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Brexit - the end of the road for costs lawyers?

No. Just teasing. Costs lawyers will be among the last to be affected, in their professional lives at least, by Brexit. However, the wider legal profession will be affected and, since when the profession as a whole sneezes costs lawyers eventually catch a cold, it makes sensible to have a quick overview of the current panorama. This is helped by the fact that the Law Society has recently published its advice to the profession on preparing for a No Deal Brexit - click here to read.

The EU’s single market in services has worked very well for lawyers, particularly those from the UK. This country accounts for 20.3% of the EU market in legal services and many foreign, particularly US law firms, established a presence in the UK partly in order to gain access to the EU market. There are 42 EU27 firms with a presence in England and Wales, mainly London. By contrast UK firms are represented in 26 of the 31 EU27 and EFTA jurisdictions, and in 2015 around 1% of practising certificates were issued to solicitors based in EU27 countries. The ability of both individuals and firms to practise across the Channel from their country of origin is facilitated by four EU Directives, two specific to lawyers, and two of more general application to the provision of services and the recognition of professional qualifications.

But what will happen come 11pm (UK time) on March 29th 2019? The UK and the EU27 have of course now agreed the terms of a Withdrawal Agreement pursuant to Art. 50 of the Treaty on the European Union. But the biggest obstacle to the agreement is whether it gets past the Westminster Parliament’s “meaningful vote”. It is still anyone’s guess what the “meaningful vote” means if it does not and what happens next. Although the European Parliament also has to approve the deal, it is less unpredictable on the subject than its counterpart in London.

If there is a Deal, then it is fairly clear what rights individual lawyers practising cross-Channel already or up to the end of the transition period on December 31st 2020 will have. Under the EU Directives UK lawyers practising in the EU27 have two means of doing so and, under the Withdrawal Agreement, these rights will continue until the end of the transition period.

UK lawyers can practise under their home title – ie English solicitors practising as English solicitors without requalifying. If they choose that route they have to register with the local legal profession but, subject to that, they can practise in English law, the law of their host state, international and EU law. Certain activities such as conveyancing and probate may be reserved by the host state so as to exclude them, and if involved in litigation they may have to work with a lawyer of the host state. Probably the majority of English lawyers practising in the EU27 have followed this route, though many of them operate in highly specialist fields of EU law such as competition or patent law.

The Withdrawal Agreement removes the right to practise under home title even from those who already practise that way, making it necessary for them to give up, requalify or for some purposes get admitted to the Law Society of Ireland. The reasons for this harsh decision, which came entirely from the European side, are not clear. The author’s suspicion is that EU27 professions wanted to curtail the activities of UK lawyers who have been more successful in penetrating the EU27 market than vice versa. So practising under home title will cease, Deal or No Deal. This also means that dual qualified lawyers, eg a person practising both as a solicitor and an avvocato in Milan, will lose the automatic right to continue to practise as a solicitor.

The alternative route is for solicitors (or barristers) to use their English qualification and experience as a short cut to qualifying in the profession of their host state. This involves further exams and/or practical experience but does have the advantage of the lawyer in question being admitted to the profession of the host state and being able to practise as such. Qualifications obtained through this route and recognised prior to the end of the Withdrawal transition period will still be recognised. Even in the case of No Deal, qualifications recognised prior to March 30th 2019 will be recognised, it seems because both the EU and the UK accept that the recognition of a qualification is an acquired right which even they cannot bargain away.

However, Deal or No Deal, the EU system of mutual recognition of qualifications ceases on March 30th 2019 or January 1st 2021 (the date depending on whether there is a transition period), and UK lawyers who have not already requalified will lose their right of audience in EU courts. UK lawyers and their clients will lose the right of legal professional privilege in cases before the EU courts and institutions and, depending on national law, possibly also in EU27 countries. UK lawyers will also lose their existing FIFO (Fly In Fly Out) right to advise clients in the EU27 and may face immigration restrictions.

For the future UK lawyers wishing to practise in the EU and EU lawyers wishing to move to the UK will be subject to the law of the country they wish to practise in. The Law Society has prepared a list of the rules that operate in each jurisdiction of the EU27, and will supply it on request – write to international@lawsociety.org.uk. These rules will apply unless and until something more liberal is agreed either UK/EU as part of the future relationship or as a result of bilateral agreements between the Law Society/Bar and the professions in the EU27 States. The Political Declaration setting out the framework for the future relationship has a highly aspirational section on exploring mutual recognition of qualifications and liberalisation of the market in services, but there is a lot of work to be done before any of this becomes a reality. In the meantime firms with substantial skin in the EU game are busy restructuring to meet the new environment.

Looking at the other side of the coin, the position of EU27 lawyers working or wanting to work in England and Wales is a mirror image. Registered European Lawyer status will cease at 11pm on March 29th (just to catch those workaholics who were planning to keep going until midnight) or on December 31st 2020 presumably also at 11pm UK time.

How will this all pan out? As a committed Remainer and activist for the preservation of citizens’ rights, the author is tired of being told, “Oh, it’ll all be OK”. It will not be, for anyone. However, given its ingenuity and powerful instinct of self-preservation, the legal profession will probably suffer less than most. It must be doing all right out of Brexit advice already and there is plenty more of that to come.

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