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No deal Brexit to cost Britain a future generation of lawyers and £3.5 billion in legal work

6 August 2019

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A no-deal Brexit could cost Britain’s legal services sector £3.5 billion’s worth of work – ten per cent more than an orderly Brexit, according to the Law Society.

It will also have serious consequences for the next generation of lawyers in England and Wales.

The Society’s UK-EU future partnership - legal services sector report, launched on 1 August, warns only an association agreement can adequately deliver on legal services on Brexit, but the EU has reiterated its position that there is no basis for reopening the withdrawal agreement reached with Theresa May.

In its report the Law Society outlines “an ideal UK-EU trading relationship for legal services post-Brexit” and says it is crucial that English and Welsh solicitors continue to have the right to provide legal services in the EU.

The report warns that without a deal, many junior lawyers of the future will be unable to move in Europe as they can now: “We particularly fear that Brexit disruption is likely to affect junior lawyers yet to begin their legal careers, as many will not be able to move in Europe as easily as their predecessors.

"This has an impact on the attractiveness of qualifying in England and Wales.”  

EU candidates would also be less inclined to study and qualify in the UK as they would be unable to use the legal qualification in their home country as they can under the existing regime.

The current EU/UK legal services framework is based on mutual recognition and gives solicitors in England and Wales extensive rights including to advise clients across the EU on all legal issues, on English and EU law, on the law of the host state and to have their qualifications recognised.

They are also much freer than non-EU lawyers to requalify under EU rules and to be employed by EU firms. 

Under the existing arrangement, solicitors can also represent clients in, for example, the Court of Justice of the European Union (CJEU) and in arbitral proceedings.

Yet the Society warns international judicial co-operation will suffer if the UK leaves without an agreement, with enforcement of UK judgments abroad decreasing in speed and efficiency with the effect of reducing business and consumer confidence.

It is calling for a “comprehensive EU-UK association agreement” to achieve the best outcome for legal services and the justice system.

This could include key justice issues such as facilitating continued judicial cooperation on civil, commercial, family law or criminal justice matters.

Such a deep relationship would, says the Society, also benefit from provisions on dispute resolution to which individuals or businesses have access – which would not necessarily need to be through the CJEU and could be through a dispute settlement scheme.

Britain is the second largest legal services provider in the world and Europe’s biggest provider.  Law Society president Simon Davis said: "The UK legal system is globally respected and the liberalisation of services in the EU has directly contributed to its success.

“In 2018 the total tax contribution of legal and accounting activities was estimated to be £19.1 billion – potentially funding the salaries of doctors, nurses, teachers and police officers.”

Davis added that the government should negotiate an agreement replicating the Lawyers’ Directives (which provide EU-wide rights on services and establishment) to enable “broader access for legal services so that English and Welsh solicitors can maintain their right to practise in the EU”.

Other models such as a free trade agreement are, said Davis, unlikely to deliver the comprehensive practice rights that have “substantially contributed to the UK legal sector’s large export surplus of £4.4bn as of 2017”.

The report says access to justice is “a cornerstone of a properly functioning justice system” guaranteeing the exercise of legal rights; but the Society fears a “lack of robust provisions on legal services [on Brexit] could significantly reduce that access”, hampering the ability of both businesses and citizens to deal with the post-Brexit challenges.

The Society warns, for instance, that disputes arising out of Brexit will cover more than one area of law and more than one jurisdiction and will also face time restrictions.

Businesses could face higher costs and operational issues if they have to employ more than one legal team to cover multiple jurisdictions.

The new report can be accessed here.

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