Does a ‘no deal’ Brexit mean the end of the road for Registered European Lawyers?

Withholding Tax

As some of us may already be aware, there is something called the Mutual Recognition of Professional Qualifications (MRPQ) Directive, which is a reciprocal arrangement enabling European Economic Area (EEA) nationals to have their professional qualifications recognised in other EEA member countries.

The MRPQ applies to a wide range of regulated professionals, and there is a further framework of directives that covers lawyers, consisting of The Lawyer’s Services Directive and The Lawyers Establishment Directives.

In the event of a no deal Brexit, the MRPQ and lawyer specific directives will simply no longer apply to the UK, and so the government has issued a technical notice which explores the impact of this on the professional services sector.

While both the UK and EU Commission have pointed out that most professional recognition that exists prior to 29 March 2019 will not be affected, the position is not so clear for lawyers as there are already different degrees of foreign lawyer status in the UK.

The first point to clear up is that EEA Lawyers who have applied for admission to the England, Wales and Northern Ireland profession prior to 29 March, or who are already recognised solicitors in the UK, should be largely unaffected. However, registered European Lawyers (RELs) who continue to practise in the UK with their existing home country title will no longer be able to provide reserved legal activities beyond the transition date at the end of December 2020, and there will be no further applications accepted for REL status after 29 March 2020.

Clearly this has implications for RELs working as sole practitioners in the UK, those employed by UK employers and of course the employers themselves, and so the SRA has issued its own guidance to be read in conjunction with the government’s own notice.

The guidance clearly sets out the future options available for EEA lawyers, and these are;

  • Continue to practice as normal as an REL and then cease to provide reserved legal activities at the end of December 2020.
  • Apply for admission as a solicitor under the three year integration route prior to end of December 2020. This is a simplified process which, assuming eligible experience has been gained over a period of at least three years, takes around three months to complete, costs £500 and does not require individuals to sit any further exams. This is the route that the SRA encourages RELs to consider as soon as possible, assuming they will meet the criteria prior to the end of December 2020.
  • Qualify as a solicitor under the Qualified Lawyer Transfer Scheme (QLTS). This is not a new scheme and requires foreign individuals to sit additional exams. There are exemptions currently available for EEA lawyers, though it is so far unclear to what extent the exemptions criteria will be affected. Furthermore, the QLTS will be replaced by the new Solicitors Qualifying Examination (SQE) in the future, which further clouds the picture.
  • Register as a Foreign Lawyer (RFL). This designation also currently exists, but gives limited practice rights without qualified supervision, and does not allow the individuals to practice as sole practitioners.

Perhaps more profoundly for many firms, a no deal Brexit will remove the ability for lawyers from any EEA state (UK included) from offering cross-border reserved legal services to other EU states on a temporary ‘fly in / fly out’ basis. While this would undoubtedly be inconvenient for many overseas businesses, it could prove to be most commercially damaging for UK law firms operating this type of arrangement.

All of this is subject to any agreed transitional period, and assumes that a no deal arrangement is the likely outcome (which the guidance is quick to point out is not necessarily the case).

Whether this guidance will result in an increase in applications from individuals to become solicitors, or create agitation in the market as professionals bring their overseas plans forwards, remains to be seen. In any case, it is easy to feel a degree of sympathy for the SRA as it attempts to plot a clear course through so much uncertainty.