Head of the UK Law Societies’ Brussels Office gives evidence in the House of Lords

Impact of Brexit on UK legal services market

Baroness Kennedy asked what assessment the Law Society has made of the impact of Brexit uncertainty on the legal sector. Helena Raulus responded that there has been more certainty following the draft of the withdrawal treaty and the outlining of the transition period. However, this elongated timeframe only means that uncertainty will re-appear towards the end of 2020. This is especially the case given the uncertainty surrounding the UK’s future relationship with the EU and whether it will be in a form of a free trade agreement (FTA). This is because civil justice is not normally dealt with in FTAs.

She pointed out that it was not possible for the EU to negotiate formally on the future relationship until the end of the transition period.

She added that, in relation to existing and upcoming new cases, the Law Society believes there needs to be a smooth transition through the UK-EU agreement including civil justice.

Continental profiting from Brexit uncertainty

Asked by Lord Anderson about EU member states trying to tempt businesses in the UK to relocate, Ms Raulus said many businesses are waiting to see the final arrangements before making their decision. She added that reaching a robust agreement on arbitration would be vital to avoid excessive costs for SMEs.

Mr Layton said that he had heard of businesses relocating to Ireland, Belgium and Cyprus. He added that, although Germany, France and Belgium are looking to lure businesses from the UK during this period of uncertainty, he expects losses of UK businesses to have an impact but not be wholesale.

Brussels Regulation

Asked about the application of the Brussels Regulations post-Brexit, Ms Raulus pointed out that despite the UK Parliament’s report and the Government’s position paper on the subject, the EU’s response to this has been ambivalent and this issue seemed to be locked behind bigger issues such as the institutional relationship and the jurisdiction of the Court of Justice of the EU (CJEU).

Mr Layton added that there was a concern that the Brussels regime is becoming a bargaining chip in negotiations on the Withdrawal Agreement.

‘Winding down’ civil justice and family law co-operation

In relation to the Government’s statement that should it fail to reach an agreement with the EU on civil justice co-operation it is considering how ‘ongoing co-operation in this area could be wound down’, Lord Cromwell asked the witnesses for their reactions, particularly in relation to family law and justice. Mr Layton expressed concern at this sentiment and said there needs to be an agreement on family law and that this is view is shared even with those in favour of the UK leaving the EU.

Ms Raulus added that to create an obligation for the EU courts to recognise the judgments from the UK courts, the EU and the UK need an agreement. As the EU has gained exclusive competence in the area, it is not possible for the UK to reach bilateral agreements with member states anymore. She further pointed out that although the European Council guidelines do recognise family law as an area to be negotiated, of more concern to The Law Society is that civil and commercial law has not been mentioned in the guidelines at all.

Lugano Convention and Mansion House speech

Lord Judd asked about Theresa May’s ambition for civil justice co-operation to be broader than the system set out in the Lugano Convention, to which Mr Layton replied this would never happen. Ms Raulus said she was wary of the ‘Danish Model’ in this area as Denmark is a member state and part of the Internal Market. She also added that, given the UK Government’s red lines, the UK has only two options on the table – an FTA (which traditionally does not cover civil justice), where the UK would need to negotiate access to the Lugano Convention, or a wider, more ambitious agreement, where the UK system is linked to the EU system in institutional level and through which the UK could gain access to the broader range of EU justice cooperation instruments.