic Year 2016/2017, so those who have secured places to read law at the omitted OSUs before 1 October 2015 or for the Academic Year 2015/2016 intake will not be affected. They remain eligible for admission to the Singapore Bar if they satisfy the other general criteria for admission.

17. Separately, there is a need to ensure that sufficient law students are interested in joining practice areas where there is an unfilled demand for lawyers. In this regard, while there is no overall shortage of lawyers, there is a shortage of lawyers entering and staying in criminal and family law practice. This shortage is unlikely to be addressed by the current supply of law graduates as many of them aspire to practise commercial and business law.

18. Having sufficient family and criminal lawyers is important to the public. The Fourth Committee recommended establishing a third law school as a targeted measure to increase the number of family and criminal law practitioners. This will be the UniSim Law School (“ULS”). Given its community-focused ethos, ULS aims to attract suitable mature students seeking a mid-career switch to the law, who can handle the demands of family and criminal law practice. ULS will begin with a modest intake of about 50-75 students a year. The ULS Steering Committee is finalising its report. We will announce details once the Steering Committee has concluded its work.

3. Regulation of Moneylenders

19. Mr Lim Biow Chuan spoke about the moneylending industry.

20. Some borrowers have good reasons for wanting to borrow, but lack access to other lending facilities. Licensed moneylending removes the need to borrow from loan sharks, but we also need to regulate the industry strictly and carefully, to protect the vulnerable borrowers.

21. We share Members’ concerns about the high interest rates and late charges imposed by some moneylenders today. We are considering imposing appropriate caps on interest rates, late fees and other charges.

22. We too are concerned about borrowers who borrow beyond their means, often from multiple moneylenders. To address this, we are considering setting up a moneylenders credit bureau, to enable industry players to assess the aggregate risk of individual borrowers.

23. Second, on debt collection practices. The actions taken by debt collectors in collecting debts cannot contravene the law. For example, the Penal Code makes it an offence if hurt or threatening behavior is involved. In addition, there is redress under the Protection from Harassment Act (“POHA”). Since POHA came into force last November, at least four anti-harassment orders have been issued against debt collectors. Borrowers who encounter criminal behaviour from licensed moneylenders or their debt collectors should report the matter to the police or the Registry of Moneylenders.

24. The Advisory Committee on Moneylending has examined these issues, and will make its recommendations soon.

4. Outsourcing Call Answering Functions

25. Ms Sylvia Lim asked about the rationale and cost-effectiveness of outsourcing our call answering functions, and its effect on service delivery.

26. During the 2012 COS debate, Ms Lim raised the issue of delays and dropped calls when bankrupts tried to contact the Insolvency and Public Trustee’s Office (“IPTO”). My Ministry replied that we were looking to improve the efficiency and responsiveness of our processes.

27. In 2013, the Ministry contracted a professional service provider to operate a new Ministry-wide Integrated Public Engagement System (“IPES”). The IPES ensures that all phone calls are answered, and emails are tracked for response times. IPES agents also serve walk-in members of the public, who come to IPTO and the Legal Aid Bureau. They deal with general enquiries and simple cases. More complex matters are referred to our case officers, and these necessarily require more time to respond to.

28. Ms Lim mentioned the case of somebody who was told that he would receive a response in 14 days. The SOP is actually between 3 to 14 working days. So some are responded to in 3 days, and some in 14 days, depending on the case officer’s workload.

29. In 2014, on average each month, IPES dealt with over 7,000 phone calls, 2,000 walk-in customers and 11,000 emails for IPTO alone. Our response times have improved significantly.

30. We will continue to refine the system to serve our customers better. Thus far, this approach has been an effective way of working within the prevailing manpower constraints. There are manpower challenges in many areas of the Civil Service, and given these constraints, outsourcing is no longer a matter of choice.

5. Conclusion

31. Madam, in conclusion, the Ministry of Law will continue to review our laws and policies to promote access to justice, strengthen the rule of law, help Singapore legal practices to become regional players and develop Singapore as a legal hub.

Last updated on 10 Mar 2015