Implications for the profession of a no-deal Brexit

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No matter the terms, exiting the EU will be the largest ever change to the UK’s legal framework. With political uncertainty continuing, it is still a possibility that the UK will leave the EU without a withdrawal agreement or any formal transitional arrangements.

 

If the UK leaves the EU without a deal we will see 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. Most significantly in the short term a no deal Brexit means that the UK will no longer have a transitional arrangement which would have maintained the status quo until December 2020 (these are conditional on the draft Withdrawal Agreement being agreed).

No deal for law firms 

The Law Society has been raising concerns about the impact of no deal for law firms and, importantly, for clients. For law firms, economic predictions have said 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%.

A no deal would mean falling back onto World Trade Organisation rules which would see UK trade with European counterparts governed by a complex web of over 30 different regimes. In some countries, UK lawyers and law firms will be able to carry on virtually as business as usual. However, in other EU and EFTA countries, both lawyers and firms will face barriers. The Law Society of England and Wales has prepared an extensive overview of the national regulations that apply in each jurisdiction in the EU/EFTA (request this by emailing international@lawsociety.org.uk).

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 and to consider registering with the competent authority in relevant states as soon as possible. We have provided further areas 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 as th-eir current status will end in December 2020 (after a grace period in a no deal scenario). We are recommending that Registered European Lawyers consider whether to gain admission to the Roll of Solicitors of England and Wales and/or whether they can practise under their home title. The best route for them 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 impacts of no deal on our justice system and how our clients can access justice across borders. Since the EU referendum the Law Society of England and Wales has been clear that EU mechanisms on civil and family justice have been hugely beneficial for families, consumers and businesses in both the UK and EU.

The loss of civil judicial co-operation mechanisms such as Brussels I Regulation, Brussels II Regulation and the Lugano Convention will make it harder for businesses and families to gain access to justice across borders.  

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. However, we want to work with them to ensure that consumers and businesses have further protection and are calling on the UK Government to seek to accede to the Lugano Convention. 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 Law Society of England and Wales has also set out possible steps for solicitors should consider in the areas of civil and commercial co-operation and family law.

Over the coming weeks as the new political reality unfolds, 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 no deal would bring to our businesses and clients.

Alexandra Cardenas is  Head of Public Affairs and Campaigns at the Law Society of England and Wales

 

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