- Antitrust lawyers lament loss of Anglo-Saxon influence in EU
- U.K.’s CMA faces challenge of greater number of deal probes
While last week’s Brexit vote took financial markets and bookmakers by surprise, a steady stream of the U.K.’s antitrust lawyers had already prepared for the worst by seeking professional solace in Ireland.
For Madeleine Healy, a competition lawyer at Gibson, Dunn & Crutcher in Brussels, it was a “natural choice” to register as an Irish solicitor in case a British divorce from the European Union took away her hard-earned rights to practice EU law.
“I’m just not taking any chances with my legal profession,” said Healy, 33, who’s from the English midlands and registered as an Irish solicitor in November 2015. “It’s very difficult to qualify as a solicitor and I’m not willing to just give it up because the U.K. decides to vote out of the EU and potentially out of free movement of professionals.”
Ireland’s Law Society said last week that a record 186 solicitors from the U.K. were admitted to practice in Ireland in the first six months of the year, most of them citing a possible Brexit and many of them specializing in EU and competition law. It got more than 40 initial queries from U.K. solicitors since the results of the British referendum became known Friday. Only 51 U.K. solicitors sought to register in Ireland in 2014.
Doing so has until now been “very easy,” said Healy, as long as lawyers have the needed certificates, the references and pay a fee of about 300 euros ($332). “I think it took me less than a month to do. I think now it would take longer because people are starting to wake up.”
A handful of trial lawyers, known as barristers, have also recently made the switch, according to the Irish Bar.
An EU without the U.K. risks not only adding costs and regulatory hurdles for companies in multi-billion euro merger deals and cartel cases, but also stoked fears British lawyers might lose the ability to defend clients at the bloc’s courts in Luxembourg.
"Privilege is afforded to lawyers of an EU bar or EU law society," Healy said. It’s unclear if, post-Brexit, British lawyers would be covered by the EU’s professional services directive or free movement of professionals, which "raises question marks over whether or not we would have privilege."
More lawyers are likely to follow Healy’s lead. Brussels has 156 U.K. lawyers recorded as practicing there, a majority of which are competition lawyers, according to the U.K. Law Societies’ joint Brussels office.
U.K. lawyers may even have to change nationality in a “worst-case scenario” that sees British citizens barred from living and working in the EU or European Economic Area, according to Trevor Soames, a Brussels-based competition lawyer at Shearman & Sterling.
Soames said he’s already decided to apply for Belgian citizenship after last week’s referendum.
“Irish qualification may not be enough,” said Matthew Hall, a competition lawyer at McGuireWoods in Brussels, who now has dual U.K. and Belgian nationalities.
“It seems that many Brussels communes are already seeing an unusual number of Brits inquiring about becoming Belgian,” said Hall.
Clifford Chance, one of the U.K.’s magic circle of prestigious firms, already applied “for Irish registration for all its English qualified competition partners prior to the U.K. referendum,” a spokesman said.
As lawyers have flocked to Ireland to preserve their right to work on EU cases, the profession is gloomy about the impact of Brexit on the future of competition law in the region.
“Britain leaving the EU is not good news,” said Bernd Meyring, an EU competition lawyer for Linklaters in Brussels and Dusseldorf. “The EU is one of the world’s leading antitrust regimes and serves as a blueprint for many emerging economies.”
European antitrust will be guided predominantly “by ‘continental law’ officials and supervised by ‘continental law’ judges,” said Denis Waelbroeck, a lawyer and academic in EU law at Ashurst in Brussels.
“The relevance of the ‘Anglo-Saxon’ approach is likely to diminish greatly and this is sad because it was one of the most business friendly component with regard to the enforcement policy and strategy,” he said.
The pound plunged to the lowest since 1985, stocks in Europe and Asia tumbled and U.S. Treasuries surged after U.K. voters on June 23 decided in a referendum to leave the EU. Prime Minister David Cameron resigned June 24, saying he’d serve another three months, after a 52 percent majority rejected his pro-EU campaign.
Cameron is meeting his fellow 27 EU leaders in Brussels Tuesday, with German Chancellor Angela Merkel warning beforehand that the U.K. can’t expect favored treatment once it leaves and that there will be no informal talks on a new relationship before the government in London files its application for divorce.
The new EU “will serve a smaller market and it will over time lose some talent because British officials, lawyers and academics might become less involved with EU antitrust issues,” said Meyring. “The U.K. has been an advocate for open markets and an economic approach to antitrust and this voice might be less listened to if it comes from outside.”
Big merger deals may in the future also have to go through the U.K.’s Competition and Markets Authority, which will inevitably stretch its resources and raise questions over its capacity. Until now, companies had to make sure they got the backing of the European Commission, the EU’s antitrust regulator.
It is a long time since the CMA had to deal with complex merger deals or significant cartel cases, said Christopher Bright, a London-based lawyer practicing U.K. and EU law at Shearman & Sterling.
“Much of its work focuses around market investigations in the domestic economy” and “taking on a role in major cases will require the agency to be reformed to deal efficiently and effectively with the workload.”
The departure from the EU may also affect the U.K. position as a favorite destination for victims seeking compensation for antitrust violations, said Antonio Bavasso, a competition lawyer at Allen & Overy in London. “Post-Brexit we may see a shift in favor of other EU jurisdictions, especially if the European Commission decisions on which many claims are based, are no longer binding in the U.K.”
The implications of Brexit for competition law will in the end depend on the relationship model the U.K. and the EU would end up agreeing on.
"It is likely that EU competition law would cease to apply in the U.K., and that U.K. courts and competition authorities would cease to be bound by EU case law and decisions, creating scope for divergence over time,” said Alex Nourry, head of Clifford Chance’s antitrust practice in London.