CONTRACT FOR THE FORMATION OF AN INTERNATIONAL GROUP OF LAWYERS
Rule 1- Form.
An unincorporated group (the “Group”), whose name is INSURALEX has been created. The Group is governed by this contract (“the Rules”) and any by-laws which may be adopted by the Group from time to time. The individual law firms which make up this organization may be referred to in these rules as “contracting parties” or “members” or “member firms”.
Rule 2- Applicable Law.
French Law is applicable to this contract except for questions relating to the status and capacity of legal and/or natural persons which shall be regulated by the law of the jurisdiction in which they are settled from time to time hereunder.
Rule 3- Name.
3.1. The name of the Group is INSURALEX.
3.2. Ownership and use of the name and any associated logo or device (including website name) shall be exclusive to the contracting parties of the Group for the time being.
Rule 4- Objects.
The Group’s objects are:
4.1 Developing and maintaining an international coordinated network of law firms, in order to improve the services provided to the clients of all contracting parties both within their own jurisdictions and in other jurisdictions;
4.2 Promoting and marketing the network in a co-ordinated way around the globe, within the code of conduct set out in particular by the Council of Bars and Law Societies of Europe (the “CCBE”) and the local bar associations;
4.3 Supporting the international legal practice of the contracting parties in the development of cross-border co-operation and familiarisation with foreign jurisdictions;
4.4 Developing and improving the quality, value, nature and amount of work undertaken by each contracting party and directly or indirectly for Insurers;
4.5 Providing a means for the mutual exchange of information and professional skills and knowhow between the contracting parties on topics of law and other matters of professional interest;
4.6 Doing all such things as may be deemed incidental or conducive to the attainment of the Group’s objectives.
Rule 5- Principal Address.
The official address of the Group shall be where the Group from time to time decides.
Rule 6- New Members.
6.1 Membership in the Group is by invitation only and comprises law firms, qualified to practice and legally practising law in their respective jurisdictions , which emphasise litigation, insurance defense and (re-)insurance law.
6.2 A candidate for membership may be identified by any member, or membership may be solicited by a candidate.
6.3 The Board, with the assistance of the members as requested, will conduct due diligence as to any candidate, including the requirement that an application form prescribed by the Board be completed to the Board’s satisfaction.
6.4 The Board may require a visit to the candidate’s office and a private interview.
6.5 Once the Board is prepared to recommend a candidate, the members will be informed of the Board’s recommendation and provided with the results of the due diligence.
6.6 The Secretary of the Board will request a vote which may be in person at a scheduled meeting or by email if conducted outside a scheduled meeting and each member will cast its vote to the Secretary. If the vote occurs in person at a scheduled meeting, the vote will be made publicly. If the vote occurs outside a scheduled meeting by email, it may be sent privately to the Secretary or publicly to all members at the election of the Member.
6.7 Candidates are admitted to membership in the Group by 75 % of the votes cast by existing contracting parties.
Rule 7- Obligations of contracting parties.
A contracting party’s obligations are:
7.1 To comply with this contract, the internal rules and the decisions of the annual general meeting;
7.2 To promote and market in their own jurisdiction Insuralex and its members and the services offered to clients and the insurance market;
7.3 To participate in the process of selecting officers and selecting new members.
7.4 To carry out any instruction/work referred to them by another contracting party, efficiently and to the best of their ability and competence, in accordance with good professional practice of the country/jurisdiction where the work should be done;
7.5 To immediately advise the contracting party referring the work if for any reason – conflict of interest, excessive existing workload, lack of expertise in relation to the specific matter, or otherwise – a contracting party cannot accept or continue to deal with the instruction/work referred him, and use his best endeavours to find another person or firm who can offer the appropriate expertise and is ready and willing to undertake the instruction/work;
7.6 To inform the President of any event or circumstance affecting the ability of the contracting party to undertake instruction/work for any other contracting party including, but not limited, to professional misconduct, criminal allegations or professional disciplinary proceedings;
7.7 To pay the entrance and annual fee together with such other levy or levies as should be imposed from time to time in accordance with the rules hereon.
7.8 To hold and maintain professional liability insurance, which limits and terms shall be prescribed by the Board.
7.9 If a contracting party firm becomes insolvent, is dissolved or is suspended or prevented by the competent authorities from practising law, its membership of the Group thereby ceases automatically with immediate effect. In the event of any doubt as to whether this has occurred, the contracting parties, except for the member in question (which may make representations orally or in writing at the discretion of the Officers) may debate the matter and any decision by them that membership has terminated under this Rule is final, regardless of any subsequent different decision by any competent court of authority. A contracting party shall be deemed to be dissolved if at least half of its partners leave between two General Meetings of the Group.
7.10 If a new application for membership is made by any law firms formed after the dissolution of a member, within the meaning of that term in Rule 7.9, the normal rules for application for membership will be followed. .
7.11 To notify the President of any referral of work to another member, unless prohibited by law or agreement.
7.12 To notify the President of the completion of any work referred by another member, unless prohibited by law or agreement.
7.13 No contracting party shall be responsible for the work performed by any other contracting party.
Rule 8- Publicity and Correspondence.
8.1 A contracting party may communicate and/or publicise its membership in Insuralex and the facilities provided by it, subject to the limits imposed by the professional code of ethics of the individual contracting party.
8.2 No party shall make public any sensitive information about another party without having advised in advance that other party and obtained its prior written consent. In the event that a contracting party should resign, dissolve or should be expelled from the Group, it shall forthwith remove any reference to the Group and/or its contracting partnership from all stationery and/or printed material used by him.
8.3 The Group’s principle is that it will appoint only one firm in any jurisdiction to be its member there and accordingly that each party shall be the exclusive representative for the jurisdiction in respect of which it is admitted and in which it practices law and shall be the formal preferential correspondent of all the others for that jurisdiction as to the Group services connected with (re-)insurance matters .
8.4 For the purposes of these Rules, a “jurisdiction” means a sovereign state having its own system of law (and legislature), including such states which have pooled or merged sovereignty to become parts of a single but federal or united country.
8.5 For the avoidance of doubt, the Commonwealth of Australia, the United Kingdom of Great Britain and Northern Ireland and the United States of America are each recognised by the Group as countries having several jurisdictions.
8.6 The Group may admit more than one member in a jurisdiction if and only if, by a 75% majority vote, the Group agrees (a) that the jurisdiction needs more than a single member to provide adequate representation for that jurisdiction; and (b) clear delineation of the number and location of the proposed members, to avoid overlap and competition. In such cases, the Group may choose to admit different offices of the same firm or different firms for the different locations.
8.7 The Group will not admit the same firm to represent it in more than one jurisdiction unless it agrees, by 75% majority, that it considers it to be in its best interests to do so despite this normal principle (or the firm is doing so in June 2011 when this Rule is adopted).
8.8 In cases governed by Rules 8.6 and 8.7, (a) a full entrance fee and annual subscription is payable by/in respect of each member and/or office as the case may be; and (b) at all meetings and in all electronic votes, different persons each from the relevant member/office shall represent the relevant jurisdictions/offices.
8.9 For the avoidance of any doubt, where any participating member has any branch office(s) which is/are not (a) member(s) in its/their own right, such branch office(s) shall not participate in any of the activities of the Group or benefit from instructions from the other members unless otherwise agreed by the Group or in the case of conflict of interest of the existing member. However nothing shall either prevent or restrict a member with such branch offices from referring work internally to or otherwise promoting it.
8.10 Each contracting party agrees that for so long as it enjoys contracting partnership of the Group it shall not establish branch office(s) in another country without the consent of the Group, except for the existing one(s) at the time of its accession to the contract.
8.11 A maximum of one additional UK contracting party can be admitted to the Group to represent Scotland if, in the opinion of 75% of the other contracting parties this is beneficial to the Group for objective reasons.
8.12 In the case of the United States of America (herein “the USA”) there may be one member in each State (and the District of Columbia).
8.13 In the case of the Commonwealth of Australia, there may be one member in each State and Territory.
Rule 9 – Resignation and Expulsion.
9.1 Any contracting party may resign from the Group at any time by notice in writing to the President, who, upon receipt of the resignation notice, shall immediately notify all other contracting parties.
9.2 The resigning contracting party shall meet without delay the obligation imposed by Article 8.2 hereof.
9.3 A contracting party can be expelled from the Group if:.
9.3.1 In the opinion of the other contracting parties it is not fulfilling its obligations to the Group (including ceasing to have expertise in and/or to hold itself out as practising (re-)insurance law) ; or
9.3.2 In the opinion of the other contracting parties its continuing membership is bringing, or is likely to bring, discredit upon the Group; or
9.3.3 It fails to send a representative to two consecutive general meetings of the Group or
9.3.4 It fails to paid the annual or any other fee within two months of its due date.
9.4 A contracting party shall remain liable for its outstanding debts and any other liability at the date of its resignation or expulsion.
9.5 Notwithstanding clause 4 of this Article a contracting party that resigns before the end of a meeting imposing a contribution/levy with which it does not agree and on account of which it resigns, shall not be liable for that contribution/levy.
9.6 No expulsion can take place unless in accordance with the following procedure:
9.6.1 Any contracting party may propose the expulsion of any other contracting party at any time;
9.6.2 The proposal shall be in writing addressed to the President and shall state, with sufficient particulars, the grounds upon which the proposal is based;
9.6.3 The President, on receipt of the expulsion proposal and without delay, shall inform the contracting party whose expulsion is proposed and shall investigate the circumstances of the request in so far as he deems necessary;
9.6.4 On completion of the investigation the President shall draft, with due regard to the requirement of confidentiality and correctness, a report of such investigation which shall contain any explanation/s offered by the party whose expulsion has been proposed;
9.6.5 The report shall be circulated between the contracting parties and will form the basis for the discussion of the proposal;
9.6.6 At that point the party whose expulsion has been proposed can present further written or verbal explanation and shall have the right to participate in the discussion concerning the proposed expulsion, but it shall have no right to vote nor shall it count towards the quorum; .
9.6.7 After the discussion, if the proposal for expulsion is withdrawn and no other contracting party takes over the role of proposer of the expulsion request, the party whose expulsion has been proposed cannot be expelled;
9.6.8 If the expulsion proposal is confirmed, a resolution for the expulsion of the contracting party may be adopted but requires by a majority of at the least 75 % of all votes present in oerson or by proxy at a general meeting or cast electronically under Rule 14.7.1 if the President implements that Rule;
9.6.9 If the resolution is passed the President shall undertake all necessary measures to enforce the decision and recover any outstanding credit from the former contracting party.
9.7 In case of expulsion the outgoing contracting party shall not be entitled to any refund of its contributions to the Group fund, nor to any compensation on any account by reason of its ceasing to be a contracting party.
Rule 10- Officers.
10.1 At the Annual General Meeting (AGM) in alternate years the members of the Group shall by vote of a simple majority of all votes present in person or by proxy elect for a term of two years a President, a Vice-President, a Treasurer and a Secretary, who will form the Board of Officers responsible for the running of the Group. No President shall serve for more than one consecutive two year term. Any other officer may be re-elected.
10.2 The outgoing Vice-President shall become the new President upon completion of the President’s term of office.
10.3 The contracting parties may dismiss any officer at any Annual General Meeting upon a vote of no confidence being duly moved and seconded upon a minimum of three weeks’ written notice to the Secretary.
Rule 11- Group Management.
11.1 The Group is managed by the Board of Officers and is legally represented by its President.
11.2 In the event of resignation or incapacity of the President during his/her years’ term, the VicePresident will take over as the President for the rest of the President’s term; this will not prevent him from seeking election as President in his own right when he would have been eligible in the normal course..
11.3 The Board of Officers has the right to take all measures necessary for the successful functioning of the Group, and has powers including, but not limited to, the following:.
11.3.1 To call meetings and fix the venue and the agenda;
11.3.2 To circulate a report every four months to all contracting parties;
11.3.3 To collect and centralise all queries of the contracting parties;
11.3.4 To implement the Group’s decisions;
11.3.5 To supervise the Treasurer in the keeping of the accounts, preparation of the budget, management of the Group’s funds, preparation of the annual income and expenditure statement and balance-sheet and to arrange annually an audit;
11.3.6 To negotiate the best offer for any contract to be agreed, on behalf of the Group, by the President;
11.3.7 To investigate and circulate a report about any contracting party not complying with the rules of the Group and eventually take reasonable actions against the contracting party in default or in breach of the Group rules.
11.3.8 To defend actions in law in the name of and behalf of the Group.
11.4 All and every decision of the Board of Officers shall be noted in a minute book or equivalent, to be held at the Secretary’s office.
11.5 The location of the administrative office of the Group, shall be determined by the Secretary and shall operate and be co-ordinated under his/her responsibility. The Secretary shall prepare the Board of Officers meetings, draft the agenda and shall keep the Board of Officers and AGM and Midterm meeting minutes.
11.6 The Officers shall be reimbursed reasonable hotel, subsistence and extra travel expenses required for the attendance at physical Board meetings held before and/or after general meetings, and if necessary not more than twice per annum at other times, and for any visits by an Officer considered necessary to assess prospective members or any member potentially subject to expulsion.
Rule 12- Internal Governance.
12.1 The Board of Officers shall only be liable for gross negligence and/or for the wilful breach of the law.
12.2 The Group shall negotiate and provide, whenever possible, a suitable D&O insurance with entity coverage for its officers.
Rule 13- Meetings.
13.1 The AGM shall be held not later than 31st May each year, at a venue to be selected by the Board and approved by the Members, and at least 30 days notice shall be given. If the Board certifies the existence of exceptional circumstances the general meeting can be postponed for 30 days. If no such meeting is called by the Secretary, then any member may summon the AGM on such notice at the offices of any member.
13.2 A Midterm meeting will also take place not later than 30 November each year.
13.3 Extraordinary general meetings may be called by the President when deemed necessary or may be requested by 25 % of the contracting parties. If so requested, the extraordinary general meeting shall be called within ten days from the date on which the President receives the written request.
13.4 Each meeting of the Group shall be chaired by its President, or the Vice President in the absence of the President.
13.5 All meetings shall be called in writing giving not less than 30 days advance notice; save that in exceptional circumstances extraordinary general meetings may be called giving not less than two weeks’ written notice.
13.6 The notice shall include:
13.6.1 Time and venue of the meeting;
13.6.2 The agenda, which shall specify all topics to be discussed including the Board of Officers’ proposals, and, if necessary, the anticipated maximum financial contribution per contracting party proposed or required for the action, which figure shall not be exceeded without the agreement of all contracting parties.
13.7 At every AGM or Mid Term meeting it is expected that the host country will organize an event in order to promote Insuralex at these occasions.
13.8 Any contracting party can submit in writing an agenda item to the Secretary not less than two weeks before the date of the meeting in question whereupon the Secretary shall forthwith inform all parties and shall put the item into the existing agenda.
13.9 In the event of an AGM being called upon half the normal advance notice for proven exceptional reasons all other periods of time in respect of such meeting shall be reduced proportionately.
13.10 At each general meeting the Secretary shall be responsible for recording minutes of all decisions taken and shall circulate them promptly after the meeting.
13.11 Admission to membership is only effective if the new member attends the first general meeting (annual general meeting or Mid Term) after admission.
Rule 14 – Votes.
14.1 At any ordinary or extraordinary meeting, each contracting party shall have one vote. The vote is verbally expressed by a delegated person of each contracting firm.
14.2 Members from the USA shall have one vote for every five members, including any part of five above any multiple of five. In any vote, members from the USA shall cast their individual votes and abstentions which (not counting simple failures of vote) shall be tallied separately by the Secretary, and announced and received as cast as whole ordinary votes (or abstentions) calculated proportionately as closely as possible in complete votes from their available total ordinary votes to the actual numbers of their votes amongst themselves.
14.3 Members from Australia shall have one vote between them, to be computed and cast in the same way as that for the group of States of the USA.
14.4 All decisions shall be taken by a simple majority of all votes present in person or by proxy, except when hereunder otherwise provided or by law or by regulations.
14.5 A super majority of 75%, or more, of all votes present in person or by proxy is required for:
14.5.1 Changes in contracting parties’ obligations including the financial contributions;
14.5.2 Modification of the rules set forth in this contract, except for the modification of the rule “one head one vote” where the unanimous Resolution of all Contracting parties is required;
14.5.3 Adoption of any sanction against a contracting party (from the simple fine to the expulsion from the Group)
14.5.4 Any decision to admit a new member as provided under article 6;
14.5.5 Any decision to dissolve the Group.
14.6 Any contracting party unable to attend any meeting in person may appoint another contracting party as his proxy. The proxy instrument must be in writing and shall clearly determine the limits of the powers conferred to the proxy. The proxy instrument shall be deposited immediately prior to such meeting with the President. (Attendance by proxy does not count as attendance for the purposes of Rule 9.3.3.).
14.7 Decisions can be made by postal or electronic ballot arranged by the President:
14.7.1 When the urgency of a specific matter requires a prompt contracting partnership decision; or
14.7.2 For the admittance of any potential member which might apply and be proposed by the Board in between AGMs; or
14.7.3 When 75% of the contracting parties agree that a decision on a specific matter can be made in this manner.
14.7 The vote of a member at its first meeting (annual general meeting or Mid Term) shall not be counted if whether alone or with any other such vote or votes it would be decisive.
Rule 15 – Funding.
15.1 The Group’s financial obligations shall be met by means of a fund created with:
15.1.1 An entrance fee;
15.1.2 An annual fee; and
15.1.3 Such additional levy or levies as the contracting parties shall from time to time agree in relation to specific projects.
15.2 The annual fee shall be payable in Euro and it will be the Treasurer’s duty to send on 1 st January the payment requests to every member who will pay no later than the 31 st January of such year into the bank account(s) maintained by the Treasurer on the Group’s behalf.
15.3 Any special levies shall be payable as and when determined by the contracting parties at the time the levy is imposed.
15.4 If a contracting party fails to pay the annual fee or any levy for a period of 2 months from the date it was due, the Treasurer shall send a written reminder. If the contracting party does not settle within a month from the date of the reminder interest may be charged at Eurolibor plus 5% on all sums due and/or Rule 9.3.4 may apply.
15.5 For all members admitted during the fiscal year, the Treasurer will send the payment request for the entrance fee and prorated annual fee promptly upon admission. Payment shall be made within thirty (30) days of receipt of the payment request.
Rule 16- Accounts.
16.1 The financial year shall begin on 1st January and shall end on 31st December of each year.
16.2 The Treasurer shall keep an inventory, a balance of account of income and expenditures and a profit and loss account for the preceding financial year in the form of an EU Annual Account and shall arrange an annual audit. All account documents are available to the contracting parties for inspection on reasonable notice.
16.3 The Board of Officers shall submit the accounts to the AGM for the contracting parties’ approval (and for audit if so required by the contracting parties).
16.4 For the establishment of the account the Treasurer is allowed to be assisted by an accountant whose costs are met as Group expenditure.
Rule 17- Winding Up.
17.1 Any decision to dissolve the Group shall be taken at an ordinary or extraordinary meeting of the contracting parties, and shall be adopted by a majority of 75%, or more, of all those contracting parties present in person or by proxy.
17.2 A trustee in liquidation will be appointed from the contracting parties to wind up the Group assets and settle all outstanding liabilities. The trustee shall not be entitled to any fees but all necessary and reasonable costs connected with the winding up shall be paid by the contracting parties.
17.3 In the event of there being any surplus after the payment of all creditors and financial obligations of the Group, such a surplus shall be equally divided amongst the law firms who were former contracting parties at the date of the winding up resolution.
Rule 18- Internal Rulings and Agency.
18.1 The contracting parties by a majority of the votes of those present in person or by proxy may from time to time agree by-laws prescribing systems, procedures, rules and regulations (not inconsistent with the current agreement) or amend or revoke the same as they shall think expedient for the management and well-being of the Group.
18.2 Nothing in this contract shall operate so as to constitute a partnership or agency between the contracting parties or any one or more of them, who will continue to practice separately in their respective jurisdictions. Further no contracting party or its representative has power to bind or obligate the Group save the President or on the express written authority and as an agent of the President.
18.3 All contracting parties subscribe to certain common objectives; however, neither they nor the Group have any control and /or oversight of the services provided by any contracting party and, therefore, have no cross-liability for their respective acts or omissions and if any attempt is made to impose this upon any referring member, such referring member will be indemnified in full as to any liability of any kind, as well as costs, by the member who provided the legal service.
Rule 19- Arbitration.
Any dispute between the Group and one or more of its parties, as well as amongst the contracting parties themselves, with regards to the interpretation and/or execution of the present agreement shall be submitted to an arbitrator appointed by the Chairman of the CCBE, who shall decide on the basis of equity rather than any specific legal system and without any possible appeal.