The fine line between law and business

Former European Court judge Giovanni Bonello has clearly touched a nerve with a recent article suggesting that ‘lawyers should not be businessmen’.

Writing in the Sunday Times, Dr Bonello argued that the law should prohibit lawyers from engaging in trade or commerce. While not all lawyers who are involved in business are disreputable, he said, “almost all disreputable lawyers, magistrates and judges also happened to have been businessmen”.

“All Europe, Malta excluded, considers the autonomy and independence of lawyers to be a supreme value in a democracy, indispensable for the effective defence and the safeguarding of the rights of persons. It identifies the overriding profit motive inherent in business, its hazards and jeopardy as obstacles against this autonomy and independence, and an increased risk of bringing the profession into disrepute. It sees doing what is inherently incompatible as incompatible with the rule of law.”

He added that both the British and the Italian systems, directly or indirectly, restrain lawyers and members of the judiciary from exercising acts of trade. “Veto, period,” he said.

At face value, part of that argument should really go without saying. It appears obvious that ‘members of the judiciary’ should be precluded from any line of activity that might open them to potential conflicts of interest. Yet it is clear from recent experience that no such veto exists in Malta.

For instance, former Chief Justice Noel Arrigo had previously been president of the Chamber of Commerce. The reasons for his eventual resignation may have been irrelevant... but long before the corruption scandal, questions had been asked about the fact that someone with such extensive business interests could be appointed Chief Justice.

But Bonello’s article is interesting as much for its timing as for its content. His recommendation comes in the wake of revelations that PN leadership hopeful Adrian Delia – who is also a practising lawyer – holds a 9% stake in Mgarr Developments Ltd. The company, which is developing 40 apartments on the site of the Mgarr Bay Hotel, still owes €7 million of the original €12 million in loans it had taken out for the development.

It also follows statements by the same Delia that he would divest himself of his business interests once elected, which would only be possible once the debt has been paid off.

It is naturally debatable how much of Bonello’s article was aimed directly at Delia’s candidature in the PN leadership election. Ostensibly, he makes no mention of either Delia, or even politics, at all. This has not stopped some observers from making the link themselves: Bonello has been described as ‘close to the PN klikka’ – i.e., part of a presumed party ‘inner sanctum’ that has a vested interest in influencing the choice of future PN leader. His article has been interpreted as an attempt to ensure that Delia does not win this election.

But regardless of the author’s intention, it would be futile to deny that his argument has deep relevance to the controversy sparked by Delia’s candidature... and also to Maltese politics as a whole. Though Delia himself argues otherwise, his business connections are – in and of themselves – a cause for concern. With question marks hovering over his ability to liquidate his assets in future, his company liabilities also expose him to accusations that he could abuse of his (future) political influence to ensure the sale of his property; or worse, be subjected to some kind of blackmail.

Such concerns are by no means limited to Delia himself. Though Bonello’s recommendation is limited to the legal profession, it remains a fact that lawyers are over-represented in Malta’s parliament: the seat of the country’s legislature. They may not all have business interests... indeed only a minority might... but these are also the people who dictate legislation for the entire country.

Among other things, they also draw up laws governing the legal profession itself. In fact, it should come as no surprise that Malta never enacted any laws along the lines described by Bonello in other European countries. A parliament composed chiefly of lawyers may be reluctant to impose too many limitations on that particular profession.

It is to be noted, for instance, that the draft ‘Lawyers’ Act’, tabled recently, does not include outright restrictions on commercial activities conducted by lawyers. Instead, it adopts a cautionary tone.

At this point a question arises: if business connections are to be ‘vetoed’ for all lawyers... how much more so should this veto apply to lawyers/businessmen who are also politicians?

Elsewhere, our reluctance to regulate this particular profession is questionable for reasons beyond politics. If legal systems in countries such as Britain and Italy – which, between them, form the bedrock of our own country’s legal tradition – saw the need for such precautions... it appears reasonable to ask why we have not.

There may be perfectly legitimate answers. Comparing ourselves with much larger countries is not always possible, nor even desirable. Malta’s size and limitations may have a practical, logistical effect on the ability of such legislation to actually work in practice.

But whether or not we subscribe to Bonello’s argument... these are questions that we should, at least, be asking.