The Brexit changes have still got legal minds running; the Lord Chief Justice of England and Wales, Lord Thomas, considers that leaving the EU is likely to be the “most complex” legal issue in recent history.
The fact that English law is no longer certain and it is considered that the UK is no longer a safe forum to bring disputes is worrying litigants; what happens to judgements which may no longer be enforceable in the European Community? There is an air of uncertainty circulating around such matters, and the task of overhauling large parts of domestic legislation, post-Brexit, is a huge job and one which is fraught with complexities say the country’s most senior judges.
Some might say that now is a good time to test cases at domestic level because once Brexit is implemented properly when the UK leaves the EU in 2019, the risk is that judges will be asked to decide cases against the background of Parliamentary uncertainty about how the law should look. This could mean that there will be a clear removal from the current principle that similar European cases are judged in the same way.
Whilst the concept of sovereignty does protect the UK’s ability to shape its own laws - a fundamental principle underpinning Brexit – the risk is having to decide whether Britain wants a complete overhaul of the laws, or whether there is instead a large scale harmonisation that falls in line with current EU regulations. Lord Thomas has also called for the Law Commission – an independent body that is responsible for keeping laws under review – to be given a bigger role after Brexit to try to disentangle highly technical areas.
There are also governmental plans to pass the Great Repeal Bill and to transfer EU legislation into UK law. Even if this is passed, parts of the law will still be subject to extensive amendment from Parliament and in some other areas more minor changes will inevitably be made.
Ever since the UK voted to leave Europe, the majority of commercial property professionals have been bracing themselves for a substantial slump in the commercial property sector; it was certainly noted that immediately after the vote the London market came to a standstill overnight. However, the month after the Brexit vote over a million square feet of commercial property was let in the city – confidence was truly restored.
This nod of assurance appears to have continued into 2017 as purchases by investors hit a nine-year high of 127,280 in 2016/17, up six percent from 119,920 in 2015/16 according to Lendy, Europe’s leading peer-to-peer secured lending platform.
The significant rise in commercial property transactions demonstrates the continuing attractiveness of UK commercial property to both domestic and overseas investors.
Lendy explains that the UK property market is the most fluid in Europe and has a number of features - such as upward-only rent reviews and long leases - that are absent in other overseas commercial property markets.
The fall in the value of sterling since the Brexit vote in June 2016 has made the UK property market more attractive to foreign property buyers who are hungry for yield in a low-interest-rate environment.
Those that believed the referendum would pave the way for a swift and decisive exit could not possibly have expected so many obstacles to the formal triggering of Article 50. But even following unprecedented peacetime political change, a series of constitutional legal challenges, constant media debate over soft or hard Brexit, a backlash from the so-called “remoaners”, and various amendment requests from the House of Lords, the path is finally clear to trigger the exit process.
Official commentators make the Article 50 process sound simple. They would have you believe that Prime Minister May symbolically delivers a notice to the European Council to kick-start a two-year withdrawal process. So far, so good, but it is that two-year process which will determine what Brexit actually looks like.
If only there was a precedent for the UK, and the EU for that matter, to follow. The simple truth is that the exit process has never previously been triggered and by all accounts, the treaty provision was never intended to be used. Whether another nation will follow the UK’s decision remains to be seen, but for now at least the UK and the EU are both entering unchartered territory.
Financial markets loath uncertainty although current thinking is that reaction to triggering the notice will be muted. As every business that depends on imported products will tell you, the supply chain is already dealing with the Brexit devaluation, so in a certain sense, the process is largely priced in.
Article 50 itself is brief. Once triggered, it obliges the EU and the UK to negotiate and conclude an agreement “setting out the arrangements for its withdrawal, taking into account of the framework for its future relationship”. Just two years are allowed for the process which can only be extended if each EU member agrees. So at this point, if no agreement has been reached, any single EU member could veto and effectively prompt the UK’s exit without a deal.
In January 2017, the House of Lords’ EU Justice Sub-Committee will hear evidence from two senior UK Judges on the significance of EU legislation designed to facilitate cross-border civil disputes. However, it cannot be avoided that there is the smell of uncertainty about the detail of the consequences for us for ending the UK/EU relationship, if it ends hard.
At present, EU legislation protects parties’ abilities to choose what governing law there should be for their contractual relationships and the ability to choose forms a fundamental freedom offered by English law.
The current EU framework applicable to contractual and non-contractual obligations is enshrined in the Rome I and Rome II Regulations, respectively.
It is not beyond the realms of possibility that a decision could be taken to leave the rules as set out in the above regulations intact after Brexit. A possible consequence being that the English Courts would be the final arbiter of how the rules are applied - ultimately a job reserved for the European Court of Justice as things stand. If that were to happen, then nothing immediate would change, but it is possible that the interpretation of the two regulations could start to differ between the UK and the remaining EU member states over time.
If the Rome I and Rome II Regulations were no longer to apply following Brexit, then it is possible that the UK would revert back to the rules in force before those regulations became law. As such, in regards to contractual obligations, the Rome Convention; which applied to the law governing contracts made between April 1991 and 17 December 2009 could apply, which, of itself, would not materially alter the present position as we know it. However, in regard to non-contractual obligations, the Private International Law (Miscellaneous Provisions) Act 1995 - which is a regime which is unlike to Rome II - could operate so that the parties would not have an express right to choose the law applicable to non-contractual relations between them.
However, it’s anticipated that when the UK eventually leaves the EU, the courts of EU member states will continue to respect the parties’ choice as to governing law as before; so that on choosing English law the parties to a contract will still enjoy an application of the rules set out in Rome I and II.