Post-Brexit trade rules must not imperil more than £500bn of British business.
No business person is ever eager to end up in court. Even the most straightforward dispute risks becoming expensive and time-consuming, and takes them away from running their business.
Yet disagreements and disputes are part and parcel of business – limiting uncertainty is therefore key. Operating with clear and reliable legal systems allows businesses to get on with the job, safe in the knowledge that if things go wrong, they know where they stand.
However, when businesses are looking to trade across borders, then the rules for resolving those disputes may be less obvious. Which laws should apply? If a court in one country makes a decision against a company, can this judgment be enforced in another country where that company operates or has assets?
With British businesses doing £513bn of two-way trade with the other EU countries in 2015, the importance of being able to answer questions like this cannot to be ignored.
Within the EU we have a clear set of rules specifically designed to give answers to these questions. The Brussels I Regulation allows the recognition and enforcement of court decisions in civil and commercial matters between the member states, while the Rome I and Rome II Regulations give guidance as to which country’s laws are applied. The Law Society will be calling for these mechanisms to be maintained in the withdrawal negotiations.
These regulations, together with the supporting EU measures on service of documents and taking of evidence, give British businesses the certainty they need to trade freely throughout the internal market, knowing what their legal footing will be if disputes arise.
Whether we can retain these mechanisms is something our negotiators will have to figure out as we work our way through Brexit. Whatever the exact form of the new regime, maintaining the same level of clear, efficient and effective cross-border dispute settlement mechanisms must be a Brexit bottom-line.
Anything less imperils more than £500bn of British business.
Catherine Dixon is chief executive of the Law Society