After Brexit, will communications between your legal department and UK outside counsel be protected by legal privilege? As the specter of a “no-deal” Brexit looms, in-house counsel whose companies have operations in the United Kingdom are trying to figure out how their companies will be affected, and what the legal department can do to assist in maintaining smooth business operations. One area that any legal department with dealings in Europe must consider is Brexit’s effect on the UK-licensed lawyers it works with.
Impact on Mobility, Privilege, and Practice Before the EU Courts
If the United Kingdom exits the European Union without an agreement in place that addresses the status of UK legal professionals, UK solicitors and barristers will essentially be treated as third-country lawyers within the European Union. The practice rights of both solicitors and barristers will be affected, but as in-house counsel have greater dealings with solicitors, this resource will focus on them.
Currently, UK solicitors and their firms can establish themselves permanently in other EU member states on the basis of their UK license. They can also provide services on a temporary basis in another member state. While serving clients in another member state, they can advise on UK law, EU law and international law, and subject to certain restrictions, the law of the member state. Without an agreement in place that addresses the continued practice rights of UK solicitors, the ability of UK solicitors to provide legal services in other EU member states will be subject to that particular member state’s provisions. Additionally, UK solicitors will not be able to represent clients before the EU courts, nor will their advice attract legal professional privilege in matters before the European Commission.
The Draft Withdrawal Agreement negotiated by the United Kingdom and European Union that was rejected by the UK parliament, provided for a transition period to allow UK solicitors to continue their current EU practice and mobility rights through December 31, 2020. During this transition period, the United Kingdom and European Union would determine the permanent arrangements for recognition and cooperation between the legal professions of their jurisdictions. If the United Kingdom leaves the European Union without an agreement in place on October 31, 2019, none of these protections nor the transition period will come into play - UK solicitors will be subject to the practice rules of member states, they will lose their ability to practice in the EU courts and have their advice be privileged before the European Commission.
Faced with this potential, UK solicitors have taken actions to preserve their rights of practice in the European Union. Numerous UK solicitors have “joined the roll” of the Irish Law Society, but unless they also obtain a practicing certificate (which requires a physical office in Ireland), it is uncertain whether they would be able to appear in EU courts based on their Irish affiliation. Many UK solicitors working in other EU countries on their UK solicitor’s license have applied to join the bar of the countries where their practices are based. The numbers of UK solicitors taking such actions appears greatest among those practicing in areas of EU law, such as competition, intellectual property, and trade.
The Loss of Privilege for UK Practitioners Would Complicate Multinational Issues With an EU Nexus
In-house counsel legal advice is not entitled to privilege protection before the European Union Commission. The same European Court of Justice precedent that established that rule also applies to external counsel from non-EU countries. If UK solicitors take on third-country status in the EU, then legal professional privilege will no longer attach to their communications of legal advice to clients in matters before the European Commission.
Given the dominance of the UK legal sector in Europe, this is a significant change. Especially for competition, trade, intellectual property, and other EU law matters, clients who have been working with UK solicitors should enquire whether or not their counsel is also admitted to practice in a state that is a member of the EU or of the European Economic Area (EEA).
Preserving privilege in multi-jurisdictional matters involving the United Kingdom will become more difficult if there is a no-deal Brexit. Notions of privilege before EU bodies is already narrower than what is routinely observed in many other civil and common law jurisdictions. A document can only be withheld from the European Commission as privileged if it is a communication with an external lawyer regarding the company’s rights of defense, a document preparatory to a request for external legal advice, or a document summarizing advice from external lawyers. Additionally, the EU courts do not have a substantial body of privilege jurisprudence, so many of the contours of the protection are ambiguous at best.
If privilege protection disappears for thousands of UK solicitors who advise on matters of UK and EU law, it is unclear how EU courts will address privilege questions around communications with UK solicitors that occurred prior to Brexit; communications between EU-admitted solicitors and those who are only UK-admitted; and investigations undertaken by UK-admitted solicitors that relate to the defense of a matter before a EU body.
Tips to Protect Legal Privilege in Matters Before the European Commission in a No-Deal Brexit
If the no-deal Brexit proceeds, clients will need to develop systems to best protect their UK solicitors’ advice from disclosure in matters before the European Commission:
- Representations should be led by EU-admitted lawyers.
- Communications regarding the representation should specifically reference that representation so it will be clear they relate to legal advice that is being provided by an EU-admitted lawyer.
- Keep in mind the EU implications of UK legal issues, so they can be addressed as needed by an EU-admitted lawyer in order to best preserve privilege.
- Internal documents generated exclusively for the purposes of obtaining legal advice (e.g., summaries) from an external lawyer may be privileged even if not (yet) exchanged with the external lawyer, BUT, make sure it is clear that the external lawyer involved is EU-admitted.
- Internal documents summarizing or reporting legal advice from external lawyers may also be privileged, provided that the underlying communications with external counsel would have been privileged; BUT, the external lawyer must be EU-admitted.
- Beware of forwarding privileged information to non-EU admitted lawyers - use the same care you would with in-house counsel located in the European Union.
- Engagement letters may be able to help clarify the roles of non EU-admitted lawyers as assisting in, but not leading, the representation.
Even if an agreement for an orderly exit is ultimately reached between the United Kingdom and the European Union, the future beyond December 2020 is uncertain. The UK legal sector (which is the second largest in the world behind the United States) may not regain equal footing with other jurisdictions before EU bodies. In-house counsel and their clients must now consider how to address their need for UK and EU legal advice if they have up to this point been relying on UK solicitors.
1 No-deal Brexit guidance: Providing legal services in the EU, The Law Society, August 30, 2019. Available at: https://www.lawsociety.org.uk/support-services/advice/articles/no-deal-brexit-providing-legal-services-in-eu/
3 CCBE UK DELEGATION PAPER: UK lawyers and their practice rights in the EU in the context of Brexit Q&A, Law Societies’ Joint Brussels Office. Available at: https://www.lawsocieties.eu/brexit/uk-lawyers-in-the-eu-qanda-on-practice-rights-in-the-context-of-brexit/5066081.article.
4 Article 19 of the Court of Justice of the European Union Statutes provides that “only a lawyer authorized to practice before a court of a Member State or of another State which is a party to the Agreement on the European Economic Area may represent or assist a party before the Court.” The Irish practicing certificate is the usual form of evidence required by the EU courts for Irish-qualified solicitors based in Ireland. See, Practising Certificates: Solicitors Outside the Irish Jurisdiction, Law Society of Ireland. Available at: https://www.lawsociety.ie/globalassets/documents/news/2019/190514-guidance-pcs-outside-jurisdiction.pdf; and “Record Number of UK Lawyers Register in Ireland,” The Irish Times, September 23, 2019. Available at: https://www.irishtimes.com/business/retail-and-services/record-numbers-of-uk-lawyers-register-in-ireland-1.4027245