EFTA-case  E-14/22

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Deadlines: Motivation ministry:    30 January 2023
Written observations:                    13 March 2023

Keywords: lawyers, advertising, customer contracts, internal market

Subject: Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market

Facts of the case:

Disciplinary proceedings are pending before the Princely Court of Appeal against the accused, a lawyer registered with the Liechtenstein Chamber of Lawyers, on the basis of a disciplinary complaint made by the Liechtenstein Chamber of Lawyers on 15-07-2021. X AG filed a complaint against the accused in which it is alleged, in summary, that the accused wrote unsolicited letters to shareholders of X AG in order to attract them to a (class) action in connection with the ‘pursuit of a claim for X AG investors’. In the letter of the law office of the accused, dated 22-02-2021, the shareholders were informed that a litigation funder was already interested in the matter and would assume the costs and risks of the action in exchange for a share of the proceeds of successful proceedings, which meant that it would be largely risk-free for the investors to take action. Such conduct, where lawyers write unsolicited letters to third parties in a manner akin to ‘cold calling’ in order to attract them to bringing an action, was not compatible with the Professional Guidelines of the Liechtenstein Chamber of Lawyers. On the basis of the decision of the Constitutional Court, the disciplinary proceedings were continued and, at the hearing on 25-10-2022, the accused invoked Directive 2006/123/EC, which is applicable to him as a lawyer. The question in this case is whether the prohibition on a lawyer advertising his services on his own initiative in specific situations in letters to selected (groups of) people who have not previously communicated to him their addresses, which were also not known from pre-existing customer contacts, and who have also not previously expressed an interest in the offer of services by the lawyer, is compatible with the provisions of Directive 2006/123/EC. In particular, it is necessary to interpret the scope of Article 24 of that directive in the light of the situation and the legal bases to be applied by the Court of Appeal.

Request for an advisory opinion:

1. Does Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market preclude a provision such as Paragraph 35(1)(c) of the Professional Guidelines of the Liechtenstein Chamber of Lawyers which prohibits lawyers from offering professional services to specific categories of potential clients and which is to be construed, in accordance with the interpretation adopted by the Liechtenstein Staatsgerichtshof (Constitutional Court), as ‘prohibiting proactive advertising by lawyers where they offer their services in certain situations to selected (groups of) people who have not themselves expressed an interest in those services’?

2. Is Article 24(1) of Directive 2006/123/EC to be interpreted as meaning that a national provision may not, in general, prohibit lawyers from, on their own initiative, contacting by letter potential clients who were not previously their customers, after ascertaining their personal addresses, and from offering them their services, in particular by bringing an action for damages in a case of damage affecting them as best only as investors?

Cited (recent) case-law: Société fiduciaire nationale d'expertise comptable (C-119/09), RS (Effet des arrêts d’une cour constitutionnelle) (C-430/21)

Policy Area: EZK