Brexit deal still lacks clarity for business, lawyers warn

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Dec 11, 2017
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Theresa May and Jean-Claude Juncker agreed a deal over the role of the European Court of Justice after Brexit

Emmanuel Dunand/AFP/Getty Images

Ministers may have been relieved at last Friday’s “Brexit deal”, but lawyers warned against premature celebrations claiming that the agreement “does not provide the type of clarity companies need”.

Theresa May’s eleventh-hour deal also dealt a blow to the credibility of the only Brexiteer at the Ministry of Justice.

Hours before the prime minister made her early morning dash to Brussels to announce the deal, Dominic Raab, the courts minister, confidently predicted the government would insist that neither the top courts in the EU nor the UK would have final jurisdiction over post-Brexit disputes.

Raab told a conference at a London think-tank last week that allowing either the European Court of Justice or the UK Supreme Court to have jurisdiction over disputes would be “lopsided” and that a separate tribunal should be created.

However, early analysis of Friday’s deal suggested that UK courts will still have to have “due regard” to relevant decisions from the EU’s top court. It also calls for the creation of a mechanism so UK courts can ask the court in Luxembourg for guidance on interpretation and that the arrangement should run for eight years after the UK quits the union.

City of London lawyers were underwhelmed by the commercial elements of the deal. 

“It does not provide the type of clarity companies need about future trading and customs arrangements between the UK and the EU,” Robert Bell, a partner at the City office of the US firm Bryan Cave, said. “Nor does it provide any guidance on the terms of any transitional deal or implementation period.”

Bell added: “Businesses are going to need a lot more comfort before they turn their backs on their Brexit contingency plans which deal with the relocation of staff and offices”.

Paul Hardy, a partner at the London office of the transatlantic law firm DLA Piper, described the deal as “principally political”. Although he went on to say that the agreement did indicate “a positive note about ensuring that goods on the EU market before Brexit can circulate freely after Brexit, about the enforcement of contracts entered into before Brexit, and the recognition of UK court judgments”.

Mark Simpson, a partner at the London office of another transatlantic firm Norton Rose Fulbright, said the negotiations were now on track for an “orderly Brexit”.

“There is clear intention to focus for the next nine months on agreeing transitional arrangements and a framework for future relations, including on trade and security,” Simpson said. 

“This is something which is certainly more achievable than the idea that a full trade deal could have been done in that time, with the risk of a cliff edge if that didn't come to pass.

“This recognition provides important reassurance that an orderly Brexit is now much more likely, and should allow businesses to adjust their contingency plans accordingly.”

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