Effectively prepare against inevitable change and uncertainty

Starved of clarity, businesses are increasingly looking to the legal and compliance functions to build a coherent strategy on Brexit management.

Of 100 UK boards surveyed, 1 in 4 would welcome GCs’ greater involvement in Brexit¥. Being proactive in notifying boards of major Brexit risks and making clear if a business’ preparations are not sufficiently comprehensive.

Mark Evans, CEO, O2 sums up “In an uncertain world, the best leaders can do is to mitigate against foreseeable problems, be ready to respond to the unforeseeable and focus on what they can control”±.

This provides unprecedented opportunity for in-house counsel to get involved earlier to shape the strategic agenda and ultimately the growth of their organisation. Delivering robust, pragmatic plans that address the realities of their businesses, minimise risk and best prepare them for inevitable change.

A trusted framework to effectively manage risk

Our guide identifies the five key priorities for Brexit risk management.

Each priority includes a detailed action list which empowers you to create practical strategies and record your organisation’s level of compliance – all written by experts and based on thorough market insight.

An introduction to the guide is below, offering a taster of the action lists for each priority area.

The guide is part of our comprehensive coverage on Brexit including:

Toolkit including practical guidance, action checklists and flowcharts

 

Brexit alerts, news analysis, legal updates and expert Q&A

Legislation tracker, Brexit timeline and horizon scanners

 

Dedicated practice area Brexit updates

To view the full guide request your free LexisPSL trial.

Introduction

This risk management guide seeks to help you identify the key legal risks and sets out some practical guidance on how these may be addressed, notwithstanding the current environment of uncertainty. This guide is directed at cross-sectoral risks affecting most businesses, rather than focusing on issues relevant only to specific sectors, e.g. financial services passporting.

Priority 1 – Risk exposure in contracts

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Brexit could have significant implications on the validity and operation of contracts. As a first step, you should identify key contracts, particularly those which relate to the provision of goods or services either to or from the EU, i.e. contracts with businesses in the EU, and which last beyond 29 March 2019.

Action point Completed?

Identify any existing key contracts with businesses in the EU which last beyond 29 March 2019

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Review your key contracts, and consider when drafting new contracts, whether you need to amend any:

  • definitions

  • references to specific legislation

  • change control provisions as a result of Brexit

Where contracts allow for variation as a result of Brexit, consider the benefits and risks of either party exercising any such rights

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Review your key contracts to assess whether Brexit:

  • will impact on pricing, and if so,

  • whether more complex pricing mechanisms need to be agreed to reflect any Brexit cost implications

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To view the full action list - request your free trial

Priority 2 – Supply chain disruption

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While there remains uncertainty over what any final Brexit deal might look like, if a deal is even reached, it is highly likely that Brexit will result in some supply chain disruption. To prepare for and mitigate against risks associated, the following steps can be taken:

Action point Completed?

If you import goods from/export goods to the EU register for a UK Economic Operator Registration and Identification (EORI) number

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If you will be importing/exporting goods, establish whether:

  • your business plans to submit its own import/export declarations

  • a customs broker, freight forward or logistics provider needs to be engaged

  • you need to use any special customs procedures, eg customs warehousing, inward processing

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To view the full action list - request your free trial

Priority 3 – Restrictions on the transfer of data

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Post-Brexit data transfers between the UK and the EU will be considered to be between the EU and a ‘third country’ from a General Data Protection Regulation 2018 (GDPR 2018) perspective. To mitigate against significant financial penalties, it is important to ensure that appropriate safeguards are in place when transferring data.

Action point Completed?

Check whether your business currently makes transfers of personal data (as defined by the GDPR) outside of the EU

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If yes, determine whether is necessary to transfer that personal data outside the EU to meet your purposes

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If yes, determine whether the EU considers the data protection provisions in the receiving company to be adequate (and if not, whether appropriate safeguards have been put in place) and whether any GDPR exemptions apply

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To view the full action list - request your free trial

Priority 4 – New legislation replacing existing EU - derived laws

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It is critical to be alert to the extent your organisation relies on existing EU laws to operate. Changes to those laws, and the uncertainty around how they may be amended in time, including in relation to obtaining registrations and licences from EU based agencies, may have a significant impact on the ability of your business to operate.

Action point Completed?

Identify whether:

  • your business is currently required by existing UK legislation to take any actions at EU level, and if so

  • document the legislation in question

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Monitor new laws and/or regulations coming into force pre-Brexit to see whether any amend/replace the UK legislation your business is currently bound by—see: Brexit legislation tracker

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To view the full action list - request your free trial

Priority 5 – Enforcement of judgments

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Currently it is relatively simple to enforce judgments of the UK courts in the EU. This may become significantly more complicated in both costs and time post-Brexit. There are several ways businesses can mitigate against the risks. Three practical proactive steps to take now include:

Action point Completed?

Ascertain whether your business has any outstanding judgements with businesses in the EU that have not yet been enforced.

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If there are outstanding judgements, take necessary steps to seek enforcement pre-Brexit.

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Review ongoing litigation to identify any matters that are unlikely to be resolved pre-Brexit and:

  • assess whether there are likely to be any enforcement issues in any matters as a result of Brexit

  • ensure the case strategy files for any affected matters are updated to reflect any possible enforcement issues

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To view the full action list - request your free trial

I use it frequently and I recommend it to my colleagues all the time. When they ask me questions, I say there’s definitely a quick answer to that on PSL.  

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