CAYMAN ISLANDS Law and Practice Contributed by: Sam Dawson, Peter Sherwood and Denis Olarou, Carey Olsen
Carey Olsen Willow House Cricket Square Grand Cayman KY1-1001 Cayman Islands
Tel: +1 345 749 2000 Fax: +1 345 749 2100 Email: cayman@careyolsen.com Web: www.careyolsen.com
1. General 1.1 General Characteristics of the Legal System The Cayman Islands is a common law jurisdiction. Litigation is primarily adversarial and is conducted through both written submissions and oral arguments. Sources of Law Sources of law include primary legislation passed by the Parliament of the Cayman Islands, secondary legislation made on the basis of authority found in primary legislation, and residual common law found in judicial precedent. The Cayman Islands is a British Overseas Territory and, as such, the UK may, by Order in Council, extend certain laws to have effect in the Cayman Islands. Judicial Precedent Where there is no binding Cayman Islands judicial precedent, decisions of the English courts, as well as decisions of the courts of other common law juris- dictions, are persuasive. In practice, except in areas where there is a difference in the underlying legislation or public policy, it would be unusual for the Cayman Islands courts to take a different view of the common law than the UK Supreme Court. Decisions of the UK’s Judicial Committee of the Privy Council on appeals from the Cayman Islands courts are binding. As a consequence, there are extensive areas of sub- stantive Cayman Islands law that are identical or very similar to English law, especially in fundamental areas such as contract, tort, equitable principles, basic trust
concepts, foundations of company law, and general concepts of corporate insolvency. However, there are also numerous important areas where, notwithstand- ing the overall kinship of the two legal systems, sub- stantive Cayman Islands law differs materially from that of England, including, in particular, in certain specialist aspects of company and insolvency law that have developed independently to help make the Cayman Islands a leading jurisdiction for international financial services and investment funds. Procedure The Grand Court Rules, which govern the conduct of most high-value litigation in the Cayman Islands, mirror closely the Rules of the Supreme Court that governed High Court litigation in England prior to the introduction there in 1999 of the Civil Procedure Rules. However, the Grand Court Rules also incorporate a statement of governing principles – the Overriding Objective – which is in some respects similar to the Overriding Objective adopted in the English Civil Pro- cedure Rules after 1999. Insolvency proceedings are governed by their own bespoke set of Companies Winding Up Rules, which displace most of the provisions of the Grand Court Rules. There are also separate rules for probate, matrimonial, personal bankruptcy, and small claims. 1.2 Court System First Instance Civil matters up to the value of KYD20,000 are heard by the Summary Court, which also hears certain other
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