Brexit – The legal story so far…

As everyone is now hopefully well aware, on the 29th March 2019, at 23:00 GMT – the UK leaves the EU. While the negotiations over the future relationship between the UK and the EU are still progressing, we do now face the possibility of there being no formal deal in place by that date.

The UK Government has reacted to this by starting to issue a series of papers which plan for the possibility of a no deal position.

Irrespective of whether you voted for or against in the referendum and whilst the position regarding a deal is still unclear, all businesses and business owners now need to consider a whole range of issues including planning for the potential implications of a no deal scenario.

We have set out below some of the areas affected and some practical steps that you may want to consider.

Employment

It appears from the draft withdrawal agreement that this is an area where consensus has been reached and there will be an “”implementation period”” from 29th March 2019 to 31st December 2020. During the implementation period, free movement will effectively continue between the UK and the EU, with EU citizens and their family members who are legally residing in the UK in accordance with Union law continuing to be able to do so.

The position for people arriving from the EU after the 29th March 2019 is a little more complicated and a registration scheme is expected for anyone who wishes to remain for more than 3 months. We would suggest that anyone who regularly employs EU nationals should continue to monitor developments in this regard.

Corporate

We do not currently anticipate that the laws and regulations governing this area will be significantly affected by Brexit. However, due to possible changes in other areas, for example, merger control , and uncertainty as to the ultimate shape and impact of Brexit, M&A activity could be affected for some time to come. In the last 12 months we have acted for organisations who are looking to set up in the UK (no doubt assisted to some extent by the value of Sterling) but we have also seen increased interest in UK based organisations setting up in the EU.

Data Protection

On Friday 25th May 2018 the General Data Protection Regulation came into force across the European Union. It is clear that these will still be applied by the UK post Brexit and you should therefore take steps to ensure your business is compliant even if you have taken the view that these regulations will not be here for the long term. Indeed it appears that the next wave of legislation in this area of law, the E Privacy Regulation is still likely to be adopted in some form even if this occurs post 29th March 2019.

Commercial

EU law has a significant effect on a wide range of areas in commercial law: advertising and marketing, commercial agencies, consumer, distribution, e-commerce, outsourcing, product liability and labelling and the supply of services. Most of this law is firmly embedded in UK law; initially, we think that it is highly likely that the UK government will keep or re-enact the relevant legislation when it comes to any post-EU Withdrawal Bill review, although there would be obvious scope for divergence over time.

EU regulations also impact on various areas including the recognition and enforcement of judgments, service of legal proceedings and the choice of governing law in contracts. For new contracts, we suggest you  consider future proofing to ensure that you are still covered regardless of the outcome of the negotiations.

Issues may also arise regarding existing agreements which are no longer viable or attractive as a result of Brexit. We would strongly advise you to review the terms of all relevant contracts and consider how they may be affected. You should consider if there are any steps (hedging or building in review/break provisions into contracts) you need to take to ensure your business is ready for the uncertainty that is likely to continue for the upcoming period.

We have to stress that the position outlined above is still not settled and like everyone we will be continuing to monitor developments carefully so would urge you to take specific advice before acting during this uncertain period. 

If you would like help on any of the issues please contact Mark Pelopida at Machins Solicitors LLP on 01582 514330.