UN RIGHTS EXPERT WELCOMES JUDGMENT OF EUROPEAN COURT ON DISTINCTION BETWEEN LEGAL AND ACCOUNTING PROFESSIONS

26 February 2002




The United Nations Special Rapporteur on the Independence of Judges and Lawyers, Dato' Param Cumaraswamy, today welcomed the judgment of the Court of Justice of the European Communities distinguishing the independent character of the legal profession from that of the accountancy profession.

In interpreting the legislative structure and content of the legal profession in the Netherlands and whether the same legislation was consistent with the European Treaty Provisions on competition law, the Special Rapporteur said, the Court in a judgment delivered on 19 February 2002 in Luxembourg, made an important and significant finding that multi-professional partnerships between the practising legal and accountancy professions are incompatible as they could interfere with the professional obligations of lawyers who must advise and represent their clients independently.

The Court found that accountants are not bound by professional client confidentiality as are lawyers. The court also observed that the accountancy market is highly concentrated, to the extent that the firms dominating it internationally are at present known as Athe big five@. The Court also alluded to possible problems of conflict of interest situations if law firms too became highly concentrated. The General Dean of the Bar Council of Netherlands referred to partnerships of law firms with such gigantic accountancy firms as resembling more Athe marriage of a mouse and an elephant than a union of partners of equal stature@.

The case was brought by two Dutch lawyers who were refused authorisation by the General Council of the Netherlands Bar to enter into partnership with accountancy firms Arthur Andersen and Price Waterhouse.

The judgment is even more significant in the light of allegations of serious professional conflict of interest in the Enron debacle, Mr. Cumaraswamy said, adding that the General Council of the Bar of the Netherlands must be commended for its principled defence of the independence of the legal profession.

In a 1996 report to the United Nations Commission on Human Rights, the Special Rapporteur expressed concern about the increasing trend towards commercialisation of the practice of the law particularly in the developed countries. In the report, Mr. Cumaraswamy said, Athe organisation of legal practices of lawyers needs to keep pace with modern changes, advances and liberalisation policies. At the same time, professionals in the practice of the law must be mindful of the need to retain the element of independence needed to discharge their professional duties.Y It is this independence in the profession which distinguishes it from any other vocation or profession@. (See United Nations document E/C/CN.4/1996/37 para. 98-99).

AI am pleased the European Court of Justice has distinguished the legal profession from other professions and upheld the importance of the independence of the legal profession@, he added today.




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