Services of Lawyers and Lawyer’s Practice (Revocation etc.) (EU Exit) Regulations 2019

Lord Foulkes of Cumnock Excerpts

Tuesday 15th January 2019 Lords Chamber

[Lord Keen of Elie]

Clearly, over time we will address the ability of the United Kingdom to agree with the EU the possibility of reciprocal rights for United Kingdom lawyers in Europe, but it is not something that we can dictate by our legislation. What we can do, however, is facilitate the position of EU-registered lawyers who are already in the United Kingdom and contributing to the legal services in the United Kingdom so that they can be secure in the knowledge of what their position will be in the event that we exit without any agreed deal.

[Lord Foulkes of Cumnock (Lab Co-op)]

The Minister may have said this before I came in. I apologise: I was held up at a meeting outside. He mentions the United Kingdom, but paragraph 2.1 of the Explanatory Memorandum says:

“The purpose of this instrument is to end the preferential practising rights of EU and EFTA lawyers in England and Wales and Northern Ireland”.


What is the position in relation to Scotland?

[Lord Keen of Elie]

The noble Lord is quite right: he was not here when I began. I said that with regard to Scotland, this is a devolved issue and the Scottish Government are addressing that matter. However, in taking forward negotiations with regard to reciprocal rights in the future, we would have in mind the interests of all lawyers within the United Kingdom, wherever they qualified. But for the purposes of determining the rights of registered European lawyers in the United Kingdom, we will deal with it by way of this instrument for England and Wales and for Northern Ireland, and the Scottish Government are undertaking to address it in the context of that jurisdiction. That is where we stand. As the noble Lord is aware, this is a devolved competence.

[Lord Foulkes of Cumnock]

The Minister has been particularly helpful in relation to that. I know that he knows Scots law very well, as do a number of other noble Members present. What is the current state of play in relation to this being dealt with in the Scottish Parliament? Is it running parallel with us? Is it ahead of us? Is it behind us? Will it be able to get it done in time? I know they are not very keen on no deal—in fact, they are not very keen on coming out of Europe at all—in the Scottish Parliament so I wondered what the state of play was in relation to dealing with this in the Scottish Parliament.

[Lord Keen of Elie]

In relation to this particular instrument, I am not in a position to say where the Scottish Government are in processing such a proposal. That is a matter for them and it is not a matter that they would, as a matter of course, disclose to me. But, as I say, I have confidence that they are aware of the issue and they have decided that they will take it forward. If they had wanted to utilise the provisions of the Scotland Act to have the UK Parliament legislate for them in regard to this matter, they would of course have said so. The very fact that they have not is indicative that they are making progress to legislate for this on their own behalf. That is where we stand.

--- Later in debate ---

[Lord Keen of Elie]

My Lords, I shall begin with the observation from the noble Lord, Lord Beith, because I omitted to identify the location of the suicide pill. I am advised that the intention is that, in the event of an agreement, it will be incorporated in the withdrawal agreement Bill, and that is the mechanism that it intend to employ’s for those purposes. I apologise for not having appreciated that when the question was first raised.

[Lord Foulkes of Cumnock]

Will that apply to all several hundred SIs? Will they all be incorporated in the withdrawal agreement Bill?

[Lord Keen of Elie]

My understanding is that that is the mechanism that will be employed.

A number of noble Lords raised the question about the access of UK lawyers to the EU 27 and EFTA. That is not the purpose of this instrument, but I do not wish to ignore it. Clearly, we would like to see a withdrawal agreement that leads on, pursuant to that, to negotiations that can ensure that we have as wide a form of access to the EU 27 and EFTA countries for legal services, like other services.

The noble Lord, Lord Thomas, made a number of perfectly good and valid points about where we are without a deal and the impact it will have upon the provision of legal services. This is a matter over which I have been in discourse with the legal profession for the past two years, and I have visited with a number of firms in jurisdictions outside the United Kingdom to discuss with them where they stand with regard to these matters, in particular in Paris. Of course, as the noble Lord, Lord Beecham, has observed, this is not for the larger firms. It tends to be the very large firms—generally City-based—who are engaged in practice outside the United Kingdom, particularly in Europe.

The noble Lord, Lord Adonis, asked about small firms and the impact on them. To a very large extent, it is the City firms who are employing European lawyers for a particular form of expertise. One has to bear in mind that small firms do not tend to have non-UK qualified European lawyers practising.

It is perhaps worth noticing—lawyers will appreciate this, but others may not—that, in England and Wales any natural person may deliver legal services for pay, except in the defined, reserved areas, of which there are six. They cannot call themselves solicitors or barristers, but they are only prohibited from practising in the reserved areas, unless they are subject to appropriate regulation. In the event, EU lawyers who have not requalified—and I will come back to this point—tend only to be here in order to show expertise within the law of their own particular jurisdiction. To try to put it in context, this applies not only to EU lawyers but also, for example, to American lawyers, so that, when they are doing international transactions they have available to them expertise in another jurisdiction’s law.

In addition, we have to bear in mind the mutual recognition of professional qualifications. After three years in the United Kingdom, an EU lawyer is in a position to apply to become a lawyer under the host state’s regulation—in other words, a solicitor or barrister. Generally speaking—and this is a point emphasised in the Bar’s briefing—those who intend to be engaged in reserved matters will take that qualification. That is why, when engaging with the profession on this matter, we have allowed for a transition period so that, by 2020, people who are intent on remaining in the United Kingdom to practise in reserved areas will have had the opportunity to move over under the three-year rule in order to have the host qualification to continue. The Bar’s briefing said that, in the experience of the Bar Council, most EU practitioners who are interested in delivering reserved legal activities, obtain one of the home titles in order to be more successful in our legal market. I hope that addresses this point.

On the issue of consultation and negotiation, the question of professional legal qualifications was raised with the EU at a very early stage on the basis that it was an adjunct to citizen rights. At that stage, the EU was not prepared to negotiate on that issue as distinct from what they regarded as citizen rights. It was, therefore, not taken forward in the context of the withdrawal agreement. In the context of the political declaration, it is directed principally to goods, although others elsewhere will discuss the distinction between goods and services. At the present time, it is our present intention to engage, if we have an agreement with the EU, on the question of reciprocity and recognition going forward. We understand the importance of this.

I might add that we have discussed the matter with those firms that generally operate in the EU and outside the United Kingdom. They have been aware of these issues for some time and very many of the lawyers whom they engage in their offices—for example in Paris and Hamburg—are now locally qualified or are qualified nationals of the host state. That is the way in which these practices are carried on.

I take the point made by the noble Lord, Lord Adonis, that some restructuring has been required to allow for this, and that has to be accepted. It is restructuring that would not otherwise have been engaged in, but these firms have undertaken it in preparation for the possibility of a no-deal Brexit. However, these tend to be the major City firms. You do not get the high street conveyancing lawyer trying to open offices in Paris—if they do, I suspect it is not terribly successful.

I recognise the development of courts in other jurisdictions and, in particular, the point made with regard to potential developments in Ireland. I am well aware of many of my fellow barristers who have checked their ancestry just to ensure that they can secure an Irish passport. Lacking that, they have sought to secure a place at the Bar of Ireland. It may be apocryphal, but I understand that the fee for registration as a solicitor in Dublin went up rapidly from €300 to about €3,000. I may be doing the solicitors’ branch of the profession a disservice in relying on that story, but these developments are taking place. Let us remember that, at the level of international litigation, the real competitors are Singapore, Hong Kong and New York, which are all places outwith the EU, albeit that there are specialist centres—Stockholm being one, in the context of shipping and arbitration; and Hamburg being another. We recognise that as well.

I come back to the instrument itself. We are required to pass it because, otherwise, we will be in breach of our international law obligations under the WTO and, in particular, the GATTs. So it is necessary for this purpose. I hope that it will not be required. I express this view without qualification. It is only appropriate and sensible that the Government make provision for what could be an eventuality. I am not going to revisit ground that the House has already covered in the context of earlier statutory instruments which were before it. I hope that it will not be required, but it is only proper and appropriate that we should engage with the profession in order to ensure that we are prepared for any foreseeable eventuality, however unpleasant and unrewarding it may be. I beg to move.