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European and German dimension.

WHAT ARE the rights of practice for foreign lawyers in Europe. particularly the possibilities of European Union lawyers practicing law in another EU country and of American lawyers practicing in Germany and Belgium/Brussels, the latter an important center as headquarters of the KU'?

EU LAWYERS WITHIN THE EU

The European Union, formerly known as the European Community, now has 15 members following the accession of Austria, Finland and Sweden in January 1995 to join the 12 other members--Austria. Belgium, Denmark, Ireland, Germany, Finland, France, Greece, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and the United Kingdom.

The basis of the EU is the 1957 Treaty of Rome' which formed the European Economic Community, known as the Common Market. The treaty states the basic principles for economic activities within the KU. Of these principles or "basic freedoms," the "Right of Establishment" (Article 52) and the "Freedom to Provide Services" (Article 59) grant the right to every EU citizen to set up a business or provide services in another member state.

The European Court of Justice in two decisions handed down in 1974 expressly decided that the provisions of Articles 52 and 59 also apply to lawyers and that these rules have a direct effect, without transformation into national law, within member states since January 1970.(10) However, different rules apply to both of these "basic freedoms," making it necessary to establish standards to distinguish the two.

In principle, while the freedom to provide services provision focuses on cross-border activities, the right of establishment applies to activities a foreign EU citizen engages in from an establishment within another EU country. In a case dealing with a German lawyer (rechtsanwalt) regularly working in Milan, Italy, the European Court of Justice held that where a lawyer or other professional from one EU member state practices on a stable and continuous basis from an establishment in another member state and his clients include nationals in the latter member state, he is to be treated as established there and his situation is governed by the treaty's rules on freedom of establishment rather than freedom to provide services.(11)

A. Cross-border Legal Services

The cross-border provision of legal services--that is, the non-regular activities of a lawyer admitted to the bar of one EU member state within another member state--is based on the Article 59 of the treaty, Subsection (1) of which provides:

Within the framework of the provisions set out

below, restrictions on freedom to provide services

within the Community shall be progressively

abolished during the transitional period in respect

of nationals of member states who are established

in a state of the Community other than that of the

person for whom the services are intended.

It follows from this provision that all discrimination against the providers of services based on their citizenship must be eliminated, and all restrictions must be abolished that, even if they apply without distinction to domestic and foreign services, may impede or make impossible the activities of a service provider who is domiciled in another member state. The free traffic in services may be restricted only by rules that are justified by mandatory reasons of the common good and are applied without distinction.(12)

Restrictions on the freedom to provide services also must be seen in the light of the EC Council's 1977 Directive to Facilitate the Effective Exercise by Lawyers of Freedom to Provide Services.(13) That directive. in Article 1, Paragraph 2, lists the professions in the different member states that are deemed to be a "lawyer" and stipulates in Article 2 that each member state shall recognize such a lawyer for the purposes of the provision of legal services within its territory. Articles 3 to 7 then state the basic principles to be applied to the lawyers providing their services in another member state.

While EU Regulations apply directly in member states, directives must be transformed into national law by the national parliaments. Germany, for example, implemented the 1977 directive in 1980 by way of the Law on the Services of Lawyers (Rechtsanwaltsdienstleistungsgesetz), which fortunately for ease is known as RADG.(14) This legislation governs the non-regular activities of lawyers from another member state in Germany.

It stipulates in Section 2, Subsection (1), that the foreign lawyer will have to use the title or designation under which he is entitled to pursue his professional activities in his home state; in Section 3, Subsection (1), that the foreign lawyer shall have the position of a German lawyer (rechtsanwalt) and shall be entitled to appear before almost all courts; and in Section 4, Subsection (1), that the foreign lawyer shall be entitled to represent his clients alone in all such court or administrative proceedings in which his clients would be allowed to present their case on their own, but beyond that he will have to work in conjunction with a German lawyer who would be entitled to represent the client before the judicial authority in question.

In Germany, even German lawyers are not admitted to all courts. In civil matters, for instance, where a demand for payment exceeds DM10,000, the matter has to be brought before a district court (landgericht), and only local lawyers admitted to the local bar association will be allowed to represent a client in such a proceeding. Thus, if a client retains a local lawyer for a matter that needs to be litigated before a district court to which the local lawyer is not to admitted, it is necessary to retain a second, locally admitted lawyer to plead the case before that court. This is why the RADG also makes a distinction between matters in which a foreign EU lawyer may represent a client alone and in which he has to do this in conjunction with a local lawyer.

B. Right of Establishment

Of course, any EU citizen may decide to study the law of another member state and take all the examinations necessary to qualify as a lawyer there. It is another question whether and under what conditions a foreign EU lawyer, already admitted to the bar of his home state, may permanently engage in the provision of legal services from an office in another EU country.

Article 52 of the Treaty of Rome guarantees a right of establishment for lawyers. As noted above, Article 52 provides that restrictions on the right of establishment are to be "abolished by progressive stages in the course of the transitional period," and Subsection (2) of Article 52 states that the right of establishment "shall include the right to take up and pursue activities as self-employed persons . . . under the conditions laid down for its own nationals by the law of the country where such establishment is effected."

Pursuant to these provisions, a lawyer may become active permanently in any and all member states of the EU or open up a branch office without the need to give up his home state bar admission or to close his home state office. National laws and regulations on bar admissions and the conduct of the professional activities violate Article 52 unless they are necessary to maintain an important interest of the common good, in particular, to protect the orderly administration of justice, the professional and ethical standards or the disciplinary supervision of the activities of lawyers.

While the cross-border freedom to provide services is the subject of the EC Council directive referred to above, the right of establishment clause still requires more detailed regulations for lawyers by the EU bodies. The EU Commission in 1995 submitted a proposal for a European Parliament and Council Directive "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."(15) The proposal now is under consideration in the European Parliament.

According to the present draft, a lawyer who has passed the necessary examinations required for the legal profession in one member state may practice law in another member state (host member state) under his home country professional title for a period of five years. In the host member state he may give advice on the law of his home member state, on EU law, on international law and on the law of the host member state! The lawyer generally would be entitled to represent clients in court proceedings, but the host member state may determine that the lawyer would have to do so in conjunction with a local lawyer.

Many other questions relating to the proposed directive are still subject to discussion.(16) Yet, at least one aspect of the draft directive already seems to have been clarified by the European Court of Justice s decision in Gebhard, cited at footnote 2, which recognized the possibility in EU law of a foreign EU lawyer establishing himself in the host member state under his home state title. Some member states hitherto had prohibited this by requiring all lawyers practicing on that territory to be a member of one of the national professions.

At present, German law has taken account of the right of establishment by way of Section 206, Subsection (1), of the Federal Law Governing the Activities of Lawyers (Bundesrechtsanwaltsordnung, known as BRAO, which roughly translated provides:

A citizen of a Member State of the European

Union or a signatory state to the Treaty on the

European Economic Area, who engages in professional

activities under one of the professional

titles provided for in Section I of the RADG, is

entitled to establish himself under such professional

title within the jurisdictional territory of

this Act for the purposes of providing legal services

in the field of foreign and international law,

if he, upon his application, has been made a member

of the competent bar association for the place

of his establishment.

The BRAO, however, is more restrictive than the proposed draft directive in that the BRAO provides that a foreign EU lawyer may advise only on foreign and international law, which would include EU law, but not the law of the host member state, being Germany.(17)

The procedure for inscription in local bar associations is governed by Section 207 of the BRAO, and is outlined below.

As stated above, EU lawyers who have become members of local German bar associations under Section 206, Subsection (1), of the BRAO may not advise on German law from their German offices. If they intend to do this, there is one other possibility besides studying German law and taking the regular German bar examination to become a normal German rechtsanwalt.

In 1988, the EC Council promulgated the Directive on a General System for the Recognition of Higher-education Diplomas Awarded on Completion of Professional Education and Training of at Least 3 Years Duration.(18) As regards the legal profession, this directive was transformed into German law in 1990 by way of the Law on Exams for the Admission to the Bar (Gesetz uber die Eignungsprufung fur die Zulassung zur Rechtsanwaltsschaft), referred to as the Bar Admission Act.(19)

This legislation stipulates the conditions under which an EU lawyer may become a German rechtsanwalt by taking a simplified version of the German bar examination.

As a first requirement, the applicant must establish that he has obtained a diploma entitling him to pursue the activities of a lawyer in one of the EU member states, which profession must be an equivalent to the German profession of a rechtsanwalt. The respective professions are enumerated in a list forming an annex to the Bar Admission Act.

Next, the applicant will have to pass an examination whose purpose it is to ascertain that he has the ability to exercise the profession of a rechtsanwalt. The exam will have to take account of the fact that the applicant has already been admitted to the bar of his home state and therefore has the professional qualification to work as a lawyer. In practice, this means that the examination may not be as difficult as the regular German bar examination.(20)

If the applicant passes the examination, he will be admitted to the German (local) bar association and become fully integrated as a German rechtsanwalt or patentanwalt without having to refer to his education abroad.

To date, the Bar Admission Act has been of limited importance. Since its entry into force in January 1991, only 66 examinations have been taken by foreign EU lawyers, with 50 candidates passing, according to statistics published by the German Federal Association of Lawyers. All in all, the pass rate of 75.8 percent is by far higher than, for example, in France, where only 30 percent of candidates pass the French equivalent examination. Of the 66 candidates in Germany, the vast majority--38--came from Greece, the Netherlands and the United Kingdom.

U.S. LAWYERS IN GERMANY

While the EU takes a rather liberal approach with regard to the cross-border provision of legal services and the provision of legal services from a permanent office by EU lawyers from other member states, the situation is different with respect to U.S. lawyers. Their provision of legal services in the Common Market is not governed by EU law, but by international law, in particular, the General Agreement on Trade in Services, commonly called GATS-Agreement, which entered into force in January 1995, together with the Agreement Establishing the World Trade Organization.(21) The signatories to the GATS-Agreement include Germany and the United States. The agreement generally governs all sectors of service industries, including legal services.

In Germany, the agreement was implemented by including a new Section 206, Subsection (2), in the BRAO, which roughly translated reads:

(2) For citizens of a member state of the World

Trade Organization who pursue a profession

which in terms of the training and competencies

may be deemed an equivalent profession of

Kechtsanwalt as provided for in this Act, Subsection

(1) shall apply mutatis mutandi with the proviso

that they may only advise on the law of their

home state and international law.(22)

In practice, new Subsection (2) of Section 206 of the BRAO makes it relatively easy for lawyers from member states of the GATS-Agreement to practice law in Germany. The only condition is inscription as a member of the local bar association, which in turn is a rather simple procedure, as noted below. By way of the Regulation for the Improvement of the Professional Situation of Foreign Lawyers (Verordnung zur Verbesserung der beruflichen Stellung auslandischer Rechtsanwalte), issued in January 1995, the German Federal Ministry of Justice determined that Section 206, Subsection (2), of the BRAO also should be applied to U.S. Iawyers.

As in the case of EU lawyers, the procedure for admission to the local German bar association is governed by Section 207 of the BRAO.

First, the U.S. applicant must prove admission to the bar in the United States by presenting documents confirming admission, and this proof must be renewed annually. Just as German lawyers, the U.S. applicant will have to obtain a liability insurance covering his professional responsibility and malpractice from an insurance company entitled to conduct business in Germany, with a minimum coverage of DM 500,000 for any event.

Next, the applicant must open an office in the district of the local bar association within three months of being admitted to the bar association. The office may be as a sole practitioner or as a branch office of a firm of lawyers.

The successful applicant will be entitled to offer services only under the home state professional designation, expressly referring to the home state, but will, however, also be allowed to use the designation "Mitglied der Rechtsanwaltskammer" (member of the bar association) in professional dealings.

The applicant no longer is required, as was the case under former German law before the GATS-Agreement, to establish the reciprocity between Germany and the U.S. home state with respect to the recognition and admission as a foreign lawyer. This requirement has been abolished making the admission to the local bar association in Germany a very simple procedure.

Once inscribed as a member of the local bar association, the U.S. lawyer will be entitled to advise German clients under the U.S. professional title on questions of U.S. law and international law. With a view to the many offices of U.S. firms in Brussels/Belgium, the U.S. delegation to the negotiations on the GATS-Agreement endeavored also to include EU law.(23) That law was omitted, however. as it was not deemed to be a part of international law, but a separate body of law among EU member states.

Neither will U.S. Iawyers be allowed to represent clients in court proceedings; they may advise only on U.S. and international law outside such proceedings. Other than EU lawyers, U.S lawyers will not be entitled to advise clients without a permanent establishment in Germany, making it impossible for them to offer their services on a cross-border basis.(24)

U.S. LAWYERS IN BRUSSELS

The situation of U.S. lawyers in Brussels differs very little from that in Germany. The negotiations on the GATS-Agreement were conducted by the EU member states jointly through the KU, and as a consequence the same rules under the GATS-Agreement apply to all EU member states. The procedure for admission to the local bar and the range of services a U.S. lawyer may offer through an office in Brussels therefore are the same as those in Germany.

U.S. Iawyers may apply for inscription in the so-called B-list of the Brussels bar. On admission, they are entitled to advise clients on questions of U.S. and international law. As in Germany, they are not allowed to advise on EU law. In their professional dealings, they may describe themselves as a member of the Brussels bar.

(10.) Judgments by the European Court of Justice. dated 21 June 1974, published in Neue Juristische Wochenschrift (NJW) 1975, page 513 [5141, and, dated 3 December 1974. published in NJW 1975, page 1095 [1095]. (11.) Gebhard v. Consiglio dell'Ordine degli Avvocati e Procuratori di Milano, Europaische Zeitschrift fur Wirtschaftsrecht 1996, page 92 et seq. (12.) Hans-Jurgen Rabe, Dienstleistungs- und Niederlassungsfreiheit der Rechtsanwalte in der EG Anwaltsblatt 1992, page 146 [1471. (13.) Council Directive of March 22 1977 (77/249/EEC), Official Journal of the EC, dated March 26, 1977, No. 78/ 17. (14.) Bundesgesetzblatt 1980, pages 1453 et seq. (15) Proposal of March 30, 1995 (95/C 128/06) official Journal of the EC, dated May 24, 1995, No. C 128i06. (16.) See Hans-Jurgen Rabe, Anwalte in Europa, NJW 1995 page 1403 [1404]; Heinz Weil, Ein Wunder in Lissabon? Mitteilungen der Brak 1993, page 2 Eberhard Haas, Der Anwalt in der EU-mit oder Gutesiegel? Mitteilungen der Brak 1995, page 89. (17) Hans-Jurgen Rabe, supra note 3, page [148]. (18.) Council Directive of March 21, 1989 (89/48/EEC), Official Journal of the EC, dated January 24, 1989, No. L 9/16. (19.) Bundesgesetzblatt 1 1990, page 1349 et seq. (20.) Feuerrich/Braun, Bundesrechtsanwaltordunung, Kommentar, section 2, Gesetz uber die Eignungsprufung fur die Zulassung zur Rechtsanwaltschaft (3d ed. 1995), hereinafter Feurrich/Braun. (21.) Bundesgesetzblatt 11, 1994, page 1441 et seq. (22.) Subsection (1), to which Subsection (2) refers, provides:

"(1) A citizen of a Member state of the European union or a signatory to the Treaty on the European Economic Area, who engages in professional activites under one of the profesional titles provided for in Section 1 of the RADG, is entitled to establish himself under such professional title within the jurisdictional territory of the Act for the purposes of providing legal services in the field of foreign and international law, if he, upon his application, has been made a member of the competent bar association for the place of his establishment." (23.) Eugen Ewig, Internationaler Dienstleistungshandel und Neue Tatigkeitsfelder fur die Anwaltschaft (GATS-Abkommen), NJW 1995, page 434 [435] (hereinafter Ewig); Martina Errens, Auswirkunger des GATS-Abkommen auf den Beruf des Rechtsanwaltes, Europaische Zeitschrift Fur Wirtschaftsrecht 1994, page 460 [462]. (24.) Ewig, supra note 14; Feuerrich/Braun, supra note 11, at 206, sidenote 8.

IADC member Christian E. Edye is a partner in the Hamburg office of Schon Nolte Finkelnburg & Clemm and he also is admitted to practice in New York and Connecticut. He concentrates on international commercial and company lau, as well as litigation. He studied German lau at the University of Hamburg, from which he was graduated in 1985, and Spanish commercial lau at the University of Salamanca. In 1986, he was granted a scholarship by the German Academic Exchange Service to study the U.S. legal system at New York University School of Law, from which he received the degree of master of comparative jurisprudence in 1987. The University of Hamburg awarded him a doctoral degree in 1991.
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Title Annotation:Foreign Lawyers in Foreign Jurisdictions: Rights of Practice and Establishment; Brussels, Belgium
Author:Edye, Christian E.
Publication:Defense Counsel Journal
Date:Jul 1, 1996
Words:3462
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