Linklaters gives evidence to Lords Committee on Brexit impact
City firms have voiced their concerns over Britain’s arrangements to leave the European Union as prime minister Theresa May pulled the trigger on article 50 last month.
Responding to a report released in March by the Lords EU internal market sub-committee, The Law Society of England and Wales has warned that a deal without reciprocal arrangements for lawyers post-Brexit would be ‘devastating’ for the UK’s legal sector.
According to research by the Law Society and TheCityUK, the legal sector is worth £25.7bn and employs 370,000 people, two thirds of whom are based outside of London. A deal is needed from Brexit negotiations that ensures reciprocal arrangements so lawyers can still practise in EU countries and vice versa, ‘otherwise a significant part of Britain’s economy will be put under threat’.
‘It is vital that businesses’ choice of English law and courts are respected, the judgments of our courts are enforced, and English legal advice is available across the EU. It is essential for the UK that these measures are replicated as part of Brexit,’ said City of London Law Society chair and Ashurst partner Ed Sparrow.
Law Society president Robert Bourns said that his organisation estimates there are more than 200 foreign-owned law firms in London, including 100 US firms, which might consider seeking a new ‘European hub’ location if they are denied access and establishment rights across the EU. He added: ‘This is an extremely big deal for UK plc.’
Linklaters gave written evidence to the committee, warning that if clients cannot conduct business between the UK and the EU as they do now and choose to relocate their activities, leading UK-headquartered firms will follow suit.
The firm also said limitations on free movement of persons, free movement of data and recognition of professional qualifications would impede its business.
‘If Europe seeks to replace English law and language for contracts, that would be a serious issue for UK law firms.’
Quentin Poole, Gowling WLG
Herbert Smith Freehills’ regional managing partner for the UK, US and EMEA Ian Cox said: ‘Being able to attract talented lawyers from across the EU to work in the UK and the continuation of the right for UK lawyers to operate without further barriers throughout the EU (and vice versa) are important. Anything which achieves less than this could well prejudice the continued global success of the UK legal sector.’
However, Gowling WLG head of international projects Quentin Poole said: ‘For the most part, lawyers aren’t qualified to practise across jurisdictions individually. I am confident international firms will continue operating in the current regulatory framework as they are now, even outside of the EU. Lawyers, unlike accountants, depend on activity. There are now significant concerns that commercial activity is likely to reduce.’
He added: ‘We managed to create a position whereby the great majority of international transactions in Europe are done in English language and English law. The risk is Europe seeks to progressively replace English law and language as one of the most frequently used frameworks for contracts, that would be a serious issue for UK law firms.’
White & Case London executive partner Oliver Brettle said: ‘At the moment things seem fine, but overarching uncertainties are never beneficial for long-term business decisions. The situation will be much clearer in five years’ time. Law firms are so big in London because it is a strong, leading financial centre, not because of the UK alone.’
georgiana.tudor@legalease.co.uk
Read more on Brexit in ‘The blueprint – clients and advisers scramble as the UK kicks off Brexit‘