Contracts—What next for in-house counsel after IP completion day?

Contracts—What next for in-house counsel after IP completion day?

On 20th January, LexisNexis UK hosted a virtual event for in-house senior counsel, facilitated by Sophie Gould from Flex legal and in partnership with Radius Law. Speakers at this event included Iain Larkins and Sandra Martins from Radius Law, Seffton Samuels, (operations director and general counsel at SMMT) Ian Leedham, (head of legal at Euro Car Parts) Ken Milnes (in-house counsel) and PSLs from LexisNexis UK.

Building on the success of a similar event in November, January’s event focused on what the end of the transition period means for in-house counsel who deal with contracts, data protection and employment law. This is the first post in a series of three, covering our panelists’ insight into contracts. 

As well as providing a high-level overview of the current situation and potential implications, the speakers answered questions from attendees. All questions asked have been posted to Radius Law’s slack channel, where you are free to view them and submit your own questions, which will be answered by expert practitioners.

The session kicked off with a few polls, asking attendees what their biggest Brexit related challenge was and whether their business planned to keep existing operations in current locations or move them as a result of the Brexit deal. Participants overwhelmingly said their biggest Brexit related challenge consisted in data protection issues, although a significant minority highlighted tariffs/customs checks and changes to immigration rules as their key concern. This makes sense perhaps, as almost nine out of ten attendees stated that their business plans to keep all existing operations in the current locations.

Ian Leedham opened the discussion on the impact of Brexit on contracts, focusing on risk management. He stated that many issues highlighted in November’s session remained—although there are now more risks that are related to coronavirus (COVID-19) than may perhaps have been anticipated.

For example, as expected, the practical issues arising from additional paperwork are giving stakeholders a headache, as well as causing delays in supply chains. Practitioners should monitor these changes closely to see if short terms delays transform into long-term supply issues. For updated content on this, see LexisPSL Practice Note: What does IP completion day mean for supply of goods?. For more specific information on risk management within your contracts, see our Practice Notes on: Reviewing commercial contracts to minimise financial difficulties, Brexit—contract risk management and Contract risk management clauses—checklist.

Ian spoke of the Percy Pig issue as an example of ‘hidden tariff’ problems which may arise. Marks & Spencer’s Percy Pig sweets are manufactured and packaged in Germany and then shipped to the UK. So far so good—no tariffs are payable thanks to the trade deal. However, some of these much-loved goodies are then exported to stores in the Republic of Ireland and in Northern Ireland, without further processing. Therefore, M&S may have to pay a duty uplift on these exports.

Like M&S, businesses should examine their supply chain and distribution channels to understand the impact the new rules of origin and tariffs will and consider whether supply and distribution routes should be adjusted. Ian reminded attendees that businesses may see issues from imports around the world, not just in the EU and therefore all supply and distribution routes should be looked at.

For helpful pointers on these issues, see our Practice Notes:

What does IP completion day mean for supply of goods?

What is an EORI number and when is it needed?

What is the concept of origin within the Trade and Cooperation Agreement between the UK and the EU?

What are commodity codes and procedure codes from 1 January 2021 and where do I find them?

What is an authorised economic operator (trusted trader) and when should a business consider applying for this status?

 

Margaret Craton, Head of the LexisPSL Commercial team, brought the discussion to jurisdiction issues. Businesses should keep jurisdiction clauses under review, assessing existing agreements and whether they will continue to be effective. The UK acceded to the Hague Convention on Choice of Courts Agreements in its own right on 1 January 2021. However, practitioners should remember that the convention only applies to exclusive jurisdiction clauses and not to asymmetric clauses. Businesses could consider using confirmatory documentation for existing clauses to avoid disputes over the scope of the Hague Convention. For LexisNexis’s coverage, see Practice Note: What does IP completion day mean for contract breach and remedies?

Ian closed the discussion on jurisdiction by reminding attendees that, regardless of Brexit, arbitration clauses are a good option to help businesses manage cross-border disputes. For LexisNexis’s coverage, see Practice Note: Arbitration—an introduction to the key features of arbitration and Precedent: Arbitration clause.

 

Upcoming Senior Counsel events – IR35: the end of self-employment?

Date: 24 February

Time: 10am – 11am

Register today

How prepared are you for the IR35 changes due for implementation in April 2021? The new IR35 rules mean that many businesses are now urgently reviewing how they employ their teams. We’ve teamed up with Radius Law and Flex Legal to bring you an event focused on the forthcoming changes to the IR35 legislation.

Join us on 24th February 2021 to ensure you’re prepared to safeguard your organisation against significant liabilities and prevent them from making incorrect and costly decisions. 

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About the author:
Gloria is a Paralegal in the Lexis®PSL Paralegal Hub. She graduated in International Law and Globalisation from the University of Birmingham in 2019 and has been at LexisNexis UK since March 2020. She has experience working for US, UK and Italian law firms on a range of matters, including IP, financial services and immigration law.