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Leaving the EU: Legal Services

Part of the debate – in Westminster Hall at 4:26 pm on 21st November 2018.

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Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon 4:26 pm, 21st November 2018

I agree with my hon. Friend, who makes an important point. The Brussels II regulation is a single legal instrument that helps families resolve disputes about divorce and the custody of children where they involve parties in more than one EU state. Under the regulation, EU courts automatically recognise judgments on matrimonial and parental responsibility that are delivered in other states. That will no longer apply to the UK when we have left the EU. Similarly, the maintenance regulation, which helps to ensure the payment of maintenance in cross-border situations, will no longer apply.

In a no-deal scenario, the UK and EU27’s trading relationships in legal services would be governed by the general agreement on trade in services, or GATS, which falls far short of replicating the current EU framework. UK lawyers would be subject to myriad rules and regulations in each of the 31 European Free Trade Association states rather than to a single legal framework. UK judgments are automatically recognised and enforced across the EU27, but they will not be in a no-deal scenario, unless the UK unilaterally signs The Hague convention.

At the moment, clients can receive UK law advice from UK lawyers however and wherever they want in the EU; in a no-deal scenario, clients in some jurisdictions might be limited in how they can received UK legal advice from UK lawyers. Currently UK lawyers have the automatic right to set up practices in an EU host state with minimal bureaucracy; in a no-deal scenario, UK lawyers’ ability to set up practices in an EU27 jurisdiction will depend on local laws and regulations. If establishment is possible, permitted activities still might be limited.

Currently UK lawyers have the right to advise clients who are based in the EU27 on EU law, because their legal professional qualifications are automatically recognised. In a no-deal scenario, clients based in EU27 jurisdictions might no longer be able to receive EU law advice from UK lawyers, as UK legal professional qualifications might not be recognised. Now, law firms can set up in one EU member state and export their services across the EU by establishing branches of the same structure in other member states. In a no-deal scenario, legal entities would lose the automatic right to use their preferred business structures in certain EU27 countries, and the UK corporate form of limited liability partnerships might no longer be accepted in some jurisdictions. As can be seen, we must avoid a no-deal scenario.

Growing concern that the UK could exit the EU without a deal has led the Law Society to publish a series of papers that give solicitors guidance on how to take steps to mitigate some of the risks. Law cuts across every area of life, and often UK and EU lawyers work across borders and enforce and litigate on family, data or business disputes. The first tranche of Law Society papers gives advice on some of the potential rule changes where a deal between a business here and in the EU goes wrong, what happens in family law if a couple splits up, and how we should approach data sharing should we quit the EU without an agreement. There is another paper on providing legal services in the EU, and I understand that further papers are in production. Perhaps the Minister could take this opportunity to explain how her Department is preparing itself and the legal services sector for a no-deal scenario.

It is fair to say that services, including legal services, have not been given the same attention in the Brexit process as manufactured goods have. The sector wants a bespoke agreement that comprehensively covers legal services and is based on mutual market access, mutual recognition of regulatory frameworks, regulatory co-operation and continued mutual access to talent. I have high regard for the Minister, her understanding of this sector and her ability. I hope that she takes the opportunity provided by this debate to set out how she will champion the English legal services sector in negotiations on the future relationship with the EU, with the intention that legal services are not left behind and will be given the tools to maintain their world-leading reputation for excellence after Brexit.