The extended period of uncertainty that has followed the leave vote is inevitably presenting challenges for businesses, especially those heavily regulated by EU law or highly dependent on imports from or exports to the EU.
Whilst we wait for details to emerge about when and how the UK will leave the EU and how particular laws will change in the future, there are certain actions you can take now to assess and protect your position:
- Key existing contracts: Review important existing contracts with Brexit in mind. How will such contracts be affected if the UK leaves the EU? What rights might you be able to utilise under such contracts to protect your position? For example, do you have rights to vary the terms on which you have contracted, increase your charges, pass on additional costs (e.g. duties or tariffs) or terminate? Might you be able to trigger rights under force majeure or material adverse change clauses in certain circumstances?
- Future contracts: Consider carefully the likely implications of Brexit on any contracts you negotiate over the coming months. For example, will you need the right to revisit your pricing model in certain circumstances? What will the impact of Brexit be on any legislative framework that applies to the contract? What rights might you need to vary or terminate the contract? What about governing law and jurisdiction?
One option is to include in any new contracts a clause requiring the parties to review the contract and agree any necessary changes if certain Brexit events (this would need to be defined) occur. However, clauses in a contract which require the parties to reach agreement at a future date are often legally unenforceable. It’s therefore advisable to take legal advice on the drafting of any such clause.
- Free movement of workers: Consider the impact any future restriction on the free movement of workers may have on your workforce. It is impossible to predict what level, if any, of free movement will result from the EU negotiations, but if you employ EU nationals or indeed employ UK nationals working in the EU, you may need to consider the implications of a change to their right of free movement.
- Reassure employees: Find out how your employees are feeling about the result of the referendum and consider whether you should issue a briefing and/or invite discussions to address this. A simple message from you to rebut any false or misleading information and put the result of the referendum in context could help the stability and well-being of your workforce.
- Continue to observe EU laws: Make sure that you continue to comply with all your existing legal obligations. Until the date of entry into force of any withdrawal agreement or, if earlier, a period of two years has elapsed from the date on which the UK serves formal notice to leave the EU, we remain bound by all EU laws.
Geldards will be providing further Brexit updates as more details become available regarding the arrangements for the UK’s withdrawal from the EU. In the meantime, if you would like to discuss any of the points raised in this article please contact:
Michelle Craven-Faulkner, Partner, Commercial
Telephone: 01332 378391
Debra Martin, Partner, Corporate
Telephone: 01332 378355
Paul Hopkins, Partner, Dispute Resolution
Telephone: 029 2039 1727
Kim Howell, Partner, Employment
Telephone: 029 2039 1473
Jaclyn Barnes, Partner, Private Client
Telephone: 0115 983 3747
Huw Williams, Partner, Public Law
Telephone: 029 2039 1765
Tiffany Cloynes, Partner, Development & Regeneration
Telephone: 0207 620 0088
Bethan Lloyd, Partner, State Aid & Corporate Law
Telephone: 0292 039 1890
Clare Hardy, Professional Support Lawyer
Telephone: 0292 039 1766