Guidance

Guidance

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)

Status

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.

Open all

You may continue to practise as an REL during the transition period.

In a situation where no new agreement is made in relation to practice rights by the end of the transition period, the previous legislation prepared for a no-deal exit scenario will apply. In this scenario, the REL regime will cease to exist (other than for Swiss lawyers) at the end of December 2020.

During the transition period, if you have already completed three consecutive years practice in English and Welsh law (including community law) and can evidence this to us, you can apply for admission as a solicitor under the ‘integration route’. Please note that you need to meet all the eligibility criteria to be admitted as a solicitor.

There are no examination requirements. Applications usually take up to three months to process, with a £500 application fee. 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 visit our website.

You may alternatively at any time choose to sit the Qualified Lawyers Transfer Scheme (QLTS) or, from 2021, the Solicitors Qualifying Examination (SQE).

Alternatively, if you do not wish to be a manager or owner of a law firm (which is not a licensed body (Alternative Business Structure - ABS), or to offer reserved legal services, after the end of the transition period you will be able to work under your home title without registering with us. If you are in any doubt about what you are able to do, please contact our Professional Ethics helpline for advice.

If there is a negotiated future arrangement, we will need to review any provisions that relate to the practice rights of professionals to see whether changes are needed to our existing regulations. We will keep you informed of any developments to this.

You can continue to practise as an REL during the transition period.

In a situation where no new agreement is made in relation to practice rights by the end of the transition period, the previous legislation prepared for a no-deal exit scenario will apply. In this scenario, the REL regime will cease to exist (other than for Swiss lawyers) at the end of December 2020.

If you will reach your three years of consecutive practice during the transition period, you can apply for admission as a solicitor under the ‘integration route’ at that point, provided you meet the conditions for admission.

Based upon the arrangements made by the Government in preparation for a no-deal exit we would be able to consider all applications to integrate into the solicitor profession that are made before the end of December 2020. We will keep this position under review.

If you do not wish to do this/do not meet the integration route criteria, you may alternatively at any time choose to sit the Qualified Lawyers Transfer Scheme (QLTS) or, from 2021, the Solicitors Qualifying Examination (SQE).

Alternatively, if you do not wish to be a manager or owner of a law firm which is not an ABS, or offer reserved legal services, after the end of the transition period you  will be able to  work under your home title without registering with us. If you are in any doubt about what you are able to do, please contact our Professional Ethics helpline for advice.

 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.

You can continue to practise as an REL until the end of the transition period.

You will not be able to apply for admission as a solicitor under the integration route, as you will not meet the eligibility criteria before the end of December 2020 if you have not been practising continuously for three years in England and Wales before that date. (The cut-off date for Swiss lawyers is longer, 31 January 2024.)

You can consider taking the Qualified Lawyers Transfer Scheme (QLTS) route. You can take the QLTS at any time. Once the Solicitors Qualifying Examination (SQE) is introduced, you can take the SQE.

Alternatively, if you do not wish to be a manager or owner of a law firm (which is not a licensed body (ABS), or offer reserved legal services, after the end of the transition period you will be able to work under your home title without registering with us. If you are in any doubt about what you are able to do, please contact our Professional Ethics helpline for advice.

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.

Currently our rules provide that you cannot become an RFL if you are an REL. This reflects the statutory position.

From 31 January 2020 when the REL regime ceases to exist (other than for Swiss lawyers) registering as an RFL will be an option available to you. However, there are differences in the types of work an REL and RFL can undertake.

As a REL, you can provide legal services independently and without supervision in more areas than RFLs can. Also, as a REL you currently have the option to become a solicitor under the ‘integration route’ if you meet the eligibility criteria to do so. An RFL must take the Qualified Lawyers Transfer Scheme (QLTS) route, (and in future the Solicitors Qualifying Examination (SQE), if they wish to become a solicitor. This table reflects the current position.

Registered foreign lawyers Registered European Lawyers
Who can become one? Any foreign lawyer (other than an EU qualified lawyer) who wants to practise in partnership with solicitors in England and Wales, or who wants to become a manager or owner of a law firm (which is not an ABS) in England and Wales, must register with the SRA as a Registered Foreign Lawyer.
During the transition period, an EU qualified lawyer cannot become a RFL if they are practising in England and Wales on a permanent basis because they must register as a REL. After the end of the transition period they will then have the option to register as RFLs, even when practising in England and Wales on a permanent basis.
An EU qualified lawyer wishing to practise in England and Wales on a permanent basis with the same rights as those afforded to solicitors must register as an REL.
What services can they offer? An RFL can practise the law of their home state, advise on English and Welsh law (limited to unreserved legal services) and provide unreserved legal services.
They can carry out or supervise any unreserved work – English legal work, foreign legal work (including business or financial advice or making business or financial arrangements) – that the firm is entitled to do.
They have rights to carry out limited reserved work independently and may carry out other reserved work at the discretion and under the supervision of a person who is qualified to supervise that work.
They can carry out or supervise foreign legal work which is reserved to lawyers of the RFLs home jurisdiction, provided they can do this within the rules of their own profession.
They have the same practice rights as authorised solicitors including the reserved activities we authorise, with minimal restrictions. These cover the work that RELs can do in relation to the areas of probate and property transactions and representation of clients in legal proceedings.
What type of firms can they work in? They can work in all types of firms but cannot be a sole practitioner. They can work in all types of firms that a solicitor can, including setting up practice as a sole practitioner.
How can they become solicitors? Through taking the QLTS. They can integrate into the solicitors’ profession after three years continuous practice in the UK (as per Establishment Directive).
They can take the QLTS (and some exemptions are available).
How are they regulated by the SRA? They are subject to the same rules of conduct as solicitors once registered with us. They are subject to the same rules of conduct as solicitors once registered with us.

During the transition period you will be able to remain registered as an REL and practise as you do now.

If before the end of that period you have been a REL for more than three consecutive years you can apply (before the end of the period) for admission as a solicitor under the integration route (provided you meet the conditions for admission). You will then be able to carry on as a sole practitioner.

If you do not wish to wait until you have accumulated three years practice or, are unable to do so by the end of the transition period, you can apply for admission as a solicitor under the Qualified Lawyers Transfer Scheme (QLTS).

In the event of a non-negotiated outcome, you will not be able to continue as a sole practitioner after the end of December 2020 unless you become a solicitor before that time. The cut-off date for Swiss lawyers is longer, 31 January 2024.

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.

We consulted on changes to the QLTS to address the changes needed in the event of a no-deal Brexit and we made amendments to our regulations to implement these changes and the other changes required to comply with the legislation the Government laid in anticipation of a no deal exit. These changes will now come into effect at the end of the transition period if there is a non-negotiated outcome. However, we may need to make further changes to reflect the Government’s approach if this looks likely to happen.

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.

In a situation where no new agreement is made in relation to practice rights by the end of the transition period, the previous legislation prepared for a no-deal exit scenario will apply.

You can continue to provide services under your home professional title which are not reserved legal activities but after the end of the transition period, you will not be able to provide any services which are reserved legal activities.

Reserved legal activities are defined in section 12 and schedule 2 of the Legal Services Act 2007. Exemptions are set out in schedule 3 to the Act. After the transition period, paragraph 7 of that schedule, which applies to EU lawyers providing services on a fly in fly out basis, will be deleted if there is a non-negotiated outcome.

The Legal Services Board (LSB) have issued guidance on reserved legal activities.

European lawyers as defined in the Statutory Instrument relating to the arrangements with Switzerland will be able to continue to provide services on a fly in fly out basis as currently for five years after exit day.

In a situation where no new agreement is made in relation to practice rights by the end of the transition period, the previous legislation and amendments made to our regulations prepared for a no-deal exit scenario will apply.

This means that yes, any foreign qualified lawyer may apply for exemptions after the end of the transition period, but only to the whole of the QLTS or the whole of parts one and two, not just to particular topics.

If you are an EEA qualified lawyer and have applied for exemptions prior to the end of the transition period, if the arrangements made by the Government in preparation for a no-deal exit remain unchanged, your application will be dealt with under the existing rules and exemptions granted prior to the end of the transition period will continue to apply. We will keep the position under review.

If there is a negotiated future arrangement, we will need to review any provisions that relate to practise rights of professionals to see whether changes are needed to our existing regulations. We will keep you informed of any developments to this.

In a situation where no new agreement is made in relation to practice rights by the end of the transition period there will be changes to who can be owners and managers of recognised bodies (ie a firm which is not a licensed body (ABS)).

The statutory provisions which allow specified EEA lawyers to be managers and owners of recognised bodies will be repealed at the end of the transitional period - that is on 31 December 2020. This will mean that unless you are a UK qualified lawyer you will no longer be able to be a manager or owner of a recognised body from that date. If you remain as manager, the firm will become a licensable body - that is, it will have to become an ABS.

However, Registered Foreign lawyers (RFLs) can be managers or owners of recognised bodies (subject to our approval). Therefore, if you are an EEA lawyer and become a Registered Foreign Lawyer, you will be able to continue to be a manager or owner of a recognised body after 31 December 2020.

If there is a negotiated future arrangement, we will need to review any provisions that relate to practise rights of professionals to see whether changes are needed to our existing regulations. We will keep you informed of any developments to this.

In a situation where no new agreement is made in relation to practice rights by the end of the transition period, if you are an owner or manager of a recognised body but not a UK qualified lawyer, and wish to continue to be after 31 December 2020, you will need to become an RFL.

In the event of a non-negotiated outcome, we are planning to automatically passport all EEA lawyers who are owners or managers of recognised bodies authorised by us to become RFLs at the end of the transitional period unless they notify us that they do not wish to become an RFL. This should minimise the regulatory burden and help make the transition as smooth as possible. There will be no fee for this process.

We will work out the detail around this once we know whether there is to be a negotiated   agreement or not. But as a minimum we will contact all such lawyers through their authorised body to notify them of our proposed course of action. We will also make clear the regulatory impact that becoming an RFL will have on them.

In brief, an RFL has limited practising rights and is subject to the same rules of conduct as solicitors. That means we can take disciplinary proceedings against RFLs. RFLs must renew their registration on 31 October each year and pay the prescribed fee. See Q4 above for a fuller summary of the position.

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.

In a situation where no new agreement is made in relation to practice rights by the end of the transition period, if you are an EEA lawyer but not a UK qualified lawyer and are an owner or manager of a recognised body and you do not want to become an RFL, by the end of the transitional period, you will have to cease being an owner or manager.

Alternatively, the firm in which you are an owner or manager will need to apply to change its authorisation from a recognised body to a licensed body. We will set up a process whereby we will ask you to notify us of the position so that we can contact you nearer the end of the transitional period to explain in detail the process you will need to follow.

In a situation where no new agreement is made in relation to practice rights by the end of the transition period, you will need to make sure that all EEA lawyers (other than UK qualified lawyers) either confirm that they will become RFLs or cease to act as owners or managers by the end of the transitional period.

Alternatively, your firm will need to apply to become a licensed body prior to then. Section 18(3) LSA will apply with the effect that your authorisation will continue after the end of that period for 90 days if your firm is a recognised body that has non-authorised owners or managers.

However, you will be in breach of our Standards and Regulations and, in particular, Rule 1.1 of the SRA Authorisation of Firms Rules as your firm will no longer satisfy the eligibility requirements to be a recognised body. Therefore, it is important that you take steps to comply before the end of the transitional period.

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.

Further help

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