EU lawyers' establishment directive

THE European Community’s (Lawyer’s Practice) (Scotland) Regulations 2000 which implement the Lawyers’ Establishment Directive (Directive 98/5) in Scotland came into force on 22 May, 2000. As has previously been reported in the Journal, the Directive is designed to facilitate the passage of lawyers from one Member State to another and was the result of complicated negotiations over a period of more than 20 years. It was finally brought into force in May 1998 and thereafter Member States were given until 16 March, 2000 to transpose the Directive into national law.

Purpose of the Directive

The Establishment Directive entitles lawyers who are qualified in one Member State to practise on a permanent basis under their home title in another EU Member State. The practice of law permitted under the Directive includes not only the lawyers’ home state law, Community law and international law but also the law of the Member State in which they are practising (the”host” state). This entitlement is, however, subject to the requirement that a lawyer wishing to practise on a permanent basis registers with the relevant Bar or Law Society in that State and is subject to the same rules regarding discipline, insurance and professional conduct as domestic lawyers. Once registered, the European lawyer is able to apply to be admitted to the host state profession after 3 years without being required to pass the usual exams, provided that he or she can provide evidence of having effectively and regularly engaged in professional activities in the host state over that period.

EU and other foreign lawyers

The Society previously had a liberal regime as regards foreign lawyers, both from the EU and elsewhere. Foreign lawyers were not required to register with and were not regulated by the Society. Moreover, as the legislation stood it was not illegal for a person who was not a Scottish solicitor to provide legal advice as long as they did not operate within the reserved areas specified by the Solicitors (Scotland) Act 1980 and did not hold themselves out to be Scottish solicitors. The Regulations will have the effect of regulating this position by requiring EU lawyers to register with and be bound by the rules of the Society. EU lawyers are still permitted to provide services in terms of the so-called Services Directive (Directive 77/249) in other EU states in the law of the home state, but not to practise permanently. It was on this basis that Dutch lawyers recently appeared before the High Court in a criminal appeal. However, it is fair to say that the Services Directive has not over the years resulted in lawyers from other EU countries providing services in Scotland. The possibility for EU lawyers of qualifying as Scottish solicitors by passing an aptitude test is still open.

It is worth noting that as the Directive only applies to EU lawyers (and only those who are also EU citizens) it will not affect the position of lawyers from outwith the Union to whom the liberal regime described above will still apply.

Implementation in the UK

The Directive has been implemented by way of separate Regulations in England, Wales and Northern Ireland, on the one hand, and in Scotland on the other hand. There have been particular problems with the implementation of the Directive in the UK due to the three separate legal jurisdictions. After a variety of different options were considered, the Regulations in both Scotland and in the rest of the UK allow European lawyers registered with one of the six domestic Bars and law societies to practise not only within the jurisdiction in which they are registered but also within the other UK jurisdictions to the extent that a member of the professional body with which they are registered is permitted to do so. This means that, for example, a European lawyer registered with the Law Society of Scotland would be permitted to practise in England to the extent a Scottish lawyer is able to.  European lawyers will be able to register in more than one jurisdiction in the UK, just as solicitors can be members of more than one Law Society at present, but the Directive specifically excludes them from being registered with any of the UK Bars at the same time as being registered with a Law Society, and vice versa.  

The areas of law within which registered European lawyers are able to practise are limited to the extent that only those lawyers coming from Member States which allow them to prepare deeds for the transfer of land or to deal with executry work (in essence, the Republic of Ireland and the Scandinavian countries, although German and Austrian lawyers can carry out executry work) will be able to do so under the Regulations. This is because the Directive does not affect notaries who, in many EU countries, have exclusive rights in these two areas.  In relation to court appearances, moreover, the Scottish Regulations allow rules to be made restricting appearances before the higher courts to those lawyers who have undergone the relevant training - as a solicitor-advocate for those lawyers registered with the Society and as an advocate for those registered with the Faculty. The rules also require European lawyers to be accompanied in court by a local lawyer in situations where only a lawyer can appear before the court in question.

Opportunities for Scottish solicitors abroad

Whilst this article has concentrated on the situation applying to European lawyers coming to the UK, the Directive also allows Scottish solicitors to practise permanently in, and integrate into the legal profession of, other EU Member States. There are, of course, already Scottish solicitors working elsewhere in the EU, but as the aim of the Directive is to break down the barriers to the provision of legal services with a view to working towards the completion of the internal market it is expected and hoped that more Scottish solicitors will take the opportunity to use their legal skills abroad.

Despite the fact that the implementation date is now past, the Directive has by no means been implemented in all EU Member States. Luxembourg and France, for example, have indicated that they will not implement pending the outcome of an action brought by the Luxembourg state for the annulment of the Directive which is presently being considered by the European Court of Justice, with a decision expected sometime in the summer. The Directive has, however, been implemented in Germany and Austria.

Electronic commerce

It’s round “2” for European Parliament discussions on Brussels I

The Parliamentary Committee on Legal Affairs and the Internal Market met at the beginning of May to discuss the second draft report on the Brussels I Regulation (on jurisdiction and enforcement of judgments in civil and commercial matters) prepared by Diana Wallis MEP, the European Parliament’s rapporteur on this issue.  The report is of particular interest since Mrs Wallis voted against her own first report, which had been subject to a substantial number of amendments.  The main bone of contention in the second report revolves around the test of “business activity” on the internet, whereby a commercial web-site actively seeking customers throughout the EU would be faced with the possibility of legal actions from clients in all the Member States of the EU.  If the web-site is aimed exclusively at its own Member State, and a customer seeks its services, this would be a passive sale by the web-site and as such it could not be expected to be sued in any Member State, other than its own.  Other MEPs are unhappy with the test, as they feel it could lead to uncertainty.  There remains much to debate before a unanimously agreeable solution can be found.  Following a vote on the adoption of the report at the end of May, a vote in plenary is scheduled for 13 June.

European Parliament approves e-commerce directive

In early May, the Commission’s draft Directive on “certain legal aspects of electronic commerce in the Internal Market” (http://www.europa.eu.int/comm/internal_market/en/media/eleccomm/com427en.pdf) was adopted at its second reading by the European Parliament.  The Directive applies to business-to-business and business-to-consumer transactions.  It also deals with the key problem of jurisdiction, by establishing that the law of the country of origin (the country where the service provider is established) should apply to electronic transactions.  There are however exemptions to the country of origin principle in respect of public health and security, consumer protection and law and order.  In addition, for regulated professions, such as lawyers or accountants, the Directive lays down the general principle that on-line provision of services is permitted and that national rules on advertising shall not prevent professions from operating web-sites.  It is expected that professional regulatory organisations in some Member States will need to modify certain rules in their codes of conduct which prohibit advertising by professionals. Member States will have 18 months from the time the date of its appearance in the Official Journal to transpose it into national law.

Commission proposes better Internet governance

As part of the e-Europe initiative launched at the end of last year, the European Commission has set out several policy recommendations for better internet management, by exploring various methods of resolving disputes involving domain names and making more room for internet addresses. The recommendations contained in a recent Communication (http://www.ispo.cec.be/eif/policy/policy.html#inetgov), focus primarily on domain names and combating cyber-squatting by examining the way the eu and the Internet Protocol addressing system are co-ordinated internationally.  The Communication also suggests a Code of Conduct for cyber-squatting cases. The recommendations further propose ensuring that members of the ICANN Board (“Internet Corporation for Assigned Names and Numbers”), which is a non-profit-making body dealing with, amongst other things, domain names, are elected through transparent and globally representative procedures.  It is expected that the French Presidency will discuss the recommendations sometime after July.

Improved rules on motor accidents abroad

In May, following the adoption of a common position by the Council, the Parliament meeting in plenary session adopted the Fourth Motor Insurance Directive http://www.europa.eu.int/eur-lex/en/com/dat/1997/en_597PC0510.html) aimed at improving protection of victims who, while travelling through another Member State, suffer loss or injury in an accident caused by a vehicle registered in a Member State other than the victim’s home country. The idea behind the Directive is to aid the victim in dealing with a foreign legal system, unreasonable delay and foreign language problems. The new rules are designed to complement the current Green Card system and will also apply to 40 other countries outside the EU. The Directive provides that insurance companies must appoint a representative responsible for settling accident claims in each Member State and must set up information centres, responsible for identifying the other party’s insurer. Under the rules, Member States will have to establish information centres providing access to national compensation bodies, for cases which are dealt with either negligently or slowly. Once the Directive is published in the Official Journal, it will be up to the Member States to implement the Directive into their national legislation within 2 years.