Law Society warns of £3.5bn hit from no-deal Brexit

Brexit: Law Society calls for association agreement with EU

The Law Society is warning that turnover from legal services would slump by £3.5bn in the event of a no-deal Brexit.

The society said it is particularly concerned about the fate of future UK lawyers, who would find it harder to work in the EU, and those from the EU who might be put off studying in the UK.

In its UK-EU future partnership and legal services report, published this morning, the society said: “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. Their rights to provide services under their home title, to establish and practise in Europe and to requalify in host state law will all become more complex under an FTA [free trade agreement] or in case of a no-deal Brexit.

“Moreover, the prospective candidates from the EU may no longer be attracted to studying in the UK and getting an English and Welsh qualification since they cannot use it in their home country to the same degree as under the current regime.

“This in the future may result in fewer ambassadors for the English and Welsh law in the EU and potentially worldwide.”

Simon Davis, president of the Law Society, said its estimate of a £3.5bn hit from a no-deal Brexit was 10% higher than from an orderly Brexit.

Mr Davis said the legal services sector contributed £27bn to the UK economy in 2018 and produced a trade surplus of £4.4bn in 2017, much of it due to access provided under EU directives.

“That is why we are urging the UK government to negotiate a future agreement that enables broader access for legal services so that English and Welsh solicitors can maintain their right to practise in the EU.”

Mr Davis said any agreement should replicate the directives, which provide EU-wide rights on services and establishment.

“There are precedents for such agreements providing necessary in-depth frameworks on legal services: the EU has association agreements through the EEA [European Economic Area] with Norway, Liechtenstein and Iceland and with Switzerland. These extend the application of the Lawyers’ Directives to EFTA [European Free Trade Association] countries.”

The society said in its report: “It would also be possible to include in an association agreement framework other key justice issues, in particular on providing for continued judicial co-operation on civil, commercial, family law or criminal justice matters.”

The society said this kind of relationship would benefit from provisions on dispute resolution which would not necessarily have to be done through the Court of Justice (CJEU).

“The Law Society has previously outlined how various systems work and believes that the UK and EU can create a dispute settlement scheme which would allow an in-depth relationship, without the direct jurisdiction of the CJEU.”

The society urged the government to maintain the openness of England and Wales for EEA lawyers, including their ability to establish themselves here and advise on EU law, the law of EEA states, English and Welsh law (outside the reserved areas), international law and the law of any other jurisdiction in which they are qualified.

It added a free trade agreement (FTA) model for a future EU-UK partnership agreement, as set out in the political declaration, “would be a long way off delivering the framework required for the optimal performance of the UK legal services sector”, the paper added.

“Historically, FTAs have not delivered substantial legal services market opening in the EU.”

The World Trade Organisation rules would also be of limited benefit, as they are restricted to advice on international public law and home country law, and only some provision for movement of people and operation of practices.

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