Football Revolution: how do the Court’s rulings of 21 December 2023 affect UEFA’s role as a ‘gatekeeper’?

Steve Weatherill, Somerville College and Faculty of Law, University of Oxford

Photo credit: Werner100359, via Wikimedia Commons

 

Summary

The Court of Justice’s rulings of 21 December 2023 found practices associated with prior approval of new sporting competitions organised by third parties to be incompatible with EU law. The most prominent reason for this finding was the absence of transparent, non-discriminatory, clear and precise substantive criteria and procedures. So – of course – governing bodies in sport must amend their practices. But what remains, if anything, of their legitimate role as a ‘gatekeeper’? Assume a prior approval system is based on transparent, non-discriminatory, clear and precise substantive criteria and procedures: when may a governing body – I will focus on football and on UEFA - refuse to authorise a new competition?

I have three questions to address in order to elucidate the legal principles set out by the Court on 21 December. First could UEFA refuse to authorise a closed League (and could it penalise participants)? I think, yes. Second could UEFA refuse to authorise a second Champions League (and penalise participants) – i.e. in a format identical to its own, except owned by third parties? I think, no. Third could UEFA refuse to authorise a new competition (and penalise participants) where the format is not identical to its own, but similar (and not closed), except owned by third parties? I think, no, unless UEFA can demonstrate its own competitions are superior according to the (predominantly economic criteria) recognised by EU law. It seems to me that UEFA is entitled to defend the European Model of Sport, most conspicuously by legitimately using its power to forestall the creation of a ‘closed’ competition, but UEFA is not entitled to protect its monopoly over the supply of competitions which comply with the European Model of Sport. Therefore the Court has opened the door as a matter of law to those who would wish to revolutionise football in Europe.

 

The treatment of governing bodies in sport as ‘gatekeepers’

What is the status of governing bodies in sport – UEFA in particular - as ‘gatekeepers’ in the light of the three momentous and lengthy rulings of 21 December 2023 - Case C-333/21 European Superleague Company SL v FIFA, UEFA; Case C-680/21 UL, SA Royal Antwerp Football Club v URBSFA, UEFA; Case C-124/21 P International Skating Union v Commission. The three rulings, all delivered by the Grand Chamber, will be referred to hereafter as ESL, Royal Antwerp and ISU.

The Court went out of its way in ESL to insist that its ruling mainly addresses the compatibility with EU law of FIFA and UEFA rules governing the prior approval of competitions and participation therein by professional football clubs or players. The Court was not being asked to rule on the compatibility of the Super League project itself with EU law (ESL para 80). The rulings, though important, do not answer every question and in fact they ask several new ones. Sometimes the Court issues rulings which are relatively concrete and have a quasi-legislative feel – not on this occasion.

Plainly, however, the Court on 21 December 2023 has done much to develop our understanding of the legal framework which surrounds UEFA’s power of prior approval. Consequently it has also done much to provide those who would wish to challenge the existence and/ or exercise of that power in order to offer new competitions on the market for football in Europe with fresh ammunition. The original version of the Superleague – a ‘closed’ competition to which in any event only two of the original twelve participating clubs continue to express fidelity – may be dead, but the incentives to challenge UEFA’s monopoly and to introduce new competitions have not vanished. This power struggle has only just begun.

The ‘gatekeeping’ power or the power of prior approval claimed by UEFA is a power to authorise new events (or not). It is, then, the power to determine the conditions under which potentially competing undertakings may enter the market for the supply of football competitions. This is a market which is well known to be immensely lucrative, but it is also, as recent trends in club ownership reveal, of increasing political salience. The world covets European football.

This gatekeeping power is capable of falling within the scope of EU law – of course. The rulings of 21 December 2023 are clear on this, unsurprisingly so. The ‘rules on a sporting association’s exercise of powers governing prior approval for sporting competitions, the organisation and marketing of which constitute an economic activity for the undertakings involved or planning to be involved therein, come, in that capacity, within the scope of the …  Treaty provisions on competition law’ (ESL para 90). In support of this proposition the Court is able to cite its previous ruling of 1 July 2008, MOTOE, C‑49/07, which also found the gatekeeping practices of a governing body in sport (in casu motorcycling) to fall foul of EU competition law. And it added that for the same reason the rules also come within the scope of the Treaty provisions on freedom of movement (ESL para 90).

The Court tells us that EU law is violated where that power of prior approval is not governed by transparent, clear and precise substantive criteria, which make it possible to prevent it from being used arbitrarily. Those criteria must be appropriate to ensure the non-discriminatory exercise of such a power and to enable effective review. Moreover there shall be transparent and non-discriminatory procedural rules. The rulings, most of all ESL, are larded with insistence on these features as a condition of legality (ESL paras 88, 134-136, 147-8, 151-152, 175, 177, 178, 179, 203, 254, 255; Royal Antwerp para 57; ISU paras 127, 133). It applies across the board in internal market law too – the same principles are applicable to review pursuant to Article 102, Article 101 and Article 56 (on abuses of a dominant position, cartels, and free movement of services) too, so competition and free movement law are aligned on this point.

This is general EU internal market law. As the Court takes care to point out, this is consistent with existing internal market case law in a wide range of economic sectors. Case law cited ranges across several areas of activity. ESL para 133, and ISU para 125 cite GB-Inno-BM, C‑18/88, which concerns telecommunications and Raso and Others, C‑163/96, which concerns the management of ports, alongside MOTOE from the world of sport.

We can understand this as EU law requiring good governance standards (transparency, non-discrimination etc) as a pre-condition to finding regulatory practices to be lawful. This is not specific to sport, but rather to any situation in which a body exercises a power of, in short, gatekeeping.

The Court is anxious to protect equality of opportunity as between undertakings, and to entrust an undertaking which exercises a given economic activity the power to determine which other undertakings are also authorised to engage in that activity and to determine the conditions in which that activity may be exercised, gives rise to a conflict of interests and puts that undertaking at an obvious advantage over its competitors, by enabling it to deny them entry to the market concerned or to favour its own activity.

The Court goes out of its way to note that it does not matter how this is created, whether by public law delegation or private market power (ESL paras 133, 137; ISU paras 125, 126). MOTOE, the motorcycling case, arose out of state regulation, but the principle that such a gatekeeper needs to be controlled is – it is now made clear by the Court - not limited to that, it applies to a gatekeeping power however created and in whichever economic sector, and in fact it is particularly important where the power is not derived from a grant made by a public authority (ESL para 137). But, even if the principle is of general application to any kind of ‘gatekeeper’, it might be of particular relevance to sport given the notoriously poor governance standards that plague some parts of it. And it is of particular relevance to the practices under scrutiny in the judgments, because at the time the process followed by UEFA and the ISU as gatekeepers was clearly deficient.

The absence of a framework providing for substantive criteria and detailed procedural rules suitable for ensuring that they are transparent, objective, non-discriminatory was fatal to the rules when they were put to the tests demanded by Articles 102, 101 and 56 TFEU. This is why the governing body practices were found to be unlawful on 21 December 2023 – just as fifteen years previously MOTOE had condemned the practices of a governing body in sport as contrary to EU competition law for want of restrictions, obligations and review within the prior approval process.

So governing bodies in sport and UEFA in particular must change. They must improve. Let us assume they do. Let us assume that a governing body has such a ‘gatekeeping’ power governed by transparent, clear and precise substantive criteria, which make it possible to prevent it from being used arbitrarily. They are appropriate to ensure the non-discriminatory exercise of the power and to enable effective review. There are transparent and non-discriminatory procedural rules.

Is that enough? What more does EU law have to say? Most of all, within the framework applicable to authorisation decisions, what criteria are legitimately applied to exclude third party organisers, and which are not? This is vital to understand just how far the Court on 21 December 2023 has shrunk UEFA’s powers as a gatekeeper.

The Court takes us a bit further. But the whole story is yet to be told.

Three questions serve to structure the analysis: First could UEFA refuse to authorise a closed League (and could it penalise participants)? Second could UEFA refuse to authorise a second Champions League (and penalise participants) – i.e. in a format identical to its own, except owned by third parties? Third could UEFA refuse to authorise a new competition (and penalise participants) where the format is not identical to its own, but similar (and not closed), except owned by third parties?

 

(i) First question

Could UEFA refuse to authorise a closed League (and could it penalise participants)? Obviously it could not when it had the inadequate framework which is the background to the rulings of 21 December, but if it has cleaned up its process and now follows a scheme that meets the Court’s requirements of transparency, objectivity etc, could it refuse to authorise a closed League (and could it penalise participants)?

I think, yes, UEFA could refuse to authorise a closed League.

ESL para 143 concerns Article 102. It tells us participation in and conduct of competitions is based on sporting merit, which can only be guaranteed if all the teams involved compete under homogeneous regulatory and technical conditions, ensuring a certain equality of opportunity. Para 144 tells us it is legitimate to make the organisation and conduct of international professional football competitions subject to common rules, and, more broadly, to promote competitions based on equal opportunities and merit. Compliance can legitimately be ensured by a scheme of prior authorisation and by accompanying sanctions in the case of violation of the rules. The same phrase appears at ISU para 132: the holding of sporting competitions based on equality of opportunity and merit.

ESL para 175 addresses Article 101. It begins by stating that ‘it follows from paragraphs 142 to 149’ – i.e. the Court explicitly wants to align Article 101 to Article 102 on this point - that the specific nature of international football competitions and the real conditions of the structure and functioning of the market for the organisation and marketing of those competitions on European Union territory lend credence to the idea that it is legitimate to have rules on prior approval – though they need to be objective, transparent etc. Para 176 states that rules on prior authorisation may be motivated by the pursuit of certain legitimate objectives, such as that of ensuring respect for the principles, values and rules of the game which underpin professional football.

Para 253 contains the same approach to Article 56 TFEU on the free movement of services.

So – provided always that the process meets the requirements of objectivity, transparency etc – the Court appears to accept that a prior authorisation system may be used to refuse a competition which is not based on sporting merit. So, most obviously, a ‘no’ to closed leagues (and penalties on participants) appears to be a legitimate exercise of the gatekeeping function.

The legal basis for this legitimate exclusion of closed Leagues is not made entirely clear by the Court. An important part of the package unwrapped on 21 December is to shrink the role played in the legal analysis by Wouters and Others, C‑309/99 and Meca-Medina and Majcen v Commission, C‑519/04 P. Conduct which ‘by its very nature infringes Article 102 TFEU’ cannot benefit from the Wouters/ Meca formula (ESL, para 185). Nor does it apply in situations involving conduct which, far from merely having the inherent effect of restricting competition, ‘reveals a degree of harm in relation to that competition that justifies a finding that it has as its very “object” the prevention, restriction or distortion of competition’ (ESL, para 186, Royal Antwerp, para 115). So only if conduct does not have as its object the prevention, restriction or distortion of competition and does not by its very nature infringe Article 102 does the Meca-Medina route open up, allowing a governing body in sport to show its practices to be necessary to achieve legitimate objectives and thereby to place its practices beyond the scope of the Treaty rules on competition.

All this comes later in the ruling in ESL than the acceptance that participation in and conduct of competitions shall be based on sporting merit and equal opportunities and merit and that rules on prior authorisation may be motivated by the pursuit of legitimate objectives including respect for the principles, values and rules of the game which underpin professional football - ESL paras 143, 144 re Article 102, para 176 re Article 101 and see also para 132 of ISU. Probably, then, the correct understanding is that action taken to defend sporting merit is not a restriction of competition by object at all within the (new) understanding of the scope of Article 101(1), and so benefits from application of the Meca-Medina formula.

The object of requiring that new competitions be open and based on sporting merit is not to restrict competition but rather ‘the pursuit of legitimate objectives, such as ensuring observance of the principles, values and rules of the game underpinning professional football’ (ESL para 176) - just as in Meca-Medina itself the Court found an inherent effect of restricting potential competition between athletes as a result of anti-doping but placed the matter outwith Article 101(1) because the rules had the objective to ‘to safeguard the fairness, integrity and objectivity of the conduct of competitive sport, ensure equal opportunities for athletes, protect their health and uphold the ethical values at the heart of sport, including merit’ (as explained, citing Meca-Medina and Majcen v Commission, C‑519/04 P, EU:C:2006:492, in ESL para 184, Royal Antwerp para 114, ISU para 112).

So, in sum: it is potentially lawful to act to suppress a competition not based on access via sporting merit, subject to showing transparent, objective, non-discriminatory (etc) criteria. This is clearly important, and it puts a shape on the legitimate objectives which UEFA may pursue in crafting pre-authorisation criteria. The Court in ESL is not opening the door to a free-for-all – certain types of sporting competition are, it seems, legitimately suppressed by UEFA as gatekeeper. In this sense the judgments put a shape on the European Sports Model. It may as a matter of law be defended: UEFA may legitimately act against ‘closed’ competitions and insist instead that only competitions which are merit-based may be approved. In December 2022 Advocate General Rantos wrote a wildly adventurous Opinion in ESL which claimed that Article 165 ‘constitutionalised’ the European Sports Model and that accordingly EU law granted a high level of protection to the sporting status quo. One year later the Court’s rulings of 21 December 2023 ignore Mr Rantos’s Opinion and prefer a much more restrained reading of the extent to which EU law respects the specificity of sport. But on this particular point – the distaste for competitions which are not based on sporting merit – the Court echoes Mr Rantos in its willingness to interpret EU internal market law in a way that gives constitutionalised (i.e. recognised in primary law) protection to open competitions.

This seems very helpful to UEFA. It is entitled to act as a gatekeeper charged with the responsibility to defend a model based on sporting merit. It means too that UEFA’s own competitions need to have access based on sporting merit.

 

(ii) Second question

Could UEFA refuse to authorise a second Champions League (and penalise participants) – i.e. in a format identical to its own, except owned by third parties?

I think, no.

This follows from ESL para 151 (concerning Article 102), on non-discrimination. This notes that UEFA itself is economically active in the market in which it has the power of pre-authorisation. So the criteria applicable must not favour UEFA over third parties. If UEFA is able to stage a competition, then it cannot prevent a third party from staging a similar competition.

It means too that UEFA may not place restrictions on third party organisers which have the effect of favouring its own competitions over others. It could not for example authorise clubs to participate in a new competition while also requiring them to participate in the UEFA Champions League.

UEFA’s rules on prior approval were overhauled after ESL was referred to the Court but before the rulings of 21 December 2023. So the rules and procedures governing prior approval condemned by the Court are not the rules and procedures which UEFA employs today. Its June 2022 renovated Regulations  may be found here: https://documents.uefa.com/v/u/_rmtminDpysQUj1VGB01HA.

However the rules, amended to clarify process and applicable criteria, seem to me to violate the non-discrimination rule on which the Court insists. They provide that third party organisers ‘shall provide confirmation that the clubs concerned can always comply with their obligation to field their strongest team throughout UEFA club competitions and national club competitions and any other International Club Competition authorised by UEFA’; also that ‘in order to protect the sporting merit of UEFA Champion Club Competitions’ and so that it ‘shall not adversely affect the good functioning of UEFA Champion Club Competitions’ particular conditions shall be met.

That seems to me to be unlawful. It seeks to protect the pre-eminence of UEFA’s competitions in the market.

The ruling in ESL seems to open up scope for competing football competitions. I have often wondered if UEFA could claim a need to have one and only one European competition for elite clubs, to produce the true champion – so football isn’t like boxing. There is no hint in the rulings of 21 December that this would be a legitimate exercise of UEFA’s gatekeeping role. Instead the Court seems to open the door to multiple competing versions of the Champions League. Whether that is economically sustainable is far from clear: I do not explore that here, I confine myself to exploring what shape EU law places on available opportunities.

 

(iii) Third question

Could UEFA refuse to authorise a new competition (and penalise participants) where the format is not identical to its own, but similar (and not closed), except owned by third parties?

I think, no, unless UEFA can demonstrate its own competitions are superior according to the (predominantly economic criteria) recognised by EU law.

The question here is whether the ruling in ESL restricts UEFA still further than merely a non-discrimination standard. If it does – it is dynamite!

I think it does, although there is room for argument about precisely what the Court’s rulings entail.

ESL para 176 ESL (addressing Article 101 TFEU) seems stronger still than a non-discrimination standard. It notes that the pre-authorisation rules limit the design and marketing of alternative or new competitions, even though they might offer an innovative format attractive to consumers. They ‘completely deprive spectators and television viewers of the opportunity to attend those competitions or to watch the broadcast thereof’ (see also ISU para 146). That suggests an even tighter control over UEFA than a mere non-discrimination standard. What is needed, it seems, is a calculation of the attractiveness of the competitions on offer (by national courts; maybe also by the Commission enforcing the Treaty competition rules). UEFA cannot simply say: this is our model, and we tolerate no other. This is explosive. It is here that the Court’s ruling could be revolutionary or, at least, that it opens the door as a matter of law to those who would wish to revolutionise football in Europe. The ruling’s treatment of media rights seems the same. UEFA cannot simply say this is the existing design and it cannot be changed. Its quality needs to be assessed (in a serious manner).

This is where/ why we appreciate the significance of the Court’s refusal to allow Meca-Medina to apply to practices which it considers by their very nature to infringe Article 102 TFEU (ESL para 185) or to conduct which does not merely having the inherent ‘effect’ of restricting competition but rather reveals a degree of harm in relation to that competition that justifies a finding that it has as its very ‘object’ the prevention, restriction or distortion of competition (ESL para 186, Royal Antwerp para 115, ISU para 113). The Meca-Medina test, which invites a relatively open-ended assessment of the necessity of practices to meet legitimate objectives in sport, is replaced by a narrower test. The pre-authorisation scheme used by UEFA to deal with new competitions (which are open and based on sporting merit) can survive only if it complies with Article 101(3) and 102.

Exemption pursuant to Article 101(3) is possible, but the Court in ESL chooses to spell out with some detailed care what is at stake under a clear concern to instruct a national court to make a careful assessment of the prevailing circumstances, and not to make easy assumptions about UEFA’s compliance with Article 101(3). (I take this to be part of the motivation for its choice to shrink the scope of the much looser Meca-Medina test). Efficiency gains must correspond not to any advantage enjoyed by UEFA but only to ‘the appreciable objective advantages’ that practice makes it possible to attain in the market(s) concerned (ESL para 152, Royal Antwerp para 121); those efficiency gains must have a positive impact on all users, be they traders, intermediate consumers or end consumers, which in football means inter alia, national football associations, professional or amateur clubs, professional or amateur players, young players and, more broadly, consumers, be they spectators or television viewers; the conduct at issue must be indispensable or necessary; and must not provide the opportunity to eliminate all actual competition for a substantial part of the products or services concerned (the large market share held by UEFA is here clearly relevant and causes the Court particular anxiety, ESL paras 199, 207).

The Court moves to Article 102, and expressly aligns its interpretation with that advanced under Article 101(3) (ESL, paras 201, 205). An undertaking holding a dominant position may escape a condemnation of abuse by showing that its conduct is objectively necessary, or that the exclusionary effect produced may be counterbalanced or even outweighed by advantages in terms of efficiency which also benefit the consumer: this is orthodox in the Court’s case law. In the circumstances under review, were UEFA to amend its rules to comply with the requirements of transparency, precision, non-discrimination proportionality etc, there would be room to show them objectively justified ‘by technical or commercial necessities’ (ESL para 203) or apt to allow efficiency gains which counteract the likely harmful effects on competition and consumer welfare on the market(s) concerned.

The Court’s hard-hitting point is this: for Article 101(3) as for Article 102, justification requires the demonstration of ‘convincing arguments and evidence’ (ESL para 205, Royal Antwerp para 120), involving ‘establishing the actual existence and extent of those [efficiency] gains’ (ESL para 204, Royal Antwerp para 121). That is an inquiry for the national court. It clearly must be a serious inquiry.  

The ruling in Royal Antwerp is similarly motivated by an insistence on the need for ‘specific arguments and evidence’ about the reality and extent of incentives and efficiency gains (para 129), as well as the attitude of spectators and television viewers (para 130), albeit in the different context of the claim that rules on home-grown players encourage training. So too under free movement, the national court must consider the factors ‘thoroughly and comprehensively … taking into consideration the arguments and evidence submitted’ (para 149).

Very similar concerns animate the Court’s treatment of UEFA’s ownership and marketing of media rights (ESL paras 210-241). It does not exclude that practice may be justified despite the apparent anti-competitive effect consequent on the centralised control claimed by UEFA at the expense of clubs acting as sellers of rights unilaterally, bilaterally or multilaterally, but it does insist on a hard evidence-based look at the possibility of exemption under Article 101(3) and at the basis of claimed efficiency gains under Article 102. This is to be done by the national court (maybe also by the Commission enforcing the Treaty competition rules).

Doubtless the Commission’s 2003 decision on joint selling of rights to the Champions League will need close attention (2003/778/EC, AT.37398). That Decision is particularly interesting for not looking at the argument that promoting solidarity in sport through income redistribution might justify the anti-competitive consequences of centralised selling. In 2003 the Commission saw no need to consider solidarity because it concluded that the economic benefits of the joint selling met the criteria stipulated by Article 101(3) and it needed to look no further. ESL finds the Court willing to consider  improvements in production and distribution resulting from the centralised sale and the ‘solidarity redistribution’ of the profit generated as of benefit to supporters, consumers, that is to say, television viewers, and, more broadly, all EU citizens involved in amateur football. It also mentions maintaining a balance and preserving a certain equality of opportunity as between the participating professional football clubs, given the interdependence that binds them together. Moreover it notes (better maybe: it claims) there is a trickle-down effect from those competitions into smaller professional football clubs and amateur football clubs which, whilst not participating therein, invest at local level in the recruitment and training of young, talented players, some of whom will turn professional and aspire to join a participating club. And ‘the solidarity role of football, as long as it is genuine, serves to bolster its educational and social function within the European Union’ (ESL paras 234-235). But the benefit ‘for each category of user – including not only professional and amateur clubs and other stakeholders in football, but also spectators and television viewers – must be proven to be real and concrete’ (ESL para 236).

It seems, then, that UEFA cannot exclude new forms of competition unless it shows that Articles 101(3) and 102 are satisfied. That, I think, requires a much more sophisticated set of criteria than UEFA currently has, even in the newly (2022) renovated form. Most of all, ESL is simply the beginning in trying to understand how far UEFA, as gatekeeper, may go in excluding new competitions which are different from existing forms of competition but which are open and based on sporting merit. There is now – after ESL – in principle more room to compete in the market for football competitions in Europe.

 

Conclusion

The Court has opened the door to those who would wish to revolutionise football in Europe. This does not mean there will be a SuperLeague or anything like it. There is no guarantee who will win the power struggles to come. A lot will depend on the attitudes of the elite clubs and of the fans, on sources of funding (certainly not limited to Europe), as well as on the skill deployed and the strategies pursued by UEFA and by those who would wish to dislodge UEFA from its current position of power. The top-down ‘pyramid’ structure of governance in sport is robust and typically defended with vigour from those near or at its top. Tension between UEFA and the elite clubs is nothing new. Moreover history tells us that competing Leagues in football tend not to survive. This, however, is not true in all sports and perhaps it will not be true in football in future. There is a lot of politics here, a lot of commercial incentives, a lot of cultural and social dimensions. But as of 21 December 2023 as a matter of law UEFA’s power as a ‘gatekeeper’ able to dictate the pattern of football competitions in Europe seems significantly weakened.

 

 

‘Can a man serve two masters’? The Court of Justice decides whether monks can be banned from being lawyers

Rebecca Zahn, Senior Lecturer in Law, University of Strathclyde

Lawyers occupy a unique position in the European Union. Within their Member States, they play a vital role in providing access to and administering justice, and upholding the rule of law. As with other professionals such as doctors or architects, access to the profession is tightly regulated by national bodies. Yet unlike other professionals, lawyers are inherently immobile. The knowledge required to be a lawyer is closely linked to the jurisdiction within which an individual trains and qualifies. An understanding of the national language as well as of a particular legal system’s customs and practices is vital for the exercise of the profession. This makes the facilitation of free movement of lawyers difficult. Lawyers can make use of the general system of Directive 2005/36/EC, which leads to full integration in the profession of the receiving Member State following the successful completion of an aptitude test. The European Commission’s Regulated Professions Database suggests that 7,506 lawyers have availed themselves of this route to gain admission to the profession in a host State.

Yet in recognition of their special status, lawyers are the only professionals who benefit from an additional regime designed to facilitate temporary and permanent free movement.  Directive 77/249/EEC permits lawyers registered in one Member State to provide temporary cross-border services in another Member State without any prior notification. There are no statistics available on the use of this right but a 2012 study for the European Commission evaluating the Legal Framework for the Free Movement of Lawyers suggested that there was a large market for the temporary cross-border provision of services albeit with limited physical movement; often such services are provided at a distance, for example by e-mail or telephone.

Finally, Directive 98/5/EC allows lawyers to register to practice law on a permanent basis in a host Member State. Article 3 of that Directive mandates that lawyers wishing to practice in a host Member State register with the competent authority by presenting their registration certificate. The competent authority shall register the lawyer initially under their home-country professional title which allows the lawyer to give advice on his home law, EU law, international law or the law of the host Member State (Article 5(1)). Under Article 6, the host Member State’s professional rules of conduct will apply to the lawyer’s exercise of activity in that State. Following three years of practice in the law of the host Member State, the lawyer can apply to be admitted to the profession of lawyer in the host Member State (Article 10).

The Directive thus harmonises access to the profession under Article 3 while granting Member States discretion when it comes to integrating individuals through its own rules of professional conduct. However, this hybrid nature of the Directive can lead to difficulties as was made clear in a judgment handed down by the Grand Chamber of the Court of Justice of the European Union on 7 May 2019 in Case C-431/17 Monachos Eirinaios v Dikigorikos Syllogos Athinon.

The case concerned a Greek monk, Monachos Eirinaios, who lives in a monastery in Greece. He is also a qualified lawyer and a member of the Cyprus Bar Association. In June 2015, he relied on Article 3 of Directive 98/5 to register with the Athens Bar Association as a lawyer who has acquired his professional title in another Member State. The application was refused on the basis of the national rules on incompatibilities contained in Article 8(1) of the Presidential Decree 152/2000 and Article 6 of the Lawyers’ Code which prohibit a clergyman or monk from being a lawyer in Greece. The Athens Bar Association argued that monks were barred from becoming lawyers due to the absence of guarantees regarding their independence, doubts as to their ability to occupy themselves fully with their functions and whether they can handle contentious cases, the requirement for actual establishment in the geographical area of practice and the obligation not to provide services without remuneration. Monachos Eirinaios appealed the decision and the Council of State referred a question to the Court of Justice asking whether Article 3 of Directive 98/5 required the Athens Bar Association to register Monachos Eirinaios even though he would not be allowed to practice once registered.

In a short judgment, the Court reiterated that Article 3 of Directive 98/5 harmonises the rules under which a lawyer can establish himself in a host Member State. Provided that the lawyer is fully qualified and has the requisite certificate from the home Member State, the host Member State authorities must register him regardless of whether he is subsequently able to practice. National authorities are not permitted to impose additional conditions for registration other than those contained in article 3. This follows from the decision in Case C-58/13 Torresi (discussed here) where the Court established the mutual recognition of the professional titles of lawyers. The Court recognised the absurdity of the situation in Monachos Eirinaios where it was requiring the competent authorities to issue a registration certificate with the knowledge that the individual would not be able to practice.

However, the Court drew a clear distinction between access to the profession on the one hand and its practice on the other hand. The Court accepted that in relation to the latter national authorities may wish to impose certain requirements in order to maintain professional standards. The Court did not comment on the nature of the complete ban on monks becoming lawyers (saying only that it could not be a prerequisite for registration) but instead required the national court to determine whether the ban complied with the principle of proportionality (without giving specific guidance on the criteria to be applied).

The decision in Monachos Eirinaios follows on from the Court’s previous jurisprudence on Directive 98/5 which has focussed on facilitating the free movement of lawyers. In doing so, it is to be welcomed. Given the sensitive nature of the topic both in terms of access to a highly regulated profession and, in the specific Greek context, of the evolving relationship between church and state, the decision also strikes a subtle balance between facilitating access while maintaining Member State discretion. It is therefore perhaps not surprising that the case was heard by the Grand Chamber. However, by circumventing any discussion of the complete ban on monks and clergymen becoming lawyers, the Court has indeed created an absurd situation; namely, that the Athens Bar Association is required to register Monachos Eirinaios and can then immediately strike him off. More detailed guidance on the proportionality test to be applied in these circumstances could have been beneficial especially as the Advocate General engaged in a more nuanced discussion of the topic.

The Advocate General suggested that the rule bans all individuals with particular characteristics from practicing law and thus should not fall under professional conduct. This is a well-spotted flaw in the rules. The Advocate General suggests instead that the Bar Association should be required to see how a lawyer conducts himself in practice before removing registration (following the reasoning in Case C-225/09 Jakubowska where it was recognised that failure to comply with host State rules may lead to a foreign lawyer being removed from the register).

In this, she is correct. In effect, the Bar Association is making an assumption that monks are incapable of fulfilling the rules of professional conduct required of lawyers because they are monks. There is no need for any assessment as to whether the monk (or clergyman) is practicing his religion. Indeed, there is also no clear definition of the scope of the definition of monk or clergyman for the purposes of the Directive (what if, for example, someone is a lay preacher in another Member State – does this classify as a clergyman in this instance?). If Directive 98/5 is to facilitate free movement of lawyers then there must be a minimum harmonisation of what we understand ‘rules of professional conduct’ to be under Article 6. Blanket bans which relate to characteristics (and do not allow conduct to occur) do not facilitate free movement and render the right to registration in effect nugatory.

Moreover, the procedural guarantees in the case of disciplinary procedures in Article 7 or the right of recourse to a court in Article 9 of the Directive only apply once an individual has practiced as a lawyer which is rendered impossible in this case. If we abstract this case from its specific facts then accepting such a blanket ban in relation to a characteristic is a potentially problematic assumption which could undermine the rule of law. What if a Member State introduces rules which require political party affiliation in order to practice as a lawyer under the guise of professional rules of conduct? In a different factual context, the lack of minimum harmonisation of what we understand rules of conduct to encompass could undermine lawyers’ ability to provide access to and administer justice. In skirting around this topic, the Court of Justice has missed an opportunity to further clarify the scope of Directive 98/5/EC.

Barnard & Peers: chapter 14

Photo credit: InHouse Legal

Recognition of Professional Qualifications post-Brexit

Dáire McCormack-George*

*The author is a Ph.D. Candidate in Law and Scholar of Trinity College Dublin, the University of Dublin. This blog post is based on his presentation at the third Radboud University Economic Law Conference, ‘Upgrading Trade and Services in EU and International Economic Law’, 15 June 2018. The author would like to thank the conference participants and attendees for their intriguing and thought-provoking questions. All errors remain the author’s.

Introduction

The present terms of the draft withdrawal agreement between the UK and the EU substantially envisage the provisional application of Directive 2005/36/EC (‘the Recognition Directive’) until the end of the transition period. They also guarantee the continued recognition of qualifications recognised before that date. But what might any post-Brexit agreement on the recognition of professional qualifications between the UK and the EU look like in the light of the EU’s current agreements with its regional and international partners? This post briefly canvases the options and suggests that a CETA or ‘CETA plus’ approach would be a good starting point for any future agreement.

Four Models of Qualification Recognition

The ideal approach in international economic law and EU external relations law is for contracting states to agree to the mutual recognition of professional qualifications obtained in either state. This approach, like the equivalent Single Market system incorporated in the Recognition Directive, provides for automatic and/or certain lesser forms of recognition, thus facilitating, to differing degrees, the free movement of persons and services. In the context of the EU’s international agreements, the EEA Agreement and EC-Swiss Agreement provide the best examples of such an approach insofar as those agreements substantially incorporate and apply the entirety of the EU qualification recognition acquis to nationals of those respective states. Such a position, of course, reflects the highest degree of mutual economic integration possible.

A second approach is evident in CETA. According to the terms thereof, the EU and Canada are obliged to ‘encourage’ professional organisations and representative bodies in their jurisdiction to draw up ‘Mutual Recognition Agreements’ or ‘MRAs’. CETA provides a rough template of what such MRAs should address, such as, amongst other things, the verification of equivalency; evaluation of substantial differences; compensatory measures; and the identification of the conditions for recognition. While the MRA template is non-binding, it nonetheless provides a helpful starting point for professional organisations in their negotiations. CETA therefore leaves it to the responsible authorities of each state to encourage professional organisations to draw up a MRA and, consequently, the domestic, regional and international market for mobility in each such profession. At present, no MRAs have been adopted, although the Architects’ Council of Europe has expressed a desire to develop a MRA with its equivalent Canadian body in the coming years.

The third approach is very similar to CETA, but one step down—‘CETA minus’. This approach requires the contracting parties to encourage professional organisations in the respective states to develop MRAs but, unlike CETA, no such MRA template is set out in the terms of any such agreement. Terms of this kind are found in some of the EU’s stabilisation and association agreements (eg, Bosnia and Herzegovina Stabilisation and Association Agreement, EC-Kosovo Stabilisation and Association Agreement, EC-Montenegro Stabilisation and Association Agreement, EU-Ukraine Association Agreement), as well as its international trade and economic partnership agreements (eg, EU-Andean Trade Agreement, Economic Partnership Agreement with CARIFORUM states, EU-Korea Free Trade Agreement, EC-Singapore Agreement, EC-South Africa Trade, Development and Cooperation Agreement). The fact that no MRA template is included in these agreements is indicative of the fact that such MRAs are unlikely to be negotiated whereas, under CETA, such agreements are readily envisaged and, in some cases, negotiation is already under way.

The final approach is the least obvious but most interesting. This approach is found not in any term concerning the mutual recognition of professional qualifications but in equal treatment guarantees in respect of workers or service providers. Given the need to treat third-country workers or service providers equally in accordance with such terms, EU member states are, in principle, thereby obliged to recognise the qualifications of third-country nationals in the same manner in which those qualifications of its own nationals or nationals of another EU member state are recognised. Whether the recognition of professional qualifications falls under such equal treatment guarantees has yet to be addressed specifically by the Court, but in principle same could fall within the scope thereof. Equal treatment clauses of this kind are found in the EC-Turkey Agreement, the Cotonou Agreement, EU-Ukraine Association Agreement, EC-Russia Partnership and Cooperation Agreement, as well as in several other stabilisation, association and partnership agreements with countries in the Neighbourhood and Mediterranean. This approach is, however, the least stable for two reasons. First, the scope of application of equal treatment clauses in such agreements is generally unclear. Second, and relatedly, the distinction between workers and service providers tend to affect their scope.

Two cases of recent vintage before the CJEU illustrate this point most clearly. In Case C-265/03 Simutenkov, a Russian professional football player was required to hold a ‘non-Community’ licence to play football, a requirement which the Court of Justice concluded constituted unlawful discrimination under the terms of the EC-Russia Partnership and Cooperation Agreement. By contrast, in Case C-101/10 Petkov the Court held that equal treatment in working conditions does not include access to a profession itself. Specifically, the Court held that as the equal treatment clause at issue was contained in the workers title of the EC-Bulgaria Agreement but not in the title on service provision, the scope of the equal treatment clause therein did not apply to certain regulated professions. Problematic here is the unclear distinction between workers and service providers, a distinction which is, increasingly, being challenged by researchers in the area of service and labour migration. And further, the approach which the CJEU takes depends very much on the specific wording and location of the equal treatment guarantee in the relevant agreement. The context, thus, is vital.

Post-Brexit Realities

To recap, there are essentially four approaches to qualification recognition presently evident in the EU’s external relations: full, automatic recognition; no recognition by default but recognition likely in future; no recognition by default and recognition in future unlikely; and uncertain recognition. Of these, CETA or a ‘CETA plus’ approach seems to me to be most appropriate for any post-Brexit agreement. Why so? My reasons (three) are as follows. First, CETA suggests that the contracting parties are ready and willing to recognise qualifications in the near future. It does not require total or partial qualification recognition across all sectors but is rather driven by market demand. At present, it is of course difficult to assess precisely what the labour and service market demands will look like in the EU and UK post-Brexit. But it is certainly plausible that at least some professions will want and need to mutually recognise qualifications so as to (i) maintain the highest of professional standards and (ii) satisfy domestic labour and service market demand. As such, the provision of a template for MRAs in CETA is most helpful and would be a good starting point for any post-Brexit agreement.

Second, insofar as international agreements reflect certain socio-economic and cultural preferences of the parties, CETA would be a good model for any post-Brexit EU-UK agreement because the UK and Canada are relatively similar in those dimensions. For example, services, professional and otherwise, increasingly constitute both Canada and the UK’s export markets and their domestic labour markets. We therefore see similar domestic demand in both countries for low-skilled and high-skilled labour manifested in these countries’ well-documented labour migration regimes. This is surely linked to the broadly liberal economic policies that both the UK and Canada have adopted over the course of their recent (and distant) histories. And in social and cultural terms, the UK and Canada share a linked culture and history given the imperial relationship of dominium between the former and the latter.

A third and final reason is pragmatic. Given that CETA has already been negotiated, and given the length of time it took to negotiate that agreement, it would be quite sensible and convenient for the UK and the EU to rely on their existing work. It is for these reasons, therefore, that the CETA model is, out of those approaches previously negotiated between the EU and its international partners, a most appropriate model for any post-Brexit deal, insofar as it relates to the mutual recognition of professional qualifications.

Barnard & Peers: chapter 27, chapter 14

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Regulators without Frontiers? European Regulators Group for Audiovisual Media Services (ERGA) and the Audiovisual and Media Services Directive 2.0

Professor Lorna Woods, University of Essex

The European Commission established ERGA, by a Decision in 2014, to facilitate the implementation of the Audiovisual Media Services Directive (AVMSD, or Directive 2010/13/EU) and thus further the internal market.  This seems to have been a development of the High Level Group of Regulatory Authorities, which was organised by the Commission (its inaugural meeting was 27 March 2003) and brought together the Member State authorities responsible for the enforcement in this field for twice yearly meetings. The aim was to reinforce cooperation between national regulatory authorities with the aim of ensuring the consistent application of the AVMSD.  It may be seen as forming part of a trend at EU level to create networks – even those involving Member State actors – to support or even intensify harmonisation. As such they may be part of a shift away from decentralised enforcement to a more centralised approach.  Such a development is by no means certain, but it suggests that discussions about the role and powers of any such body has a more than technical significance.

The Decision establishing ERGA described its tasks as:

(a) to advise and assist the Commission, in its work to ensure a consistent implementation in all Member States of the regulatory framework for audiovisual media services;

(b) to assist and advise the Commission, as to any matter related to audiovisual media services within the Commission's competence. If justified in order to advise the Commission on certain issues, the group may consult market participants, consumers and end-users in order to collect the necessary information;

(c) to provide for an exchange of experience and good practice as to the application of regulatory framework for audiovisual media services;

(d) to cooperate and provide its members with the information necessary for the application of the Directive 2010/13/EU, as provided for in Article 30 of Directive 2010/13/EU, in particular as regards Articles 2, 3 and 4 thereof (the basic rules on cross-border broadcasting).

ERGA’s establishment was thus not foreseen by the 2007 version of the AVMSD, and ERGA operated in addition to the Contact Committee that had been created by Article 29 of the directive.  Implicitly, this suggests that the Contact Committee was not sufficient in the Commission’s view for consistent and effective implementation of the AVMSD across the Member States. A European Parliament resolution from 2004 already ‘[r]egret[ed] that the Contact Committee established under the television without frontiers is mostly composed of representatives of the national government ministries and not by members of independent media regulatory authorities’. 

In the eyes of some, the Contact Committee did not – as a matter of form – allow for the cooperation of the national regulatory authorities, as those regulators did not necessarily participate in the Contact Committee. That situation could adversely affect consistency in pan-EU application of the AVMSD and give rise to concerns about enforcement, especially in the cross-border context and the risks of an unequal playing field (as between the approaches of the various Member States). The introduction of another forum for experts to share experience also raises questions about the difference between ERGA and the Contact Committee (if any) and their respective roles – especially given that there is already a platform for media regulators (EPRA), albeit one that lies outside the EU framework. 

Is the significance of the proposal an attempt to delineate between effective enforcement (which would fall to ERGA) and the development of policy (which is the responsibility of the more political body, the Contact Committee)? This point has indeed been made by the Chair of ERGA. Or is ERGA just ‘more European’ than the Contact Committee by virtue of its members’ independence from national political objectives, for example?  That ERGA is about more than effective enforcement finds some support in the report of EPRA which describes ERGA as holding ‘strategic EU policy-oriented discussions’ and ‘intend[ing] to adopt common positions or declarations on the implementation of the audiovisual EU regulatory framework’.

Moving to the directive, Art. 30A of the revised AVMSD (re-)establishes ERGA, a seemingly uncontroversial point from the Commission’s proposal which was unchanged through the legislative process. The Commission envisaged that ERGA would be composed of national ‘independent regulatory authorities’ in the field of audiovisual media services, thus linking this to the new provisions on the independent regulatory authorities introduced in Article 30 (containing provisions to ensure independence).  By contrast, the Contact Committee is ‘composed or representatives of the competent authorities of the Member States’ and is chaired by a Commission representative.  Apart from an attempt by the European Parliament to install 4 MEPs on the Contact Committee (unsuccessfully), this structure remained unchanged.  So while the Contact Committee may have representatives from the relevant national regulatory authorities, it may not in respect of all Member States.

The difference in membership is significant: the Commission’s proposal sought to ensure that it was the independent regulators, rather than Government ministers or senior civil servants, which participated in ERGA. The Commission here would no longer be controlling the meetings (as chair) but be ‘down-graded’ to participant.  This too is important in terms of ensuring that ERGA itself is independent from the Commission, as well as from Member States and commercial interests.  The wording has been amended slightly through the legislative process to include the reference to national regulatory authorities and/or bodies in the field of audiovisual media services.  This change may be semantic to reflect the actual nature of the relevant institutions, but arguably weakens the link to the independent regulators required by Article 30.  Insofar as this independence requirement might be seen as a fact making these regulators more EU focussed rather than open to national policy initiatives (as has been seen in other sectors, e.g. telecommunications), the change might be an attempt to limit the supranational element of the proposal. This is in contrast to the Contact Committee, which could well have (national) political undercurrents, given that its membership might include politicians and civil servants as well as or instead of technical experts. 

The original Commission proposal more or less tracked the tasks ascribed to ERGA in its 2016 decision with the addition of the task of giving opinions, when so requested, ‘..on the issues envisaged in Articles 2(5b) [new provisions on allocation of jurisdiction], 6a(3) [co-regulatory systems and the development of Union codes of conduct], 9(2) [self/co-regulation in relation to food and drink that are high in salt, sugars or fat (HFSS)], 9(4) [sharing best practice/union codes of conduct in respect of HFSS foods and drink] and on any matter relating to audiovisual media services, in particular on the protection of minors and incitement to hatred’.  This may reflect the power of the Commission, under Article 3(1) of the Decision, to consult ERGA ‘on any matter relating to audiovisual media’ - wording that is reflected in the recitals to the AVMSD (recital 37). With the focus on new forms of governance, it could be said that the Commission envisaged ERGA as having a significant role that maybe went beyond the idea of enforcement alone, though the involvement in jurisdiction and anti-circumvention decisions is in itself important (though note that the database containing the details of which service provider is established where is the responsibility of the Commission rather than – as suggested by the Parliament in its AMD 52, the responsibility of the Commission and ERGA).

These provisions did not remain unchanged. The initial view of the European Parliament’s joint rapporteurs was that ERGA should remain a consultative body without decision-making power and that more competences should be given to the Contact Committee (with a revised constitution to include four MEPs). To this end, the Parliament proposed that the Contact Committee should be provided with relevant information as regards Article 3 [freedom of reception/derogation procedures], 4 [circumvention provisions] and 7 [accessibility provisions] – the first two points of which are now in the directive. 

The Council’s view of ERGA’s role here was also more limited than the Commission’s proposal, though it seems that there were some differences in views between the Member States. Council amendments limited ERGA to giving technical advice – though what ‘technical’ in this context means is rather uncertain – does it relate to matters relating to technology (surely not) or instead advice in the practical implementation of the rules? It seems that general policy advice may lie outside ERGA’s competence, reflecting in broad terms the division of roles between ERGA and the Contact Committee. The Council proposals also resulted in the deletion of ERGA’s role in the reference to self and co-regulation in Article 9.  The Council also pushed back against the Commission’s control of ERGA in that the Commission proposal envisaged that the Commission was to be empowered to adopt ERGA’s rules of procedure.  According the Council’s view, this falls to ERGA itself.  Under the 2016 Decision, ERGA had a limited ability to raise issues. Article 2(2) provided that:

The chairperson of the group may advise the Commission to consult the group on a specific question.

This task does not appear in the list of tasks enumerated in the AVMSD – it is, perhaps, a reflection of the fact that ERGA does not or should not have a policy role.

ERGA seems to be more limited than the Contact Committee. The tasks of the Contact Committee are quite open-ended. It is to ‘facilitate effective implementation’ of the AVMSD – all of it – but in addition its scope is extended to ‘any other matters on which exchanges of views are deemed essential’ (Article 29(2)(a) and recital 32a). There is overlap with the tasks of ERGA in that both are concerned in the exchange of best practice in relation to the derogation provisions in Article 3(5). The AVMSD identifies further specific areas where the Contact Committee is to be consulted. For example, it is the Contact Committee and not ERGA that is to be consulted on the development of Union codes of conduct (the development of which is stated to be ‘in accordance with the principles of subsidiarity and proportionality (Article 4a(2) 3rd para)).  In the context of the development of guidance on the calculation of market share (Article 13(5a)) and listed events (Article 14(2)), the Commission is empowered to consult the Contact Committee not ERGA. While ERGA may be requested to give an opinion, the Contact Committee may provide opinions on its own initiative. Further, in addition to responding to requests from the Commission, the Contact Committee may also respond to Member States’ requests. The Contact Committee’s role extends to ‘examin[ing] any development arising in the sector on which an exchange of views appears useful’ (Article 29(2)(f)).  This gives the Contact Committee an agenda setting function which can also be seen in the fact that the Contact Committee discusses what should be included in the reports that are submitted by the Member States to the Commission on implementation of the AVMSD (see guidance issued by Contact Committee).

In sum, ERGA is confirmed as part of the apparatus for consistent enforcement of the AVMSD.  While it may be the case that there is a distinction between the policy discussions and the coordination of enforcement, it seems that there have been different views within the institutions as to the role of ERGA and these might not go away on the coming into force of the revised AVMSD. While we wait to see how ERGA operates in practice and interacts with the Contact Committee it can be said that, on a sliding scale of pan-EU regulators ranging from EU agencies at the top to informal groupings at the bottom, the ERGA lies near the bottom with its narrowly drawn, technical advisory role.

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What “mutual recognition” really entails: analysis of the Prime Minister's Mansion House Brexit policy speech

Professor Stephen Weatherill, Somerville College, University of Oxford

Theresa May’s speech at Mansion House in London on 2 March 2018 has attracted a torrent of comment. It has been greeted as, on the one hand, shallow and unrealistic and, on the other, as the most thoughtful contribution to the debate offered so far by a member of this government. In truth both descriptions are accurate. I want here to focus on Mrs May’s aspiration to promote “mutual recognition” as a means to manage the future economic partnership she envisages between the EU and the UK.

In her portrayal of the treatment of goods after Brexit, Mrs May insists that “both the UK and the EU have a strong commercial interest in preserving integrated supply chains that have built up over forty years”, and she envisages “that trade at the UK-EU border should be as frictionless as possible”. Echoing David Davis’s speech in Vienna on 20 February she wants to “ensure that, as now, products only need to undergo one series of approvals, in one country, to show that they meet the required regulatory standards”. How to achieve these aims and visions? Mrs May declares that “we will need a comprehensive system of mutual recognition”.

Much of what passes for “negotiation” on the UK side since the despatch of the Article 50 letter of withdrawal in March 2017 has involved a desire to retain the benefits of EU membership while shrugging off the status and responsibilities of membership. But when Mrs May appeals for “a comprehensive system of mutual recognition” she is going still further. She is not asking for something that applies within the EU. She is asking for something that even EU Member States do not expect of each other. A “comprehensive system of mutual recognition” is not found within the EU. Mrs May is asking that the UK be treated better than a Member State of the EU.

Mutual recognition in primary EU law is most prominently found in the area of free movement of goods, persons and services, but it is not absolute mutual recognition. Instead it is conditional or non-absolute mutual recognition. That means that where something is good enough for the market of one Member State, it is to be treated as good enough for the market of all the other Member States – unless the target (or host) State can show a good reason why it should be entitled to rely on its stricter standards to exclude something that is acceptable elsewhere in the EU. The reservation unless is structurally crucial in the law of the EU’s internal market. A State is not inevitably obliged to open up its market to a product or service which does not conform with local laws. It may appeal to its tougher standards of health protection, its more assiduous concern for consumer protection or its particular fastidiousness in the area of environmental protection – and it will need to be judged, ultimately by a Court, whether the State has a strong enough justification of this type to place obstructions in the way of the impulse towards market integration. National rules, practices and standards that impede inter-state trade are in this way routinely put to the test.

Protectionism and reliance on anachronistic rules that have no place in an integrated European market will fail the test and such objectionable rules must then be disapplied. But there is room for sincerely and well-targeted measures to pass the test, and to remain in force as non-tariff barriers to trade which serve an interest that is shown to rank higher than trade liberalisation. This is plain from the Treaty on the Functioning of the European Union, which does not impose an unconditional rule of freed cross-border trade, and it is embedded too in the Court’s famous elaboration of the basic Treaty norms governing free movement, its Cassis de Dijon principle, which equally imposes only a conditional or non-absolute requirement of mutual recognition in the EU internal market.

So primary EU law imposes something less than the “comprehensive system of mutual recognition” to which Mrs May aspires. If she imagines that the EU will agree automatically to admit UK goods and services into its internal market simply because those goods and services comply with UK law, then she is imagining a model which is not even available within the EU. And it is utterly unrealistic to imagine it will be on offer to a third country.

Mutual recognition also deserves assessment at the level of EU secondary legislation – the vast number of measures, most of them Directives but some of them Regulations, which provide the legislative platform on which is built the EU’s internal market. The EU’s Treaty rules on free movement combine with the legislative acquis on harmonisation within the internal market and on the regulation of particular sectors to produce a dense and intricate network of rules which reflect the liberalisation of markets within the EU but also the regulation of those markets by the EU.

But there is no “comprehensive system of mutual recognition” here – at least not in the shallow description offered by Mrs May. The point of these rules is to establish EU rules, which are then implemented at national level. This generates a common system apt to release the advantages of an integrated trading space that transcends the limits of national political boundaries. On this model Member States regulate in order to achieve the same agreed common purposes – they do not show mutual recognition of each other’s different choices and techniques. Across the whole wide sweep of EU rule-making there is a common core of agreed EU standards, which all participants must meet. Moreover, the application of those rules is secured within tightly defined institutional and constitutional constraints. The EU is not simply a system of rules, it is a system too that involves the oversight of the Commission, the place of sector-specific agencies, the authority of the Court of Justice and the everyday involvement of national courts and administrative agencies. Rules – but also supervision, administrative co-operation, interpretation and enforcement too.

There is, of course, detailed sectoral variation, both in the particular intensity and shape of the rules adopted by the EU and in the scope permitted for State action even in areas where the EU has intervened. But the general picture is plain. Whether one is looking at the authorisation of medicines or the prohibition of unfair common commercial practices, the regulation of professional qualifications or the administration of the European Arrest Warrant, working time or environmental impact assessment, the model is visibly similar – there is a common foundation of EU rules on which all the Member States rely, and this is supported by a dense institutional network. This is not unconditional mutual recognition of difference. It is managed mutual recognition of carefully circumscribed difference.

It is remote from Mrs May’s “comprehensive system of mutual recognition”.

To be fair, awareness of this background is not wholly absent from Mrs May’s speech. She speaks of commitments that UK and EU regulatory standards would remain “substantially similar in the future”; she adds that the UK might “remain part of EU agencies such as those that are critical for the chemicals, medicines and aerospace industries”. This jars with the frustratingly glib slogan earlier in the speech according to which Mrs May claims that “the referendum … was a vote to take control of our borders, laws and money”, but it might be generously interpreted as an admission that taking back control will require a more sophisticated appreciation of the virtue of multilateral action than the remorselessly unilateral tone of much of the case for Brexit has been hitherto willing to concede. And indeed the speech was reported, perhaps with the impetus of a little behind-the-scenes spin, as mapping a route to a more realistic relationship with the EU than some go-it-alone Brexiters have urged – “May tells Eurospectics to face facts”, proclaimed the lead story on the front page of the Financial Times the day after the speech.

More realistic, perhaps – but the problem with the speech was that it was not realistic enough.

In part this is because of the persisting contagion of cherry-picking, but the deeper problem of a speech which includes an aspiration to a “comprehensive system of mutual recognition” is that this completely neglects the very nature of the EU. The EU is a rules-plus system. It is based on common rules but also common institutions and common constitutional principles. It is far more intricate than Mrs May allows.

Mrs May accepts “the need for binding commitments – for example, we may choose to commit some areas of our regulations like state aid and competition to remaining in step with the EU’s”. Elsewhere she is softer in her promises. The UK will need to make a “strong commitment” that its regulatory standards will remain as high as the EU’s. (Here too the media was evidently briefed on the gap between “binding” and “strong” commitments). In the matter of workers’ rights or the environment, “the EU should be confident that we will not engage in a race to the bottom in the standards and protections we set”.

But this is not good enough to generate the trust that constitutes the necessary underpinning of frictionless trade in the internal market! The EU’s model of mutual recognition demands much more, both in the binding character of the rules and in the supporting institutional and constitutional architecture. Failure to accept this necessary starting-point leads Mrs May to embrace unrealistic expectations. On services, she says that “given that UK qualifications are already recognised across the EU and vice versa – it would make sense to continue to recognise each other’s qualifications in the future.” In the matter of transfrontier broadcasting she aspires to “creative options … including mutual recognition”. On financial services “our goal should be to establish the ability to access each other’s markets, based on the UK and EU maintaining the same regulatory outcomes over time”. But the EU’s approach to mutual recognition goes far deeper than mere possession of the same rules.

Everything that Mrs May says – about agencies and regulators, about data protection and energy co-operation, about Euratom and transport, about judicial co-operation and science, and so on - assumes a UK that enjoys a high degree of independence from the EU’s rules and especially from its institutions, yet is able to dip in here and there as an associate member according to specially crafted arrangements. But although EU is built on rules and it is built on trust, it is also built on institutional and constitutional frameworks that underpin those rules and verify that trust is warranted. This is what the Commission has lately taken to describing as the EU’s “ecosystem”.

This is what the EU is determined to defend; this is what the UK has chosen to quit. Mrs May’s speech does not come close to recognising, still less to explaining, the magnitude of the changes that are looming in consequence. Her speech asserts that the UK “will not accept the rights of Canada and the obligations of Norway”, the shabby politician’s trick of rejecting a suggestion that absolutely no one has advanced, but she is perilously close to asking for the obligations of Canada and the rights of Norway.

One of the relatively few concrete observations in Mrs May’s speech which looks beyond mutual recognition of rules also to acknowledge the institutional consequences concerns financial services. She notes “the highly regulated nature of financial services, and our shared desire to manage financial stability risks” and so accepts that “we would need a collaborative, objective framework that is reciprocal, mutually agreed, and permanent and therefore reliable for businesses.” Quite so! And this invites the exasperated retort – but that is exactly what you have right now! How illuminating that when, directly after the speech, Mrs May was asked by a journalist whether Brexit is “worth it”, she laughed nervously and said “we won’t think again on Brexit”, and studiously avoided the question. “A collaborative, objective framework that is reciprocal, mutually agreed, and permanent and therefore reliable for businesses” is what the EU delivers. Appeal to the language of “mutual recognition” conceals the density and the intensity of the obligations that are required to generate trade integration on the truly deep and special scale that the EU’s internal market has achieved. Mrs May has belatedly embarked on a journey which accepts that leaving the EU entails difficult choices and unavoidable harm, but she has a long distance to travel yet to come fully to terms with the consequences.

Barnard & Peers: chapter 27

Art credit: facto-facts