The post-Brexit world – an ABC guide for lawyers

As the countdown continues to Britain’s exit from the EU, the CCBE (Council of European Bars and Law Societies) is monitoring potential legal profession impact.

Already, the Law Society of Ireland has published a Frequently Asked Questions facility for those querying a no-deal effect on professional qualifications. 

Qualifications

Discussions between the Law Society and the Department of Justice are ongoing on issues of ongoing mutual recognition of qualifications between the adjoining jurisdictions and the Republic.

"As matters stand, existing qualifications obtained are unlikely to be affected, as pre-exit qualifications will continue to have force.

“Of immediate concern is that for those who have successfully undertaken the England and Wales preparatory course in recent years, that they should complete the registration with the Solicitors Regulation Authority in England and Wales,” a Society spokeswoman said.

Meanwhile, the UK House of Commons Select Committee on International Trade heard evidence on the impact of Brexit on services.

Evidence from the Law Society of England and Wales last month detailed how a WTO scenario, in particular, will impact negatively on the legal sector.  

The delegation urged the British Government to seek to secure both market access and mobility for English and Welsh solicitors to:

• advise on English and Welsh law (home country) law and international public law in all four modes of supply (this includes fly-in fly-out advice, FIFO),
• set up a law firm under host state rules, including movement of natural persons (Mode 3 and Mode 4),
• employ local lawyers and be employed by them,
• form partnerships with local lawyers, including movement of natural persons (Mode 3 and Mode 4),
• attract talent to Britain (Mode 4) – provisions on intra-corporate transferees, contractual service suppliers, independent professionals, business visitors and, more generally, on immigration),
• represent clients in arbitral proceedings and other alternative dispute resolution (ADR) mechanisms.

The Law Society of England and Wales urged the British Government to incorporate legal services as part of its trade promotion.

It said that future trading agreements should contain specific commitments to support cross-border trade in legal services, recognition of qualifications and access to government procurement mechanisms.

The current enquiry on services reflects many of the submissions made two years previously, as the Commons Business Committee considered the issue of UK Trade Options Beyond 2019. 

The General Council of the Bar of England and Wales, submitted evidence then, mainly on the issue of passporting for financial services.

Unfortunately, many of those concerns are still live issues.

A CCBE International Legal Services Committee analysed varying Brexit scenarios as follows:

Scenario 1 – ‘No deal’

• If the UK leaves the EU without a Withdrawal Agreement or any special trade arrangements, World Trade Organisation (WTO) rules would apply according to the WTO services schedule,
• The access for the UK legal services sector to the EU legal services market would be governed by national regulatory frameworks for third country legal practice, which are determined by national statutory and/or professional regulations concerning legal practice and binding commitments made in the EU GATS Services Schedule,
• With regard to the EU, this means that UK lawyers (and all non-EEA lawyers as is the case today) are entitled to provide, within the EU, advisory services in ‘home country and public international law’ excluding EU Treaty Law issues, and these advisory services may be subject to additional national limitations (Domestic Regulation) imposed by individual EU Member States as set out in the WTO schedule^[1],
• Conversely, the legal access for EU services firms to the UK services market will be governed by the UK GATS Schedule of Commitments (although UK national regulations are more liberal than the UK GATS Schedule of Commitments),
• It should also be noted that, in the United Kingdom, Regulations implementing various EU Directives – the Lawyers Services Directive (77/123/EC), the Establishment of Lawyers Directive (98/5/EC), the Mutual Recognition of Professional Qualifications Directive (2005/36/EC) and the Services Directive (2006/123/EC) will be repealed or amended to meet WTO obligations,
• It should also be noted that WTO rules do not permit preferential treatment for nationals of different states. This is referred to as the “most favoured nation” (MFN) rule. It means all countries must be treated the same way as the most favoured nation.

Scenario 2 – Withdrawal Agreement

• The Withdrawal Agreement in its current version has been rejected in the United Kingdom by a large political majority,
• It is possible to make changes to the Withdrawal Agreement, but this is very unlikely,
• At a minimum, it is expected that EU leaders would not entertain any revision unless the United Kingdom position has the backing of the House of Commons,
• If a revised Withdrawal Agreement is reached and approved, then the UK will not need to apply WTO rules and a new trade agreement would be negotiated (including a new trade in services agreement) by the Commission.  What follows would be a transition period up until 31 December 2020 to allow discussions on an EU–UK trade deal (the transition period can be extended by up to one or two years, but any extension needs to be requested before 1 July 2020).  During this transition period the current status quo will be maintained (subject to the provisions contained is Article 27 as set out below) which means that the current EU Lawyers’ Directives continue to apply (along with other EU legislation).

The Withdrawal Agreement foresees the following:

“Article 27 – Recognised professional qualifications:

1. The recognition, before the end of the transition period, of professional qualifications, as defined in point (b) of Article 3(1) of Directive 2005/36/EC of the European Parliament and of the Council, of Union citizens or United Kingdom nationals, and their family members, by their host State or their State of work shall maintain its effects in the respective State, including the right to pursue their profession under the same conditions as its nationals, where such recognition was made in accordance with any of the following provisions:

(a) Title III of Directive 2005/36/EC in respect of the recognition of professional qualifications in the context of the exercise of the freedom of establishment, whether such recognition fell under the general system for the recognition of evidence of training, the system for the recognition of professional experience or the system for the recognition on the basis of coordination of minimum training conditions;

(b) Article 10(1) and (3) of Directive 98/5/EC of the European Parliament and of the Council in respect of gaining admission to the profession of lawyer in the host State or State of work;”

This is in line with the position expressed by the majority of EU27 Bars, which also only grandfathers the rights of those who integrated into the host country profession prior to Brexit (in accordance with art. 10 Establishment Directive), or who acquired the host country title in accordance with the Professional Qualifications Directive (Article 13 and 14). However, it must be emphasized that after the transition period the rights of those who practice under their home-country title (in accordance with art. 3 Establishment Directive) are not grandfathered.

In addition, if recognition of professional qualifications has been requested before the end of the transition period, the application will be processed domestically in accordance with the EU rules applicable when the application was made:

“Article 28 – Ongoing procedures on the recognition of professional qualifications

Article 4, Article 4d in respect of recognitions of professional qualifications for establishment purposes, Article 4f and Title III of Directive 2005/36/EC, Article 10(1), (3) and (4) of Directive 98/5/EC, Article 14 of Directive 2006/43/EC and Directive 74/556/EEC shall apply in respect of the examination by a competent authority of the host State or State of work of any application for the recognition of professional qualifications introduced before the end of the transition period by Union citizens or United Kingdom nationals and in respect of the decision on any such application.”

Other scenarios - revocation or extension of Article 50

The United Kingdom can unilaterally revoke Article 50.  The European Court of Justice has ruled that the EU treaties do allow the United Kingdom unilaterally to change its mind and to withdraw its Article 50 application to leave the European Union.

The possibility of a revocation exists for as long as a withdrawal agreement concluded between the EU and that Member State has not come into force or, if no such agreement has been concluded, for as long as the two-year period from the date of the notification of the intention to withdraw from the EU, and any possible extension, has not expired.

• If revocation occurs, the current status quo is maintained. The purpose of such a revocation must be to confirm the EU membership under terms that are unchanged as regards its current status as a Member State and would bring the withdrawal procedure to an end. A unilateral revocation cannot therefore be used for the purpose of postponing Brexit,
• The EU may also decide by unanimity to extend the Article 50 period beyond the end of March if there would be a very good reason to extend the period — for example, a general election or a second referendum,
• During this period, the current status quo would also be maintained.

[1] On 3 December the United Kingdom submitted a proposed revised schedule to the WTO, for its post-Brexit trade existence.

The United Kingdom has removed the words “(excluding EC law)” from its definition of the permitted scope of legal services that may be practised by foreign lawyers in the UK.