Services of Lawyers and Lawyer’s Practice (Revocation etc.) (EU Exit) Regulations 2020

Baroness Scott of Bybrook Excerpts

Thursday 29th October 2020 Grand Committee

Moved by

[Baroness Scott of Bybrook]

That the Grand Committee do consider the Services of Lawyers and Lawyer’s Practice (Revocation etc.) (EU Exit) Regulations 2020.

[Baroness Scott of Bybrook (Con)]

My Lords, these regulations relate to the recognition of legal qualifications and European lawyers’ practice rights and form part of the Government’s preparations for the end of the transition period.

This instrument will revoke and replace our existing legislation made in 2019 in preparation for the UK leaving the EU without a withdrawal agreement. It will remove from our domestic legislation in England, Wales and Northern Ireland any preferential practice rights for EU, EEA and Swiss lawyers, so that they are treated in the same way as third-country lawyers after the transition period. These regulations remedy the deficiency in retained EU law as such law makes provision for reciprocal arrangements with the EU which will no longer exist. However, EU and EEA EFTA-qualified lawyers who have already successfully become solicitors or barristers before the end of the transition period will be able to retain their qualification and related practice rights.

Noble Lords will be aware that the Government have signed agreements with the EU, the EEA EFTA states and Switzerland, which contain arrangements regarding the UK’s withdrawal from the EU. This instrument will give effect to provisions in those agreements relating to lawyers’ practice rights and the recognition of legal qualifications for those within scope of the agreements. Scotland will be taking forward its own legislation on this matter.

Before I turn to the detail of the instrument, I will briefly set out the background. EU law currently enables UK, EU and EFTA lawyers from one state to establish and practise in another state under their home-state professional title without necessarily having to requalify in the other state. In 2019, the Government made legislation which removed the preferential practice rights of EU and EEA EFTA lawyers in England, Wales and Northern Ireland to come into force on exit day, which I will refer to as the 2019 regulations. A further amending instrument was made, again in 2019, to implement parts of the Swiss citizens’ rights agreement.

The 2019 regulations and the 2019 amendment regulations were not designed to come into force at the end of the transition period under a withdrawal agreement. Given that the UK secured a withdrawal agreement and a separation agreement with the EEA EFTA states, as well as the citizens’ rights agreement with Switzerland, there are provisions in the 2019 regulations which are either no longer needed or will not function correctly. Furthermore, additional provisions are needed to implement the relevant provisions of the agreements relating to lawyers.

This draft instrument will therefore revoke the 2019 regulations and the 2019 amended regulations. Subject to transitional provisions, it will also revoke the domestic legislation that implemented the lawyer-related EU directives—the European Communities (Services of Lawyers) Order 1978 and the European Communities (Lawyer’s Practice) Regulations 2000.

The lawyers’ services directive and lawyers’ establishment directive will no longer apply to the UK, and there will be no system of reciprocal arrangements under which EU and EFTA lawyers can provide regulated legal services and establish themselves on a permanent basis in the UK and, likewise, UK lawyers in the EU.

This instrument will implement provisions in the EU withdrawal agreement and the EEA EFTA separation agreement which allow applications to join one of the legal professions in England and Wales or Northern Ireland made before the end of the transition period to be completed under the current rules.

This instrument will also implement a transition period of four years from the end of the transition period for Swiss lawyers within scope of the Swiss citizens’ rights agreement to register as a registered European lawyer and to practise under their Swiss professional title or to apply to join one of the legal professions in England, Wales or Northern Ireland. Additionally, it will implement provisions which allow lawyers established and employed in Switzerland to continue to provide temporary services under the lawyers’ services directive for up to 90 days in a year, for at least five years, where this is under a contract agreed and started before the end of the transition period.

Finally, this instrument will implement provisions in the agreements to facilitate regulator-to-regulator co-operation and will make further provision to enable regulators in England, Wales and Northern Ireland to complete any ongoing disciplinary proceedings against EU or EEA EFTA lawyers which commenced before the end of the transition period. By aligning the rights of EU and EFTA lawyers with those of third-country lawyers, we will still allow them to continue to access our world-leading legal services market, while ensuring that the UK complies with its international obligations. I beg to move.

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[Baroness Scott of Bybrook (Con)]

I thank all noble Lords for their valuable contributions. I will start with my noble friend Lord Kirkhope. I listened to everything he said. I do not have very much to say, other than that we have left the European Union and we need to make these SIs to protect our UK lawyers through the transition period and give a clear understanding to our European and Swiss lawyers about how they can remain in this country if they wish to do so. I have taken note of the idea of a grace period. I will certainly go back to the MoJ and say that that has been brought up and that we perhaps should consider it.

All three speakers spoke about third-country lawyers. Quite rightly, our legal services market is already one of the most open in the world. I say to the noble Lord, Lord Ponsonby, that we are not changing that at all. All we are doing is saying that, after the transition period, EU lawyers will have the same rights as those third-country lawyers. We regulate only certain legal services. Many foreign law firms provide services to clients without needing to be regulated in the UK.

Third-country lawyers also have significant opportunities to pursue careers in legal services in the regulated sector of the UK. This includes accelerated routes to seek admission as solicitors or barristers through transfer examinations, and to hold ownership and management interests in legal businesses alongside our UK lawyers in a regulated market. There is a public interest risk in retaining the current framework for EU and EFTA lawyers without the benefit of existing EU rules on the regulatory co-operation and oversight that we have had. There is a good and very exciting opportunity for EU lawyers to join third-country lawyers in this market.

My noble friend Lord Kirkhope brought up what the withdrawal agreement means for lawyers. Under the withdrawal agreement, during the transition period existing rights, including lawyers’ home state professional title practice rights across the UK and the EU, will continue.

The withdrawal agreement allows UK lawyers resident in the EU 27 at the end of the transition period who have transferred to the host state profession to continue to practise in the member state in which they reside, subject to the regulatory rules in that member state. This means, for example, that where a UK lawyer is living in Germany and has been successful in joining the German legal profession, that will continue to be recognised. Similarly, EU lawyers who are resident in the UK at the end of the transition period and who have transferred to one of the UK’s professions will be able to continue to practise in the relevant part of the UK, subject to the relevant regulatory rules. Those are the matters that will be dealt with soon after the withdrawal agreement comes into force.

A number of noble Lords asked what impact the outcome of the negotiations with the EU will have on this instrument. I assure them that the outcome of the negotiations should have no effect at all on this instrument.

The noble Lord, Lord Thomas, asked what we were going to do to protect the rights of UK lawyers in the EU and EFTA countries. As EU and EFTA lawyers will be subject to domestic rules in the UK, UK lawyers wishing to practise in the EU and EFTA states will be subject to the national rules and regulations of those individual EU and EFTA member states. This will vary between member states and may vary within member states where they have multiple regulators. This instrument does not and cannot address the issues of the rights of UK lawyers in the EU and EFTA states. However, we continue to work closely with UK regulators and professional bodies as they develop guidance for EU and EFTA lawyers in the UK and UK lawyers working in the EU and EFTA states. Continued information sharing and joint efforts to secure arrangements for UK lawyers through regulator-level agreements will be important to protect future market access. For UK lawyers working in the EU and in EFTA states, given the range of regulatory arrangements that may apply, we have advised them to contact their EU or EFTA member state regulator for guidance. The Government are doing everything they can to support lawyers through this change.

The noble Lord, Lord Ponsonby, asked me how many lawyers will be affected by these regulations at the end of the transition period. Estimating the total number of lawyers exercising rights under the lawyer-related EU directives in England and Wales and Northern Ireland or UK lawyers exercising such rights in an EU or EFTA state is difficult, as lawyers providing services on a temporary basis do not need to register with a regulator in the other state, so no data exists to quantify their activity. In terms of EU or EFTA lawyers exercising their rights to establish in England and Wales permanently, the Solicitors Regulation Authority data shows that there are 783 registered European lawyers registered with the SRA in England and Wales as of August 2020, while there are 301 English and Welsh solicitors practising as RELs in the EU. That will give the noble Lord an idea of the numbers that we are talking about.

The noble Lord, Lord Ponsonby, also asked if we have done any consultation with those RELs. The draft regulations remedy a deficiency in retained EU law, but also ensure compliance with international obligations. As such, we could not conduct a meaningful consultation on the approach we have taken.

I think that I have answered all the questions. However, I will look at Hansard early next week and if I have missed any questions I will certainly come back to noble Lords. The UK Government are committed to protecting the citizens who benefit from rights under the agreements—many of whom make valuable contributions to the UK legal profession. It is also important that this instrument makes other changes to ensure that we remove the EU frameworks, as we can no longer provide preferential rights to EEA countries unless provided for under a comprehensive FTA, except the transitional provisions to give effect to the relevant provisions of the agreements. Aligning the rights of EU and EFTA lawyers with those of third-country lawyers will allow them to continue to access our world-leading legal services market while ensuring that the UK complies with its international obligations.

The rights of UK lawyers in EU EFTA countries cannot fall under the scope of this instrument. The rights of practice, ownership and establishment of UK nationals or those with a UK qualification in the EU will be governed by the national policies and rules of individual member states. We continue to work closely with the UK regulators and professional bodies as they develop guidance for EU and EFTA lawyers in the UK, and UK lawyers working in the EU and EFTA.

The UK legal services sector is one of the leading and most attractive in the world. The Government are committed to championing the sector both through promoting legal services overseas and maintaining its competitiveness. I underline once more that this instrument is a vital part of the Government’s preparations for the end of the transition period and enables us to comply with our international obligations.

Motion agreed.