As of now, the UK is scheduled to leave the European Union on 31 October. It is still unclear, however, whether and how this will happen. A deal could be agreed between the UK and the EU, meaning that a transitional period would begin, during which we would still effectively be an EU member state. Alternatively, Brexit may be delayed again as it was earlier in the year. The scenario on everyone’s mind, however, is “no-deal”. Without a deal in place and without an extension, the UK will cease to be a member state and will have no transitional period to ease the way.
Needless to say, this will have an impact on a number of areas of law and regulation and this impact will be felt more keenly in some areas than others. In this bulletin, we consider our five Document Folders, addressing some key points about the impact of a no-deal Brexit.
If a no-deal Brexit takes effect it will not of itself cause significant legal changes relating to commerce within the UK, and in particular it will have limited impact on English law of contract and commercial law generally. However, there is uncertainty about various issues relating to trade between the UK and the EU 27 countries after Brexit takes effect.
A no-deal Brexit might affect the parties’ contract obligations, and so you should review your existing commercial contracts and consider what, if any, special provisions should be included in new contracts. The implications and commercial realities for you will be specific to your business, your particular circumstances and the nature and terms of the contracts concerned. Further details on this topic are available in our newsletter item, here.
The Government has published guides to prepare your business or organisation for Brexit and Brexit guidance for your business, which you should review as part of your overall no-deal planning.
Other key areas in our Business documents portfolio that merit consideration are consumer rights, data protection, and intellectual property. These are briefly outlined below and are addressed in more detail in our latest Business newsletter, available here.
UK businesses selling to consumers in the UK will not see a great deal of change in the event of a no-deal Brexit, but those selling into the EU must keep up to date with post-Brexit changes to EU consumer law. Cross-border enforcement of consumer rights is also set to become more difficult.
Data protection has been a major topic in recent years, particularly with regard to the GDPR. The GDPR is, of course, an EU regulation. A no-deal Brexit would mean the end of the EU GDPR in the UK, with a new UK GDPR to replace it. The UK GDPR will, in most respects, be the same as the EU GDPR, albeit with some contextual changes. From the EU’s perspective, the UK will become a ‘third country’. This will have implications for international personal data transfers and for dealing with individuals based in the EU and EEA. Transfer mechanisms such as standard contractual clauses may be required where they weren’t before Brexit, and you may need to appoint a European Representative.
In the realm of intellectual property, again, a lot of day-to-day activities should be unaffected. Copyright in particular is globally harmonised through international treaties. Registered IP rights within the UK should also not experience a great deal of impact. Holders of EU-centric IP such as EU trade marks and Community designs, on the other hand, will need to be aware of some key changes including some new UK rights that will, in essence, take over from their EU equivalents. Holders of .eu domain names may also need to take action if they are only UK-based.
The risks and implications for UK SME private companies remain the same now, should the UK leave the EU without a negotiated deal on 31 October 2019, as it did in March 2019.
The immediate impact of a no-deal exit on English company law as it applies to UK SMEs will be minimal. The main company law implications will only be relevant to listed PLC’s or corporate groups with companies or branches across the EU.
The body of EU law in force on 31 October will be imported into UK law and the Companies Act 2006 will continue in force as at present; therefore, a no-deal exit will not of itself change the legal status and operation of UK incorporated private limited companies. As such it is not necessary to update or change our corporate templates to accommodate a no-deal exit, which are only aimed at UK based and governed SME private limited companies and can be used following 31 October 2019 as they are used now.
As always, the exact implications and commercial realities for each of our customers will be unique to their individual circumstances. The Government has published guides to prepare your business or organisation for Brexit and Brexit guidance for your business, which customers should review as part of their overall no-deal planning.
In respect of Brexit, one of the key considerations is the future of EU nationals living and working in the UK. In the event of no-deal, the EU Settlement Scheme will still be in place, allowing EU nationals the opportunity to apply for indefinite right to remain. However, in the event of no-deal, only those already living in the UK by 31 October 2019 will be able to apply for settled status. The deadline for applications in a no-deal scenario will be 31 December 2020.
Under the European Union (Withdrawal) Act 2018, in the event of a no-deal Brexit all EU employment law will be converted (as it was before Brexit) into UK law. The Employment Rights (Amendment) (EU Exit) Regulations 2019 will make some small technical changes and introduce new provisions intended to preserve UK-located European Works Councils but employment law will otherwise remain the same for the time being. Further down the line, the UK government may take the opportunity to dismantle EU-derived employment laws, post-Brexit. However, it’s worth pointing out that some aspects of UK employment law – such as equality legislation – go further than EU minimum requirements. After a no-deal Brexit, even if the UK government does decide to repeal some EU-derived employment rights, there are still likely to be areas of employment law where the UK goes further than the EU.
Health and Safety
The duty to protect the health and safety of people affected by your work will not change with Brexit and you should continue to manage risk in your business in a proportionate way.
The HSE has made minor amendments to regulations to remove EU references but legal requirements will remain the same as they are now. Health and safety standards will be maintained.
If you make goods for supply to the UK market that currently use a Conformity marking (CE), you may need to change to the new UKCA marking. If these apply to your goods, you will need to use the new UKCA marking to indicate that your goods comply with UK regulations and can only be placed on the UK market. More information is available as part of the Government’s Brexit resources, available here.
The role of UK Approved Bodies (currently UK notified bodies) in the conformity assessment process will not change. Goods for supply to the EU will still require the CE marking.
We are continuing to monitor developments and their impact on our Health and Safety document portfolio, and we will send out updates as and when necessary.
There has been minimal intervention from the EU on the laws which govern how property is held in England and Wales. In short, leaving the EU, whether with or without a deal, will have little impact upon the laws and regulations governing property ownership and transactions in England and Wales. As a result, no changes are currently needed to our Simply-Docs template property documents which can continue to be used as they are whether the United Kingdom leaves the EU with a deal or not.
is an effect of Brexit relating to minimum energy efficiency standards and
energy performance of buildings which implemented EU directives. Whilst these may be subject to review
following our departure, it is unlikely that these will be repealed without a
similar regime being put in place due to the UK’s commitment to reduce
greenhouse gas emissions. If any change
is made it is unlikely to be made for some time whilst the UK government
addresses other more complex issues following Brexit.
 Reproduced with permission form Simply Docs