Activity based regulation – EU perspectives on partial access to reserved activities

Regulating legal services in England and Wales

The regulation of legal services is in England and Wales is in the process of major change. The Legal Services Board is considering whether certain ‘legal’ services (notably will-writing, estate administration and probate activities) should be reserved to persons with particular qualifications (or not). There are also LSB reviews ongoing regarding, for example, the regulation of immigration advice and services.  The current review of legal education in England and Wales, being undertaken by the LETR, will be assessing how the current regime of legal education in England and Wales is suited to the new post-Legal Services Act 2007 world, which will be allowing new modes of ownership of legal service providers, and is scheduled to recommend changes to meet the challenges at the end of 2012.

The LSB has oversight over eight types of legal actor in England and Wales that are authorised to practice the “reserved activities” in the legal sphere. Will there be consolidation or further fragmentation of the legal professions? What impact might there be on legal education?

The European Dimension

Naturally there is a European dimension to all of this ferment. For one thing many European trained legal actors (members of more than 26 professions) can freely practice law in the UK, and for another the authorised regulators of legal services in the UK (Competent Authorities in EU-speak) have an obligation to admit such professionals to practice, and, in some cases, admit them to their particular legal profession, and, if not admit them immediately, then assess their qualifications and indicate missing elements of knowledge of competence that must be made up before joining the relevant legal profession.

Moreover the European Commission has recently published a review of the economic impact of reserved activities (in the legal and other sectors) and legal services directives themselves are currently under evaluation.

Recognising competence to perform legal activities

This assessment of continental legal professionals by UK regulators is mandated by the Lisbon Treaty single market provisions and, in particular, for our current concern, by Directive 2005/36/EC. This Directive, which consolidated 15 earlier Directives, is now itself subject to revision. When Directive 2005/36/EC itself was initially proposed, it included a provision allowing for access to practice part of the professional activities of a profession by incoming migrants, without joining the profession itself. This did not survive the negotiating process and was dropped. The new proposal revives the idea of partial access. This potentially means that UK legal regulators may have to give access to reserved legal sector activities to persons not belonging to a UK legal profession.

Partial Access to reserved activities

The new provisions on partial access are more carefully drafted than their predecessors. They follow the lead of the CJEU in the Colegio case (C-330/03 Colegio de Ingenieros de Caminos, Canales y Puertos).

A revised Article 1 indicates the migrants will have ‘partial access to a regulated profession’ and a new Article 4(1) indicates that they will be able to gain access to ‘part of the same profession’, but the new Article 4f is more accurate in indicating that ‘The competent authority of the host Member State shall grant partial access to a professional activity in its territory…’ (my emphasis) if certain conditions are fulfilled. So here we have the separation of the host State profession from the host State professional activity. The activity in question must be lawful in the home State and should be able to be ‘objectively be separated from other activities falling under the regulated profession in the host Member State’. If the activity is autonomously exercised in the home State that would be sufficient to fulfil this criterion. Partial access by a migrant can be rejected if there are sound proportionate public interest reasons to do so.

Partial access is only to be granted where:

‘differences between the professional activity legally exercised in the home Member State and the regulated profession in the host Member State as such are so large that in reality the application of compensatory measures would amount to requiring the applicant to complete the full programme of education and training required in the host Member State to have access to the full regulated profession in the host Member State’.

Professional Identity

Persons permitted to access a reserved activity by these new provisions will normally do so under their home State professional title. So at one level we could say, so what, this is nothing new, already EU lawyers can practice law in the UK under their home State professional titles, but, one difference is that they are currently regulated by the UK professional bodies with whom they must register when they establish. [By virtue of Article 5 of Directive 2005/36/EC lawyers providing services will do so though operation of the provision of Directive 77/249/EEC and Directive 2005/36/EC will not apply.]

Lawyers, or others, seeking partial access to aspects of legal practice on a more permanent basis will be able to use the establishment provisions of the revised Directive should the proposal become EU law. The Member States could argue that regulation would be required by the host State regulator, but, as the new entrants would not necessarily be members of the host State profession so which professional rules and obligations woud apply to them, and how? There will clearly be pressure to atomise professional rules so that individual reserved activities can be effectively autonomously regulated. This disaggregation of professional activities could weaken professional identity. If an EU citizen can use EU law to access a reserved activity in another Member State without joining a host State profession then why logically should a UK national not be able to do so?

See further

See Lonbay, J, ’Assessing the European Market for Legal Services: Developments in the Free Movement of Lawyers in the European Union’, Fordham International Law Journal 1629.