Guidance on the impact on exempt European lawyers of the Governments Statutory Instrument on the basis of a no deal EU exit scenario

Guidance note on the impact on exempt European lawyers of the Government’s Statutory Instrument on the basis of a ‘no deal’ EU exit scenario

Issued on 10 December 2018

Status

This Guidance does not form part of the SRA Handbook. It is intended to explain some of the implications of a ‘no-deal’ EU exit on exempt European lawyers and firms they are involved in, should this happen.

Who is this guidance for?

Exempt European lawyers (EELs), law firms and other interested parties.

Purpose of this guidance

In response to the Technical Notice published by the government and the laying of a draft statutory instrument (SI) this guidance sets out the potential impact on EELs and law firms of a ‘no deal’ EU exit and future options. published by the government, this guidance sets out the potential impact on RELs and law firms of a ‘no deal’ EU exit and future options.

This guidance is not intended to provide definitive answers on the impact of EU exit on legal services, as this will depend on the outcome of the negotiations between the UK government and the EU.

General

On 12 October 2018 the Government published a Technical Notice setting out its approach regarding the impact of a ‘no deal’ EU exit scenario on EU lawyers practising in the UK. On 21 November 2018 the Government laid the draft Statutory Instrument, The Services of Lawyers and Lawyer’s Practice (Revocation etc.) (EU Exit) Regulations 2019, before Parliament.

The Government has stressed that the publication of the Notice does not mean that a ‘no deal’ scenario is the most likely. They are taking steps to prepare for all potential outcomes, including preparing for a no deal scenario.

We will continue to work cooperatively with the Government and interested parties to make sure that whatever the outcome of the negotiations, any changes are implemented as effectively and smoothly as possible both for the profession and the people who use the services of European lawyers.

This note is published in response to the Technical Notice and the draft SI to explain the impact of the changes to EELs in the event of a no deal EU Exit.

The current position

Our existing arrangements allow for a special category of European lawyers to be managers or owners of law firms we regulate: exempt European lawyers (EELs).

EELs are principally EEA/EU lawyers based entirely in offices outside of England and Wales.

We have created EELs to reflect statutory provisions which allow certain EEA/EU lawyers to be managers and owners of recognised bodies without being authorised persons.

Impact of a ‘no deal’ EU exit on EELs.

In the event of a no deal exit, the draft SI deletes these statutory provisions1 from the end of the transitional period – 31 December 2020. This means that from that date, EELs can no longer be owners or managers of recognised bodies unless they are Scottish or Northern Irish lawyers. They will become unauthorised persons which will make the law firm in which they work a licensable body, that is an Alternative Business Structure.

There are presently about 1900 EELs in this situation who mostly work in City and International law firms we regulate. We want to make the transition from our current arrangements as smooth as possible in the event of a no deal exit from the EU. This guidance sets out answers to some common FAQs that EELs may have.

Questions and answers

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Further help

If you require any further assistance, please contact the Professional Ethics helpline.

  1. For the detail, see the changes proposed by paragraphs 8(2) and (4) and 13(2) and (4) of the Schedule to the SI
  2. For the purposes of this guidance this means an advocate or solicitor in Scotland or a member of the Bar of Northern Ireland or a solicitor of the Court of Judicature of Northern Ireland