Iceland International Trade in Legal Services

Is there legislation governing the legal sector

Lawyers Profession Act No.77/1999

Under what title do lawyers practise?

 Lögmaður  (translated as lawyer or attorney)

How does an individual lawyer obtain a "licence" to practise law? How often must this be renewed?

Rules on licenses for legal practice are set forth in Chapter 3 of the 1999 Act.  According to Article 6 of the Act, lawyers must fulfill the following requirements to practise law at the district court level: 1. Possess legal competency and be mentally capable of practising law; 2. Have never been declared bankrupt; 3. Have an untainted reputation, as required for Parliamentary elections; 4. Have completed legal studies with a final examination or a master’s examination from the legal faculty of a university recognised in Iceland in accordance with the Act on Universities, and 5. Have completed the test provided for in Article 7 (theoretical as well as practical test relating to the theoretical and practical fields that are most relevant for law offices, including the lawyers’ code of ethics, a test conducted by a three member test committee appointed by the Minister of Justice.  Conditions for obtaining a licence to practise law as a Supreme Court lawyer are set forth in Article 9 of the Act. They are as follows: 1. Have been licensed as a district court lawyer for a period of five years; 2. Have fulfilled the requirements made in Article 6, the first paragraph, subparagraphs (1)-(3) ; 3. Have represented litigants in oral hearings in at least 30 cases in the district courts or any special courts, of which at least ten shall have been private cases that fulfiled the requirements for appeal to the Supreme Court, or on which the Supreme Court permitted appeal, and 4. Demonstrate his/her fitness for such licence by a test comprising the oral presentation of four cases in the Supreme Court of which at least two shall be private cases. Exemptions may be granted by the Minister of Justice for persons who have practiced as judicial officer or prosecutor for a period of ten years. The Minister of Justice may also grant exemptions for the benefit of persons who have been granted similar licences in other states (see Article 9, last paragraph).

Does this entitle the holder to practise throughout the country? If the law license only permits one to practice on a sub-national level, please explain the jurisdictional limits

There is a single national jurisdiction in Iceland following legislation amending the 1998 Judiciary Act.

Are there certain activities that are "reserved" to those who are licensed to practise law in the jurisdiction?

According to Article 2 of the 1999 act, a lawyer ” refers to any person who is licensed as a representative in litigation before the Supreme Court or the district courts representation “ which suggests that the reservation of practice is limited to the title and to representation in court.

Icelandic nationality is not a requirement for qualification as a lawyer, however a period of residency of one year is required for non-nationals who wish to sit the Icelandic Bar exam.

Article 19 of the 1999 Act mentions that “[l]awyers may form companies in the form of their choice for the provision of their services, including limited liability companies. Such limited liability shall not affect a lawyer’s personal liability for any loss he or his employee may cause others in the course of his functions”. The code of ethics adds that lawyers should only conduct legal work unless an exemption has been granted under article 12 of the Act and that the law office business name must not imply that it provides any other services than the attorney and real estate services. Article 19 of the Act on the Lawyers Profession states that: “participation in a company operating a law office, or ownership of such company, is prohibited for others than lawyers”. 

What other ethical or regulatory requirements must a licensed lawyer comply with? 

Additional requirements may be found in the Code of Ethics of Icelandic Attorneys adopted by the Bar Association, available at http://www.lmfi.is/logmenn-og-thjonusta/log-og-reglur-um-logmenn/sidareglur-logmanna/ 

Do law firms need to receive a "license" (or permission/approval) to practice law?

There is no mention of licensing arrangements for law firms in the relevant Acts but a lawyer must inform the Board of the Bar Association of the identities of the owners of a business law firm, and fulfil requirements in relation to trust accounts and indemnity insurance.

Which authority issues licences? Are there different authorities for individuals and firms? 

The Ministry of the Interior issues licences to individuals for the right to appear in the District or Supreme Court on fulfilment of the requirements of article 6 of the Act.

Is the jurisdiction a member of the WTO?

Iceland joined the WTO on 1 January 1995.

Has it made any commitments under GATS in legal services?

Iceland has scheduled no limitations on foreign lawyers providing legal consultancy services in foreign or international law in modes 1-3. Foreign lawyers may also provide services in Icelandic law in modes 1-3 by requalifying with the Icelandic Bar.

Is the jurisdiction party to bilateral agreements which offer special treatment to businesses or individuals from particular countries?

Iceland is a member of EFTA through which  it is a party to the EEA agreement with the EU. Through EFTA it is also party to 24 free trade agreements (covering 33 countries) with the following partners: Albania, Canada, Chile, Colombia, Croatia, Egypt, Gulf Cooperation Council (GCC), Hong Kong, Israel, Jordan, Korea, Lebanon, Macedonia, Mexico, Montenegro, Morocco, Palestinian Authority, Peru, Serbia, Singapore, Southern African Customs Union (SACU), Tunisia, Turkey, Ukraine

Do these currently include legal services or are there plans to include them in future?

Legal services are included by Iceland in agreements with Chile, Colombia,Korea, Singapore and Ukraine and in these Iceland has reiterated the commitments it has made in the GATS. In the EFTA agreement with Hong Kong, both parties commited to develop disciplines in the area of professional services. In the agreement with Peru both parties agreed to follow an approach of mutual recognition of qualifications in order to promote trade in services.

Are foreign lawyers from different jurisdictions treated differently as a result of any such agreements?

Lawyers from within the EU, EFTA or Switzerland are covered by the various EU directives covering legal services (The Lawyers' Establishment Directive 98/5/EC, the Lawyers Services Directive 77/249/EC). The result of these directives is that any EU or EFTAn lawyer can provide legal assistance in Icelandic as well as foreign and international law and can requalify as a Icelandic lawyer.  Foreign lawyers from outside the EU or EFTA are more restricted in their scope of practice and may not requalify.

There are no foreign law firms established in Iceland given the small size of the local market.  

Lawyers from other EFTA or EU jurisdictions may provide services in the district court by applying to the Ministry of the Interior.  There is no other requirement or restriction on foreign lawyers practising outside the courts on a temporary basis in Iceland. 

Iceland is one of the 25 countries in Europe that has signed the Schengen agreement. This allows a non-EEA national to obtain a visa to enter one or more of the Schengen countries for business or tourism purposes on a single visit of up to 90 days, or to make multiple entries to the Schengen area on any number of occasions over a 180 day period, provided none of these is for longer than 90 days.  A number of non-EEA countries are exempt from visa requirements. Iceland has also commited in the GATS to permit entry to "persons who as representatives of a service provider covered by the agreement are seeking temporary entry for purposes of negotiation for the sale of services or entering into agreements to sell services for that service provider, where this selling activity is not directed to the general public".

There is no licensing requirement as practice outside of the courts is not regulated for non-Icelandic and non-EEA lawyers.

There are no specific requirements for foreign lawyers beyond any normal residency formalities.  EEA lawyers are treated as Icelandic lawyers.

Not applicable

Are foreign lawyers permitted to undertake arbitration and mediation?

A party may entrust any person practising as a lawyer in any other member state of the European Economic Area, who has the right to represent litigants in court, with his representation in a corresponding Icelandic court, provided that person is, during court sessions, assisted by a lawyer practising in Iceland (3rd paragraph of Article 2). Other nationals are not permitted to appear in court.

Can foreign lawyers requalify as local lawyers?

EEA lawyers  may fully requalify as Icelandic lawyers following the European Establishment Directive 98/5/EC, either by examination or by assimilation over a three year period of continuous and effective practice in Iceland. Non EEA lawyers must requalify through the rull domestic route i.e. siting the Icelandic bar exam and fulfiling other requirements made on domestic applicants.

Can a foreign law firm obtain a licence to open an office?

Not applicable - there is no requirement for foreign law firms.  Firms from EEA countries will need to follow the same notification procedures as Icelandic firms. Article 12 of the 2004 Regulations on EEA lawyers, recognises that registered lawyers “coming from the self same group of Attorneys may [in Iceland]" work at a representative firm or branch of that group of Attorneys. Icelandic rules take precedence in cases where there is a conflict of rules to ensure the protection of customers and a third parties.

Even if a foreign law firm does not require a legal licence must they register in some form in order to set up an office? (e.g. with a ministry of company affairs etc)

Not applicable

Not applicable

Not applicable

Not applicable

Are there rules about the name a foreign law firm can take?

Iceland does not permit EEA law firms to establish if they have any non-lawyer ownership. Article 11 of the 2004 Regulations states that the activities of groups of attorneys are also subject to Article 19. Article 13 of the 2004 Regulations on EEA lawyers gives further information: “Permission according to Art. 11 and 12 to render service in this Country does not extend to Attorneys working in this Country as associates in a group of Attorneys if there are parties in the group who are not Attorneys. A group of Attorneys comes under para. 1 if it includes parties not coming under the definitions of Art. 1 and:-1. Own the entire capital and reserves (equity) of the group of Attorneys or part thereof; 2. use the name under which the group of Attorneys work; or 3. are in control of the direction of the group”.

There is no mention of a prohibition on employment by a foreign lawyer however the implications of article 12 of the Act are that any lawyer who is not employed by an Icelandic or EEA lawyer who has an office trust account and indemnity insurance registered with the Icelandic Bar will need to fulfill these requirements. There is therefore a de facto prohibition on employment by a foreign lawyer.

Icelandic lawyers and lawyers from the EEA may enter into a partnership according to Art. 11 of the 2004 regulations which provides that:“Attorneys who are registered in accordance with Art. 2 may render Attorneys service in co-operation with other Attorneys or in a group of Attorneys.  Attorney service may be granted in association with Attorneys from the selfsame group of Attorneys or from the selfsame home country, in association with Attorneys from different Member States or Attorneys from other Member States and with Icelandic Attorneys. The activities of groups of Attorneys are subject to the provisions of Art. 19 of the Act on Attorneys as applicable”.

Article 11 of the 1999 Act mentions the possibility for a lawyer to employ another lawyer (“A lawyer may engage another lawyer to work for his office. The employer shall be responsible for the employed lawyer’s management of client’s finances, and shall be financially responsible for his functions in other respects.”). 

Other useful sources or comments or links

Website of the Icelandic Bar Association - http://www.lmfi.is/english/