The words ‘no deal’ are a prevalent occurrence in recent Brexit rumours. It’s also true that this seems to mean different things to different people.
If current Brexit talks end with a no deal, which is likely on the cards, what do you think would be the legal ramifications, for example what would happen in the criminal law sphere, how each individual sector change?
Below Lawyer monthly has heard Your Thoughts on the prospects of a no deal scenario, and what the legal sphere may see as a consequence.
Richard Thomas, Employment Lawyer, Capital Law:
With every new day showing more and more signs of a likely “no-deal” at the end of the two-year negotiation period, solicitors and other professionals alike are starting to dread what this deadlock will mean in practice.
From a lawyer’s perspective, the absence of any concrete and clear deal could spark legal and jurisdictional chaos across the UK. While we’ll hopefully have a ‘Great Repeal Act’ in force by this point, which would implement all EU legislation into domestic law, many fear that it doesn’t cover all bases. Legal and regulatory gaps could emerge post-Brexit
As an example, the EU has established several regulatory bodies (such as the European Aviation Safety Agency and the European Food Safety Agency) that regulate business activities in the UK. What will become of the regulation of such industries in the event of a legislative void?
Equally, domestic immigration law may find itself with an enormous question mark over its head following our withdrawal. With the debate on free movement of people at the forefront of Brexit negotiations, it cannot be said with certainty how migrants (both British and European) will be treated in the event of a no-deal.
Theoretically, it may be that the three million or so EU citizens residing in the UK will be treated as ‘third country nationals’. In practice, this may mean that each individual member state would have to barter an immigration deal with the UK to guarantee its citizens’ rights. A similar situation may arise for British nationals currently residing on the continent.
Commercial lawyers are also likely to be apprehensive of the future, given the potential ambiguity surrounding our trade relationship with the EU. Without a new trade agreement, the rules of the World Trade Organisation would apply by default. Worryingly, this would mean the imposition of tariffs and duties on goods sold by the UK to its European neighbours, and vice versa.
Whether “no deal is better than a bad deal”, as the Prime Minister so often puts it, is as yet unknown. But it’s this uncertainty that countless lawyers across the country dread the most.
Shara Pledger, Solicitor, Latitude Law:
If the current Brexit talks end with no deal, which is looking increasingly likely, there may well be a knock-on effect on both inbound (people entering the UK) immigration control, and the rules that will apply to British citizens entering or residing in Europe. The current regimes relating to non-EU and Irish citizens are unlikely to change.
Leaving the EU gives the UK the power to end free movement of people (one of the cornerstones of EU membership of course), and introduce its own rules and procedures. These could include tough new measures for both new migrants and those currently residing here. In real terms however, the government and UK industry both recognise that our economy relies heavily upon EU workers, and cannot afford to lose them. To this end, a transitional period will be required, and the UK will need to have a longer-term plan for managed EU migration.
From a practical perspective then, failure to reach a deal may not directly change the government's current plans for inbound immigration. However, it could leave British citizens living in or travelling to Europe without any guarantees – something that will no doubt be of concern for those likely to be affected.
Alfonso Valero, Principal Lecturer, Nottingham Law School:
The future of London as an international dispute resolution centre outside of the EU
Although there is some disagreement in the Cabinet as to whether or not there ought to be some planning for a “no-deal”, it is not impossible to think that the UK may not have reached a trade agreement when the Brexit day comes. This article looks at the risks on London as an international dispute resolution centre.
There are two important reasons for which London is an international forum for dispute resolution: one, English law as the chosen law for international contracts, particularly in financial and maritime sectors; and two, a long tradition of legal practice with judges committed to promote London as a dispute resolution centre, as demonstrated by Mr Penadés in his article ‘Commercial Choice of Law in Context: Looking Beyond Rome’.
On that basis, some may feel that London will not really suffer as a consequence of a no-deal. However, the pre-eminence of London courts cannot be understood in recent times without the tools for recognition of judgements (Brussels and Lugano regime) and the uniformity that provides the Rome regime in the applicable law. Outside of that context, enforceability of judgements across the European Economic Area becomes less clear and therefore the balance may be inclined in favour of other internationally recognised financial centres such as Paris or Munich. The UK government is very much aware of that and that’s why the paper ‘Enforcement and dispute resolution - A future partnership paper’ considered joining the Lugano Convention, which would mean joining the European Free Trade Agreement.
Accordingly, it is to be expected that a no-deal together with being outside of the EFTA would damage quite considerably the importance of London as a litigation forum. In all likelihood will be able to retain a very significant proportion of the disputes which have no real links to the EEA, but any litigant seeking recognition within the EEA would be minded to find a more suitable forum.
When it comes to arbitration, as shown by Professor Mistelis and Mr Friedland in their 2015 International Arbitration Survey, London is very much a preferred forum internationally, alongside Paris, Hong Kong, Singapore and Geneva. It can be said that as arbitration is outside of EU law, membership of the EU/EEA is irrelevant; more so considering that since West Tankers there have been cases of arbitration running parallel to litigation. Additionally, the parties choose arbitration precisely to avoid resorting to courts. On that basis, it can be said that London as an arbitration centre should not be in danger.
However, arbitration cannot be separated from the economic activities. If the companies that get involved in arbitration have relocated following the withdrawal of the UK from the EU, they may easily choose a different seat of arbitration.
We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!
