Law of Bermuda

The law of Bermuda is based on the common law legal system of England and Wales.

Sources of law

The law of England and Wales as it stood in 1620 – of all kinds: common law, equity and statute – became the law of Bermuda at that time, and it remains so to the extent that other sources have not changed it.
The Parliament of Bermuda enacts statutes on all domestic legal issues.
Bermuda has a body of delegated legislation.
Precedents established in Bermuda courts are binding on equal and lower courts.
Precedents established in the courts of England and Wales have force in Bermuda to the extent that they are "on-point". This is an issue because Bermuda statute law and England and Wales statute law are usually different. A particular example of this has arisen since the implementation of the Woolf reforms in England and Wales in 1998, since they do not apply in Bermuda. The effect has been that case law on Bermuda court procedure, except local case law, has stagnated since that date.

Immigration

The main categories of resident in Bermuda are:^{[citation needed]}

Bermudian status — Bermuda does not have its own nationality law. Bermudians are British Overseas Territories citizens by default, which is the island's de facto citizenship. Bermudian status can be obtained:

By birth — Although it is possible to be born Bermudian, simply being born in Bermuda does not automatically confer this status. One must be born in Bermuda to a parent who holds Bermudian status, in order to be considered Bermudian by birth.
Through residence — A subset of permanent residents, who have been living on the island since 1989, can apply for Bermudian status if they are Commonwealth citizens.

Spouse of a Bermudian — This status confers many of the rights of a Bermudian (free access to the job market, for example) but does not itself bring status rights. People with this status eventually become Bermudian in their own right after ten years. However the status is lost if the marriage itself breaks down.
Permanent resident — Immigration law reform in 1998 severely restricted the ability of new persons to come to Bermuda and obtain Bermudian status. Persons without status residing on the island since 1989 became eligible for permanent residence certificates, which allowed them to stay and work on the island indefinitely, but without the right to vote, subject to a high landowning tax and without the right to own local businesses. Their spouses and relatives remain eligible to obtain permanent residence certificates. Such people are known locally as "PRCs".
Guest worker — Persons with work permits may work and reside on the island with their spouses and minor children for the term of their permit (usually 30 days-5 years, although 10 year permits are possible). Permits are tied to a specific employer and job, and that job generally must be offered to Bermudians, spouses or PRCs before a work permit will be issued. Their spouses and children may not work without themselves obtaining a work permit. Work permits can be renewed. There is no provision in the law for work permit holders or their family to acquire any permanent residence or citizenship rights over time.
Property owner — A person who owns property under a licence (see property law, below) does not thereby acquire any citizenship rights. However such people are entitled to reside in Bermuda.

Company law

Two types of company can be incorporated in Bermuda:

a local company, which is owned 60% or more by Bermudians; and
an exempt company, which is owned chiefly by non-Bermudians

As a matter of broad principle (to which there are many exceptions):
- only a local company may trade in Bermuda (there is a similar restriction on foreign companies, and on non-Bermudian sole traders and partnerships);
- only local companies are expected to contribute to the local economy through taxation.
- exempt companies may have a physical presence in, and employ staff in, Bermuda.

Property law

All conveyancing in Bermuda is unregistered. Bermuda has no equivalent of the British Law of Property Act 1925.
Bermuda has no capital gains taxes, but there is ad valorem Stamp Duty on sales and gifts of real estate.
Generally, Bermuda real estate cannot be vested in a corporation, except:
- in a trust company;
- in the management company of a condominium; or
- in other cases with the permission of the minister, strictly limited by policy.
Bermuda real estate cannot be vested in a non-Bermudian, nor in a trust which may benefit a non-Bermudian, unless a licence is obtained on behalf of the non-Bermudian. The fee for the licence is a substantial percentage of the market value of the real estate.
With some limited exceptions, only real estate in the hands of non-Bermudians is available for sale to non-Bermudians.
It is common for Bermuda real estate to be owned by trusts.

Trust law

See also Trust law

It is illegal to act as a trustee, as a business, without a licence. Generally, licences are only granted to corporations, so almost all professional trustees are trust companies. A professional person may act as a trustee if (and only if) he or she has a connection with a licensed trust company, and delegates certain functions to that trust company.
Unpaid private trustees are fairly common, although usually only for domestic trusts (see below).
The residence of a trust follows the residence of its trustees. A trust is therefore only Bermuda resident if a majority of its trustees are Bermuda resident.
Generally, Bermuda tax law is generous in its treatment of non-Bermuda assets, which include foreign currencies even where held at Bermuda banks. There is usually no tax charge in Bermuda (for example, to Stamp Duty) on settling non-Bermuda assets into trusts, nor on the income those assets produce, nor on their sale, nor on their distribution to beneficiaries. Like the other offshore financial centers ("tax havens") this has led to the use of Bermuda trusts by settlors and beneficiaries from higher-tax jurisdictions.
By contrast, Bermuda assets are generally charged to ad valorem Stamp Duty upon being settled into trust.
Bermuda (by statute) recognises the concept of non-charitable purpose trusts.
Domestic trusts (that is, trusts settled by Bermudians, with Bermudian beneficiaries) are very common, due to the stamp duty legislation, which imposes a tax of up to 15% of the value of Bermuda-assets in an estate on death, but does not tax an interest in a discretionary trust.

Litigation and the Bermuda court system

Together with a number of tribunals, Bermuda has a three-tier court system:

Magistrates Court, with a mainly criminal jurisdiction;
Supreme Court, with a civil and criminal jurisdiction, covers the roles of the English Crown Court, County Court and High Court. Among others, this includes the Commercial Court.^[1]^[2]
Court of Appeal has equivalent status to the English Court of Appeal. There is a further right of appeal to the Privy Council in London.

Judicial Officers

The current Chief Justice of Bermuda is Narinder Hargun, who was appointed in 2018.^[3] For previous Chief Justices, see Chief Justice of Bermuda.

References

^ "Supreme Court | Government of Bermuda". www.gov.bm. Retrieved 2024-05-05.
^ "Bermuda's Commercial Court has joined the Standing International Forum of Commercial Courts | Government of Bermuda". www.gov.bm. Retrieved 2024-05-05.
^ "Hargun appointed as Chief Justice". Bermuda: The Royal Gazette. July 17, 2018.

External links

Bermuda Laws, an official site with all Bermuda legislation, including delegated legislation.
The following law firm websites have "publications" sections which, although primarily for marketing purposes, have many articles on substantive legal issues, generally aimed at clients, rather than lawyers: