Professional briefing - The Journal Online

Professional briefing Europe
The imminent Services Directive will assist service
provision generally in the way already enjoyed by
lawyers, but will have some impact on the profession
Cutting red
tape in Europe
Whilst the business of the European
Union is notoriously quiet between
Christmas and New Year, with
“Brussels” shutting down for the
festive season, a major reform is due
to take place on 28 December when
Directive 2006/123 on services in the
internal market (the Services
Directive) comes into force in
national law. The UK Government is
implementing the Services Directive
through the Provision of Services
Regulations 2009 (draft at
www.opsi.gov.uk/si/si2009/draft/ukd
si_9780111486276_en_1), which
apply UK wide. It published a note
titled “Guidance for Business on the
Services Regulations” in October:
www.berr.gov.uk/files/file53100.pdf .
Barriers remain
The Services Directive is designed to
simplify provision of services across
borders by removing legal and
administrative barriers to trade in this
sector. According to recent statistics
the services sector is the largest, most
dynamic economic sector in the EU,
accounting for around 70% of
both output and employment.
However, as the UK
Government note shows,
it yields relatively low shares
of intra-EU trade (24%) and
investment.
Seeking to give full effect
to the Internal Market for
services, the Services Directive
requires each member state
to remove unjustifiable or
discriminatory requirements
affecting the setting up or carrying
on of a relevant service activity in
that country. It also facilitates cooperation
between regulatory
authorities; sets up “one stop
shops” for services
providers
48 / theJournal December 09
According
to recent
statistics the
services sector
is the largest,
most dynamic
economic
sector in the
EU, accounting
for around
70% of both
output and
employment
to find information and complete the
necessary formalities in one place
(Single Point of Contact); imposes a
general obligation for procedures to
be electronic; and sets out quality of
service provisions.
It applies to a whole raft of service
providers from professional services
such as lawyers, accountants and
actuaries to consumer services such as
tour operators, travel agents, plumbers
etc; but not to notaries, financial service
providers, electronic communication
providers, or health services.
Legal profession: topping up
Cross-border supply of services is
not new to the legal profession, one
of the key professions already taking
advantage of the right to free
movement in Europe. Indeed, the
Services Directive affects the legal
profession only to the extent that it
does not conflict with the provisions
of the legal professions’ “own”
directives, Services of Lawyers
(Directive 77/249) and
Establishment (Directive 98/5). The
former gives an EU lawyer the right
to practise on a visiting or temporary
basis in a member state other than
that in which the lawyer qualified,
and the latter gives an EU lawyer
the right to practise on a
permanent (“established”) basis
under the lawyer’s home state
title in a member state other than
that in which the lawyer
qualified. In practice this means
that the provisions of the
Framework Services Directive will
top up the provisions of the two
lawyers’ directives.
It is actually the competent
authorities, the regulatory bodies,
who are impacted by the
Services Directive to a
large extent.
The obligation to co-operate with
other regulatory bodies ramps up the
informal co-operation and liaison to
date. It does so by setting up an
electronic information exchange – the
Internal Market Information System
(IMI). Within this exchange the Law
Society of Scotland will be able to ask
the Paris Bar Association whether Ms
Avocat has qualified to practise,
whether she has any disciplinary
findings against her and for evidence
of her practising certificate. This can
all be done through pre-translated
tick boxes and transmitted directly
from Edinburgh to Paris and back.
Moreover, the emphasis on electronic
communication leads to the
obligation for all applications to be
processed electronically.
Now this has caused something of
a headache as most regulatory bodies
do not yet have fully automated
processes for applications for entry
into the profession or renewals. In
addition the UK regulatory bodies
have maintained that original copies
of certificates must be provided and it
is in the public interest for this
requirement to be maintained.
A further issue for the legal
profession is the question of deemed
authorisation. Again the emphasis on
swift access to markets led to a
provision in the Services Directive,
whereby if an individual (e.g. a tour
operator) had completed the relevant
formalities to supply their service and
the deadline for responding had
passed, that individual would be
deemed to be authorised to supply
their service in the UK. However, the
Law Society of Scotland had argued
that this is not appropriate for the
legal profession and, along with the
Solicitors Regulatory Authority for
England & Wales, lobbied the
Ministry of Justice for a system of
deemed refusal justified on overriding
reasons of public interest.
States of readiness
Given the scale of reforms, there is
concern that a number of member
states may not have their
implementing provisions in place in
time. Business organisations are
concerned about this leading to a
patchwork of rules and systems, the
very thing the Services Directive was
due to combat. However, the UK
intends to meet the deadline and the
legal profession, consumers and
business should be ready for it.
Julia Bateman is Head of the Law
Societies Joint Brussels Office.
e: Julia.Bateman@lawsociety.org.uk
www.journalonline.co.uk