Practice rights: Law Societies’ priorities for the upcoming withdrawal negotiations between the EU and the UK

Under the Lawyers’ Services Directive 1977 (“LSD”), the Lawyers’ Establishment Directive 1998 (“LED”), the Professional Qualifications Directive 2005 (“PQD”) and the Framework Services Directive 2006 (“FSD”), individual solicitors and law firms have extensive rights. These rights include the right to establish permanently in another member state under their home title, the right to requalify without an equivalence examination after three years of regular and effective practice of host state law, and the right to set up a branch of a home state law firm.

The current system is considered a success as it allows all European law firms and individual qualified lawyers to be treated on a par with domestically established law firms across the EU.

The UK has an excellent reputation as being an open market for legal services. Some of the largest law firms in the world have their main base of operations in the UK, and there are more than 200 foreign law firms in London alone (including 100 US firms, and firms from over 40 jurisdictions).

Thirty six of the top 50 UK law firms have at least one office in another EU member state, and UK law firms have a presence in 25 of the 27 member states. The loss of rights equivalent to those granted under the LSD, the LED and the PQD could clearly have a negative impact on UK law firms.

The Law Societies will be asking to maintain access for lawyers to practise and establish within the EU through the LSD and LED, or equivalent mechanisms. The Law Societies also seek access for lawyers to represent their clients before the EU courts and allow their clients to benefit from legal professional privilege (“LPP”).

Ability to practise outside of the EU/EEA/Switzerland

Outside the internal market for legal services, lawyers and law firms would lose these automatic rights to practise and establish and would need to rely on the World Trade Organisation (“WTO”) framework and the General Agreement on Trade in Services (“GATS”). The EU framework for legal services offers far better market access than the GATS. Furthermore, each member state is able to list its own limitations on the market access and national treatment of foreign lawyers as part of the EU schedule of commitment under the GATS.

Access to the EU courts and Legal Professional Privilege

EU membership currently allows lawyers to represent their clients before the EU courts, and specialised tribunals for example on registration of EU trademarks, and allows the clients to benefit from LPP. The loss of these rights would be of serious concern to both lawyers and their clients. It is crucial that a firm operating internationally is able to represent their clients in different courts, and retaining rights of audience and LPP is essential for law firms to continue to provide the best possible service to their clients.

Mutual recognition of professional qualifications

Requalification as a full member of the host state legal profession is governed by the PQD. The basic rules are that a lawyer seeking to requalify in the EU/EEA/Switzerland must show that he or she has the professional qualifications required for taking up or pursuit of the profession of lawyer in one member state and is in good standing with his or her home Bar or Law Society.

The PQD is particularly beneficial as it allows UK lawyers to requalify in any member state and vice versa which is an attractive prospect for foreign law firms who operate on an international basis.

Once the UK leaves the EU, if it is not able to maintain access to the PQD, then there should be scope for the UK to conclude one or more mutual recognition agreements.