Collaborative platforms and Brexit – clarity needed

We are still members of the EU, but not effective members. We must continue paying the fee, but we are not really able to exercise our rights, or sensibly plan ahead, until the model of our future relationship is settled.

This makes it difficult for competent authorities like the Legal Services Board and the regulators it supervises, and for law firms themselves, to develop policies. (At the bottom of the pile are people like myself, trying to bring news of developments of the EU, without any clarity as to their eventual impact on the UK.) The sooner our relationship with the EU is resolved the better.

A good example is the European Commission’s guidelines from last month on the collaborative or sharing economy, which cover the new mode of delivery of services through collaborative electronic platforms. These platforms are of significant importance to many parts of the UK economy, including legal services, where several have sprung up to offer aspects of work that usually fall to a solicitor, or else to signpost potential clients to lawyers.

The commission’s new guidelines are described as having various aims: to help all players engage confidently; to ensure balanced developments (since member states deal with them differently – for instance, see Uber’s travails in some parts of the EU); and to provide guidance on how existing EU law should be applied.

The commission invites member states to review, and where appropriate revise, existing legislation in the light of the guidance.

Effectively, the guidelines are pro-platform. The commission sees them as the future of delivery of services. Therefore, since service providers should be subject to licensing or other authorisation only where strictly necessary to comply with the public interest, collaborative platforms should only be banned as a last resort.

They should not be subject to licensing where they act merely as an intermediary between consumers and those offering the actual service.

Nevertheless, despite this general trend, lawyers have their own section in a staff-supporting paper, which recognises the importance of regulation.

It is good to see the European Commission saying things like this about legal services: ‘Reserves of activities linked to the possession of a professional qualification will apply to service providers in the traditional sectors as well as to those in the collaborative economy. This is due to the specific character of certain professions for which the protection of the title or the activities are subject to specific professional or deontological rules.

‘For example, where legal advice is a reserved activity, no service provider is allowed to give advice or draft private deeds for others on a regular basis and for remuneration unless he is a lawyer, irrespective of whether the advice is given face-to-face or through a collaborative platform.’

Less encouraging is a section from the main paper, on rating systems: ‘Rating and reputational systems or other mechanisms to discourage harmful behaviour by market participants may in some cases reduce risks for consumers stemming from information asymmetries. This can contribute to higher quality services and potentially reduce the need for certain elements of regulation, provided adequate trust can be placed in the quality of the reviews and ratings.’

The guidelines are not the end of the matter, just a first step. Many more significant developments will follow – for instance, the upcoming Court of Justice of the European Union decisions on the two Uber cases: Case C-434/15 Asociación Profesional Élite Taxi v Uber Systems Spain, S.L. and Case C-526/15 Uber Belgium BVBA v Taxi Radio Bruxellois NV.  

EU guidelines on the collaborative economy would usually be significant in how, for instance, competition law and the single market will deal with them in the future. But now? Do we take notice of them or not?

If we remain part of the single market, then they continue to be important, whether we are able to vote on them in the future or not. If our relationship towards the EU becomes like any other non-European country, then who cares? We can create our own beautiful and independent guidelines.

Will our government try to influence the EU’s attitude towards the collaborative economy in the two or so years before we leave the club, and will anyone in the EU listen to us any more? Regulators and businesses need resolution.

Maybe, no matter how isolated we become, EU policy will continue to be vital - even if viewed by us from a distance through binoculars - because the platform providers delivering legal services into the UK will base themselves in a member state like Ireland (as Facebook does now), and so be subject to EU regulation.

And, in that case, short of controlling the internet in the way China tries to do, the UK will have difficulty in controlling the providers.

Jonathan Goldsmith is a consultant and former secretary-general at the Council of Bars and Law Societies of Europe, which represents around a million European lawyers through its member bars and law societies. He blogs weekly for the Gazette on European affairs