City reacts with frustration to Brexit white paper

first_imgThe government’s Brexit White Paper was met with a cool reaction in the City today, as it failed to clarify ambiguity around the status of professionals.The paper rejects City firms’ preferred option of ‘mutual recognition’. In a terse statement, lobby group TheCityUK, said: ‘The overriding issue for financial and related professional services firms is the ability to continue serving customers and clients. Mutual recognition would have been the best way to achieve this. It’s therefore regrettable and frustrating that this approach has been dropped before even making it to the negotiating table.’The statement added: ‘In hundreds of discussions across the EU, the industry has never come across an unanswerable technical or commercial barrier to this approach.’TheCityUK has worked closely with leading international law firms in defining and promoting its preferred outcomes for legal services and their clients. But what has emerged in the White Paper is vague – a commitment to explore a ‘new bilateral agreement’ which would cover a ‘rules on jurisdiction, choice of jurisdiction, applicable law, and recognition and enforcement of judgments in civil, commercial, insolvency and family matters’.New arrangements ‘would not replicate single market membership’, the white paper warns, and professional and business service providers would have rights in the UK and the EU which differ from current arrangements.Law Society president Christina Blacklaws commented: ‘Ultimately the government will be judged on the outcome but today’s white paper is at least pointing in the right direction – however, the final deal will depend too on the priorities of the EU27. There is going to be a tough negotiation towards what looks like a free trade agreement. The white paper clearly states the benefits of civil judicial co-operation to both UK and EU and the fact businesses benefit from legal certainty in situations where disputes arise.’Other proposals include that the UK will be ‘committed to membership of the European Convention on Human Rights’.The EU-wide Unified Patent Court (UPC) – which the UK formally ratified in April – also gets a mention. The government said it intends to explore staying in the court.WHAT THE WHITE PAPER SAYS: ‘The UK and EU economies rely on the cross-border provision of professional services. This includes legal services, where the UK is the destination for 14.5 per cent of total EU legal services exports.It also includes accounting and audit services. In 2016, UK firms provided over 14 per cent of EU27 audit and accountancy imports.’In addition to the general services provisions, the UK proposes supplementary provisions for professional and business services, for example, permitting joint practice between UK and EU lawyers, and continued joint UK-EU ownership of accounting firms. The supplementary provisions would not replicate Single Market membership, and professional and business service providers would have rights in the UK and the EU which differ from current arrangements.’The Bar Council said the ‘dissapointing’ position and Free Trade Agreement (FTA) approach to services would give the legal services sector ‘real cause for concern.’A spokesperson said: ‘Unless the government can explain how a binding EU-wide regulatory framework for legal services could be agreed in an FTA context, the legal professions in the UK would be left to negotiate different bilateral agreements (at a political and/or bar association level) covering the provision of legal services with many of the other 27 (or 30, including EEA) member states.’Even if successful, this would provide only a patchwork of rights and obligations, varying from country to country.  All this will take many years, if it can be accomplished at all, and in the meantime UK clients will face additional difficulties and cost in ensuring access to justice in their dealings with the EU/EEA.’last_img