Disorderly Brexit Will Cost Legal Sector £3.5 Billion
The potential impact Brexit will have on conveyancers was considered this week after it was revealed that the legal sector could face a catastrophic decline in the event of a disorderly exit from Europe.
The UK is currently the second largest global provider of legal services and the largest in Europe. Despite the power and respect the British legal system garners, experts have predicted that a no-deal scenario could cost the legal sector and therefore the UK economy £3.5 billion.
The Law Society has warned that the legal sector contributed 1.4% of the UK’s GDP in 2018 with £19.1 billion being paid in tax receipts through legal and accounting activities.
The statement made by Law Society president Simon Davies urged the government to ensure they are able to negotiate a similar agreement to the EU Lawyers’ Directive, enabling legal service providers to move and work freely throughout the EU.
Simon Davis, Law Society of England and Wales president, commented:
“According to our estimates, the volume of work in legal services would be down £3.5bn* – nearly 10 percent lower than under an orderly Brexit.”
“Our sector contributed £27.9 billion to the UK in 2018 – 1.4% of GDP – and in 2017 posted a trade surplus of £4.4 billion, according to the Office for National Statistics (ONS). Much of this balance of payments surplus is down to access provided by EU Lawyers’ Directives.
“In general, we have a trade surplus with the EU27 when it comes to services. We have a trade deficit when it comes to manufacturing.
“And in 2018 the total tax contribution of legal and accounting activities was estimated to be £19.1 billion – potentially funding the salaries of doctors, nurses, teachers and police officers.
“That is why we are urging the UK government to negotiate a future agreement that enables broader access for legal services so that English and Welsh solicitors can maintain their right to practise in the EU.
“Such an agreement should replicate the Lawyers’ Directives, which provide EU-wide rights on services and establishment, as other models are unlikely to deliver the comprehensive practice rights that have substantially contributed to the UK legal sector’s large export surplus of £4.4bn as of 2017.
“There are precedents for such agreements providing necessary in-depth frameworks on legal services: the EU has association agreements through the EEA with Norway, Liechtenstein and Iceland and with Switzerland. These extend the application of the Lawyers’ Directives to EFTA countries.
“The UK legal system is globally respected and the liberalisation of services in the EU has directly contributed to its success.”
How disruptive would a no-deal scenario be to the legal sector?