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UK’s legal sector, a £25.7 billion industry, could be at risk if the Government is unable to secure guarantees for it after the country leaves the European Union (EU), lobby group TheCityUK warned on Tuesday.

Britain’s legal services sector is preferred by international companies for dispute resolution due to the use of English law in commercial contracts.

EU rules require member states to recognise and enforce UK’s law and vice versa.

This makes Britain a very attractive place to draw up contracts and resolve disputes for many businesses, both local and international. It has become one of the largest legal sectors in the world with four times more turnover than France and two and half times more than Germany. It is second only to the United States.

The potential loss of mutual enforcement rules, which is a likely consequence of the Brexit, could force many companies to look elsewhere for legal services.

The sector, which employs roughly 370,000 people, is now urging the Government to find a solution that will allow mutual enforcement of laws and judgments to continue. It is likewise calling on lawmakers to adopt measures to ensure free movement for legal professionals in the European market, noting the high number of foreign law firms operating in the country.

The group pointed out the adverse effects to other key sectors including financial services, energy, real estate and technology if legal support services are disrupted.

Miles Celic, chief executive of TheCityUK, said it is vital that the key challenges and opportunities for the legal sector are addressed during the Brexit negotiations, and that its competitiveness is not only maintained but enhanced.

The legal services sector added £25.7 billion to the country’s economy last year, comprising 1.6% of UK’s gross domestic product (GDP).

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