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

Lord Kirkhope of Harrogate Excerpts

Thursday 29th October 2020 Grand Committee

[Lord Kirkhope of Harrogate (Con) [V]]

My Lords, I declare my interest as a practising solicitor and a member of the Law Society of England and Wales. These measures are part of a plethora of instruments brought about by our exit from the European Union, an exit that makes us a third country in relation to EU provisions and regulations of all kinds.

Some of my particular interests in this House are in the fields of security and justice and in those areas our new status as a third country is particularly problematic, especially where, in order to protect our citizens, we need to carry on a strong co-operation to defend us from terrorism and major criminality by the exchange in real time of information and data. Inevitably, our new status will diminish our rights in that regard and, unless we can find a way to avoid the third-country category, the challenges ahead are difficult to meet and solve.

Here before us are some regulations that are inevitable because of that new status. They are no doubt necessary, but regrettable nevertheless. Over many years, the reputation and strength of our legal services has grown and through calm and constant negotiations, in which I and many others had the privilege to be involved, we have established the rights of our lawyers and lawyers from other European nations to practise law in each other’s jurisdictions, so that until this time the free flow in both directions has become reasonably straightforward.

Of course, the journey has not always been easy because in law, as in other professions, there have been the residual elements of market protection or closed-shop mentality in a number of countries. However, recently we have seen a lessening of boundaries that has resulted in the growth of services which, while being of general benefit, has been particularly important to this country, to our financial services industries and the City of London and our national legal practices in particular. Therefore, noble Lords will understand why I have some regret for these measures.

Effectively, from 1 January 2021 UK-qualified solicitors will no longer be able to practise as EU lawyers in EU and EEA member countries. They will lose their rights of audience before EU courts and all communications between UK-qualified lawyers and their clients will lose the protection of legal professional privilege in EU courts and institutions—one of the most important elements of that relationship. Similarly, the same will apply in reverse to European-qualified lawyers.

UK lawyers, if they wish to continue European practice, will be obliged to requalify in a host state under article 10 of the establishment directive. This will be time consuming, costly and uncertain of outcome. UK law firms might have to cease activities in other European countries if professional rules or company law are inconsistent with ours. Also, some national rules on the continent do not allow a mix in a single legal firm of domestic and third-country lawyers. This means that the complications I have stated, plus differences in the limited liability of such entities, will force the termination of many international firms.

Of course, the Government have stated, which is welcome, that they are seeking a future relationship agreement with the EU. We do not know how that is going, but without it, and comprehensive provisions related to services as opposed to trade, lawyers and the vital services that they provide will suffer badly. Without it, the UK and the EU will fall back on the General Agreement on Trade in Services—GATS—under the umbrella of the WTO. If so, lawyers cannot guarantee that they will receive the protection of EU regulations, which would be universally applied. Instead, they will be at the mercy of individual states’ treatment of third-country lawyers, which, of course, varies between states. There are limitations; these usually include certain areas of practice, such as only permitting in the fields of international public law and home country law from the lawyer’s perspective. Unfortunately, some nationality requirements even block UK lawyers from requalifying and prevent new partnerships being formed or continued between EU and non-EU citizens.

As I suggested, being outside the EU, our solicitors will lose all rights of audience in front of EU courts, which is most important in some practice areas, such as competition law and intellectual property law—fields in which our practitioners are particularly needed and successful, and on which the economic advancement of the UK in the post-Brexit world surely partly depends. How we and our European neighbours allow market access to foreign lawyers in future, in the event of reliance on WTO rules, also limits our choice based on historical associations. As noble Lords will know, the most favoured nation provisions do not allow discrimination, even positive discrimination, between trading partners.

I have highlighted some of the areas of difficulty and disadvantage to United Kingdom lawyers in coming months. I accept that, of course, our Government can alleviate these problems to some extent by incorporating in their current negotiations with the EU a clear mutual recognition of professional qualifications provision, but history demonstrates the problems in re-achieving what we are now losing. Mutual recognition agreements between specific nations could follow if such arrangements were in a trade agreement and given sufficient prominence.

In the provisions before us, I am pleased that one of the welcome items is in respect of RELs, or registered European lawyers. They currently have only until the end of this year to meet the UK registration requirement for re-qualification. It would be very helpful and a positive gesture if a grace period could be afforded to those who need more time to requalify, even if they reach three years of being first registered after 31 December.

At the end of the day, there is an inevitability to measures such as these, but we have it in our power to ensure that implementation leaves us with minimum damage to vital parts of our service industries and maximum good will with our European neighbours, with which we will need to co-operate in these and so many other areas in future.