City lobby group on Brexit: Lawyers need access to single market plus “clear and sensible” transition

Brexit: some opportunities as well as dangers

The UK government must secure a high level of access to the single market, with a “clear and sensible transition period” to minimise the damage to legal services, TheCityUK has warned.

In the absence of access to the single market, the pressure group said there would be a “high risk [of] considerable losses in financial and reputational terms to the legal services sector over the long term”.

In its report, The impact of Brexit on the UK-based legal services sector, TheCityUK, which lobbies on behalf of the financial and professional services sector, said Brexit offered some “potential opportunities”.

These included not being part of a proposed EU regulation on the harmonisation of contract law, while benefiting from new networks of trade and investment agreements.

However, TheCityUK said it was essential to maintain access to free movement of professionals in “broadly the same terms that currently exist through the unique set of lawyer-specific directives”.

The report went on: “Lawyers have a unique position in relation to the legal regime for free movement in the EU.

“It is the only (liberal) profession that is covered by a separate system of directives and employs a unique mechanism of mutual recognition without immediate integration into the profession of the receiving member state.”

TheCityUK said that with the Lawyers’ Services Directive and Lawyers’ Establishment Directive, EU lawyers had reached a level of free movement “inconceivable in other parts of the world”, even in the federal structures of the USA.

The group called on the government to recognise the “unique nature of access” to the single market currently enjoyed by UK lawyers and place a “high priority” on maintaining it during the course of the negotiations to exit the EU.

“It should also be noted there are member state-specific restrictions on foreign (non-member state) lawyers and law firms.

“Post-Brexit, assuming agreement cannot be reached on maintaining the current level of single market access, these restrictions may impact on the ability of UK lawyers and UK-based law firms to operate in individual member states.”

On enforcement, TheCityUK said it was “critical” that the government issue a “clear statement on its choice for optimising the future legal framework for the enforcement of judgments” from UK jurisdictions both domestically and internationally.

The group said this should be done “now, unilaterally and without affecting the negotiations to exit the EU by stating an intention to ratify the Hague Convention” and seeking a “Denmark-style agreement” on enforcement.

Miles Celic, chief executive of the TheCityUK, said: “The UK-based legal services sector is the leading global centre for the provision of international legal services and dispute resolution.

“The sector’s contribution to the UK economy was around £25.7bn in 2015, 1.6% of total UK GDP, and it employs around 370,000 people across the country, two-thirds of whom are outside of London.

“It is vital that the key challenges and opportunities for the sector are addressed in the Brexit negotiations and that its competitiveness is maintained and enhanced.

“The best Brexit deal will be one which is mutually beneficial to the UK, the EU and globally and which allows for a clear and predictable shift from current business conditions to whatever new arrangement is agreed.”

Chantal-Aimee Doerries QC, chairman of the Bar Council, commented: “Echoing the sentiment of TheCityUK paper, we must not take for granted the high regard in which our courts and judges are held around the world, and the role this plays in our economic success. Our judiciary are seen as independent and incorruptible.

“Our courts, in particular the Rolls Building courts, are a popular forum for commercial dispute resolution. In 2013-2014, a foreign party was involved in about 80% of the 1,100 commercial claims issued, and in about 45% of cases all parties were from outside the UK.

“This reflects the appeal of our courts, but also that of the barristers and solicitors who practise in them.”

In a separate development, Catherine Dixon, chief executive of the Law Society, has been appointed adviser to Mayor of London Sadiq Khan’s Brexit expert advisory group.

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