No-deal Brexit guidance: Providing legal services in the EU
The Law Society has published guidance for solicitors that highlights the changes in civil and commercial cooperation that will occur should the UK leave the EU on 29 March 2019 without having reached an agreement with the EU.
In this scenario, the EU and UK will have failed to sign a withdrawal agreement (governing the terms of the UK’s departure from the EU) and an agreement governing the future relationship between the two parties.
The UK will immediately leave the EU’s institutional structures without a transition period. In many areas, cooperation between the UK and EU will cease, and the applicable legal regime in many practice areas will change.
In this article we consider the impact of losing the Lawyers Establishment Directive, Lawyers Services Directive and Mutual Recognition of Professional Qualifications Directive; and the impact of a no-deal Brexit on rights of audience and legal professional privilege.
Key points to consider for UK solicitors practising in an EU/EFTA member state:
- The practice rights of UK lawyers practising in an EU/EFTA member state will be determined by the existence of a regulatory framework for third country lawyers, if any, in that particular jurisdiction.
- UK lawyers practising in an EU/EFTA state who have not yet registered with the competent authority should consider doing so as soon as possible.
- UK lawyers who can prove three years of ‘effective and regular pursuit of a professional activity’ under the Lawyers’ Establishment Directive in the member state should consider re-qualifying into the host state’s legal profession.
- In advance of 29 March 2019, UK-qualified lawyers who practise in another EU member state may also wish to consider starting the re-qualification procedure under Article 13 of the Mutual Recognition of Professional Qualifications (MRPQ) directive, subject to conditions set out by the competent authority.
- Alternatively, UK lawyers who are eligible to become a full member of another bar in an EU/EFTA member state should consider joining that bar (for example, through the Law Society of Ireland route to requalification).
- No deal will mean that the Citizens’ rights chapter of the Withdrawal agreement would not apply. Each EU/EFTA member state will determine whether to guarantee the residence and working rights of UK citizens.
- If you are eligible to acquire the nationality of an EU member state, you may wish to consider doing so to ensure your EU free movement rights.
- UK-qualified lawyers will lose their rights of audience before the EU courts after the withdrawal date, unless they hold alternative EU/EEA (but not a Swiss) qualification.
- Communications between UK qualified lawyers and their clients will lose the protection of the legal professional privilege (LPP) in front of EU courts and EU institutions. UK lawyers should consider involving their EU/EEA-qualified colleagues in ongoing cases to secure the application of LPP where applicable.
- At present UK lawyers can provide services in EU member states on a temporary basis using their home state qualification (a practice known as fly-in, fly-out or FIFO). Following a no deal Brexit, the provision of such services will no longer be automatically permitted, and UK lawyers will have to ensure that they are in compliance with the national law of the EU/EFTA state concerned. It is also possible that immigration controls will be put in place between the UK and EU/EFTA states following a no deal Brexit. Under such circumstances, solicitors will have to ensure that they possess the appropriate visa and/or work permit in advance.
- Law firms with existing operations in the EU/EFTA should review their existing structures are in keeping with national company law and professional rules for legal practice in that country for third-country lawyers.
- Branches of UK LLPs or other entities should review whether they can continue operating in the relevant EU/EFTA state, or restructure to become a national structure/branch of a firm headquartered in another EU/EFTA state.
- When reviewing firm structures, consideration should be given as to whether national rules authorise local (i.e. EU/EFTA) lawyers to practise together with third-country lawyers, as well as the potential impact on equity, profit sharing, limitations of liability and taxation.