Implications for the profession of a no-deal Brexit

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Whilst the UK Parliament has passed a motion to reject the possibility of a no deal and the UK and EU have agreed that the earliest the UK would leave the EU is 12 April, it is still possible that the UK could leave the EU without a deal. Even with an extension or the passing of the current Withdrawal Agreement and a transition period could lead to talks breaking down, leaving the possibility that the UK will leave the EU without full arrangements on its future relationship.

A no deal Brexit would have A significant ramifications for the ability of lawyers to do business in the EU as well as the co-operation the UK has with the EU in civil, family and criminal justice matters.

No deal for law firms

The Law Society continues to raise concerns about the implications of no deal for law firms and, importantly, for clients. For law firms, economic predictions have shown that a no deal Brexit could cost the legal sector up to £3 billion in turnover by 2025 and that growth would also slump to 1.1%. Whilst the Withdrawal Agreement and therefore and transition period to December 2020 will create some certainty, it is imperative that we avoid a cliff-edge either in the next few months or at the end of this period.

We have seen some individual member states take steps to prepare for no deal which will help those living or working in EU member states. However, no deal would mean falling back on World Trade Organisation rules which would see UK trade in legal services with European counterparts governed by a complex web of over 30 different regulatory regimes. In some countries, UK lawyers and law firms will be able to carry on virtually as business as usual. We continue to update our  extensive overview of the national regulations that apply in each jurisdiction in the EU/EFTA (you can request this by emailing international@lawsociety.org.uk). This also includes an overview of steps that member states have taken to mitigate the impact of no deal.

Over the coming weeks, the Law Society of England and Wales will continue to speak to our European counterparts and the UK Government about what steps can be taken to mitigate the risks that a no deal would bring to businesses and clients. 

We are advising solicitors and English and Welsh firms who operate in the EU, whether temporarily or permanently, to consider the regulatory framework for third country lawyers in the country they are trying to operate and to consider registering with the competent authority in relevant states as soon as possible. We have highlighted further issues for solicitors operating in the EU to consider here.

The Government and the Solicitors Regulation Authority have also made provisions for registered European lawyers in the UK when their current status will ends in December 2020 (after a grace period in a no deal scenario). We are recommending that Registered European Lawyers consider whether to gain admissionto the Roll of Solicitors of England and Wales and/or whether they can continue to practise under their home title. The best route for each will depend on the work they undertake, and further information can be found in our guidance here.

No deal for clients

The Law Society has also been considering the likely impact of a no deal Brexit on our justice system including how  clients can access justice across borders. We have now published guidance for our members in eight areas of law to consider the steps they could take in a no deal scenario including family law, consumer law, criminal justice and security, data protection, intellectual property, VAT, civil judicial co-operation and providing legal services in the EU.

We are pleased that the UK Government has taken the necessary steps to have the 2005 Hague Convention in place for a no deal scenario which will mean that parties with an exclusive choice of court agreement will still see their judgment recognised and enforced across the EU. We also want the UK Government to seek to accede to the Lugano Convention so that consumers and businesses have further protections. The UK Government have also acceded to the 2007 Hague Convention which covers the recovery of child support. 

In many other areas of judicial co-operation, national law rules of EU member states will apply where previously there was near automatic recognition and enforcement of judgments and orders.

The future UK-EU relationship

Whilst all eyes are on getting the Withdrawal Agreement through the UK Parliament, significant negotiations will need to be conduct around the future relationship. We have an indication of the UK and EU priorities from the political declaration but there is still considerable scope on the detail of the new UK-EU partnership.

Were pleased to see that the political declaration included a commitment to maintain judicial co-operation on matrimonial proceedings, parental responsibility and other related matters and that there was a reference to professional qualifications.

However, we continue to call on the UK-EU to be more ambitious. We are concerned about the lack of reference to civil and commercial co-operation which ensures that the businesses and citizens who need to cross borders to access justice.

We also remain concerned about the lack of ambition on trade in services.  Free trade agreements are generally blunt instruments when it comes to facilitating trade in legal services. A more comprehensive ask is needed. We will continue to make the case to the UK Government and to the EU.

 

Rebecca Goshawk is Public Affairs Manager at the Law Society of England and Wales

 

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