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The EU and the UK: what do lawyers make of the Referendum?

15 March 2016

BrexitJust under four months before the UK electorate votes on whether to leave or remain in the European Union, the Law Society Gazette gathered representatives from the European Parliament, in-house counsel, and private practice lawyers based in the UK, to discuss the implications of the referendum for law in the UK, for law firms, and for clients, in a roundtable discussion.

Philippa Charles, Head of the International Arbitration Department at Stewarts Law, participated in the debate. Coverage of the roundtable appears here on the Law Society Gazette's website - Roundtable: Brexit legal strategy.

A core concern for participants was the lack of certainty that surrounds the "leave" option: what form of relationship with the EU will the UK adopt if there is a vote in favour? Suggesting that the UK might adopt a position similar to that of Norway or Switzerland would, it was posited, result in a scenario in which Britain would trade a theoretical freedom to operate without restrictions, or a reclamation of sovereignty, for an obligation to comply with EU legislation into which the UK would have no substantive input - no EFTA state has access to the EU's market without paying for that and accepting certain obligations which follow from it. There was doubt that the UK's status as the world's 5th-largest economy was sufficient to generate bargaining power which would avoid any such problems or restrictions on its future relationship with the EU.

The time necessary to resolve post-Brexit arrangements with the EU was also considered: although Article 50 of the Lisbon Treaty provides for a two-year period from the giving of notice of a State's intention to withdraw from the European Union, the complexity and number of issues which would have to be negotiated and agreed suggested that it was likely to take considerably longer. Given the execution of the EU's Free Trade agreement with Canada had taken in excess of 7 years, the period of a decade cited by the Cabinet Office seemed realistic, if not ambitious, in the view of some of those present.

Other areas discussed were:

  • The risks to industries such as the financial sector, where "passporting" of business within the EU is considered a major advantage: were the UK to be outside that market, there may be a flight of institutions to countries which remain in the EU, to preserve that flexibility;

  • The extent to which business is burdened by EU regulation versus the extent to which business welcomes the clarity and certainty offered by such regulation on the conduct of business across Europe;

  • The day-to-day impact of rulings on employment rights in the EU which can have serious and significant consequences for employers (holiday pay entitlements including notional commission, for example) - and the effect within the UK of future governments rowing back from some EU-generated rights and entitlements for employees;

  • The position of EU nationals resident and working in the UK in the event of Brexit: naturalisation applications are increasing at present but are not straightforward. Could Britain suffer a "brain drain"?

  • The impact of a vote to leave on the status and importance of the English courts as a preferred venue for dispute resolution. From the perspective of arbitration practitioners, doubts about the continuation of mutual recognition and enforcement of judgments, and the resurgence of anti-suit proceedings if the "court first seised" principle no longer applied as between the English courts and those of other member states, might promote the use of arbitration for commercial parties to ensure certainty and enforceability in those countries pursuant to the New York Convention of 1958.

The Law Society's detailed report "The EU and the Legal Sector" is available through the Law Society website here.

Philippa Charles, Head of International Arbitration, Stewarts Law LLPPhilippa Charles heads the International Arbitration department and is commended for her provision of "an excellent service for her clients." Sources praise her as a "bright, tenacious and energetic" practitioner with "good, up-to-date knowledge of the law." She is described in the Legal 500 as "a good strategic thinker with very strong written advocacy, which makes her an easy go-to" (2009), as a lawyer who "has always brought common sense and leadership to her cases" (2007) and as a lawyer whose "intellectual skills are impressive" (2012). She has extensive experience of high-value, complex cross-border disputes and has advised extensively on issues concerning jurisdiction and governing law, in addition to representing clients in both arbitration and court proceedings. She has written widely on topics relating to arbitration and cross-border issues in both the national and international press.

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