“So these lawyers walk into a Bar and … “ The Court of Justice liberalises cross-border access to the legal profession

Dr Julian Lonbay, Senior Lecturer,
Postgraduate Research Admissions Tutor, Birmingham Law School, University
of Birmingham

Introduction

Does EU law allow its citizens to seek the quickest possible means to qualify for a professional activity, even if it means leaving out large areas of training required by national law on access to the national profession that exercises that activity? The Court of Justice has addressed this issue recently in its judgment in Joined Cases C-58/13 and C-59/13 Angelo Alberto Torresi and Pierfrancesco Torresi v Consiglio dell'Ordine degli Avvocati di Macerata.

Background: Mobility rights for lawyers under Directive 98/5/EC

In Italy, as elsewhere across Europe, there is a special section of the roll of lawyers (elenco) for those lawyers emerging from elsewhere in the European Economic Area who are seeking to establish under their ‘home State professional title’ in Italy. This follows the implementation of Directive 98/5/EC to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained. This Directive requires host State Competent Authorities to register and automatically recognise the professional titles of lawyers, whose professions are listed in Article 1(2) of the Directive. Such lawyers, once registered, have the right to exercise their profession in the host country, according to Article 5 of the Directive.

However, unlike other countries, in Italy 92% of the registered European lawyers are Italian nationals. The Consiglio nazionale forense (Italian National Bar Council) has established that nearly 3,500 such registered European lawyers were Italian nationals who had obtained their professional title elsewhere in the EEA. 83% of these lawyers had obtained their professional title, abogado, in Spain.

The via spagnola

Spain, until recently, imposed no requirement for post–university mandatory training before becoming an abogado. One simply had to have a Spanish law degree, or one recognised as equivalent to a Spanish law degree, and one could register with one of the eighty-three Spanish Bars as an abogado. [There is now a mandatory training period and State exam in Spain, the first of which was held in 2014.]

As many Italians with a laurea in guirisprudenza (Italian law degree) discovered, the Spanish authorities often considered the Italian Law degree to be equivalent to a Spanish law degree, and their degrees could be homologated more or less automatically. Armed with their new Spanish recognised diplomas they could enrol as lawyers in Spain, and thence return triumphant to Italy, where they were entitled (under Directive 98/5/EC) to practise as Spanish lawyers. Such practise can include dealing with matters of Italian law (subject to some deontological and other restraints). So instead of undergoing the required Italian period of legal practice and passing a State exam before being able to practice as an avvocato (Italian lawyer), which would take at least two years, they could qualify abroad more speedily, and then return as lawyers from another Member State and practice in Italy as such. 

An abuse of EU law?

The Italian Bars were concerned at this practice and considered it to be an abuse of European Law and argued even that it threatened the Italian national identity which should be protected by Article 4(2) TEU.

The Torresi cases were an opportunity to see if EU law could bear such an interpretation. The two Torresis returned from Spain qualified as abogados, and asked the Bar of Macerata (in Italy) to inscribe them on the special roll for registered European lawyers. The Bar Council of Macerata took no decision within one month (which was the time limit set by Italian law), and they then turned to the Consiglio nazionale forense (CNF) asking it to take action on their applications. The CNF was not convinced that Article 3 of the Directive could be used in such circumstances which it thought might constitute an ‘abuse of law’ and be contrary to Article 4(2) TEU

‘in that it permits circumvention of the rules of a Member State which make access to the legal profession conditional on passing a State examination, given that the Constitution of that Member State makes provision for such an examination and that the examination forms part of the fundamental principles of protecting consumers of legal services and the proper administration of justice?’

Two questions were referred to the CJEU by the Italian CNF. Preliminary issues of jurisdiction and capacity took up much of Advocate General Wahl’s Opinion (§§19-83) and more than half of the Grand Chamber’s ruling. The substantive legal issues dealt with aspects of the free movement of lawyers under Directive 98/5/EC and are dealt with below.

The following questions were referred to the CJEU:

‘1.      In the light of the general principle which prohibits any abuse of rights and Article 4(2) TEU, relating to respect for national identities, is Article 3 of [Directive 98/5] to be interpreted as obliging national administrative authorities to register, in the register of lawyers qualified abroad, Italian nationals who have conducted themselves in a manner which abuses EU law, and as precluding a national practice which allows such authorities to reject applications for registration in the register of lawyers qualified abroad where there are objective circumstances to indicate that there has been an abuse of EU law, without prejudice to respect for the principles of proportionality and non-discrimination and to the right of the person concerned to institute legal proceedings in order to argue a possible infringement of the right of establishment and, consequently, the possibility of judicial review of the administrative action in question?

2.      If the first question should be answered in the negative, is Article 3 of [Directive 98/5], thus interpreted, to be regarded as invalid in the light of Article 4(2) TEU, in that it permits circumvention of the rules of a Member State which make access to the legal profession conditional on passing a State examination, given that the Constitution of that Member State makes provision for such an examination and that the examination forms part of the fundamental principles of protecting consumers of legal services and the proper administration of justice?’

Were the Italian via spagnola practices an abuse of EU law?

Advocate General Wahl

The Advocate General first acknowledged that ‘abuse of law’ was a recognised concept in EU law. Citizens could not fraudulently or abusively rely on EU law. The concept of abuse had both objective and subjective elements that had to be assessed by national courts, but without compromising EU law.  Objectively EU law should not lead to the “wrong results” and ‘subjectively’ there should be no manipulations or artificial fulfilment of the conditions of EU law so that one could benefit from its provisions “abusively”.  

In this case the Advocate General the Italian practice in question showed the EU law was functioning correctly and achieving its correct aims. Nothing in Directive 98/5/EC indicated that the EU legislature wished to allow Member States to practise “reverse” discrimination against their own nationals. EU citizens were entitled to seek out the most favourable jurisdiction in which to qualify. This indeed was the rationale for “harmonising” the pre-conditions for exercising the rights conferred by Directive 98/5/EC.

Fraud

If there was a legitimate fear of fraud, then, in those rare cases, an investigation could be legitimate and Article 13 of the Directive, encouraging close collaboration between competent Authorities in the relevant Member States in such cases, should be used.

Italian national Identity (Article 4(2) TEU)

As to the threat to Italian national identity the Advocate General was perplexed, how did the fact that an Italian used EU law rights to become a Spanish lawyer and then practice in Italy as such, threaten Italy’s legal order and compromise Italy’s national identity? The Italian Government, at the hearing, had not supported the CNF on this point. The Torresi pair were not seeking access to the Italian legal profession itself, but to the Italian legal market as abogados. The Parliament, Council, Spanish and Polish Governments, intervening , had all considered that Italy maintained its rights to control access to the profession of avvocato. How could Italy deny an abogado right to practice in Italy? It was Spain’s competence to determine how an abogado qualified and it would strike at the heart of Directive 98/5/EC to allow such an interpretation.

Grand Chamber of the CJEU

The CJEU convened as a Grand Chamber to consider the case.  Having disposed of the preliminary jurisdictional issues they turned to the substantive questions of law. First they pointed out their earlier case law interpreting Directive 98/5 as a mechanism for the “mutual recognition of professional titles of migrant lawyers”.

§38
In that context, Article 3 of Directive 98/5 undertakes a complete harmonisation of the preliminary conditions required for the exercise of the right of establishment conferred by that directive, providing that a lawyer who wishes to practise in a Member State other than that in which he obtained his professional qualification is obliged to register with the competent authority in that Member State, which must effect that registration ‘upon presentation of a certificate attesting to his registration with the competent authority of the home Member State’ …

Presentation of the home State certificate by the migrant lawyer was the sole condition applicable before registration in the host State. The CNF argued that this was an abuse of law, as they were evading the Italian training requirements.

Abuse of Law

The Court confirmed that abuse of law was a concept that EU law recognised, and that Member States could take measures to prevent nationals from ‘improperly’ circumventing national law. Echoing Advocate General Wahl they considered that the concept had both objective and subjective dimensions. If, despite formal observation of the conditions of EU law, the objectives of that law were not met then the objective condition for abuse of law was met. The subjective element required an intent to obtain an improper advantage from EU law by ‘artificially’ complying with conditions set down.

Applying this test to the Torresi cases they declared:

            §48

… it must be held that the right of nationals of a Member State to choose, on the one hand, the Member State in which they wish to acquire their professional qualifications and, on the other, the Member State in which they intend to practise their profession is inherent in the exercise, in a single market, of the fundamental freedoms guaranteed by the Treaties …

It could not be an abuse of law as it was the intention and purpose of EU law to create the opportunity for an EU citizen with a degree to travel elsewhere, qualify there, and then return. The objective element of the abuse of law test was not met. EU law intended the result complained of. The fact that they were availing themselves of more ‘favourable’ legislation was not enough to meet the subjective element of the test.

Italian national Identity (Article 4(2) TEU)

The Court confirmed that EU law must ‘respect the national identity of Member States’ (Article 4(2) TEU). The Italian CNF argued that Article 3 of Directive 98/5/EC allowed a circumvention of Article 33(5) of the Italian Constitution as it allowed Italians to evade the national Bar exam, thus allowing circumvention of rules that formed part of the Italian national identity. The Court followed the Advocate General and confirmed that Article 3 of the Directive gave access to the legal market in Italy, not the Italian profession of avvocato (lawyer), therefore there was no evasion of national rules. They confirmed also that the Italian Government, at the hearing, had accepted this.

Commentary

The Court in this ruling is supporting a view that EU law allows for regulatory competition. There is a market formed of the national regulatory regimes for legal services of the Member States. Citizens and businesses can choose which regime to opt for. In doing so, it is true that future lawyers can leave out aspects of training that would have been required had they remained at home. But in making that choice there is no abuse, it was what EU law was designed to do. It is really no surprise that States are no longer fully sovereign within their territories. By the logic of the single market, borders are supposed to be disappearing.

In this case, EU law, decided by the Member States, has decreed that once admitted to the nominate legal professions, recognised in Article 1(2) of Directive 98/5/EC, then those with the relevant professional titles have the right to establish in another Member State, as set out in Directive 98/5/EC, under their home State professional titles. This means that it cannot be an abuse of law to exercise these rights. The purpose of the rule was to permit that very mobility.

Member States do not have to have identical rules for accessing the profession of lawyer. The content of education is a matter that is, in the main, reserved to Member States. Equally the range and depth of reserved legal activities varies across the EEA. So some States allow non-lawyers to practise in areas that, in other States, are reserved for particular legal professions. It is recognised that access to legal practice varies profession by profession, country by country, across the EEA. This causes complications when lawyers move across borders as their training and range of activities will be different. For the consumer of legal services this is great as they can have a wide choice of expertise to draw upon. For the regulators it is uncomfortable. They must co-ordinate with professional regulators from other Member States. They must learn and understand the regimes operating elsewhere. They must co-ordinate should disciplinary issues arise, and they must consult each other should complexities or misunderstandings arise when the migrant lawyer is seeking access to a host State legal market. All this interaction encourages pan-European engrenage (enmeshment) at many levels.

In the Torresi case the Consiglio nazionale forense did not raise the issue of Article 10 of the Directive. This allows a migrant lawyer who has been practising law under the home State title for three years, to convert into an avvocato. Such lawyers must show that they have

effectively and regularly pursued for a period of at least three years an activity in the host Member State in the law of that State including Community law.

These lawyers are exempt from any aptitude test or adaptation period. Thus a few years down the line, the Italians who have taken the via spagnola will be easily incorporated into the Italian legal profession. This was probably not raised at the Court of Justice, as it had already indicated in its earlier case law that such access did not infringe the principle of non-discrimination.

In Luxembourg v Parliament and Council, Luxembourg had complained that Article 10 allowed the practice of national law by migrant EEA lawyers, without regard to any training requirements in national law. Luxembourg lawyers had to undertake a whole raft of training in national law, so why should the migrant lawyers be exempted? Furthermore could Luxembourg not protect its consumers of legal services against these untrained hordes of migrant lawyers? The Court found that there were sufficient safeguards in the EU legislation to protect consumers, and that national and migrant lawyers were not in exactly comparable situations, so discrimination had not arisen. The migrant lawyers had various restraints imposed upon them by the Directive itself. Thus there was no issue of ‘unequal treatment’ that EU law might have sanctioned.

The court, in Torresi , has re-affirmed the primacy of the Single market. It is there to benefit citizens and businesses in Europe, not to make life easy for the national regulators of economic activity. Future European lawyers can pick and mix their training and, once qualified, can decide where in Europe to practice. The forces unleashed by this liberalization fosters an ‘ever closer’ Union for providers of services, their consumers and also for the regulators of legal services.

Barnard & Peers: chapter 14