Briefing on ‘Economic effects of reform in professional services’

September 28th, 2017 § 0 comments § permalink

The briefing was prepared by Policy Department A for the Internal Market and Consumer Protection Committee. (External Author: Dr Erik Van Der Marel).

The briefing notes, amongst others, that high entry barriers for professions markets are linked to lower productivity in the EU and that regulatory barriers must consider how a country will carry out any guidelines.

Professional services such as legal, accounting, engineering and architectural still have high entry barriers. Many firms are prevented from emphasising competition in their sectors, whilst these barriers decrease consumer choice and any positive effects of a single European services market. For example, the high restrictions or entry barriers in the legal profession limits the supply of legal services detrimentally impacting on equal access to justice. Higher entry barriers are linked with lower productivity rates in European Union countries overall.

The proportionality test announced in the Services Package shall ensure that professional qualification is justified and proportionate.

Any services reform package in the future from the EU should consider the capability and how well equipped a Member State is in governing that service market.

The brief can be found here.

The New Restrictiveness Indicator for Professional Services: An Assessment

September 21st, 2017 § 0 comments § permalink

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The study, which was prepared at the request of the Internal Market and Consumer Protection Committee of the European Parliament, analyses the Restrictiveness Indicator which was developed by the European Commission as part of the Services Package. It cautions that the use of the new indicator has to be combined with assessments of proportionality, and that more attention should be paid to barriers to free movement.

Executive summary – extracts:

(…) professional services are regulated with the aim to minimize market failures such as (insufficient) consumer protection (…)

(…) whereas with unjustified or disproportionate regulation, ‘less is good’, that is, less restrictiveness is helping the better functioning of markets, this is not the case with regulation dealing with ‘societal risks’ (i.e. market failures). Such risk regulation is in principle justified, although this ought to be carefully verified, and it should be proportionate and effective (target, in EU case law called ‘suitable’), but one cannot a priori go with the motto ‘less is good’. (…)

(…) studies need to be embedded in a policy evaluation where justification of rules, their proportionality and effectiveness (‘suitability’) are included as well. (…)

The study can be downloaded here. For the Services Package, see Blog of 10 January 2017.

Professional services: How does regulation matter?

September 13th, 2017 § 0 comments § permalink

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On 9 November 2017, the European Commission will organise a conference on ‘Professional services: How does regulation matter?’ (which will take place in Brussels).

Stakeholders (including national authorities, professional, and consumer organisations) will have the opportunity to discuss initiatives under the Services Package that are related to professional services, i.e. a legislative proposal for a proportionality test and a Communication on reform recommendations in regulated professions.

The conference programme can be downloaded. More details on the conference, including registration, can be obtained here.

For more information on the Services Package, please see the relevant posts on the Training Blog.

Draft report by MEP Danti on the need for professional reforms

July 27th, 2017 § 0 comments § permalink

Nicola DANTI - 8th Parliamentary term

Nicola DANTI – 8th Parliamentary term

Further to the workshop on 11 July 2017, MEP Nicola Danti has now published his draft report on ‘on the implementation of Directive 2005/36/EC as regards regulation and the need for reform in professional services’.

The draft report recognises the fundamental role played by regulated professions in the EU and the importance of quality services. It asks, amongst others, for better comparability of the level of professional qualifications.

Major points of the draft resolution include:

1. Stresses that regulated professions play a fundamental role in the EU economy, representing a significant part of the occupation rate as well as an important share of the added value in the Union; believes, furthermore, that the quality of professional services is of paramount importance for preserving the EU economic, social and cultural model;

3. Believes that the Commission communication of 10 January 2017 might help Member States to better regulate professional services; stresses, however, that elements beyond mere economic analysis are needed for a holistic assessment of the performance of the regulatory environment in each Member State;

8. Acknowledges that some Member States did not consult the relevant stakeholders in an appropriate manner while preparing the NAPs; calls for a broader involvement of all interested parties in the future;

11. Recognises the role of professional regulation in achieving a high level of protection of public interest objectives, such as the protection of consumers, (…) the safeguarding of the proper administration of justice, (…) acknowledges the margin of appreciation of Member States in determining the ways to achieve this;

12. Notes that profession-specific regulations pursuing objectives in the public interest aim to ensure effective supervision of the lawful practice of the regulated profession, and of its deontological rules where relevant;

13. Points out that better comparability of the level of professional qualifications is needed in order to increase the homogeneity of the evidence of formal qualifications across the European Union and to create a level playing field for young Europeans entering the professions, as well as promote their mobility;

17. Recalls that the analysis of the impact of the regulations in Member States should be subject not only to a quantitative but also to a qualitative assessment encompassing the general interest objectives and the quality of the service provided;

19. Welcomes the acknowledgement by the Commission of the need to reflect on the impact of new technologies on professional services, especially in the legal and accounting sectors; notes in particular that close attention needs to be paid to the consequent risks for service recipients, including consumers, of such a transformational change;

Services Package: Developments in the European Parliament

July 20th, 2017 § 0 comments § permalink

(1) IMCO draft report: proportionality test proposal

At the end of June, MEP Andreas Schwab published his draft report on the proportionality test proposal of the European Commission. [The Commission proposal aims at setting up a common framework for conducting proportionality tests when introducing new regulation of professions.] The rapporteur considers that the proposal should not be an instrument of mere ‘de-regulation’ but that the added value of professional regulation should be recognised by putting an emphasis on smart regulation which can further economic growth in the EU.

As far as education and training is concerned, the draft report clarifies / highlights that:

– “the rules concerning professional education and training remain within the competence of Member States, especially concerning the possibility to delegate this task to professional organisations. However, according to established case-law, if those activities are remunerated, free movement should be guaranteed in particular as regards the conditions required for accessing professional training (Case C-313/01 Morgenbesser).” (recital 7b (new))

– “Member States should enjoy a margin of appreciation within which they are able to determine the degree of protection which they wish to afford, and if necessary to strengthen the regulation in place. The fact that one Member State imposes less strict rules than another Member State does not mean that the latter Member State’s rules are disproportionate and therefore incompatible with Union law.” (recital 12)

– “The introduction of additional requirements might be suitable to attain the public interest objectives. (…) For example, the obligation to undergo continuous professional development might be suitable to ensure that professionals keep abreast of developments in their respective areas, as long as it does not lay down discriminatory and disproportionate conditions to the detriment of new entrants. Likewise, compulsory chamber membership should be considered appropriate where professional organisations are entrusted by the State with safeguarding the relevant public interest objectives, for example in supervising the legitimate practice of the profession, or organising or supervising continuous professional training; (…) (recital 20a (new))

(2) Workshop on ‘Reforming professional services’, 11 July 2017

Under the chairmanship of MEP Nicola Danti, two expert panels considered ‘economic effects of regulating professional services’ and ‘recommendations for policy -makers’.

The CCBE was represented by the chair of the EU Lawyers committee, Hugh Mercer, who pointed out that professional rules (such as independence, competence, confidentiality) are necessary to ensure standards and attitudes of professionals to uphold the rule of law. He deplored that ‘free movement of service providers’ is not taken into account in the restrictiveness indicator of the Services Package, noting that the lawyer’s profession has been at the forefront of the free movement of lawyers in Europe. The CCBE also adopted a memorandum of mutual recognition of continuous training activities and furthermore it shares information on disciplinary proceedings in the Member States. The CCBE also discusses innovation and the future of the legal profession and will soon publish its e-book of last year’s conference. Hugh Mercer emphasised that it is not (always) possible for clients to evaluate the quality of services and, therefore, regulation is needed.

The Commission was represented by Martin Frohn who presented the Commission’s work within the framework of the Services Package. In his presentation, he referred to several examples of restrictions identified by the Commission, including reserved activities, noting inter alia: ‘Legal advice of any kind is reserved to lawyers in many Member States hindering other legal consultancy services, in particular online services’. The OECD’s presentation on “No jobs for old lawyers? Disruptive innovations in legal services” specifically focused on lawyers: disruptive innovation – what’s happening in the legal services; the scope of regulatory restrictions and recent reforms in Member States (France and UK/upcoming reforms in Portugal); rationale of regulation – does it still apply?.

For more information, please see presentations-here and recordings-here.

European Parliament: IMCO workshop on ‘Reforming professional services’ postponed to 11 July 2017

June 16th, 2017 § 0 comments § permalink

The workshop which was supposed to take place on 20 June 2017 (see post of 8 June 2017) has now been postponed to 11 July 2017 (9.30-12.30).

The CCBE will be represented at the workshop by Hugh Mercer, chair of the CCBE EU Lawyers Committee.

European Parliament: IMCO workshop on Reforming professional services

June 8th, 2017 § 0 comments § permalink

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The workshop will take place on 20 June 2017, 15.00-18.30, in Brussels.

Two expert panels will focus on economic effects of regulating professional services and recommendations for policy-makers (see here).

More information will be available in the coming days.

Related post(s): European Commission Services Package

Services Package & Proportionality Test: Council agrees on a General Approach

June 1st, 2017 § 0 comments § permalink

Please click here to read the General Approach concerning the Commission proposed ‘Proportionality Test’ Directive. [The proposed directive sets a common framework for conducting proportionality assessments before introducing new, or amending existing, legislative, regulatory or administrative provisions restricting access to or pursuit of regulated professions.] The parts which are of particular interest  from a ‘training’ perspective have been highlighted by the CCBE in yellow.

The European Parliament has also started work on the proposal. The IMCO committee had a first exchange of views on the proposal on 11 May 2017. Several MEPs, including the rapporteur Andreas Schwab, raised on this occasion the question as to whether there is a need for this proposal – first and foremost, the Commission should seek to strengthen the enforcement of existing legislation. (IMCO timetable: 12/13 July – presentation of draft report; 5 September – deadline for amendements; 28 September – vote of amendments; 21/22 November – vote in the Plenary.)

For more information on the Services Package, please consult the post published on 10 January 2017.

European Commission publishes Services Package

January 10th, 2017 § 0 comments § permalink

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Today, the European Commission has published a Services Package which is aimed at making “it easier for companies and professionals to provide services to a potential customer base of 500 million people in the EU”.

Amongst others, the package contains a Communication which provides “Guidance for national reforms in regulation of professions”.

The section on lawyers contains, inter alia, information on the training of lawyers and some recommendations:

“In view of their particular role, the rules on the access to and the pursuit of the legal profession are among the most stringent in the business services sector. In terms of qualification, higher education is required in the large majority of Member States (a law degree being compulsory), followed by a mandatory traineeship and/or additional professional experience and bar examination. The total duration of the training varies between 3 years (Ireland) and 9 years (Slovenia). It appears, however, that in some Member States (Greece, Italy), training and experience obtained abroad are not duly taken into account when allowing access to legal traineeships for lawyers. Recently, Spain introduced new rules on the qualification of lawyers, but clarity is lacking regarding the registration of graduates who started their studies before the reform entered into force.

Mandatory continuous professional development is provided for in most Member States, except for the Czech Republic, Greece, Malta, Slovakia, Slovenia and Spain where it is voluntary. Despite the extensive case-law on recognition of qualifications, mutual recognition of lawyers’ cross-border continuing professional development appears to be problematic, especially for lawyers wishing to benefit from the rights granted to them under the two Lawyers’ Directives.”

In the Recommendations part, the Commission specifically refers to Greece and Italy:

“Greece and Italy should ensure that training and experience obtained abroad are duly taken into account so that lawyers can access legal traineeships in line with Case C-313/01.”

The European Commission is also proposing to streamline and clarify how Member States should undertake a comprehensive and transparent proportionality test before adopting or amending national rules on professional services. According to the proposals, the competent authorities shall consider in particular: (…)  the link between the complexity of the tasks and the necessary possession of specific professional qualifications, in particular as regards the level, the nature and the duration of the training or experience required, as well as the existence of different routes to obtain the professional qualification; (…).

For more information, see:

Commission Press Release of 10/01/2017

Commission Communication on reform recommendations for regulation in professional services

Staff Working Document accompanying the Communication

Proportionality test before adoption of new regulation of professions

European Commission consultation on the regulation of professions

June 7th, 2016 § 0 comments § permalink

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Last week, the European Commission launched a  public Consultation on the regulation of professions: proportionality and Member States’ National Action Plans.

The ‘National Action Plans’ section of the Consultation raises, inter alia, questions about training requirements: do professional qualifications or continuous professional development requirements create disproportionate barriers to the access and exercise of a profession? In the ‘Proportionality in Regulation’ section of the Consultation, the Commission is consulting on a possible common EU-wide methodology for assessing the necessity and proportionality of national regulations in the professions. Regulators are asked, for instance, to indicate grounds of justification for regulating a profession as well as the criteria used (such as the need to have specialised skills and training to practice the profession).

The CCBE will determine in the coming weeks to what extent it can provide input to the Consultation.

The deadline for the consultation is 19 August 2016.