Committee of Supply – Head R (Ministry of Law)

Mdm Chair, over the last few years, it has been reported that a record number of students are studying law overseas, particularly in the UK and Australia. I believe the trend might have started around 2011, when data on the top earners' niche professions was published and lawyers featured near the top. In subsequent years, the rising starting salaries of lawyers at top firms were also published, and I believe this might have sent a signal to prospective students that this might be a path to quick riches. But, of course, practising lawyers know better.

This large supply came to a head last year when a number of students seeking training contracts soared and many did not get places. Of those who took up places, some did so knowing they would not be retained. I am sure many of those who did not get places will be seriously disappointed.

One view is that there is no need to regulate the supply of lawyers and it may just be left to market forces so that, in the years of oversupply, not all would get jobs and salaries may drop, making the profession less attractive to future cohorts and this would naturally limit supply.

Personally, I take a different view. I am in favour of more regulation. The process to qualify as a lawyer is relatively long, requiring study, practical training and, finally, traineeship. If a person starts embarking on this journey at the age of 18 to 21 in the expectation that they would one day become lawyers, they may feel they have wasted their time if, at the very end, they are unable to get training contracts and jobs. In this regard, I believe it might be kinder to restrict the numbers earlier so that prospective students do not unnecessarily embark on a journey they cannot complete. This is especially so if the families have incurred significant costs and debts to send their children abroad in the hope that they would be able to pay it back once qualified.

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In the past, restrictions had included having a shorter list of recognised universities and requiring higher grades from students to qualify as lawyers. This sent a signal that going abroad to study law did not ensure places to practise and that, in itself, limited numbers.

SILE has recently announced restrictions on the list of universities that will be recognised. Are there any plans for further measures to restrict the supply of lawyers?

My second cut. I declare my interest as a lawyer at Rajah & Tann and I practise dispute resolution. I find some of the developments to promote Singapore as a hub for international dispute resolution very exciting. The enabling legislation to set up the Singapore International Commercial Court (SICC) was passed last year. This creates another dispute resolution option for international transactions. So, for example, a European and an Asian party may enter into a joint venture agreement for a project in Africa and have disputes under that agreement governed by the SICC, picked by the laws of yet another country if they wished. This gives tremendous flexibility to parties in commercial transactions.

Likewise, the Singapore International Mediation Centre was set up last year and this will complement the dispute resolution services that could come out from not only SICC, but the International Arbitration Centre. The Singapore International Mediation Institute was also set up to train potential mediators.

While all these developments are very exciting, one concern is whether all these will actually create benefits for locally qualified lawyers or whether it will only give jobs to international lawyers. I personally believe that local lawyers can benefit if they work in international firms, but I would be interested to know if the Ministry itself has any view on this and how these developments would actually benefit both Singapore and local lawyers.

Madam, I declare my interest as a family law practitioner. The launch of the Family Justice Courts was described by the Chief Justice as one of the most significant events in the legal calendar last year. To many family lawyers, the details that were subsequently unveiled represented a change of seismic proportion. Two diametrically opposed approaches need to be reconciled and one of which was what most have been used to – being adversarial on behalf of the clients.

In the new legal ecosystem, family lawyers have to be conflict managers and problem solvers but it is not clear how quickly the transformation has to be made and if it would come at a cost in terms of fewer paying clients or considerably longer working hours because of

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the need to attend training courses to acquire new skills in counselling and mediation. Currently, lawyers are undergoing accreditation scheme assessment courses as well. Could the Minister explain the impact upon the legal profession as a whole?

Madam, three years ago, at MinLaw's Committee of Supply, I highlighted the frustration of some of my residents who are undischarged bankrupts in dealing with the Insolvency and Public Trustee's Office. The experience had been that there were long delays and, when they tried to call the officers in charge, they could not even leave phone messages as the mailboxes were full.

I thus read with interest The Straits Times' report of 7 July 2014 that MinLaw had, from 2013, outsourced some call answering services. The report stated that the Ministry had engaged People Advantage, a subsidiary of Certis Cisco Security, to help it to field public calls from Certis' call centre at Paya Lebar. Apparently, more than 50 outsourced persons answered the Ministry's calls. The Ministry's spokesman explained that the Ministry had wanted to improve the way it responded to public queries and to enable their officers to focus on case-specific issues.

Could the Ministry clarify the following: one, what led to the decision to outsource call answering; two, has such outsourcing been done for all the Ministry's departments or only some; three, has there been any preliminary assessment of cost effectiveness; and, four, anecdotally, a resident who recently called it told me that while her call was answered promptly, she was not able to speak to the officer in charge but was told that the officer would call her back within two weeks. Has the Ministry assessed whether case response times have improved?

Madam, about a year ago, a resident sought my assistance as he was being harassed by a licensed moneylender. His son had borrowed money from a licensed moneylender but failed to pay the loan on time. After his son ran away from home, my resident was left to face the wrath of the debt collector engaged by the licensed moneylender.

I was surprised to hear about the tactics used by the debt collector. In my mind, there seems to be little difference between the debt collector engaged by a licensed moneylender and that of an illegal loan shark. Both debt collectors seem to be using harassing tactics to humiliate the resident into making payment or harassing them at odd hours in the middle of the night. There was also the reported case of a group of debt collectors who were at Funan

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Centre creating a nuisance when demanding repayment of a loan. Clearly, this is unacceptable.

As there are more licensed moneylenders setting up business, especially in the HDB estates, I urge MinLaw to better regulate licensed moneylenders, including regulation of the tactics used by them or by their debt collector to chase for repayment of debt. There should also be better regulation as to the interest charged or admin or penalty fees that can be imposed by the licensed moneylenders.

Can the Minister provide an update on the review of the moneylending regulatory regime? We can do more to protect our consumers from illegal harassing tactics of the debt collectors.

Thank you, Mdm Chairman. We will continue to improve our justice system. We will try and ensure access to justice to as many people as possible, refine our justice system to help protect families and enable law firms to modernise and grow.

I will cover three main areas in my speech. First, what we are doing to help litigants; second, how we are improving the Family Justice system; and, third, what we are doing to help Singapore law firms expand regionally. Senior Minister of State Indranee Rajah will cover the other areas.

First, on helping litigants. Mr Hri Kumar requested an update on criminal legal aid. The Government will now play a bigger role in criminal legal aid. It will provide funding to CLAS administered by the Law Society. That is a significant shift in the Government's philosophy. The enhanced CLAS scheme will serve up to 6,000 accused persons per year. These are people who we assess are unable to afford their own lawyers. It should not affect the work of the small law firms. We will continue to monitor the figures and assess accordingly.

The enhanced CLAS scheme will adopt a revised means test to allow more deserving persons to qualify for assistance. It will provide more services, apart from full representation, and people can receive basic legal advice or assistance in writing letters of representation or mitigation pleas.

Increasing the awareness of CLAS is also important. The Law Society will produce a pamphlet of rights that will raise awareness of CLAS. It will be distributed to police centres,

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police posts and Community Clubs throughout Singapore.

In addition, there are people without lawyers who are charged in Court. They can be referred to the Community Justice Centre at the State Courts. The Centre will provide basic legal advice and refer them to CLAS where appropriate.

We have worked closely with the Courts, Law Society and the Criminal Bar to prepare for the launch of CLAS. The official launch will take place later this month on 23 March.

The scheme's success would not be possible without the help of volunteer lawyers and law firms. There has been strong support shown for the scheme from the Bar. Thirteen law firms have pledged to take on CLAS cases on an annual basis. This is in addition – and I emphasise – an addition to the many lawyers who have already committed to doing CLAS work and who have been the backbone of CLAS. The big firms have also come forward. They have assigned lawyers to work for CLAS full-time or given time off to work for CLAS.

There is strong participation from the legal profession and strong Government support. More accused persons without means will have access to justice and they will receive the help and the guidance and assurance they need as they face the criminal justice system.

Let me now turn to the family justice system. Another major area of reform has been in the family justice field. Families should be saved as far as possible. But, often, the marriage has irretrievably broken down. The parties end up in the Court system and the Court process should not worsen the anguish for the family.

For these reasons, the family justice system was revamped and the Family Justice Courts were set up. They will help families through this area of the law by providing: (a) simplified and streamlined processes and practices; (b) enhanced case management; and (c) the judge-led approach.

The aim is to: (a) reduce costs; (b) simplify the process; (c) focus on the essentials; and (d) protect the children. The process should resolve the key issues, which are the division of assets and the custody and access to children. It should not reopen the wounds of the marriage and allow the Court process to become an arena for emotional conflict.

Ms Ellen Lee asked about the impact of these reforms on the legal profession as a whole. Family lawyers will be an important link between their clients and the Court. The Family Justice Committee has an on-going dialogue with the Family Bar through the Law Society on

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these changes. That will continue.

Senior Minister of State Indranee Rajah has also disseminated newsletters to family lawyers, describing the reforms to all of them and how the family justice system has been revamped. We have also organised, either directly or with partners, numerous courses, talks and training sessions for family lawyers. These have touched on the new judge-led approach and case management, the appointment of Child Representatives and family mediation. In addition, a framework has been established to train and certify family lawyers as Family Mediators.

Feedback from the Family Bar has been positive. The Family Justice Courts will explore additional training areas, as appropriate. Family lawyers are encouraged to attend these courses to equip them with the necessary skills to manage cases in the new family justice system.

Looking forward, the Ministry will continue to review family law-related legislation with an impact on people and family life. These include the Guardianship of Infants Act, the Intestate Succession Act, the Inheritance (Family Provision) Act and the Legitimacy Act. We will also look into strengthening the enforcement of maintenance orders. This will help those who depend on maintenance payments to raise their children after their divorce. We aim to complete this work in 2016.

Next, let me turn to the regionalisation of Singapore law practices. The Ministry is taking active steps to help Singapore law practices grow further. We want them to tap into regional opportunities. We are the leading dispute resolution hub in the region. There are three components in our strategy: (a) international arbitration; (b) international litigation; and (c) mediation.

We have enjoyed success in the field of international arbitration. We are now Asia's leading arbitral centre and one of the world's leading arbitral centres. We aim to replicate that success for Court-based litigation and international mediation. We have, in that context, recently set up the Singapore International Commercial Court (SICC), the Singapore International Mediation Centre (SIMC) and the Singapore International Mediation Institute (SIMI).

Mr Vikram Nair asked for updates on the SICC, SIMC and SIMI and how they will benefit local lawyers.

The SICC offers foreign parties with access to a neutral court forum in the region. It will be an alternative to the usual customary fora. It introduces innovations designed to make it

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more attractive for international parties. For example, it has special procedures for efficient resolution of cases governed by foreign law and a distinguished and diverse panel of international judges who will work with our Singapore judges.

Since the SICC was launched on 5 January this year, 11 eminent international jurists have been appointed as International Judges. The SICC will increase opportunities for our lawyers and local firms. Law firms will also benefit from the exposure to complex cross-border disputes and eminent international judges with vast experience.

International mediation is another area that will provide opportunities for our lawyers. The SIMC offers world-class international commercial mediation services. It has a panel of over 65 world-class mediators from 14 jurisdictions. Since its launch last November, the SIMC has already received its first international mediation referral.

The SIMC and SIAC have introduced an innovative Arb-Med-Arb Protocol. This will allow settlements reached at mediation to be recorded as consent awards that are internationally enforceable.

The SIMI will also help make mediation a viable and attractive option to resolve disputes. It will set standards and provide greater understanding of mediation.

With international commercial arbitration, litigation and mediation services now collectively in place, Singapore can offer the full suite of dispute resolution services to commercial users that are best suited to address their business needs. This will provide local lawyers and law firms with more work, as we have experienced for international arbitration.

Senior Minister of State Indranee Rajah will describe some of the other schemes that are available for local lawyers and law firms. She will also take the remaining cuts.

Mdm Chairman, this is an exciting time for the legal profession. Asia's economic growth will provide opportunities to Singapore lawyers and local law firms. I would encourage law practices to take advantage of regional opportunities, build capability, upgrade skills and leverage on technology. The Government will assist.

There are various schemes offered by the economic agencies, including those announced recently. These include 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

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international exposure, which is important for future leadership positions.

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.

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

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. Any further extensions will need to be carefully considered. Flexibility has to be weighed against 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.

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

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 will discuss this suggestion with the Law Society and the Singapore Institute of Legal Education (SILE).

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. The number at UK universities has doubled over four years to hit around 1,140 students in 2013. The number at Australian universities has increased more than 25% to hit around 390 between 2011 and 2013. Taken together, the number of students from UK universities and Australian OSUs has increased by 47% over the past three years.

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There is a distinction between: (a) law graduates getting training contracts and being subsequently employed as practising lawyers; and (b) law graduates being able to find employment more generally.

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

The SILE has put in place measures to facilitate more training contracts. Senior lawyers can now supervise up to four practice trainees, instead of two, 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 practise.

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.

For overseas universities, we maintain a list of Overseas Scheduled Universities (OSUs). The Fourth Committee on the Supply of Lawyers had recommended that the list of OSUs be reviewed and updated every five years to better reflect current rankings of UK Law Schools, as a "qualitative sieve".

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.

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.

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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 law, who can handle the demands of family and criminal law practice. ULS will begin with a modest intake of about 50 to 75 students a year. The ULS Steering Committee is finalising its report. We will announce details once the Steering Committee has concluded its work.

Mr Lim Biow Chuan spoke about the moneylending industry. 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 must regulate the industry strictly and carefully, to protect vulnerable borrowers.

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. 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 risks of individual borrowers.

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 behaviour 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.

Mdm Chairman, I would just need two minutes to complete the rest of my speech, if I may.

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

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

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.

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.

Ms Lim mentioned the case of somebody who was told that he would receive a response in 14 days. The SOP is between three and 14 working days. So, some are responded to in three days and some in 14 days, depending on the case officers' workload.

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.

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.

Madam, in conclusion, MinLaw 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.