Article 60 of the Draft Free Economic Pilot Zones Act Deceives the Public

To boost economic growth momentum, the government proposed the draft "Free Economic Pilot Zones Special Act." As the name suggests, this act aims to develop the economy, and its appropriateness is currently subject to intense public criticism. Among its provisions, Article 60, Paragraph 1 stipulates that Taiwanese and foreign attorneys or foreign law firms may establish or invest in incorporated law firms within the pilot zones, which is manifestly erroneous.

Taiwanese law—especially the Attorney Regulation Act—has never contained provisions allowing the establishment of incorporated law firms. Specifically, during the past nine years of revisions to the Attorney Regulation Act led by the Ministry of Justice since 2006, the matter of incorporated law firms was discussed; however, recognizing that insurmountable hurdles remained, the idea was ultimately abandoned due to these unaddressed difficulties. Since the foundational Attorney Regulation Act fails to provide for this, how could it be hastily inserted into the Free Economic Pilot Zones Act?

Paragraph 3 of the same article in the Free Economic Pilot Zones Act further stipulates: "The composition, establishment registration, investment methods, investment ratios, application conditions for permission, procedures, practice conduct, liability for damages, professional liability insurance, dissolution, merger, penalties for violations, disciplinary action, and other matters requiring compliance and management regarding the incorporated law firms referred to in Paragraph 1 shall be governed by other laws." Since all related establishment and other matters concerning incorporated law firms are to be governed by separate laws, even if this article is enacted, pursuant to Paragraph 3, all relevant matters must still be legislated separately. This effectively nullifies the legal effect of Paragraph 1, rendering the article a dead letter and a sheer laughingstock in legislative history. Furthermore, predicting based on reality, it will be impossible to legislate the provisions of Paragraph 3 within three years; thus, this provision is clearly deceptive and should be deleted.

Attorneys and the execution of attorney duties by law firms possess a social and public interest nature, as explicitly mandated by the Attorney Regulation Act and the Code of Ethics for Attorneys; their purpose is not to make money. Therefore, the concept of "investment" does not apply to law firms. Treating it as an investment violates the Attorney Regulation Act and the Code of Ethics for Attorneys and should be subject to sanction. Yet Article 60, Paragraph 1 unexpectedly prescribes the "investment" in incorporated law firms. That the Executive Yuan—and particularly the Ministry of Justice, which is in charge of legal affairs—remains unaware that law firms are not profit-driven and cannot be subjected to the concept of "investment" is truly erroneous.

The Free Economic Pilot Zones Act seeks legislation for the purpose of economic development and, at best, concerns financial, fiscal, and technological issues. It has virtually nothing to do with the creation of incorporated law firms. Given the current caliber of Taiwanese attorneys, they are more than adequate to meet the developmental needs of the pilot zones. Foreign attorneys or firms may already provide legal services in Taiwan or through Taiwanese attorneys in accordance with the law; thus, there is no necessity to bypass the Attorney Regulation Act and legislate separately for incorporated law firms.