The government’s no-deal advice for Brexit is coming thick and fast. It is not easy to find the technical papers on the website of the Department for Exiting the European Union (DExEU), but every solicitor should seek them out and see which apply to his or her clients’ or firm’s situation.
Personally, I think no-deal is unlikely, given the strong wish on both sides to seek a deal, and the long history of fudge in such negotiations. But others have put forward strong reasons not to be so sanguine. The Law Society is preparing its own no-deal advice for the profession, to be ready if and when the case arises.
In last week’s second batch of governmental advice, there were at least two of crucial importance to the whole legal profession. Probably the most important, because it covers nearly every lawyer, was the document ‘Data protection if there’s no Brexit deal’. This received practically no press coverage, since it does not have the popular appeal of passports or international driving licences, but it is equally central to our lives. The paper makes clear that, although there will be regulatory alignment between the UK and the EU in event of no-deal, there will be problems. For data flowing from the EU into the UK, ‘the UK would at the point of exit continue to allow the free flow of personal data from the UK to the EU. The UK would keep this under review.’ But the other way is not so easy.
In the long term, data going from the UK to the EU will be covered by an adequacy agreement, which should not be difficult to achieve since each side abides by the General Data Protection Regulation (GDPR). But the EU has told the UK that the decision on adequacy cannot be taken until the UK is a third country, and negotiations on this point have no scheduled starting date. So it looks as if there will be a gap between the GDPR covering us during our membership of the EU, and the EU finalising the adequacy agreement.
During that gap, all law firms sending data to the EU should, according to the government, consider introducing standard contractual clauses for their EU-bound data flows. There are other options, and the government refers those interested to the Information Commissioner’s website. Given the short period of time left before a possible no-deal, it is obvious that preparations should take place immediately.
The other crucial paper issued last week was that on ‘Handling civil legal cases that involve EU countries if there’s no Brexit deal’. The Gazette published a short summary and also a note by Lucy Frazer QC MP, a parliamentary under secretary of state at the Ministry of Justice.
The original paper is long and detailed, and merits close reading by all those who have current, or may have future, civil cases involving another EU member state. The paper cites the nine civil law instruments (including those which cover recognition and enforcement of judgements in civil and commercial, matrimonial and parental responsibility, and maintenance matters, insolvency and small claims) plus four international agreements (covering similar topics). The effect of no-deal on each instrument is different according to its rules and applicability – for example, those which rely on reciprocal recognition will no longer apply after Brexit, but others will.
The main warning for solicitors is that the government specifically advises parties to such cross-border disputes to seek professional legal advice about how no-deal will affect their case. And, assuming anyone reads the technical papers and takes on board what they say, solicitors will therefore be approached by clients in the coming days to advise on the matters raised.
DExEU published its first tranche of technical papers towards the end of August, and there was one on ‘VAT for businesses if there’s no Brexit deal’. I don’t have to tell anyone who runs a business how complex VAT is, and how much more complex are the rules for cross-border VAT. There is a section in the note on service providers like the legal profession, and all those with cross-border transactions should prepare themselves by reading it.
Finally, the other 50-odd technical papers cover issues on which solicitors are advising clients. Competition lawyers should particularly note ‘Merger review and anti-competitive activity if there’s no Brexit deal’. The most common others are likely to be those covering importing and exporting, meeting business regulations, money and tax, protecting the environment, regulating energy, farming, seafaring and work place rights.
There are more to come, between 20 and 30 more, including on areas doubtless important for us. I just hope that my personal prediction comes true, and that none of them will ever have to be used.