UK's Exit from EU – Possible non-negotiated outcome at end of transition period (31 December 2020)
UK's Exit from EU – Possible non-negotiated outcome at end of transition period (31 December 2020)
Published: 12 March 2020
Following the UK's exit from the EU on 31 January 2020, this guidance is intended to explain our current understanding of some of the implications should the UK government and the EU fail to reach an agreement during the transition period to 31 December 2020, leading to a non-negotiated outcome.
Who is this guidance for?
Registered European Lawyers (RELs), European Lawyers, law firms and other interested parties.
What happens if there is no agreement?
In a situation where no new agreement is made in relation to practice rights, the previous legislation prepared for a no-deal exit scenario will apply. You may find it useful to refer to our previously published no-deal guidance.
The UK Government has published three statutory instruments relating to the status of EU lawyers in a no deal exit scenario. These arrangements will come into force in the event of a non-negotiated outcome at the end of the transition period although it is likely that changes will need to be made to these arrangements if it appears this scenario is likely.
If there is a negotiated future arrangement, we will need to review any provisions that relate to practice rights of professionals to see whether changes are needed to our existing regulations. We will keep you informed of any developments to this.
Does no agreement mean the same outcome as a no-deal Brexit in March or October 2019?
No. No deal on the future relationship would still leave the Withdrawal Agreement in place. But in relation to practice rights for lawyers, the outcome would potentially be very similar as would have been the case with a no-deal exit, unless specific measures are agreed or taken unilaterally by the EU.
What is the SRA doing?
We will continue to work closely with the Government to understand how leaving the EU will impact on how we regulate solicitors, RELs, and law firms in England and Wales. We will continue to make sure any changes are managed as smoothly and effectively as possible both for the profession and the people who use the services of RELs.
We have already made amendments to our Standards and Regulations to take effect in the event of a no deal Brexit which will now only take effect in the event of a non-negotiated outcome. There will need to be further changes to reflect the end of the transition period and the Government’s position as it emerges during this period.
We will continue to update our guidance when appropriate and will write directly to individuals who we believe are affected by changes if we think that is necessary.
We will be working closely with the relevant Government departments to ensure that we are up to date and understand the impacts on our regulated community.
We are seeking to negotiate information sharing agreements with regulators in the EU.
The transition period – to 31 December 2020
In practice, the position in the transition period is unchanged as a result of the Withdrawal Agreement and the implementing legislation. This means:
New registrations of RELs still accepted
We can still accept new REL applications until 31 December 2020. During the transition period any EU lawyers established here on a permanent basis must be registered as an REL whether providing reserved or unreserved legal activities.
The Integration Route still applies
If you are an REL, you may, subject to meeting the eligibility criteria, be able to seek admittance to the solicitor’s profession under the three year ‘integration route’. This means that RELs who have accumulated three years continuous practice in English and Welsh law (including Community Law) can (subject to eligibility criteria) apply for admission as a solicitor within England and Wales.
There are no examination requirements. Applications usually take three months to process, with a £500 application fee. We will do what we can to make sure the application process is as efficient as possible. We encourage any RELs who meet the admission criteria and who wish to be admitted as solicitors to apply to us as soon as possible. For more information on how to apply and eligibility criteria see routes to admission.
RELs and foreign lawyers can still qualify under the QLTS and use QLTS exemptions
The Qualified Lawyers Transfer scheme (QLTS) helps foreign lawyers become qualified as solicitors of England and Wales, if they are already a qualified lawyer in one of our recognised jurisdictions. For our list of recognised jurisdictions and what may constitute a qualified lawyer for these purposes, please see Qualified Lawyers Transfer Scheme.
Foreign lawyers can apply for exemption from the first part of the QLTS if they have passed the Legal Practice Course (LPC).
Currently, the right for EU lawyers to apply for exemptions from the QLTS reflects the rights under the Recognition of Professional Qualifications Directive and will continue to do so during the transition period.
The new Solicitors Qualifying Examination (SQE) which is set to be introduced in autumn 2021 will replace the QLTS. There would be the potential for exemptions for parts of the SQE, dependent on someone’s qualifications and experience.
Exempt European Lawyers and ownership of law firms
Our previous regulations specifically provided that a special category of European lawyers could be managers or owners of law firms we regulate. Our new Standards and Regulations no longer refer to exempt European lawyers. This does not affect their ability to be managers and owners of law firms in accordance with the relevant statutory provisions (section 9(A)(6)(c) of the Administration of Justice Act 1985 and section 111 of the Legal Services Act 2007).
During the transition period there are no changes to who may be an owner or manager of a law firm.
Fly-in/Fly-out rights will continue
EU lawyers currently have preserved rights to provide reserved legal services (with some restrictions) on a ‘fly-in/fly-out basis’. This allows lawyers who are authorised members of a profession in an EU Member State to provide services into the UK on a temporary basis, under their home-country professional title (and for Solicitors of England and Wales to do the same into EU jurisdictions). These rights continue during the transition period.
After the transition period: What will happen on 1 January 2021 if there is a non-negotiated outcome?
On 1 January 2021, if there is no new agreement in place in relation to practice rights, there will be a number of significant impacts:
- The REL regime will come to an end and RELs (other than Swiss lawyers) will lose their associated practice rights in the UK
- We will not accept any further applications to become a REL or to be admitted as a solicitor under the integration route (other than from Swiss lawyers)
- An EU lawyer will no longer be able to be a sole practitioner as an REL
- Exempt European Lawyers (as previously defined in our rules) (other than those registered as Scottish or Northern Irish lawyers) will no longer be able to be owners or managers of a law firm in England and Wales (unless it is a licenced body, commonly known as an Alternative Business Structure or ABS)
- The fly in/fly out practice rights of EU lawyers (but not Swiss lawyers as specifically defined for this purpose), previously granted under the Lawyers Services Directive 77/249/EEC, will end. The removal of the fly-in/fly-out rights should not affect EEA lawyers’ ability to come here and provide non-reserved legal services on a temporary basis. Firms are advised to consider their arrangements and take the necessary steps to make sure that they comply with the new regime so that, for example, clients are not left without adequate representation on exit day.
- The arrangements for recognising professional qualifications (previously granted under the Recognition of Qualifications Directive 2005/36/EC) will change.
The Government has made separate arrangements in relation to Switzerland. Swiss lawyers who are registered as RELs on exit day (31 January 2020) may continue to be RELs for four years after exit day and Swiss lawyers may continue to apply to become RELs in that period. The separate arrangements for Switzerland mean that the fly-in/fly-out rights of certain specified European lawyers will continue for five years after the end of the transition period.
What are some of the options after the transition period if there is a non-negotiated outcome?
Limit your practice to non-reserved work
In January 2021 EU lawyers will be able to provide unreserved legal activities without being registered in the same way as other foreign lawyers if they wish to.
Qualify as solicitor
A foreign qualified lawyer may seek to qualify as a solicitor through the QLTS or the SQE.
We made amendments to recognition of professional qualifications to take effect in the event of a no deal exit in line with the current Government position. These amendments will now take effect at the end of the transition period if there is a no new agreement in place in relation to recognition of practise rights. We will keep the position under review.
In line with the SQE, all foreign lawyers will potentially be able to apply for exemptions from all of parts 1 and/or 2 of the QLTS. Exemptions will not be granted topic by topic. Any applications for exemptions made by EEA lawyers before the end of the transition period will be dealt with under the existing rules and exemptions granted before that date will continue to apply.
If you are an REL and wish to continue to provide reserved legal activities after 1 January 2021 or are one of the very small number of RELs who presently practise as a sole practitioner, you will need to seek to qualify as a solicitor, through the QLTS or SQE route (see above).
Register as an RFL
Any EU lawyer who is not a qualified as a solicitor or barrister in England and Wales (or a Scottish or Northern Irish solicitor or barrister) but wants to be involved in the management or ownership of a law firm (which is not an ABS) in England and Wales will have to register as a Registered Foreign Lawyer (RFL). An RFL cannot practise as a sole practitioner.
Being an RFL also gives limited additional practice rights.
We will take steps to passport all individuals who are RELs at the end of the transition period to become RFLs. We will ensure that this process is seamless and creates minimum disruption. You may wish to read our guidance on RFLs. We will write to individual RELs well before that time to explain what this means, and you have will have the option to decline to become an RFL.
If you require any further assistance, please contact the Professional Ethics Helpline.