20 January, 2017
With the uncertainty that we as a country are faced with at present, we have often been asked the question by businesses as to what Brexit means both practically and legally for them. Whilst in the short term, many of the EU laws by which we are governed will be applied under a "Great Repeal Bill", the short answer is that we quite simply do not know all of the answers for the long term status of this legislation and it may well be many years before we do. Whilst economically there is much instability, it is at least comforting for businesses that from a legal perspective, not much should need to change right away. This article therefore focusses on this area of the law and the considerations which businesses should apply in pre and post-Brexit Britain.
Considerations in relation to …
i) … advertising and marketing
Prior to entering into contracts, businesses need to consider the implications of the changes on their advertising and marketing campaigns. UK laws have always diverged from those of the rest of the EU somewhat, partly due to the differing cultures and practices at this side of the English Channel. Whilst the EU has sought to harmonise the legislation across the EU relating to advertising it is likely that this is one area of the law which will be subject to change. However, the main consideration for businesses (particularly those trading cross-border) is not that change may be on the horizon but that what is going to be legal in post-Brexit UK may not be so in the EU and vice versa thus presenting cost and continuity challenges.
ii) … confidentiality
Confidentiality is an important concern for businesses at any stage of commercial dealings with a third party. Were the UK to have noted 'remain' in the Summer then we would looking forward to welcoming the new Trade Secrets Directive in 2018. This is designed to protect trade secrets by firstly defining what they are and introducing clear rules on its unlawful acquisition, disclosure and use.
iii) … consumer law and e-commerce
As most will be aware there have been vast quantities of new legislation relating to trading with consumers over the past few years, not lease including the Consumer Rights Act 2015 and the Consumer Contracts Regulations 2013. Businesses should have taken steps to update their trading terms in light of those new laws (and particularly in light of Trading Standards being able to penalise them if this is not done). With these pieces of legislation consolidating domestic (as well as EU) law, it is unlikely that these will be changed again in the near future. This means that for those who updated their terms a further change shouldn't be round the corner and for those that haven't, it would still be strongly advised and worthwhile to do so now.
On the flip side, unless the UK takes up EEA membership, businesses within the UK could lose out on the ability to provide online services across EU member states. It would be important for advice on different jurisdictions and terms and conditions to be taken from abroad thus potentially making this an overly onerous and expensive exercise.
iv) … intellectual property
it remains to be seen what will happen to the status of the Community Trade Mark (CTM), offering businesses protection across the EU. There have been some schools of thought that leaving the EU would mean that businesses who do not also hold a UK Trade Mark (in addition to their CTM) would have to make a separate UK Trade Mark application although it would seem more sensible for legislation to be implemented to give a CTM effectiveness. This is something that we'll have to keep a close eye on.
v) … contract law and the contracts themselves
Whilst contract law of itself will be unaffected by Brexit, it is of vital importance to ensure that the contracts with which you are operating (whether on short or long term bases) work for you. The main issues to consider are going to be those under which businesses are importing or exporting and hinge massively on the deal which the UK is able to strike with the rest of the EU. For example, will there be an imposition of new tariffs or a reduction in the freedom of movement and as we have seen already, what might the affect be on fluctuations in exchange rates? Ensuring that commercial contracts have clauses set out within them to give your business the ability to ride these uncertainties or even terminate the contract in the event of a significantly adverse event is very important.
Essentially, whether pre or post-Brexit, it is important that your contracts work for your business by ensuring that they contain and do exactly what you need them to do. The right contract will give your business the ability to trade with confidence and certainty and if there are any doubts about how Brexit may affect the relationships that you have with suppliers and customers alike then where possible, it would be wise to tackle these well in advance. For advice and assistance on commercial and contract law matters, please feel free to contact John Pickervance via John Pickervance or on 0333 207 1134.