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Lord Lucas: I beg to move that the House be now resumed. In moving this Motion I suggest that the Committee stage on this Bill be resumed not before 8.45 p.m.

Moved, accordingly, and, on Question, Motion agreed to.

House resumed.

Right of Establishment for Lawyers

7.45 p.m.

Lord Slynn of Hadley rose to ask Her Majesty's Government, in the light of the 14th Report, Session 1994-95, of the European Communities Committee on the Right of Establishment for Lawyers (HL Paper 82) and the judgment of the European Court of Justice dated 30th November 1995 in Case C-55/94 Gebhard v. Milan Bar Association, whether it is likely that the proposal for a Directive on the Right of Establishment for Lawyers will now be modified so that it can be adopted in a form acceptable to Her Majesty's Government and the legal professions in the United Kingdom.

The noble and learned Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. The subject-matter of the Question is one of considerable concern to the legal professions of England, Wales, Scotland and Northern Ireland. It is scarcely of less concern to those who are or may become their clients.

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The Treaty of Rome clearly envisaged that restrictions on the provision of legal services, as with other services, and on the right of establishment would go. This was the parallel of rights which were given to workers to move freely around the member states. For some professions this should not have been too difficult to achieve. For doctors and architects, for example, I imagine that appendicitis is not very different in Athens from that in Copenhagen.

For lawyers it has not proved to be at all easy, as was to be expected. Different systems of law, different procedures, different methods of qualifying exist in the various member states. It is especially difficult because, despite an increasing familiarity with community and international law, lawyers are trained and admitted to practise in a single jurisdiction. Steps have been taken. In 1977 the Council of Ministers adopted a directive which laid down the conditions under which lawyers could carry out occasional and temporary services in other states, using what is called their home state title. If a solicitor went to Paris to practise he still called himself a solicitor. He could advise on law on that basis. That directive has been useful and was a good move, although it has not been used as much as might have been expected.

After that directive there were two outstanding tasks. One was to make it easier for lawyers from one state to qualify in another member state. That meant adopting a system by which qualifications were recognised mutually between the member states. It took 17 years for agreement to be reached on a directive relating to architects, which I suggested might perhaps have been one of the simpler professions, and it took a little less time for several other professions. It was not at all surprising, therefore, that the noble Lord, Lord Cockfield, as the commissioner responsible, began to despair of achieving by the agreement of the member states a directive for each profession. The Commission adopted a general directive, leaving it to the professions to come up with an agreed scheme. I pay tribute to the initiative of the noble Lord, Lord Cockfield, in ensuring that this step was taken.

The general scheme was that after a three-year course which would be recognised people would be able to practise their professions in the light of their experience, but there would be an aptitude test. In order to move in the same profession into a different state it was necessary to take a test.

The second problem was of a different nature. What ought the rules to be by which a lawyer from one state can go and practise his own law, or community law, or international law, or even what is called the host state law in another state? For another and different 17 years the Council of European Bars of the member states worked on a draft directive and they produced this in 1992. Many, perhaps most, lawyers thought that the scheme advised by the Council of European Bars was a very good scheme, but the Commission had other ideas, which were made available to the European Parliament in 1995.

When the Select Committee looked at this matter most witnesses agreed that the directive was necessary in order to make it easier for lawyers to practise, not

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just on an occasional or temporary basis, but on a more continuing and permanent basis in a state other than that in which they qualified. It was recognised to be particularly necessary in order to provide for cross-border legal services becoming more prevalent and necessary. It would seem to be necessary also because it was found that in seven member states only locally qualified lawyers could practise. Lawyers from other states therefore, if they wished to practise there, had to become members of the local Bar or the local lawyers' association and become integrated.

A proposal for a directive was therefore put forward by the Commission. I do not need to go into detail on that. I mention just two or three relevant points. It proposed that lawyers should be entitled to practise in another member state under their home title for a period of five years, so long as they registered with the appropriate professional authority in the host member state to which they went. They used their home title--a solicitor in Paris would call himself a solicitor--and would be subject, under the proposal, to the professional control of both his home Bar and the host Bar in the state to which he went.

The second matter I want to mention is that it was proposed that if a lawyer from one state practised for three years in another state--the host state--he would not be required to take a professional aptitude test, unless he had never practised in law other than the law of the host state, when he would be required to take a test limited to procedural law and rules of professional conduct.

The Select Committee took the view that it is important to improve the free movement of lawyers throughout the Community while protecting and providing adequate safeguards for clients. The proposed draft directive is good in that it complements the existing two directives I mentioned--the 1977 directive and what I may call the "Cockfield directive". It would make it easier for a lawyer to become established on a continuing and relatively permanent basis in another state. By providing that a lawyer will be subject to the deontological rules of both professional bodies in the home and the host state, it provides a system of disciplinary control.

Two matters remained controversial. The first was that a lawyer could only practise in another state for five years and then, under the proposal, he would need to leave the host state or qualify as a local host state lawyer. The Select Committee, Sub-Committee E, felt that that was unjustified. It seemed absurd on the face of it that someone who had practised--say an English solicitor in Paris or Bonn--for five years, should have to leave at the end of that period when he had built up a practice with clients who wanted him. It seemed to us that there was no justification for that restriction and as a matter of principle we did not feel that practice under the home state title--solicitor in Paris--should be considered merely as a stage towards the full integration of the individual lawyer into the host state profession.

It seemed to us that it was a desirable end in itself that a solicitor or barrister should be able to go into Paris or Bonn, or wherever in the Community, and practise

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using his English or Scottish title. Indeed, the fact that he continued to practise as a solicitor or barrister was the sole indication to his client that he may not have the same detailed knowledge of the host state law as someone qualified in that state. So we come out very firmly against that.

The second matter in issue was how far the host state should be allowed to test the lawyer's knowledge of the host state law and practise before he could become a member of the local Bar. That is a more difficult question. It seemed to us, as it seemed to the legal professions in the United Kingdom, that a balance has to be established between ensuring that the client is adequately protected in that his lawyer has the requisite knowledge and qualifications on the one hand and, on the other, avoiding sitting tests which really constitute a discriminatory barrier against nationals of other states.

In the result we concluded that the Commission's proposal was wrong and that some testing would be justified but that, in deciding whether a lawyer from a foreign state should be admitted to the local Bar, full credit should be given for individual experience and qualifications; there should be some flexibility. I do not believe that we in this country would want to make it too difficult for a good, experienced lawyer from another member state to be integrated into our profession here any more than we would want barriers to be erected against our lawyers integrating abroad.

The Commission's present proposal is that a lawyer may be admitted without a test if he has practised for an unbroken period of three years, subject to his taking a test if he has not practised in the host state law. Recently the European Parliament, in a careful and well-thought-out report--with Madame Fontaine as the rapporteur--put forward more detailed proposals which would leave out of account any aptitude test, but which would require that effective and regular activity be taken into account before someone was admitted into the legal profession of the host state.

Those are the two matters which remain for negotiation and on which both the Select Committee and the legal professions of the United Kingdom are in agreement. The five-year proposal is a bad one and we feel that, with some flexibility, it is right that there should be aptitude tests. But they must not be discriminatory. This is an important question and I hope that the Minister will be able to give some information as to how far the aims of the Select Committee and of the United Kingdom professionals--solicitors, barristers and advocates--are likely to be achieved.

7.58 p.m.

Lord Irvine of Lairg: My Lords, your Lordships will be grateful to the noble and learned Lord, Lord Slynn of Hadley, both for bringing this matter before your Lordships' House and for his lucidity in explaining an issue which may seem esoteric to many of your Lordships. Putting it in my own way, I would like to compare the present position with the position that would obtain under the proposed new directive.

If I, as an English Queen's Counsel, wish to practise in either English or Italian law in Florence, then I can do so on one of two bases: first, as a temporary service

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provider under Article 59; or, secondly, as a fully fledged member of the Florence Bar. For the second, I would have to pass an aptitude test in Italian law. But if I opt for the first route, then I may provide English law services on a temporary or intermittent basis. If, however, I want to stay in Florence permanently as a practising lawyer, my only option under the present regime is to pass an aptitude test in Italian law and so become a fully fledged member of the Florence Bar.

Now, under the Commission's proposed Directive on Freedom of Establishment for lawyers, in its current form, I could practise as an English lawyer in Florence for a limited period of five years. But after that five years, I would have to become a fully fledged member of the Florence Bar, or go home and abandon the good will that I have built up. The fact that I will be as well qualified to go on doing what I have been doing for the past five years, but that I am to be disabled from doing so, strongly suggests to me an arbitrary restrictive practice. After the decision of the European Court in Gebhard, which is mentioned in the noble and learned Lord's Question, I believe that this five-year restriction might be held contrary to Article 52 of the treaty as an unjustifiable obstacle to trade. Since in my example I have practised English law in Florence for the past five years, consistently, no doubt, with the public interest in Italy, why, rationally, should I not be free to continue to do so? That is the first point.

Next, I turn to what the new directive proposes in relation to aptitude tests. The present position, as I understand it, is that if I want to become a fully fledged member of the Florence Bar, Italy can require me either to pass an aptitude test, which will examine my knowledge of the law of Italy, or to serve a certain number of years as a lawyer in Italy before I can become a fully fledged member of the Bar. In fact, all member states, apart from Denmark, as I understand it, have opted to require an aptitude test. True, there have been some complaints that some countries, although not the United Kingdom, make their tests so difficult to pass that foreign lawyers are effectively excluded. True, there are these complaints, but the remedy for that lies in Article 52. If aptitude tests are operated in such a way as to amount to an unjustifiable barrier on free movement, then they are in any event unlawful under Article 52.

So, if there is this problem, that is the appropriate remedy. The remedy is not to introduce a blanket rule excluding aptitude testing and as a result to penalise those states which operate aptitude tests reasonably because others may not operate them reasonably. What the new directive proposes is that the obligation to pass an aptitude test in a foreign system of law, as a condition of becoming a fully fledged member of a foreign Bar, should be dispensed with where the individual has practised for three years in a practice involving the application of the law of the host state. For my own part, I firmly agree with the Select Committee of your Lordships' House, which, at paragraph 62 of its report, expressed the opinion:

    "To relax these principles so as to confer the host country professional title on lawyers unqualified and untested in the law of the host country would in our view be unacceptable".

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The Commission's current proposal would dispense with the need for an aptitude test where, if I may continue with my example, I pursued for an unbroken period of three years, which is the Commission's version in the new directive, or regularly for three years, which is the better European Parliament version, a practice which involves the law of the host member state, Italy. Where the three-year requirement is not met, the draft envisages that I may still ask the Italian authorities to take into consideration such experience of Italian law as I may have.

This new regime would result in entry to the legal professions of the countries in the European Union without any formal examination in the relevant legal system or without any objective testing of aptitude to practise in that system.

Initially, the CCBE was opposed to this change. Its original draft allowed for national authorities to insist upon an aptitude test, provided that they took into account and gave full credit for any relevant experience of domestic law. That is the present position with the United Kingdom aptitude test. My understanding--and I look forward to hearing whether this may be confirmed by the noble and learned Lord the Lord Advocate--is that the UK delegation for the CCBE is proposing to vote in favour of the European Parliament report, which substantially retains the Commission's proposal. I have to say that I am disappointed by that.

I believe that the Select Committee of your Lordships' House was correct. I do not think that an obligation to pass an aptitude test in a foreign system of law, as a condition of becoming a fully fledged member of a foreign Bar, should be dispensed with simply because of some practice over a three-year period involving some application of the law of the host state. In my view, that would let into legal practice those who had not, by objective standards, demonstrated their capacity to practise as professional lawyers in a foreign system of law--a plain and obvious danger not only to the standing of the profession, but also to the protection of consumers of legal services. So my position is that the aptitude tests should be retained as an available option for member states in the interests of the maintenance of high professional standards in the law. I certainly look forward to hearing the views of the noble and learned Lord the Lord Advocate on this important subject.

8.6 p.m.

Lord Lester of Herne Hill: My Lords, as the noble Lord, Lord Irvine of Lairg, has just said, we are grateful to the noble and learned Lord, Lord Slynn of Hadley, both for initiating this debate and for his very skilful chairing of Sub-Committee E of the Select Committee on the European Communities whose report we are now considering. I had the privilege of serving as a member of that sub-committee and contributing to its report. We noted there that the right of establishment is among the fundamental freedoms accorded by the European Community treaty to nationals of member states and that there is a powerful case for a directive on the right of lawyers to establish themselves in member states other than their home state.

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For the single market to function effectively, obviously it is very important that qualified members of Europe's legal professions should be able to practise in every member state in the interests of their clients, subject to adequate and effective safeguards for professional standards and for the public.

To achieve that, as the noble and learned Lord, Lord Slynn, has indicated, has involved a very protracted exercise of complex consultation. At the invitation of the Commission, the Council of the Bars and Law Societies of the European Community (CCBE) laboured for 17 years to produce a draft directive on the right of establishment for lawyers. In addition to the pioneering role of the noble Lord, Lord Cockfield, I should like to pay a particular tribute to the dedicated and patient work done by Mr. John Toulmin QC, in his capacity as the former president of the CCBE. Mr. Toulmin reminded the sub-committee that as companies, employees and individuals become increasingly mobile within the Union, they need more cross-border legal advice on matters involving both Community and national law. How, he rightly asked, could a prohibition on obtaining such advice in the country of the potential migrant lawyer, rather than in the home state, be objectively justified either under the provisions relating to the establishment or under those relating to competition. The answer is that such a restrictive practice in favour of vested local or national professional interests cannot be objectively justified.

Since we published our report a year ago, the Court of Justice has decided the Gebhard case. The facts of that case exemplify the reason why European law is needed in the interests of the citizens of Europe, whether as members of the legal profession or as clients and users of legal services. Since neither the noble and learned Lord, Lord Slynn, nor the noble Lord, Lord Irvine of Lairg, has mentioned those facts, I do so briefly because they are quite informative. Mr. Gebhard, a German national and a qualified member of the German legal profession, had lived for many years in Italy, practising law in Milan, with no criticism of any kind being made of his activities in the set of chambers with which he was associated. When he opened his own chambers in 1989 together with Italian colleagues a number of Italian practitioners, including his former associates, now his competitors, complained to the Milan Bar Council of his use of the title Avvocato on the letterhead of the chamber's notepaper and of his having appeared using that title before the local Italian courts. He was forbidden by the Milan Bar Council from using the title Avvocato and was suspended from practice for six months.

It was not the function of the Court of Justice to decide whether Mr. Gebhard had been properly disciplined in favour of his Italian competitors, though I am bound to say that the facts illustrate how easy it is for, say, British lawyers to be discriminated against when practising in other member states, and vice versa, unless there are adequate safeguards against abuse and against the perpetuation of unjustifiable professional restrictive practices purporting to be in the wider public interest.

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Happily, however, the European Court rejected the argument that Mr. Gebhard could not be regarded as being established in Italy unless he belonged to the Italian professional body. The Court made clear that, although the host state might restrict the practice of certain activities or the use of their professional title, those restrictions must be necessary and must be applied in a non-discriminatory and proportionate way.

It is those safeguards which protect the people of this country against unscrupulous and unqualified overseas lawyers, whether from Europe or elsewhere, who seek to practise here, and protect British lawyers like myself or the noble Lord, Lord Irvine, if we wish to practise abroad. We would be protected from unjustifiable barriers in seeking to practise law in other member states.

There were two problems about the draft directive which particularly concerned Sub-Committee E. The first related to the rigid and arbitrary five-year limit on practice under home title. We strongly disagreed with the view of the European Commission that a five-year limit of that kind was justified. We preferred the CCBE draft directive which made provision for an indefinite right for a lawyer to practise under his home title in another member state. We suggested that Article 2 of the proposals should be amended so as to make similar provision.

I agree with the noble Lord, Lord Irvine of Lairg, that it is strongly arguable that a rigid five-year limit of that kind is arbitrary and violates European Community rules. I very much hope that the Commission will be persuaded to adopt this view. The fact that the Legal Affairs and Citizens Rights Committee of the European Parliament has put forward an amended proposal on these lines will, I hope, carry weight in the corridors of power in Brussels.

The other, more difficult question concerned aptitude tests. We pointed out that clients in the host country must be able to have confidence that a lawyer qualified under the legal system of that state had the necessary knowledge. The relevant professional body of the host state must be able to ascertain that this is so, if necessary by adopting tests, so long as such tests do not create unjustified discriminatory barriers. We did not consider, on the basis of the evidence about aptitude tests which we received, that artificial or discriminatory barriers were being created by the application of the principles of the Diplomas Directive. We observed that if they were they would be likely to be struck down by the European Court. To relax those principles so as to confer the host country professional title on lawyers unqualified and untested in the law of the host country would be wholly unacceptable.

Most of the witnesses maintained that the CCBE draft directive had achieved a balance appropriate to the Diplomas Directive. We made it clear that we favoured a solution whereby testing was retained but with a positive obligation on the authorities in each country to give full credit to individual experience.

The Legal Affairs Committee of the European Parliament has proposed that, where a lawyer has not practised the local law, his or her competence may be

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assessed by reference to professional experience and knowledge gained in the host state, with an interview where necessary, rather than by a formal aptitude test. This suggestion is broadly in line with stronger amendments suggested by the CCBE--which I prefer--applying to all migrant lawyers, whether they have practised the local law or not. They would allow the host state to require attendance at specified courses in the host state's legal system.

I fully accept the force of the comments of the noble Lord, Lord Irvine. I am as anxious as he to preserve professional standards, but it is strongly arguable that the CCBE amendment--which is stronger than that of the European Parliament--would represent a sensible compromise. It would create a presumption that a person who is professionally qualified as a lawyer and has practised under his or her own state title for a number of years would have gained sufficient experience in the law of the host state to gain exemption from the aptitude test. Something rather similar applied traditionally in this country if one wished to change status from barrister to solicitor. In order to be exempt from certain tests one had to show seniority in the profession, and that seemed to work fairly well.

Most importantly, the CCBE amendment would also protect consumers and the administration of justice, provided it worked properly, by enabling the competent authorities in the host state to satisfy themselves on a flexible case-by-case basis of the migrant lawyer's competence. Provided they did that, that would seem to be perfectly satisfactory as a formal aptitude test. It would meet the legitimate concerns of some other member states about aptitude tests without permitting the test to be used as a device for discriminating against migrant lawyers. I hope that the Commission will agree to a sensible compromise which has built-in safeguards against abuse. If not, I would be strongly opposed to a blanket prohibition on aptitude tests for the reasons so clearly and powerfully expressed by the noble Lord, Lord Irvine of Lairg.

Our report expressed belief that a directive on the establishment of lawyers could open up new opportunities for enterprising lawyers, give clients access to greater choice of services and enhance the process of enrichment and cross-fertilisation among the legal systems within the European Union. Safeguards requiring knowledge of or experience in host country law are surely necessary to protect the consumer. It is no less essential that a directive does not permit the erection of unnecessary barriers. What is required is modification of the Commission's proposal on the two points of principle where it departs from the CCBE draft directive. I look forward keenly to the speech of the noble and learned Lord--the first that I will have heard from him in his capacity as Lord Advocate--and any indication as to the likely approach to be taken on this subject.

8.19 p.m.

The Lord Advocate (Lord Mackay of Drumadoon): My Lords, the Question that we are considering this evening arises out of a campaign that has been pursued by lawyers throughout Europe for the

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best part of two decades. I welcome this opportunity to inform your Lordships, the wider public and the profession in the United Kingdom, of the Government's assessment of the Question posed this evening by the noble and learned Lord, Lord Slynn of Hadley.

As the noble and learned Lord said, the directives of 1977 and 1988 made some progress in achieving the objective of lawyers being able to establish themselves in different parts of the Community, but that progress has unfortunately been more leisurely than many would have wished and, despite the best efforts of government and individual lawyers, the matter has progressed at a pace which has caused a measure of frustration and, I suspect, a measure of irritation on occasions.

It is right, therefore, that your Lordships should appreciate, as was recognised by the report to which I shall turn in a moment, the valuable role played by the Council of the Bars and Law Societies of the European Community in trying to drive matters forward. It was in 1992 by a majority, I understand, of 10 to two that the CCBE agreed a draft directive which provided a framework for the establishment of lawyers in member states other than those states in which the individual lawyers had obtained their qualifications.

By coincidence that draft was published during the period of the United Kingdom presidency of the European Community. My noble and learned friend the Lord Chancellor commended it to the Commission at that time and again sought to give some impetus to the Commission in the work that required to be done. The Government and the professions, working closely together, kept up the pressure thereafter and at the end of 1994 the Commission published its proposals which form the basis of our discussion this evening.

Unfortunately, the proposal, as drafted and put forward by the Commission, was not one which either the Government or the professions in this country could accept without qualification. That was the position which was reflected in a number of other member states throughout the Community. For that reason, negotiations with officials of the Council required to commence but, most unfortunately, after a few months these became deadlocked. It was only when the Legal Affairs Committee of the European Parliament took a hand, at least as far as the European organs are concerned, that some progress was made.

By a remarkable coincidence, this very evening the European Parliament, at a plenary session in Strasbourg, will consider its Legal Affairs Committee's opinion on the draft directive. As we speak, the debate is going on and, as I hope to indicate later, the Government are optimistic that some progress will be made.

There can be little doubt that in considering the matter the Legal Affairs Committee was assisted, as your Lordships will be assisted, by the very detailed scrutiny of this matter which was carried out by your Lordships' Select Committee on European Communities. Its deliberations were, of course, chaired by the noble and learned Lord, Lord Slynn. I personally, and on behalf of the Government, wish to pay unqualified tribute to all members of the committee for the very fair and thorough manner in which they examined the issues. A

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reading of the report makes clear that not only did they bring their own personal expertise and experience to bear on the issues, they spent considerable time hearing evidence from organisations within this country, from the Lord Chancellor's own department, the professions, and various bodies within other European countries.

The report is a most impressive document. The conclusions are clear and carefully argued and reached. The Government are very grateful to the committee and accept the views which the report sets out.

At the same time it would also be right to acknowledge the work carried out by members of the United Kingdom delegation to the CCBE who have worked over the last few years at their regular meetings and, more informally, in lobbying interests in Europe in trying to drive the matter forward. I know that the UK delegation, the previous chairman who was mentioned by the noble Lord, Lord Lester, and the current chairman, Matthew Clarke, have dedicated a lot of time and effort in bringing the matter forward and, in particular, briefing and lobbying members of the European Parliament at the present time. At the risk of tempting fate, the signs are favourable that some fruits of their long campaign will become clear once the discussions in Strasbourg have been concluded this evening.

All noble Lords who have spoken have dealt in detail with the draft directive and the objections to it. For that reason it is unnecessary for me to deal in detail with the nature of these objections other than to make clear that in both matters the Government share the concerns that have been expressed in this House. The first objection is that the directive gives lawyers the right to practise under the home state titles in another member state but that would be limited to a period of five years. After that, as the noble Lord, Lord Irvine of Lairg, indicated, the lawyer would be faced with a stark choice of packing up and going home or alternatively becoming a fully qualified and enrolled member of the local Bar. That is a very stark problem which, there seems little doubt, is unacceptable on all sides.

The next objection is the question of the "fast track" entry to the legal profession of the host state by showing some three years' "effective and continuous" practise in the host state. Those who could show that their practice included host state law, including Community law, would be entitled to be admitted without any aptitude test at all. If the three years' practice did not include host state law, the aptitude test would have to be limited to procedure and professional ethics. The Commission sought to justify this approach on the ground that practise under home state title was a step in the way to integration as a member of the host state profession but, as noble Lords have pointed out, that is viewing a practice in another jurisdiction using one's home state title, whether it be advocate, solicitor or barrister, in an unacceptable manner.

As I indicated, the Government are quite clear that both these matters are objectionable and every effort is being made to address them in discussions with the active support of the CCCB.

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By another stroke of good fortune the case of Gebhard v. Milan Bar Council came along. As the noble Lord, Lord Lester of Herne Hill reminded us, the court rejected the Bar Council's argument that a lawyer cannot be regarded for the purposes of the treaty as being established unless he belongs to, or acts in association with, a member of the professional body of the host state. The court also held that although national measures which restrict certain activities to those possessing a particular qualification or membership of a professional body were permissable, restraints on the exercise of a fundamental freedom guaranteed by the treaty--and of course the right of establishment is one such fundamental freedom--must comply with four conditions familiar to those with a knowledge of Community law. First of all they must be applied in a non-discriminatory manner. Secondly, they must be justified by imperative requirements in the general interest. Thirdly, they must be suitable for securing their objective and, fourthly, and importantly, they must be proportionate; that is, that they should not go beyond what is necessary in order to attain their objective.

In those circumstances it appears to the Government that what is proposed in the draft objective, in so far as it imposes a time limit, cannot be valid because it appears to impose an arbitrary and blanket restriction on the exercise of the right of establishment by lawyers under the home state title. I am heartened by the contributions of all the noble Lords who have spoken this evening in that they would appear to accept that view.

The Legal Affairs Committee of the European Parliament has proposed amending the directive so as to provide for a right of establishment under home title without limit of time. If, as can confidently be expected, that amendment is adopted by the European Parliament this evening, it is reasonable to hope that the Commission will revise the text accordingly. That would be a major advance towards achieving not just the Government's policy towards the directive but the wishes of the legal professions throughout the UK.

I turn now to the other major area of controversy which is undoubtedly more difficult. It is the provisions concerning admission to the host state professions. It remains the Government's aim to ensure that these provisions are such that legal professional standards are maintained and that consumers are not misled as to the nature of the qualifications possessed by the lawyers who are practising and available to provide legal services. The Commission's proposals, which provided that joining the host state profession after five years was compulsory if the lawyer were to continue to be allowed to practise in the state concerned, and that in certain circumstances the lawyer could join the profession without his competence being tested at all, were not acceptable either to the Government or to the legal professions of this country.

While I understand the view expressed by the noble Lord, Lord Irvine of Lairg, about abandoning aptitude tests, there may be some room for compromise in dealing with the second major area of controversy. There may be adequate methods of assessing competence falling short of an examination or aptitude

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test. The competent professional authority of the host state could assess an applicant's competence, taking into account professional experience and knowledge gained in the host state. One possibility could be attendance at courses of the nature that has been mentioned. In appropriate cases that might require the lawyer to prove his competence at an interview, to produce proof of attendance at courses, as I have said, or to practise for a period under the supervision of a host state lawyer. In seeking a compromise, it is important to bear in mind the existence of the CCBE code of conduct which applies to lawyers engaged in cross-border practice throughout the EU.

That code provides, among other things, that a lawyer should not handle a matter which he ought to know that he is not competent to handle. The code has been adopted by the majority of Bars and Law Societies throughout the Community and is part of the practice rules for solicitors both north and south of the Border.

Such an approach appealed to, and was adopted by, CCBE in a meeting it held in Dresden last autumn. The approach it adopted there was consistent with the Government's policy which is to seek a compromise in this difficult area. It may be for the CCBE to speak for itself as to why it adopted that attitude, which involved abandoning a commitment to the aptitude test, but clearly it felt that some compromise was necessary, and as all the Bars and Law Societies throughout the Community are represented, no doubt by eminent leaders of their respective professions, the House can have some faith that the compromise was reached for good, sound reasons after many years of reflection and discussion.

Unfortunately, the compromise proposed by the CCBE has not yet found favour with the Legal Affairs Committee of the European Parliament. Under its proposals, lawyers who have practised under their home titles in another member state for three years would be entitled to membership of the host state profession if their practice had included host state law. If the practice did not include host state law, the competent authority would be able to require the applicant to attend an interview. In an important change, however, put forward by the Legal Affairs Committee, the competent authority of the host state would be able to refuse to allow the applicant to benefit from those provisions, particularly if it considered that that would constitute a threat to public order, or because of disciplinary proceedings, complaints or incidents of any kind.

The Government's view is that the drafting of that amendment put forward by the Legal Affairs Committee is somewhat unclear and leaves something to be desired. It is an amendment which will have to be considered carefully, and when the matter goes back to the Commission further discussions will be necessary. As always in this matter the Government intend to consult closely the legal professions whose support throughout the years has been welcomed warmly.

It follows, therefore, that provided decisions are taken in Strasbourg this evening in the manner anticipated, some substantial progress is being made. To answer the question posed by the noble and learned Lord, it is

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hoped that if the European Parliament adopts the amendments which are being put to it by the Legal Affairs Committee, and if thereafter the Commission revises the draft directive, taking account not just of those amendments but of further representations being made to it by this and other governments, there is reason to believe that at long last a common solution will be found.

Indeed, I can go further and say that there is a serious hope with, it is believed, a measure of justification, that a common position may be found during the Irish presidency during the latter part of the year. In conclusion, I thank the noble and learned Lord, Lord Slynn of Hadley, for raising this issue, and I thank other noble Lords for the support they have given to the Government. I shall look forward to reading tomorrow's newspaper to see what was decided as Strasbourg this evening.

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