Solid as a rock

Despite its political instability, Gibraltar still attracts a host of international clients. Alex Wade asks the locals why it's a good place

There is an element of paradox about Gibraltar. British since the Treaty of Utrecht in 1713, its airstrip is also a main road. Its inhabitants, while hotly asserting their own nationhood and wish for decolonisation, also vociferously insist on maintaining links to the UK. Spain's territorial claims pose a conundrum, as any deal that sees The Rock ceded to Spain throws up uncomfortable questions for Madrid concerning Ceuta and Melilla, its territories in Morocco, not to mention the Basque separatists and what precedent they would draw.
The paradox, or at least quirkiness, extends to its lawyers. Almost all are barristers, having qualified at the London Bar. This is the traditional means of entry to the legal profession for a Gibraltarian, preceded by a law degree at a UK university. They practise in partnerships, in the same way as solicitors via a fused profession, answerable to all the usual rules on solicitors' accounts and conduct.
Many of the firms in Gibraltar are the equivalent of a high street practice in the UK, with two or three partners looking after the domestic affairs of many of the Rock's 30,000 inhabitants. However, there are a number of larger commercial firms that attract substantial international work, and which, despite the current political uncertainty, continue to thrive.
The largest firm in Gibraltar is 13-partner Hassans, and Peter Montegriffo, senior partner of its private client department, says that it is “always expanding”. He says that the political situation has barely impinged on the flow of work. The firm has taken on eight lawyers in the past year, and it has dedicated departments in financial services, telecommunications, corporate/capital restructuring and litigation. The firm's clients range from small businesses and high net worth individuals to large multinationals. Montegriffo says that more than 50 per cent of Hassans' work is international.
The strapline on the brochure for Hassans says it all: “In Europe. Offshore. Online.” The words accompany a glossy shot of a large, breaking wave, the sort that surfers yearningly describe as a 'tube'. Confident, eye-catching and assertive, Hassans' advertisement epitomises the mood among the leading commercial firms. All of the firms make much of Gibraltar's unique status as an offshore financial centre located in the EU, which has a legal structure based on English common law. As far as Montegriffo is concerned, everything is in place for Gibraltar to be the international offshore centre.
There is much on the Rock to lend credence to Montegriffo's view. By virtue of Article 227(4) of the European Economic Community Treaty, Gibraltar is within the European Community and yet, via the 1972 UK Accession Treaty, is exempt from customs tariffs, the common agricultural policy and VAT regulations. It has a reputation for legitimacy flowing from its roots in the UK common law system, with Gibraltar's House of Assembly a democratically elected, self-governing legislature that enacts laws independently of the UK. It has an independent tax status and, as many wealthy individuals have found, the absence of estate duty, inheritance tax, gift tax and capital gains tax, as well as low income tax rates, which can make it a highly desirable location. Testimony to this is the Spanish property boom east and west of the Rock, as ever-increasing numbers of UK and German émigrés set up home under the warm, blue skies of the Costa del Sol or Costa de la Luz, vesting ownership of their dream homes in Gibraltar-registered companies.
The merits of Gibraltar are extolled not merely by native Gibraltarians such as Montegriffo, but also by people like Nicholas Keeling, the senior resident partner of the only international firm with a presence on the Rock, Denton Wilde Sapte. After qualifying with Withers, Keeling spent periods in East Africa, Abu Dhabi and London before settling in Gibraltar, where he has practised for 13 years. Dentons in Gibraltar undertakes traditional offshore work, with trust and corporate matters featuring heavily. Its client base is international and Keeling highlights an array of factors that keep the clients coming. As well as those elements identified by Montegriffo, there are practical issues too. “Here we have available commercial space and the ability to set up a business, on the ground, quickly and without need for work permits,” says Keeling. The Rock is easily accessible from most EU centres and within the central European time zone.
As for the political climate, Keeling is sanguine. “I can't really say that the uncertainty has led to a downturn in the flow of work,” he says, adding that the back-up of Dentons ensures that there is always work, particularly through referrals from City firms lacking knowledge of the infrastructure in Gibraltar.
However, both Keeling and Montegriffo agree that in the aftermath of 11 September the offshore world suffered. Keeling believes that in the immediate aftermath company formations were down 60 to 70 per cent. Since then, as concern about the possibility of money laundering in offshore centres intensified, Gibraltar has come under pressure to sign up to various EU and Organisation for Economic Cooperation and Development tax regime demands. In an effort to remove any doubt as to the Rock's financial probity, the government, led by chief minister Peter Caruana, has recently published its proposals for compliance.
Christian Hernandez, an associate with Gibraltar's longest-standing practice Isola & Isola, says that while company/commercial work suffered a downturn after 11 September, his firm has “never been busier” in transactional and litigation matters. “I'm currently working on one deal worth £980m, and in July completed another worth £195m,” he says. This is a long way from the call he received from one client post-11 September, instructing him that because he had just lost millions in high-risk investments in the US, a large number of subsidiary companies that Hernandez had established in Gibraltar for him would have to be closed.
If the Rock may have lost a little of its lustre, it seems that its fundamental allure remains. Joseph Emanuel Triay QC, senior partner of Triay & Triay, one of Gibraltar's longest standing practices, embodies another element of the Gibraltarian paradox and provides a compelling illustration of just how alluring a Gibraltar lawyer can be. Eminently distinguished in his large office in Irish Town, with its leather chairs and antique furniture a curious Dickensian counterpoint to the implacable blue skies of Spain across the border, he appears every inch the old school, colonial lawyer. One would expect him to be the embodiment of Caruana's views on the vexed question of sovereignty, to endorse the majority view of categorically rejecting any concessions to Spain as a matter of principle. But not so. With a twinkle in his eye, Triay (or 'JE' as he is known) says: “Gibraltar works in English and plays in Spanish.”
He says that the present uncertainty should be seen as an opportunity, not a threat. “Gibraltar would have to make a big mess of its situation to lose the advantages it has,” says Triay, emphasising the peculiar heritage of those born and bred on The Rock. Almost all are fluent in English and Spanish and yet are recognisably not English, with ancestry from Mediterranean ports such as Genoa and Malta evident in their intonation. His own sense of Gibraltar's past has persuaded him that if Gibraltar is to maintain the unique advantages of its trading economy, this can be done only in friendship with Spain.
Triay is a man entirely at ease with himself and his 10-partner firm, founded in 1905 and brought on by his father, SP Triay KC. He says that although the firm is a general practice, its lawyers are obliged to specialise as and when it suits the clients' needs.
The firm undertakes local practice matters as much as it does international offshore work. Triay insists that the primary duty of a lawyer is to be objective in the service of a client's instructions. “If the client is wrong, one has to persuade him that he's wrong, and then one seeks a settlement with the other side. Much better though are the times when the client is right, and then one uses the law and the facts to serve him.” It is evident that this belief in an overriding duty deflects him from entertaining any worries about whether political uncertainty, or even anything more humdrum, could seriously affect his practice.
The larger players have recently seen the arrival of a competitor, eight-lawyer Triay Stagnetto & Neish. Founded by three QCs in 2001 in a merger of Louis W Triay & Partners and Stagnetto & Co, the firm has already acquired a reputation for its litigation expertise, which, with regular instructions from the government, it looks set to consolidate. Two other firms of note are Marrache & Co and Attias & Levy. Marrache was the first firm on the Rock to open a London office, and is particularly well known for its insolvency work. Attias & Levy is a general practice and has a departmentalised structure, with lawyers practising in litigation, offshore services and commercial sectors.
As the debate about the Rock's future continues, Isola & Isola celebrates its 110th anniversary, and its senior partner Peter Isola celebrates his 50th anniversary as a barrister. For all that is uncertain, perhaps there is something to be said for continuity, even of the paradoxical, quirky kind – at least among lawyers.