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What does the Brexit Trade Deal mean for Legal Services?

The announcement on Christmas Eve (a mere seven days ahead of the end of the transition period on 31 December 2020) that the United Kingdom (UK) and the European Union (EU) had reached an agreement on the terms of the UK’s future cooperation with the EU, after months of fraught negotiations, came as welcome relief to many businesses and individuals, as the worst case scenario (a no-deal) was officially averted.

For the UK legal services sector, the publication of the full text of the Trade and Cooperation Agreement (TCA) between the UK and the EU provided further good news, as it contains a section specifically dedicated to legal services. Very few services, and no other professional services, are given such recognition in the TCA. As noted by the England and Wales Law Society’s (EWLS) Head of International, “this is welcome news for our sector as it reflects its importance, in itself and as an enabler of cross-border trade in other sectors”. It also sets an important precedent for the inclusion of specific provisions for legal services in future international trade agreements.

The Legal Services section of the TCA[1]: the devil is in the detail

The TCA provides the basic right for UK qualified solicitors to provide “legal services” (which is specifically defined in the agreement and includes arbitration, conciliation and mediation services but excludes, amongst other things, legal representation before courts and tribunals) in relation to home jurisdiction law and public international law (but not Union law) across the EU (and vice versa for EU lawyers in the UK). Embedded in the TCA is therefore a general principle for mutual market access for UK and EU lawyers under their home jurisdiction professional title (without the need for requalification or admission to the host legal profession), which is what Boris Johnson’s press briefing statement that “there’s some good stuff in there about barristers, lawyers and solicitors being able to practise law in the EU” refers to.

But – and this is a big but – the section must be read in conjunction with the Annexes to the TCA which contain the individual Member States’ restrictions and exemptions to this general principle. In other words, the basic right referred to above – for a UK lawyer to advise on UK or public international law in an EU Member State (including virtually over the internet or through a temporary practise in the UK) – is not automatic and may be overridden by the individual EU member states’ domestic rules on how third country lawyers may practise in their jurisdiction. The TCA does however make it clear that where EU Member States do require UK lawyers to register to provide advice on UK and public international law, this cannot mean requalification or admission to the local legal profession, nor can it involve hurdles more onerous than those that apply to other third country lawyers.

In addition, the TCA does not provide for the recognition of mutual qualifications, which means it may prove more difficult for individual solicitors to go beyond this basic right (unless and until the Partnership Council, the new body set up to deal with future UK-EU relations, approves a detailed system for mutual recognition in the future).

The TCA also fails to clarify whether UK civil court judgements which do not fall within the scope of the Hague Convention (which the UK acceded to in its own right effective from 1 January 2021) will be recognised in the EU (and vice versa) in the future. A decision regarding the UK’s accession to the Lugano Convention (which is substantially similar to the Recast Brussels Regulation and would allow for the mutual recognition of judgements) remains pending – the unanimous approval of the contracting states (including the EU) to the Convention is required and the EU’s position on this issue remains unclear.

What does this all mean in practice?

The bottom line is that, in many respects, the TCA (despite its specific section devoted to legal services) does little in practice to change the default position for legal services had there not been a deal (see our previous article, available here, for further details on this). The dissolution of the Single Market liberalised regime for UK-EU legal services from 1 January 2021 is a significant change and means that UK law firms and lawyers are now subject to a host of rules and regulations in each of the EU/EFTA states.

While this all sounds rather gloomy, the silver lining is that this was not unexpected and many UK law firms had in place contingency plans to allow business to continue from the start of this year, and the considerable time and effort expended by many firms in understanding the relevant national regulatory frameworks has not gone to waste. The TCA also provides welcome clarity and transparency as to what these rules and restrictions are. The EWLS is currently analysing the non-conforming measures contained in the Annexes to the TCA and is updating its country-by-country information on market access for legal services in each EU jurisdiction, which should hopefully provide further clarification and guidance.

Finally – and to end on a piece of good news – the striking of a deal between the EU and UK means that UK lawyers will be able to access France’s new foreign legal consultant scheme (which was always dependent on the EU having a trade agreement in place with the UK), and the EWLS has confirmed it is in contact with the National Council of French Bars to seek implementation as early as this month.

To discuss any questions arising from this alert or for specific legal advice on particular circumstances, please contact Zulon Begum (Partner).  Also, see our recent articles Getting Ready for the End of the Brexit Transition Period: Four Issues for UK Employers and Brexit and the Legal Services Sector: Countdown to the End of the Transition Period.

[1] See Section 7 of Title II of Part 2 of the TCA (pp 113-117) available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/948119/EU-UK_Trade_and_Cooperation_Agreement_24.12.2020.pdf