The EU-UK Trade and Cooperation Agreement (TCA) – the Brexit free trade agreement, finalised just before Christmas 2020 – gives a shiny gift-box to lawyers. But, on opening it, we find that the size and wrapping have deceived us as to what is inside.
Nevertheless, the fact that we have been handed a gift-box at all is significant. Effectively, in an agreement which is notoriously short of coverage on services, picking out only five service industries for special provisions, legal services turns out to be one of the five (the other four are delivery, telecommunications, international maritime transport and financial services). Section 7 of Title ll of Part Two of the TCA is devoted to the cross-border services provided by our profession.
The impact of this inclusion should not be under-estimated. It shows that legal services are recognised by the UK government as a significant export. It is a template which can be pointed to in future trade agreements, and not only those in which the UK is one of the negotiators. Legal services are exported by other countries, with the US being the most obvious example, and there is now a precedent – including wording and definitions – which can be used as a starting point for similar deals. It is a milestone in the cross-border trade of legal services world-wide.
But, as stated, the contents of the box are disappointing, particularly when compared to what went before. As many have pointed out, the Brexit process has involved the closing of previously open markets, and those markets were uniquely open for cross-border trade in legal services. Solicitors could go to any EU Member State, either to provide temporary services or to establish on a permanent basis under home title, and offer legal services on home, host and EU law without many bureaucratic requirements. Solicitors could also easily requalify as a local lawyer. Most of those avenues have now been closed off.
There is a basic right in the TCA for solicitors to offer ‘home jurisdiction law and public international law, excluding Union law’ in the EU. That is good. But the basic right is subject to many complex provisions and reservations, meaning that there is no harmonised EU-wide right.
The main exceptions are contained in one of the many annexes to the text of the agreement, which shows that individual Member States will retain existing rules for how third country lawyers may practise in their jurisdiction. For those who want to read it, the part relating to legal services runs from pages 544-555.
The Institute for Government, in its summary of the TCA, gives brief examples of how these restrictions will work in practice for legal services:
‘For example, in the Czech Republic, UK lawyers will have to be resident to provide legal advice, while across the border in Austria they are specifically prohibited from being resident and must provide legal advice on a cross-border basis. Many of the EU’s member states will prohibit UK lawyers from any ownership or control of law firms in their countries.’
But that is not all that will need to be read to work out exactly how the basic right can be exercised. As with any trade deal, there are not only sectoral provisions, such as the part relating to legal services, but horizontal provisions, too. These traditionally cover, among other things, the kind of movement allowed into the country for trade purposes, and the category of people allowed to enter, for example ‘Business visitors for establishment purposes’, ‘Contractual services suppliers’ or ‘Independent professionals’. The Law Society has undertaken a preliminary analysis of some of these provisions with a view to their impact on legal services, and further analysis will follow as time passes.
Some of the horizontal provisions are an improvement on what would have been available if there had been no deal, for instance on independent professionals and short-term business visitors.
But there is disappointment in the legal profession that there are not more substantive provisions on the mutual recognition of professional qualifications. The TCA contains no more than a Canada-style deal, with just a framework for future recognition rather than a detailed pathway with comprehensive coverage. This will make it more difficult for individual solicitors to go beyond the basic right above.
There is also disappointment that civil justice is not covered by the deal. There is frantic work behind the scenes to ensure that the UK will soon become a party to the Lugano Convention, which covers the recognition of judgements in civil and commercial disputes.
There are other topics of great importance to lawyers, such as cross-border data transfers (to be subject to an extra transitional period while the European Commission considers an adequacy decision in respect of the UK). And there will be further topics of interest to lawyers dependent on their areas of specialisation.
So, while it seems churlish to complain when we have been handed a gift, it would be dishonest not to admit privately that we are nevertheless disappointed by what we have received, at any rate at this initial stage of examination of its details. As the many complex provisions, and their impact on legal services, are looked into more carefully over the coming weeks, there may yet be scope to reassess the balance between pleasure and disappointment, and to weight it more towards one end or the other.
Jonathan Goldsmith is a Law Society Council Member for EU matters.