Wednesday, August 04, 2010

Europe Wants to Liberalize Services and This Includes Lawyers


(thanks to praized)

In my paper "From Ethics to Regulation" I have shown how at the global level legal services and lawyers are being subsumed under the general category of services. In GATS the idea is to remove barriers to trade in services. To the dismay of lawyers, there is no special category for the legal profession. What's worse is that they are likely to be classed with accountants.

The European Union is now pushing this agenda. In 2006 the Services Directive was adopted with transposition into national law by the end of 2009. The European Commission is requesting submissions for an evaluation of the mutual evaluation process. In other words how is the directive being applied particularly in relation to the requirements "either on the establishment of service providers or on the cross border provision of their services".

Once again, lawyers are only referred to obliquely as legal advisers among others.

The European Commission argues in the consultation document that
The Services Directive has the potential to foster growth and job creation in the largest, most dynamic and innovative pillar of the EU economy, the services sector. This becomes even more vital in the context of the current economic crisis. According to conservative estimates, the potential economic benefits of the Services Directive could range between 60-140 billion euro, representing a growth potential of 0.6-1.5% of GDP. But these gains can only be reaped if the Directive is implemented fully in all EU countries.
The kinds of things being consulted on include: any specific legal form for provision of services (eg. partnership or sole practitioner); bans on establishments in more than one country (eg. European law firms); minimum or fixed prices for services; any limitations on the provision of other services (eg. MDPs).

The UK response is quite liberal. The only limits on legal services are in claims management which must be authorized, and for insolvency practitioners who have reserved activities.

Contrast this with Greece, for example, to see the other side. Minimum tariffs are applicable for lawyers; lawyers can't have more than one establishment in Greece; and no MDPs for lawyers.

Italy is a halfway house with restrictions on form for lawyers (solo practice or partnerships owned by lawyers); minimum tariffs and fixed prices have been removed, but maximum tariffs apply; and MDPs have restrictions.

There's a long way to go yet. Not all member states have yet implemented the directive, while, some like Greece appear to have taken an overly restrictive view. Italy clearly just hasn't got round to doing it properly.

The consultation is open to consumers, businesses and other interested parties. The closing date is 13 September 2010. Documents can be downloaded from the European Commission consultations page.

(H/T to Richard Parnham)
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