By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A well-known QC has backed calls to liberalise the Bar, telling Tribune Business: “Bahamianisation has been more of a curse than a blessing.”

Fred Smith QC, the Callenders & Co attorney and partner, said the ‘Bahamianisation’ concept had helped foster a sense of entitlement and protectionism at the expense of maintaining high performance standards.

He added that it had also helped create a political and economic elite who had been able to “profit at the expense of” the rest of Bahamian society.

“I do not advocate nationalistic protectionism at all,” Mr Smith told this newspaper in a recent interview. “It dumbs down the quality of service to simply benefit nationalism.

“It decreases opportunities for competition, the provision of cutting edge products to the consumer, and ultimately only benefits a select few.”

Continuing with this theme, he added: “Bahamianisation has been more of a curse to the Bahamas than a blessing.

“It is short-sighted, insular and creates a class that is politically and financially powerful, profiting at the expense of the many. It is not the idealistic equaliser it holds itself out to be.”

Mr Smith’s comments are likely to reignite debate on the merits of Bahamianisation, which many view as a powerful tool for national development.

Its proponents believe this policy concept has enabled Bahamians to train for, and ascend to, top managerial and ownership positions in their own economy, thereby contributing to the betterment of society.

Others, such as Mr Smith, instead argue that Bahamianisation has resulted in reduced performamce standards and innovation, given some local expectations that they will ‘automatically’ be promoted into certain positions because of their nationality.

Such debate has been rejuvenated after Tribune Business and other media recently revealed a request by the Financial Services Group (FSG), a committee of the Bar Association, for $6,000 to fund a survey that would ascertain attorney view on ‘liberalising’ the legal profession.

This prompted several attorneys, including Paul Moss, himself the principal of a Bahamas-based financial services business, to reject the notion of ‘opening up’ the Bar to specialist practitioners and law firms.

Mr Smith, though, has become the first prominent attorney since the FSG survey revelation to publicly endorse the Bahamian legal profession’s liberalisation.

“As a senior practitioner, I very much support the liberalisation of the Bar,” he told Tribune Business. “It is certainly in keeping with our international obligations, in particular to CARICOM, and the free movement of people between Caribbean nations.”

Mr Smith’s latter comment appears inaccurate, given that the Bahamas has never signed on to the Caribbean Single Market & Economy (CSME) and its associated ‘free movement of people’ concept.

However, the ‘opening up’ of various professions to foreign workers is an issue that the Bahamas’ trade negotiators will have to deal with in determining the terms of this nation’s accession to full World Trade Organisation (WTO) membership.

Still, Mr Smith argued that Bar ‘liberalisation’ “can only accrue to the benefit of the domestic and international legal services consumer.

“The deeper the Bahamas’ bench is, the greater its ability to provide competitive legal services, not only in financial services but in maritime, trust, litigation, arbitration, mediation and asset protection, which will reduce costs to the consumer and also put the Bahamas at the cutting edge in the provision of such services,” the Callenders & Co partner added.

Mr Smith said ‘liberalisation’ would add to, and boost, the Bahamas’ existing competitive advantages, including its proximity to the US and “ease of accessibility” from North and South America, and Europe.

“Given that the Bahamas promotes itself as a safe, stable and competitive jurisdiction in which to do business, expanding and liberalising our Bar, and allowing foreign practitioners to appear in the country, will expand the jurisdiction and legal services industry,” he reiterated.

Apart from numerous spin-off economic benefits, such as the impact on the real estate and property rental market, Mr Smith said ‘liberalisation’ would create opportunities for joint ventures and partnerships between Bahamian law firms and their foreign counterparts.

This, in turn, would also provide avenues for Bahamian attorneys to train and work abroad in international partnerships, and aid this nation’s goal of becoming an arbitration/alternative dispute resolution (ADR) hub.

Mr Smith repeated his belief that Freeport was “ideally suited” to become an ADR hub, especially with respect to maritime disputes, an idea that has also been backed by the Grand Bahama Port Authority (GBPA) and government ministers.

“I encourage the Government to continue to pursue the liberalisation of the Bar,” he told Tribune Business.

Opinion in the legal profession is split on the issue. Those advocating it believe the Bahamas lacks the depth of expertise necessary to handle increasingly complex financial services transactions and client demands.

Just as importantly, they also believe that in a relationship-driven business, the Bahamas lacks the key contacts necessary to attract and retain major ‘blocks of business’.

Such a problem, ‘liberalisation’ proponents feel, can be addressed by ‘opening up’ to specialist foreign financial services practitioners and law firms. They argue that the likes of the Cayman Islands and Bermuda have gained a competitive advantage by already doing this.

But senior attorneys who have called for ‘liberalisation’, such as Bryan Glinton, Brian Moree QC and Michael Paton, have been quick to point out that such an ‘opening up’ will not be widespread, with areas such as family and criminal law reserved for Bahamians only.

‘Knowledge transfer’ to Bahamians would also be required, as would partnerships and joint ventures between local and foreign law firms.

Opponents, though, argue that ‘liberalisation’ is unnecessary and will not be a ‘silver bullet’ or one-shot panacea to resolve the financial services industry’s lack of growth.

Mr Moss recently described the ‘liberalisation’ issue as a ‘red herring’ to Tribune Business. He suggested it was distracting attention from the real issues as to why the Bahamas’ financial services industry is not growing, such as ‘ease of doing business’ woes and a lack of worldwide marketing/promotion.

Elsworth Johnson, the Bar Association’s president, last week questioned why the Bahamas had seemingly been unable to develop a deep enough financial services expertise base after 40 years of Independence.

He argued that Bahamian attorneys were just as bright and competent as their foreign counterparts, but said Bar ‘liberalisation’ was a matter for the Government, Parliament and Immigration policy.

The Christie administration, though, appears to have determined that legal profession ‘liberalisation’ is necessary to help revitalise the financial services sector.

Prime Minister Perry Christie earlier this year told the Bahamas Financial Services Board (BFSB) conclave in Abaco that the Bahamian legal profession needed to ‘open up’ to specialist foreign attorneys, suggesting this was key to the industry.

This followed similar calls by former financial services minister, Ryan Pinder, and his successor, Hope Strachan.

Mrs Strachan last year said her meetings with high net worth individuals and their advisers revealed that the inability of foreign specialists to practice from the Bahamas was a major obstacle to the financial services industry’s growth.

“The Bahamas is notoriously recognised for its closed shop policy towards foreign lawyers and certain other industry professionals,” Mrs Strachan told a Bahamas Institute of Financial Services seminar.

“On a recent industry-related trip, it was communicated that this continues to be an impediment as to why more business is not being referred to the Bahamas, despite our advanced legislation, our location and proximity to the US, our language, political stability, our cadre of well-educated and experienced professionals, and our reputation as a well-regulated and respected international financial centre.

“This was a common unsolicited theme from many of our friends and industry partners. The question is: What should be done about it? Are we prepared to recognise the problem and do something to fix it?”

Her call then for more openness, and an end to what was perceived as a ‘closed shop’, was met with strong push back from many in the legal profession.