Braced for a Brexit? Why lawyers should start thinking about a UK-EU divorce now

Braced for a Brexit? Why lawyers should start thinking about a UK-EU divorce now

Every scandal has a 'gate', so now every existential European crisis has to have the obligatory two consonants tacked onto an 'exit':

Britain + exit = Brexit

Marry it to a hashtag and that's social media sorted too. The UK's potential divorce from the EU pruned back to a clunky acronym.

Oh well.

Whatever happens, we are clearly going to be seeing a lot more of our hashtagged friend in the months and years to come, whether we like it or not.

So what should lawyers be doing? More importantly, what should they be telling clients?

Last night, a panel of QCs and leading experts from Monckton Chambers, chaired by Sir Stephen Laws, gathered to discuss the ‘what ifs’ of Brexit.

They stressed that legal advisors can’t afford to ignore this. Increasingly lawyers are going to be asked to advise on the potential implications of a UK exit. Clients will only be fobbed off with platitudes for so long.

So what if we decide to say our ‘Br'au revoirs’ to the EU?

Here are some of the the key ‘takeaways’ from the evening:

  • Dates: When would we leave? In essence, nobody knows. A date hasn’t been set for the referendum so there is nothing to work with at the moment. If polling day is in 2017, then the earliest leaving date is 2019 (ie after the two year long period set out in article 50 of the Treaty on European Union). However, the likelihood of the UK extracting itself from the EU within two years seems to be wildly optimistic. Bank on an exit at some point in the early 2020s?
  • UK breakup: Would a 'yes' vote to leave the EU result in a flurry of further exits and awkward acronyms, this time from the UK itself (a Scoxit, Nexit or even a Wexit)? This is certainly a possibility in the long run.
  • EEA: Would the UK join Norway, Iceland and the 37,000-odd people of Liechtenstein in the EEA? The consensus was that this seems unlikely. For a start, the Norwegians, as ‘top dog’ in this trading block, might not be too keen for the truculent Brits to ‘upset the apple cart’ (to quote one member of the audience). What’s more, the EEA is, simply put, ‘EU-Lite’. There are entrance fees (Norway still has to stump up hundreds of millions of euros annually towards the EU budget) and—and here’s the rub—it has little or no say on the EU laws imposed on it via the EEA.
  • Bilateral treaties: So what about the Swiss model or, to quote Boris Johnson, Britzerland? Under this scenario, the UK would enter into various bilateral treaties with the EU allowing for the free movement of goods but not, say, the free movement of people. This is one step down from the Norway model but, in reality, this is unlikely to be on offer as the EU is not particularly happy with the current arrangements. Moreover, relationships between this Alpine enclave and the EU are pretty cool at the moment after Switzerland scrapped free movement for EU citizens after a referendum last year.
  • EU/ UK citizens: What of the millions of EU citizens in the UK, and millions of UK citizens in the EU? What happens to them? UK citizens wanting to move from the UK to the EU (and vice versa) should work on the basis they may not have any legitimate expectations they can exercise their ‘free movement’ rights post-Brexit. The Conservative election victory and proposed Referendum Bill has effectively put everyone on notice of this possibility. Therefore, coming home has to be as much a part of any plan as leaving home. Local laws are likely to provide for a period of time to adjust to the disappearance of EU rights so that, for example, UK citizens have time to hand in their notices and sell up. As for UK citizens who moved to the EU years ago, local laws (including human rights laws) may provide some help: they might be able to argue that they have a ‘legitimate expectation’ they can stay put. The key word here, of course, is ‘might’. Nothing in this area is ever certain.
  • Businesses: As for businesses, similar issues arise and the panel stressed that directors should start considering the issues now. Frustratingly, what they should think about is ‘wholly unclear’ as we don’t know what the plan is yet. For example, what would happen to a company’s board where it is a smorgasbord (or smorgasboard?) of UK and EU citizens? Where should a business now place itself geographically? Businesses like certainty. This is going to be in short supply for the next few years.
  • Laws: How different would the laws look were the UK to walk out the door? In many cases it is truly plus ça change, plus c'est la même chose. Yes, in theory, the UK would have more power to do as it pleases, such as in connection with the free movement of persons, but in practice it might very well end up enacting laws which are the same as, or similar to, those of the EU. Indeed, whatever legal model is chosen, the UK would doubtless have to apply EU standards when exporting to the EU, the UK’s main trading partner. And don’t forget the need to negotiate scores of treaties with third countries to deal with the trade in UK goods.
  • Human rights: What about—and please steel yourself for another acronym—a HRexit? In other words, a repeal of the Human Rights Act 2000 or an exit from the European Convention of Human Rights (ECHR) or both, before or during a Brexit? This deserves another blog post in itself but, in my view, there were two stand out points: (i) human rights are so interwoven into the devolved institutions in Scotland, Wales and Northern Ireland that unpicking them is likely to be a Herculean task, (ii) if we decide to not leave the EU, we could do so at a later date by contriving a situation where we are kicked out (not by sending Engelbert Humperdinck, to the Eurovision Song Contest again, but by the UK leaving the ECHR).

So far so negative?

Possibly—and this is just the briefest of flavours of the issues that the panel raised.

However, perhaps we ought to finish on a more chipper note?

The challenges that the country would face are arguably not insurmountable if we decide to leave.

Indeed, this is all academic if negotiations for reform go well, as well they might. There seems to be an increasing political will to accommodate the UK as the sixth largest economy in the world and member of the UN Security Council. Other EU countries are keen on reform too.

Perhaps, in the end, the threat of Brexit will result in 'Breform'? And, all being well, the death of ‘Br + noun’ acronyms?

I can only hope so.

So what do you think? Should we stay or should we go and how would this affect you in legal practice? How do you think this would affect commercial law?  Do let us have your thoughts below.




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