Bermuda & its Legal System
Bermuda is the oldest and largest self-governing dependent territory of the United Kingdom. The Island comprises a fish-hook shaped archipelago of several hundred islands (commonly said to be 365, one for each day of the year) and is situated in the Atlantic Ocean, some 720 miles due east of Cape Hatteras, North Carolina and some 774 miles southeast of New York.
Bermuda boasts a local population of approximately 68,000 and is approximately 21 miles long and a mile wide. The capital and business centre of Bermuda is the City of Hamilton and almost all international companies in Bermuda have their principal office there.
Bermuda is a British Dependent Territory (colony), meaning that executive authority in Bermuda is vested in the Queen and is exercised on her behalf by the Governor of Bermuda after consulting with the appropriate Minister of the Government of Bermuda. The Government of Bermuda was reconstituted by the Bermuda Constitution Order 1968 which came into force in 1968. The Constitution is an overriding constitution that no domestic legislation or principle of common law can derogate from.
The Bermuda Constitution provides for a Westminster style of government. Bermuda has a bicameral representative government. The House of Assembly is the equivalent of the British House of Commons and the Senate is the equivalent of the British House of Lords. There are 36 electoral constituencies in Bermuda, each of which is represented in the House of Assembly by a directly elected Member of Parliament (“MP”). The Senate consists of 11 Senators each of whom is appointed by the Governor for the life of the Parliament (which can be no more than 5 years).
The person who commands the majority of the 36 MPs (in practice, the leader of one or other of the two main political parties in Bermuda) becomes the Premier and then forms a Cabinet of 12 Ministers chosen from both the Senate and the House of Assembly. Each member of Cabinet is sworn into office by the Governor of Bermuda.
Bermuda has no corporation or profits taxes, withholding taxes, capital gains taxes or capital transfer taxes, and is widely regarded as a premier offshore financial centre. It has enjoyed a long history of political, economic and social stability and its international business sector has successfully overtaken tourism as the country’s economic mainstay. The Island is the world’s leading domicile for captive insurance companies and one of the world’s leading reinsurance markets.
The Bermuda dollar is tied to the United States dollar at par and U.S. dollars are used interchangeably on the Island with Bermuda dollars.
The Legal System
The law of Bermuda is based on the common law legal system of England and Wales and decisions of the English Court of Appeal and House of Lords are highly persuasive authority in the Bermuda Courts. The Bermuda Legislature enacts Bermuda’s laws. However certain UK Acts apply to the extent that they have been specifically extended to Bermuda or have survived since they originally became Bermuda law in 1612.
Together with a number of tribunals, Bermuda’s court system comprises, in ascending order of superiority:
The Magistrates’ Court
The Supreme Court, headed by the Chief Justice and staffed by Puisne Judges
The Court of Appeal, a 3 person panel of justices headed by the President
There is a further right of appeal in certain cases to the Judicial Committee of the Privy Council in London
The Supreme Court includes a Commercial Court which consists of the Chief Justice and another designated commercial judge. Each of the Puisne Judges of the Supreme Court exercises the same jurisdiction and, whilst decisions of Judges of co-ordinate jurisdiction are highly persuasive, no judge of the Supreme Court of Bermuda can bind another.
The Court of Appeal for Bermuda typically sits in Bermuda for three months of the year, in March, June and November. The Justices of Appeal tend to be peripatetic and sit on various Courts of Appeal throughout the Commonwealth. All decisions of the Court of Appeal are binding on the Supreme Court.
The Judicial Committee of the Privy Council is the final court of appeal for litigants in Bermuda. Decisions of the Lord Justices of the Privy Council on appeal from the Court of Appeal for Bermuda are binding on all Bermuda courts. The Privy Council is not bound by its own previous decisions.
Much of Bermuda’s law is derived from British law, both statute law and the common law (case decisions). Thus whilst the courts in Bermuda will give weight to any reasoned decision from a Commonwealth jurisdiction, by far the greatest weight is given to decisions of the Supreme Court of England and Wales in the development and interpretation of Bermuda’s laws.