Leaving the EU: Legal Services

Alex Chalk Excerpts

Wednesday 28th March 2018 Westminster Hall

[Robert Neill]

My hon. Friend makes a very important point. At the moment, the UK is the jurisdiction of choice for the majority of commercial law contracts, litigation that follows from them, and commercial law arbitration, but we cannot take that for granted. A number of English language commercial courts that apply UK law have already been established elsewhere in the world. As I understand it, another is proposed in Amsterdam, which would clearly have an impact once we leave the EU. Mutual recognition of judgments is one of the UK legal sector’s key asks, and he anticipated with great timeliness that I was about to move on to what the Law Society, the Bar Council, the City of London Corporation, TheCityUK and others in the sector are looking for from the Government to maintain the position of UK legal services once we leave the EU.

The legal services sector’s key priorities are as follows. First, EU27 legal providers should be permitted to provide services in the UK, and vice versa—UK legal providers should be able to provide services in the EU27—on the basis of mutual recognition of regulatory regimes. That would enable European lawyers based in London firms and UK lawyers based in the EU27 to continue to advise and represent their clients.

Secondly, the UK and the EU27 should continue automatic mutual recognition of legal qualifications gained before and during—and after, I submit—the UK’s exit from the EU. That ought to be part of the agreement we seek. Otherwise, we would be in the perverse position that an English lawyer who, like me, is also qualified in the Republic of Ireland—I am a member of the Irish Bar—was able to continue to practise in the EU27 using their Irish qualification but not their English qualification. That is why there has been a considerable increase in the number of English solicitors being admitted to the Law Society of Ireland and English barristers seeking to be called to the Irish Bar. It would be much more sensible to retain those people in the UK as part of a mutual deal with our EU partners.

Thirdly, as my hon. Friend said, it is critical that UK court judgments can continue to be enforced in the courts of the EU27. That obviously applies to commercial law, but it also impacts maintenance payments, for example. Let us say that the partner from whom a UK national is having difficulty getting support for their child is an EU national who is living back in the EU27. Maintenance payments, like a judgment in the largest commercial litigation, can currently be enforced in any EU27 court and implemented by the authorities of any EU27 member state by virtue of our membership of the EU. One regulation covers the whole lot. It is important that we seek to preserve that arrangement. It would be extremely complicated if we had to enter into arrangements with individual EU member states, so we must try to do it en bloc.

It is also to the benefit of the EU27 to have the judgments of their courts recognised and enforced in the UK. There would be mutual advantage to preserving that arrangement, and it is most important that that is done without any break in continuity. Contracts of all manners are being entered into that, in all likelihood, will run beyond the date on which we leave the European Union. It is essential that people can enter into such contracts with sufficient certainty that they will be enforceable throughout the transition period and in the end state after we leave.

It is suggested that, as well as seeking the broadest possible deal with the European Union on that, the UK should consider re-signing The Hague convention as an independent party. I suggest that the two are complementary—it is not either/or. We are currently a party to that convention by virtue of our membership of the EU, but that will no longer be the case once we leave. I ask the Minister to take on board the concern that, in the negotiations, we should seek a waiver from the EU to allow us to re-sign as an independent party prior to Brexit so that there is no delay in ratification.

[Alex Chalk (Cheltenham) (Con)]

My hon. Friend is making a powerful case, and I entirely agree with him about The Hague convention, but does he agree that the great prize would be replicating the provisions of the recast Brussels I regulation, which derives from EU regulation 1215/2012? That is the gold standard. It is the best option, and The Hague convention is very much a fall-back provision.

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[The Parliamentary Under-Secretary of State for Justice (Lucy Frazer)]

It is a pleasure to serve under your chairmanship, Mr Davies. It is also a pleasure to hear the debate brought about by my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) and the contributions made by the other members of the Justice Committee. That Committee is doing a huge amount of work to ensure that the issues that matter in our justice system are brought to the forefront and to Ministers to ensure that we have the best possible justice system going forward.

Today, as always, my hon. Friend highlighted important issues that affect us in relation to Brexit. Like him, I acknowledge the important work done by our legal services sector. By reference to points similar to his, there are four key points. The first is jobs, and the legal services sector is the source of many jobs. As he rightly mentioned, it employs well over 300,000 people.

Secondly, the sector contributes significantly to our economy: £24 billion every year. As my hon. Friend highlighted, that money is brought in by not just the legal services sector but its interdependency and relationship with the financial services sector. He mentioned TheCityUK, whose CEO, Miles Celic, highlighted that very point. He said:

“The UK-based legal services sector forms an integral and crucial part of the wider financial and related professional services ecosystem which makes the UK a truly globally-leading international financial centre.”

The legal services sector does not only those things but so much more. It supports people when they are most vulnerable. Many lawyers give up their time to support others for free through the Bar Pro Bono Unit and LawWorks, and I was pleased to see the launch in 2014 of the UK collaborative plan for pro bono, with more than 40 firms committing 325,000 hours a year to support the most vulnerable.

Our sector is so successful because we have outstanding professionals. We have a well-established system of law and a first-class judiciary, whose expertise and impartiality is recognised throughout the world. For those reasons, my hon. Friend is right to say that we need to protect this sector post Brexit, and we are doing that in a number of ways.

My hon. Friends the Members for Henley (John Howell), for Cheltenham (Alex Chalk), and for Bromley and Chislehurst referred to the importance of mutual recognition and the enforcement of judgments. I hope that in our withdrawal agreement we will soon reach an agreement on the protection of and mutual recognition of judgments, and on separation for cases that are pending and currently before the courts.

[Alex Chalk]

I am encouraged to hear that. Some of the evidence presented to the inquiry stressed that if we get such an agreement right, there is a great opportunity for a springboard, particularly in east Asia, where there is a lot of work that British lawyers can seek to win. However, that will require that sound foundation of mutual recognition of judgments, and mutual enforceability.

[Lucy Frazer]

I am grateful to my hon. Friend, and it is important to give certainty to the legal services sector, so that they can advise their clients accordingly. My point was about the withdrawal agreement and what will happen to cases that are already pending before the court. The second stage of our negotiation was about implementation, and we have given businesses legal certainty by ensuring that our current arrangements will continue to apply during the implementation period. We are starting to negotiate and come to an arrangement on what will happen in future after we leave the EU.

My hon. Friend the Member for Cheltenham was right when he mentioned the gold standard and the Brussels regulation, and my hon. Friend the Member for Henley was correct to identify the importance of the Hague convention. Both those things are important, and we hope to secure the Hague convention as a minimum. It is right to ensure that there will be no gap before we rejoin that convention, and we are pressing to secure that. Our ambition and aim is to negotiate as hard as possible and ensure arrangements and protections in future that are similar to those we currently have.

My hon. Friend the Member for Bromley and Chislehurst raised the important question of legal services, the right of citizens to practise here and abroad, and the mutual recognition of qualifications. Again, on separation, as part of the withdrawal agreement we have agreed that any lawyers within the scope of the citizens’ rights agreement who have become part of the host profession in the member state should remain recognised and able to practise. Last week we agreed the terms of the implementation period, in which we will have the same rules as now. Therefore, rules on market access will continue, including on the provision of services and establishments for lawyers. The Government are keen to ensure a good deal for the legal services sector in future.