A need-to-know guide to new EU legislation

As European elections approach, EU institutions have been agreeing legislation at a brisk pace, clearing the decks before the next term begins. Remarkably little is written about this new legislation, though it continues generally to affect us.

Of course, law firms with offices or clients in the EU will keep a close eye, but this article concerns the rest of the profession. We should be aware of the trends of new legislation. Although we are no longer members, the EU is a formidable soft power whose rules and principles cast a long shadow, particularly over near neighbours. And what happens there might happen here next. The following new legislative initiatives seem relevant:

• the anti-money laundering (AML) package;
• the on-again, off-again Corporate Sustainability Due Diligence Directive (CSDDD);
• the EU AI Act;
• the anti-SLAPP directive; and
• regulation on the digitalisation of justice.  

I will not describe each in detail but rather trends and likely consequences. Given the recent adoption of the laws, very little is yet operative, but they will come into force over the next couple of years.

The AML package tightens the screw on money laundering. There is now a regulation (directly applicable) to replace previous directives (to be implemented by member states). This aims to iron out national differences in key areas to ensure that the same rules apply equally everywhere. Its second innovation is the introduction of an EU-wide Anti-Money Laundering Authority (AMLA), based in Frankfurt with more than 400 staff, which will have powerful capacity to oversee and enforce the rules. It will begin operations in mid-2025.

The AML rules applicable to lawyers remain generally as before (as indeed they still apply here to solicitors). The powerful enforcement rules of the AMLA will apply to the legal sector, but with exemptions in place to protect professional secrecy.

The lesson is that the ratcheting up of strict AML rules continues apace. We should not expect any reduction in the burden on solicitors in the future.

At the time of writing, the sustainability directive looks likely to be going ahead, following a big wobble when France and Germany refused to support it. It contains due diligence obligations for large companies regarding actual and potential adverse effects on the environment and human rights for their business chains of activities, both upstream business partners and partially downstream activities, such as distribution or recycling.

As I have written before, the danger for those firms which may be caught up in reporting obligations as service providers to large companies will lie in any potential breach of professional secrecy (always that). In other words, if the large companies ask for information which the lawyers cannot give because of their professional obligations. Luckily, European lawyers managed at the last minute to have a recital – not an actual clause – inserted into the directive (Recital 31a in the current draft). It says: ‘This directive should be without prejudice to the rules on professional secrecy applicable to lawyers or to other certified professionals who are authorised to represent their clients in judicial proceedings, in accordance with Union and national law.’

The lesson here is twofold: first, as with AML, due diligence obligations in this area are going in one direction, always stricter; second, we need to be vigilant in our own jurisdiction to ensure that future compliance measures always respect legal professional privilege.

The remaining pieces of legislation affect us less obviously.

The EU AI Act does not mention lawyers at all – and that is partly its problem. The threat to legal services by AI which is not controlled by lawyers, and which probably comes from outside the jurisdiction, is unknown by decision-makers, because the legal profession has not yet educated those in charge. The EU AI Act also teaches us that AI is likely to end up being regulated by governments – whatever our own government currently says about a light touch – and is likely to be based on risk.

The anti-SLAPP directive affects EU lawyers directly, of course. But its lesson for us is narrower: that our government is not alone in legislating against the abuse of litigation to silence critics. Lawyers will need to be alert that the balance between competing rights, such as to privacy and to freedom of expression, remains appropriate.

And, finally, there is the regulation on digitalisation of justice, or to give it its full name: digitalisation of judicial cooperation and access to justice in cross-border civil, commercial and criminal matters (Regulation (EU) 2023/2844). Most of it will be applicable only from 1 May 2025, and it tells us the obvious: European digitalisation of justice proceeds apace.

This has been a brief gallop. The scanning of EU legislation will need to continue.

Jonathan Goldsmith is Law Society Council member for EU & International, chair of the Law Society’s Policy & Regulatory Affairs Committee and a member of its board. All views expressed are personal and are not made in his capacity as a Law Society Council member, nor on behalf of the Law Society