Asks: Brexit or bust – a brave new world?
It was once said that Richard Nixon’s gift to the world was the addition of the suffix “-gate” to any scandal, whether US or international. Perhaps David Cameron’s gift will sadly be the inclusion in the next edition of the Concise Oxford English Dictionary of the noun“Brexit”. More certain is the fact that 50 years hence – in 2066, some 91 years after the 1975 Referendum which produced a two-to-one majority in favour of the UK remaining a member of the then European Economic Community – many of those who voted for or against Brexit will reflect on whether it was all worth it. By then the history books will tell us whether we became a bankrupt nation of little global influence or whether the 23rd June 2016 was, as per our now Foreign Secretary’s rallying cry, “Independence Day”.
Maybe I can now dream in my next life as coming back as an international trade negotiator, the required skillset for which filled many a column inch in last weekend’s press. We are told that various magic circle firms are eagerly anticipating a plethora of calls from the Foreign Office, Treasury and the new Ministry for Brexit, for highly qualified experts to launch into immediate trade talks with Australia, China, Canada – in fact anyone who will have us.
Simultaneously, the Article 50 “nuclear button”– which would commit the UK to exit in the absence of an agreed extension at the end of a two year negotiation period – is currently the subject of at least two contemplated legal challenges. This is on the basis that the authorisation of the signing of Article 50 cannot be undertaken by the Prime Minister acting alone: rather, there has to be, it is suggested by various legal luminaries, a formal vote in Parliament. It is argued that our new Prime Minister’s commitment to effect the will of the people (“Brexit means Brexit”) would require a majority vote in Parliament, and one that will doubtless be resisted in conscience by a majority of the House of Commons but who will nonetheless be compelled to implement the will of the 17 million people who voted “out”.
The legal implications of this unholy mess are still evolving. Corporate and M&A activity is suggested to already be in decline, investment decisions have been postponed, and property prices are reportedly heading into a downward spiral if not stagnation. The British Pound has plummeted against the US Dollar, albeit it is holding up against the Euro, in part, with the markets potentially concerned by the prospect of an Italian banking crisis. In no particular order, the plethora of legal issues that will require strategic and intellectual brainstorming by any firm include possible changes to the anti-money laundering (AML) regime in the UK, a re-calibration of the rules surrounding legal professional privilege, as well as amendments to mutual legal assistance procedures. Immigration, employment and asylum issues, already ever-present, are set to become more prevalent as are challenges to the European Arrest Warrant regime once the dust on Article 50 has settled.
However, as painful as the 2008 crash was for many law firms and practitioners, with every crisis there is opportunity. The truth is: lawyers thrive on chaos and crisis. Commercial litigators may well see an upturn in an already vibrant market with international disputes regarding the enforceability of commercial contracts, an explosion in ever-increasing arbitration disputes, and the world of intellectual property laws becoming more frenzied and legally challenging. We have already secured an opt out from the European Account Preservation Order (EAPO) but the wider impact of European legislation and the soon to be historical supremacy of the European Court of Justice will engage the great and the good of the Commercial Chancery and Tax Bar for many years to come.
The President of the European Commission, Jean-Claude Juncker, somewhat hysterically suggested that Article 50 could be activated by David Cameron simply uttering the word “Brexit” or more colloquially “we are leaving”. Commercial litigators – indeed any half decent disputes lawyer – would say unequivocally that the key approach to negotiation is to keep your winning hand until last so our negotiators and the Prime Minister with her coterie of Brexiteers should politely decline to press the Article 50 button until they are ready to do so, even if that takes years. After all, the Commission and the rest of the 27 EU member states can hardly seek an order for specific performance!