Luxembourg fights directive on single market for legal services

Date: 11/06/1998

By Myles Neligan

THE Luxembourg government is fighting a last-ditch legal battle to prevent the entry into force of a European Commission directive designed to set up a single EU market for legal services.

The directive, which was approved last year by all Union member states except Luxembourg, would allow lawyers qualified in one EU country to practise permanently in another.

It would also make it easier for expatriate lawyers to become full members of the legal profession in their host country. EU lawyers, with the exception of those practising in Luxembourg, are solidly behind the initiative.

“The directive complements the EU single market for goods and European economic and monetary union,” said Patrick Oliver of the Law Society of England and Wales. “It is in line with the restructuring which we are seeing across most sectors, and will open up new opportunities for European lawyers. We would like to see a similar mutual recognition deal in force world-wide.”

But Luxembourg is protesting that the original draft directive should have been proposed on a legal basis requiring the unanimous agreement of all 15 EU governments, rather than merely a qualified majority.

The Luxembourg authorities formally lodged a legal challenge to this effect in the European Court of Justice last month, making it clear that they would veto the proposal if it were resubmitted for unanimous approval.

The ECJ proceedings are expected to last between three and 18 months, depending on how many other EU governments exercise their right to intervene in support of the original directive.

Most observers expect the Court to throw out Luxembourg's legal challenge, but the case has highlighted the fears of the Grand Duchy's tiny community of no more than about 500 lawyers.

While the country's legal profession is careful to stick to technical arguments over the directive's legal basis when arguing its case in public, Luxembourg lawyers admit in private that they fear they will be swamped by an influx of foreign solicitors and barristers attracted by the exceptionally lucrative professional opportunities on offer in the Grand Duchy.

The large and growing case-load of the ECJ and the European Court of First Instance, which is at present handled exclusively by Luxembourg lawyers, together with the presence of numerous international banks and corporations, make the EU's minnow member state a land of milk and honey for legal eagles.

Lawyers from the Union countries which have already opened up their legal professions to outsiders are frankly unsympathetic.

“The presence of a large international legal community only enhances the profile of a city and usually generates a great deal of business for other sectors of the economy. You only have to look at Brussels or London to illustrate the point,” said one UK lawyer.