Guidance

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 | Updated 25 November 2019

Status

This Guidance does not form part of the SRA Standards and Regulations. 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 statutory instrument (SI) this guidance sets out the potential impact on EELs 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. The Government has made the Services of Lawyers and Lawyer's Practice (Revocation etc.) (EU Exit) Regulations 2019, to come into force on exit day.

The Government has taken 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  SI to explain the impact of the changes to EELs in the event of a no deal EU Exit.

The current position

Our previous regulations specifically provided that a special category of European lawyers could  be managers or owners of law firms we regulate: exempt European lawyers (EELs). These provisions reflected the statutory provisions of section 9(A)(6)(c) of the Administration of Justice Act 1985 and section 111 of the Legal Services Act 2007. Our new standards and regulations no longer refer to exempt European lawyers. European lawyers who satisfy the requirements set out in the statutory provisions referred to will continue to be able to be managers and owners of law firms we regulate as recognised bodies.

These provisions relate mainly to EEA/EU lawyers based entirely in offices outside of England and Wales.

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

In the event of a no deal exit, the 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 have connections 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

Open all

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