Brexit

For insight into what Brexit may mean for your business, please review the articles below or visit our dedicated Brexit LinkedIn page for all of our latest updates and you can also follow our Brexit tweets at #WMBrexit.

Brexit: People – How can employers attract and[...]
The overall pool of candidates who are free from immigration restrictions will be smaller from […]
The overall pool of candidates who are free from immigration restrictions will be smaller from January 2021, when free movement for European nationals ends. In addition, with an ever increasing focus on technology and automation, UK businesses are likely to need highly skilled individuals with STEM backgrounds, who may be in short supply.
Given the inevitable increase in competition for the best people, now is the time to think about recruitment practices and incentivising existing staff. Here are four things we are seeing businesses concentrate on in their HR strategy planning:
- A focus on long-term flexible working – not only in the sense of working from home (which looks set to be the default for many roles, for some time), but also in working hours and practices, to fit around other commitments. Many employers have been implementing new flexible working policies, to give more choice to employees about when, where and how they work. In doing this, thought should be given to how performance will be monitored and service levels maintained. We are also increasingly seeing employers permitting employees to “work from anywhere”. Such practices could attract international candidates who intend to stay overseas and carry out the role remotely – but be aware that there will be implications in terms of tax, immigration status and employment rights to consider.
- Re-thinking business values and culture – there’s no doubt that we are seeing a greater push for businesses to be purposeful in their ethical and social commitments, which we considered in our article on stakeholder engagement. Initiatives relating to the environment, sustainability and ethical working practices are now a must for many individuals when searching for an employer, so it’s important to know what your business’ message is. It’s also essential to have genuine equality and diversity practices in place, with many businesses now opting to publish diversity data and taking steps to address under-representation, such as signing up to the Race at Work Charter. Businesses that have a clear vision, which employees believe in and can contribute to, are likely to stand out to candidates.
- Consider applying for a sponsor licence – If you want to also look outside of the UK workforce to recruit skilled individuals, now is the time to apply for a sponsor licence. The government is actively encouraging businesses to do so in preparation for the end of free movement for European nationals from 1 January 2021. There are already over 31,500 UK registered sponsor licence holders, but it’s likely that many more businesses will be making applications in the coming months. For employers who already have a licence, there are still significant changes to the immigration rules from next year, for you to get to grips with. While the aim of the new rules is to streamline some aspects of the points based system, it should be noted that there are still prescriptive requirements about who is eligible for sponsorship, stringent duties on sponsors and significant costs involved.
- Investing in people, through training and apprenticeships – the provision of training courses should serve to encourage better performance and productivity, but it also signals a long term commitment to developing your people. This could lead to more internal promotions, giving employees the opportunity to progress in their careers and boosting staff retention rates. In addition, offering apprenticeships to encourage junior entrants, particularly in roles which focus on the development of technology, can assist with filling skills gaps. Now is the time to get a plan for apprenticeships in place, particularly as the government has increased incentive payments for apprentices hired between 1 August 2020 and 31 January 2021.
Once you have a talented workforce, how do you ensure your business is protected in the event that people move on? In the next Brexit: People publication we will consider how you can protect your business’ interests and confidential information, including how and when restrictions on competition might be used.

The impact of Brexit on UK data protection[...]
UK data protection legislation has historically been largely EU-driven, going right back to the 1995 […]
UK data protection legislation has historically been largely EU-driven, going right back to the 1995 Directive which was the foundation of the Data Protection Act 1998.
More recently, the General Data Protection Regulation (GDPR), having direct effect in all member states, come into force on 25 May 2018 to harmonise the acquisition, processing and retention of personal data across the EU. On the same date the UK implemented the Data Protection Act 2018 to supersede the 1998 Act and reflect the provisions of the GDPR.
Given the inextricable link to EU law in this key regulatory area, the prospect of Brexit has caused some concern as to the impact on UK businesses. At this stage, the future remains unclear and will be determined by the deal/no deal conundrum. The following explores the current position and what businesses need to consider in anticipation of the changes likely to occur.
Although the UK left the EU on 31 January this year, nothing has changed as yet, because we are in the transitional period pursuant to which EU law will continue to apply in the UK until 31 December 2020. The latest date for applying for an extension to this period, 1 July 2020, has now passed and accordingly GDPR will cease to have direct effect in the UK on New Year’s Day 2021, at which point the UK will become a third country for the purposes of EU data protection law.
The UK is committed to maintain an equivalent regime post-Brexit to minimise the impact on UK data controllers and processors and to this end the Government has passed the European Union (Withdrawal) Act 2018 and the Data Protection, Privacy and Electronic Communications (Amendments etc.) (EU Exit) Regulations 2019 (The Exit Regulations) which serve to ensure EU law as it exists on exit day, including GDPR, will be incorporated into UK law.
From that point, at the end of the transitional period, the UK legislative regime will comprise the Data Protection Act 2018, the Privacy and Electronic Communications Regulations 2003 and the ‘UK GDPR’.
So it will effectively be business as usual then? Well not quite: as well as additional administrative demands on businesses trading in both the UK and the EU which will become subject to dual regulation, there is still one key piece of the jigsaw missing. Smooth and easy data transfer to and from the EU post Brexit is fundamental to the ability of British businesses to trade freely with EU member states. As outlined above, the UK status under EU data protection law will change on 1 January to that of a third country. As such, new arrangements need to be put in place determining what controls will apply to the import and export of personal data going forward and these have yet to be resolved.
Data transfer – the current position
At present, personal data can flow freely between EEA territories (the EU member states and Norway, Liechtenstein and Iceland) and those third countries (12 in all including Canada, Switzerland and New Zealand) which have been afforded ‘adequacy status’ by the EU. An adequacy ruling is crucially important, as it means that effectively these countries are treated as if they were in the EU as regards the transfer of personal data without any further safeguards being required.
Absent an adequacy ruling, the transfer of personal data from EEA territories to a third country requires ‘appropriate safeguards’ to be in place. Such safeguards include:
- Use of the EU Standard Contractual Clauses (SCCs) (known historically as the model clauses) between importer and exporter (but only covering data controller to data processor and data controller to data controller transfers)
- Binding Corporate Rules, the use of which is limited in practice as they apply only to intra-group transfers and the application process for adopting them is lengthy
- (Prior to the decision of the European Court of Justice on 16 July 2020 in the case of Schrems II, which is covered below) for transfers to the US, confirmation that the receiving party was a member of the US department of commence ‘Privacy Shield’.
Data transfer – post Brexit
With regard to the transfer of personal data from the UK to the EU, the Exit Regulations provide that the UK will recognise all EEA countries (and Gibraltar) as ‘adequate’, as well as those countries already subject to an EU adequacy decision, and permit the transfer of personal data to them without the need for additional protections. The UK will also recognise the SCCs as a legitimate basis for transfer and all binding corporate rules existing on exit day.
So the UK has already played its part in taking the necessary steps to preserve business as usual for data transfer from the UK to the EU once the transitional period comes to an end.
Whether the EU will reciprocate remains to be seen, however. If it doesn’t make an adequacy ruling for the UK by 1 January 2021, future transfers of personal data from the EEA to the UK will be restricted. It seems unlikely that an adequacy decision will be made by this date, unfortunately, as although the EU has indicated it will consider such an application, it will not do so until the UK has left the EU and so there will be no seamless transition in this regard. Accordingly, any UK businesses which routinely transfer personal data from the EU to the UK (including UK-based business which serve EU-based customers) will need to implement alternative safeguards to maintain the free flow of data import.
The SCCs are the most obvious solution and are largely boilerplate, with limited scope for amendment or negotiation, which should expedite the process; nonetheless UK organisations with pan-European operations will need to start putting preparations in place sooner rather than later.
Schrems II – a spanner in the works?
Recent developments with regard to the Court of Justice in the EU (CJEU) decision on the validity of the US Privacy Shield in the case of Schrems II risk causing further problems to the Brexit negotiations on data transfer.
In this case, the CJEU held that the Privacy Shield did not afford adequate protection for personal data transferred to member organisations, specifically due to the intrusive public surveillance measures approved under US law. Following the judgment, personal data can no longer be compliantly transferred from within the EU to organisations in the USA on the basis of Privacy Shield certifications and organisations which were relying on this have been left in a panic having to urgently implement alternative safeguards, which meet the requirements of the GDPR, although the judgment has cast some doubt on whether the SCCs will actually work in this context.
So why is this a potential issue for our position post Brexit? Because at the same time as the UK is seeking to negotiate and obtain an adequacy ruling from the EU, it is also seeking to negotiate a data trade arrangement with the US. The EU will be closely scrutinising this and clearly won’t be prepared to allow the UK to circumvent the Schrems II ruling with a separate data transfer deal with the USA. If the European Commission harbours any concerns that the UK may simply be used as an outpost between the EU and the USA to facilitate data transfers which couldn’t be made directly, it is likely to seriously impede the UK’s ability to obtain an adequacy decision.
Next steps
It is clear from the above that our data protection journey to the other side of Brexit is not clearly mapped. UK businesses have only a few months to prepare for change assuming exit day is 1 January 2020 and in anticipation of change and you should act now to:
- Map your data import activities from the EEA and identify what alternative mechanisms (like SCCs) need to be put in place to facilitate legitimate data transfer from exit day
- Review your documents (privacy policy and notices, contracts and data protection impact assessments, for example) and update to reflect the UK’s departure from the EU
- If your data processing activities take place in both the UK and the EU, consider how you need to adapt for dual regulation, including whether you need to appoint separate data protection officers and nominate a new lead supervisory authority.

Data – how does Brexit affect data coming[...]
If the UK leaves the EU without a deal then it’s likely that we’ll become […]
If the UK leaves the EU without a deal then it’s likely that we’ll become a “third country” under EU data protection laws. This means that, despite having implemented the GDPR, the UK will no longer be deemed to offer adequate protection of European personal data.
If you import personal data from the EEA then you should ensure that you have Standard Contractual Clauses in place with the exporter before the end of the transition period. If you won’t be keeping an establishment in the EU, then you may also need to appoint a local representative.
For insight into what Brexit may mean for your business, visit our dedicated Brexit page here or Brexit LinkedIn page for all of our latest updates and you can also follow our Brexit tweets at #WMBrexit.

UK secures first major trade deal post-Brexit with[...]
On Friday 11 September the UK and Japan agreed a free trade deal, which is […]
On Friday 11 September the UK and Japan agreed a free trade deal, which is the first major trade deal secured by the UK as an independent nation. The deal took just over three months to conclude and the full text will be available in October.
The UK Government has published a press release here. Here are the highlights of the key points to note.
The newly-agreed deal between the UK and Japan is bespoke to the UK economy, and will be welcome news to UK businesses exporting to Japan, including companies operating within the manufacturing, financial services, technology and food and drink industries.
The Government has reported that UK businesses will be able to benefit from tariff-free trade on 99% of exports to Japan, and is being (perhaps overly) optimistic that the agreement could result in an economic boost of £1.5 billion to the UK economy.
Although Japan currently makes up around 2 per cent of British trade, the deal will undoubtedly see an increase in trade over the coming years. We have summarised some of the key highlights of the deal below:
- Digital and data provisions – the UK has committed to uphold the principles of net neutrality, as well as introducing a ban on data localisation, which will prevent British businesses from having the extra cost of setting up servers in Japan. It has been reported that this could be useful for UK fintech firms in particular operating in Japan.
- Improved market access for UK financial services – the deal creates a streamlined application process for UK firms seeking a licence to operate in Japan along with an annual dialogue between Her Majesty’s Treasury, UK financial regulators and the Japanese FSA that will explore ways to further reduce regulatory friction. Financial services are the UK’s biggest export to Japan, accounting for 28% of all UK exports.
- Tariff free access for more UK goods – the introduction of new and more liberal Rules of Origin will allow producers of coats, knitwear and biscuits to source imports from around the world for their exports to Japan.
- Geographical indications (GIs) – new protection for certain iconic UK goods, increasing GIs from just seven under the terms of the EU-Japan deal to potentially over 70 under the new trade agreement.
- New copyright protections – new protections for UK creative industries which go beyond the EU on provisions that tackle online infringement of IP rights, such as film and music piracy.
- Immigration – more flexibility for Japanese and British companies to move talent into each country, covering a range of UK skilled workers to enter Japan, from computer services to construction. This includes commitments that go beyond the EU-Japan deal, for investors, spouses and dependants, and a wider range of intra-company transfers. Requirements for visas will be clear and transparent, and with an aim that they be processed in 90 days. A worker transferring from their UK HQ to the Tokyo office will be able to take their spouse and dependants and stay for up to five years.
- Supporting UK car and rail manufacturing – supporting major investors in the UK like Nissan and Hitachi through reduced tariffs on parts coming from Japan, streamlined regulatory procedures and greater legal certainty for their operations.
- More generous market access for malt producers – Japan has guaranteed market access for UK malt exports under an existing quota which is more generous and easier to access than the EU quota. The UK is the second biggest exporter of malt to Japan, with UK producers exporting £37m there each year.
- Strong tariff reductions for UK pork and beef exports – tariff reductions on pork, beef, salmon and a range of other agricultural exports. Low tariffs will continue for key food and drink products covered by quotas, such as Stilton cheese, tea extracts and bread mixes. This forms a pathway to further market access under the comprehensive and progressive agreement for trans-pacific partnerships (CPTPP), which has been committed to by Japan as part of the agreement.
For further information on how this impacts your business please contact one of our team below.

Business Immigration Hub
Business Immigration has never been so relevant to so many businesses in the UK. The […]
Business Immigration has never been so relevant to so many businesses in the UK. The end of free movement for EEA nationals with the expiry of the Brexit transition period on 31 December 2020, and the extension of the points based immigration system to both EEA and non-EEA nationals from January 2021, mean that employers who have previously never needed to engage with immigration requirements may well find they have to do so in the future. Businesses now require a sponsor licence to recruit individuals from anywhere outside the UK (other than Ireland), which represents a major shift from the previous position under which recruitment from within the EEA was not subject to immigration controls.
A new points based immigration system has now been introduced, which applies to all non-UK migrant workers, including those from the EEA (other than Ireland). The extension of the points based system to EEA nationals represents a significant constraint on previously unfettered movement of workers between the UK and EEA. However, for businesses in other parts of the world, the new system may actually make it considerably easier to move staff to the UK due to a relaxation of some of the eligibility requirements for UK work visas.
UK businesses seeking to recruit non-UK staff will need to familiarise themselves with the new rules and rapidly adjust to the changes if they are to remain compliant with domestic immigration requirements, while preserving their chances of securing the best talent and seamlessly moving their staff between jurisdictions to meet operational demands.
In order to assist employers prepare for the changes to the Business Immigration regime that came into effect from January 2021, our specialist Business Immigration Team prepared a series of short videos below. Some of these have now been superseded by the introduction of the new regime.
- Immigration, Brexit & the forthcoming changes to the UK’s immigration system
- An overview of the current system
- The impact of Brexit on the current system
- The EU Settlement Scheme
- Considerations for British staff working in the EU
- Summary of the current points based system
- How to apply for a Sponsor Licence
- Managing Your Sponsor Licence
- Sponsoring a migrant worker – overview of Tier 2 General and ICT visas
- Process of sponsorship – overview of practical points
- The UK’s points based system from January 2021
- Other routes into the UK
- Conducting right to work checks
- Preparing for the post-Brexit era
- How can we help?
The videos can be viewed in sequence, or you can choose those that are most relevant to the issues your business is facing. Either way, our Business Immigration Team is here to help with any follow-up queries you may have.

Government Guidance on New Immigration System – What[...]
Following on from our recent webinar on Preparing for Brexit, the Government has now […]
Following on from our recent webinar on Preparing for Brexit, the Government has now published some much awaited details on the operation of the new Points-Based Immigration System from 1 January 2021 in its first in-depth guidance document on the subject. The guidance, entitled The UK’s Points-Based Immigration System: Further Details, includes an overview of the requirements and conditions for each of the main economic migration routes (as well as those for students and visitors), an explanation and case examples of how points can be earnt/traded for the skilled work route, and a list of all occupations which will qualify for sponsorship under the new system.
The Government maintains that the new system will be more streamlined, accompanied by simplified rules and guidance, as well as being fairer as it applies equally to migrants from every part of the world.
What’s new in the UK’s Points-Based Immigration System?
The Immigration and Social Security Co-ordination (EU Withdrawal) Bill which will form the legal basis of the new system has yet to become law, but the aim of the guidance is to prepare employers and applicants alike for the upcoming changes. The guidance confirms that free movement for EU nationals will end at 11pm on 31 December 2020 and changes will come into force. In particular:
- EU migrants arriving in the UK from 1 January 2021 will be subject to the new immigration system.
- The existing Tier 2 (General) route will be replaced by a new Skilled Worker route. Tier 2 (Intra-Company Transfer) will remain in place (with some adjustments).
- Existing sponsors will automatically be granted a new Skilled Worker licence or Intra-Company Transfer licence and will not need to make a further application. The expiry date will match that of the current licence, and sponsors will receive an appropriate allocation of Certificates of Sponsorship (presumably dependent upon their existing allocation, although this remains to be seen). Existing Tier 2 (General) migrants who need to make a new application following the closure of that route will do so under the Skilled Worker route.
- A key difference between the Tier 2 (General) and the Skilled Worker routes, and one that will be welcomed by many sectors, is the lowering of the skills level from degree level (RQF 6) to A-level equivalent (RQF 3), bringing a number of previously excluded roles within the scope of sponsorship. This includes:
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- In the construction industry, builders, carpenters, welders, plumbers and electricians;
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- In the retail and leisure sectors, sales supervisors, sales administrators, warehouse and logistics managers, leisure, sports and travel managers;
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- In the food and drink industry, chefs, butchers, bakers and bar/restaurant managers;
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- In the health and social care sector, senior care assistants and nursing assistants; and
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- A wide range of technicians in various fields such as laboratory technicians, IT technicians, pharmaceutical, medical and dental technicians, photographers and sound engineers.
- The salary threshold for Skilled Workers will be lowered from £30,000 to £25,600 per annum, with new entrants able to enter on a lower salary than their more experienced counterparts, provided it does not dip below the lower floor of £20,480 per annum.
- While there are still certain mandatory criteria for Skilled Workers which will earn an applicant a fixed number of points (namely a job offer with a licenced sponsor, the job meeting the minimum skills threshold and the migrant demonstrating the requisite English language skills), the new system introduces tradeable points for certain attributes such as salary, relevant PhD qualifications and shortage occupation roles.
- The annual cap under the current Tier 2 (General) route will be suspended and employers will no longer have to carry out the Resident Labour Market Test, which, coupled with lower salary and skill thresholds, will potentially make it easier to recruit migrant workers to skilled roles.
- In country-switching will become easier for Skilled Workers, with most migrants (save for those on short-term or visitor visas) able to apply to switch from one immigration route to another without having to leave the UK, provided they meet the criteria of the category they are switching into.
- A specific category of visas for health and social care workers will be introduced as part of the Skilled Worker route.
- Tier 2 (Intra-Company Transfer) will still only be available for roles at RQF Level 6 or above, however the “cooling-off” period rules will be relaxed to allow more flexibility for shorter-term assignments. From 2021, an overseas intra-company transferee must not have held an ICT visa for more than five years in any six-year period, except where they qualify to be granted up to nine years on the basis of their salary.
Familiar features
New features and streamlining aside, the overall system of sponsorship will remain in place and the guidance confirms that some aspects will be largely unchanged save that they will apply to both EU and non-EU citizens from 1 January 2021. For example:
- Application fees will continue to apply under the new system in the same way that they do now.
- The Immigration Skills Charge will continue to be levied on UK employers of Skilled Workers and intra-company transferees on the same basis.
- The Immigration Health Surcharge will still be payable by the majority of overseas migrants coming to the UK for more than 6 months (subject to the anticipated introduction of an exemption for frontline NHS staff).
- Although the Resident Labour Market Test will be abolished, employers will still be expected to recruit for genuine vacancies which meet the prescribed skill and salary thresholds.
- Dependants (spouses, partners, children) will still be able to accompany skilled workers and postgraduate students to the UK.
- Skilled Workers will be required to prove that they can speak English to the required level by way of an English language test, an academic degree taught in English or being a national of a majority English-speaking country.
The visitor and student routes are also expected to remain much as they are with some minor tweaks to improve the process where necessary. The Youth Mobility Scheme, which provides a temporary route for young people from participating countries to work and travel in the UK for up to two years, will also remain in place, with the Government confirming its intention to extend the scheme to other countries (which may well include EU countries).
Travel within the Common Travel Area (United Kingdom, Ireland, the Isle of Man and the Channel Islands) will continue with no changes. Irish citizens will retain their special status and be free to live and work in the UK as they are now, and no additional immigration controls will be introduced at the Eire/Northern Ireland border.
Watch this space
As you might expect, the implementation of the points based immigration system will be phased and this guidance document is likely to be the first of many implementing the Home Office’s wider plans up to 2025. So what else can we can expect as part of the UK’s fully realised Points-Based Immigration System?
- Further guidance on any updates to the maintenance requirements for migrant workers under the new system is anticipated in the autumn of 2020. The requirements for the main work and study visa categories themselves will be written into the Immigration Rules. These will also be published later in 2020, along with more detailed guidance for applicants.
- The Home Office retains the ability to widen the number of attributes for which tradeable points may be obtained, and they may seek to do so in response to the country’s economic needs and pressures.
- Changes are expected to border control procedures for EU nationals, although what these will be will largely depend upon the course and outcome of negotiations on the future EU-UK relationship.
- The Government intends to introduce a universal ‘permission to travel’ requirement which will require everyone wishing to travel to the UK (except British and Irish citizens) to seek permission in advance of travel. Electronic Travel Authorisations (ETAs) will also be introduced for visitors and passengers transiting through the UK who do not currently need a visa for short stays or who do not already have an immigration status prior to travelling. This aims to allow security checks to be conducted and decisions taken as to whether individuals should be allowed to travel to the UK at an earlier stage.
- An unsponsored graduate route will be launched in summer 2021, giving international students the opportunity to stay in the UK to work or look for work after they graduate. Undergraduate and master’s degree students may be granted a non-extendable period of two years’ stay under the route, whilst PhD students will be able to stay a maximum of three years (although switching to another route will be possible).
- An unsponsored route for highly skilled workers is expected to be introduced under the points based system in 2022. This will allow for a small number of only the most highly skilled workers to enter the UK without a job offer in place.
What do you need to do now?
If your business already has a sponsor licence under Tier 2 (General) or Tier 2 (Intra-Company Transfer), no new application is required, although you should familiarise yourself with the changes to the rules which may in some cases mean sponsorship is now possible for roles which were previously excluded. You should also check whether you have a sufficient certificate of sponsorship allocation to deal with the potential increased demand from January 2021. Now is also a good time to make sure the existing licence is up-to-date, is held by the correct sponsoring entity, contains correct key personnel details etc, and that all Home Office notification requirements have been met.
If your business doesn’t currently have a sponsor licence but thinks it may need to recruit from the EU or beyond from January 2021, the Government is actively encouraging licence applications to be made now. As we get closer to the end of the year, more organisations are likely to be submitting applications which is likely to result in increased processing times, and potential delays to recruitment plans.
Should you require assistance with a sponsor licence application or further guidance on any of the issues addressed above, please get in touch with the Walker Morris Business Immigration Team using the contact details below, or visit our Business Immigration Hub for more information.

EU–US Privacy Shield invalidated by the Court of[...]
Click here to watch a video nugget on this topic. The Court of Justice of […]
Click here to watch a video nugget on this topic.
The Court of Justice of the European Union (CJEU) has hit the final nail in the coffin of the beleaguered EU-US Privacy Shield. Walker Morris data protection and privacy experts explain the judgment and what this means for transfers to the USA, as well as the potential implications for post-Brexit Britain.
What’s happened?
The GDPR requires that transfers of personal data to so-called third countries (that is, countries not in the European Economic Area (EEA)) can only occur where the receiving organisation is subject to comparable data protection obligations to the GDPR.
The Privacy Shield framework is a set of voluntary obligations and principles relating to the protection of personal data, overseen by the US Department of Commerce, that US organisations could elect to be bound by. Organisations that underwent Privacy Shield certification were bound by its requirements and were deemed to provide an adequate level of protection for personal data.
Accordingly, EEA organisations could freely transfer personal data to organisations in the USA that were ‘Privacy Shield certified’ and such certifications formed the basis for significant volumes of personal data transfers.
In 2016, the European Commission deemed the Privacy Shield framework met the standards required under EU law, although that did not prevent Privacy Shield being the subject of much discussion by privacy law commentators and activists, in a similar way to its predecessor, the Safe Harbor Principles. Complaints generally related to the wide powers afforded to public authorities in the USA to obtain access to personal data held by private organisations – particularly in terms of government surveillance – which contrasts with fundamental principles of EU data protection law. Critics argued that the Privacy Shield failed to take sufficient steps to prevent this occurring to data transferred to organisations in the USA.
On 16 July 2020, when considering a complaint brought against Facebook Ireland by Austrian national Maximillian Schrems about this issue, the CJEU decided that the Privacy Shield did not afford adequate protection for personal data transferred to organisations that had self-certified. Following the judgment – known as Schrems II – personal data can no longer be compliantly transferred from within the EEA to organisations in the USA on the basis of Privacy Shield certifications.
Can we still transfer personal data to the USA?
While Privacy Shield has been invalidated in accordance with the Schrems II decision, other “appropriate safeguards” remain in place to allow personal data to be transferred to the USA.
One of the key appropriate safeguards is the standard data protection clauses adopted by the European Commission, which are often referred to as the Model Clauses, or Standard Contractual Clauses (SCCs). The SCCs take the form of a prescribed contractual agreement that can be entered into between the two parties involved in a transfer of data where the exporting data controller is in the EEA and the data importer (which can be a controller or a processor) is outside the EEA.
As part of the complaint brought by Mr Schrems, the CJEU considered the validity of the SCCs as a means of transferring data to the USA. The Court concluded “that the validity of [the SCCs] is not called into question by the mere fact that [they] do not, given that they are contractual in nature, bind the authorities of the third country to which data may be transferred.”
The CJEU did not therefore invalidate use of the SCCs, although it did assert that the context in which SCCs are used must be considered by the data exporter. Supervisory authorities (such as the Information Commissioner’s Office (ICO) in the UK) have the power to prohibit data transfers on the basis of SCCs in cases where such transfers are likely to have adverse effects on the protections afforded to relevant data subjects.
While the CJEU only considered controller-to-processor SCCs in Schrems II, the decision is considered to be equally valid for controller-to-controller SCCs.
What should we do now?
The ICO is reviewing its guidance following the Schrems II judgment. Until it publishes updated guidance, the ICO advises that organisations currently using Privacy Shield as the basis for personal data transfer from the EEA to the USA should continue to do so. However, organisations not currently using Privacy Shield should not start to do so.
EEA organisations that transfer data to the USA should review data sharing arrangements and identify where these are based on Privacy Shield certifications.
Once these have been identified, the agreements should be reviewed. Some agreements may include provisions that govern what should happen should the Privacy Shield framework be removed. Where the agreement is silent on this topic, the following options could be considered:
- Consider whether the transfer needs to take place. The recent decision could act as a prompt to review processing activities. Under the GDPR principles of purpose limitation, data minimisation and storage limitation, consider whether the transfers are necessary for the organisation or whether the relevant processing activities should cease.
- Process the personal data exclusively in the EEA. For organisations with multiple servers, technological reorganisations could enable all data subject to the GDPR to be stored on servers within the EEA. Where multiple processors are engaged, agreements can amended (or entered into) to ensure that only processors with operations based in the EEA are used to process personal data that is subject to the GDPR.
- Anonymise personal before it is transferred. This will not be appropriate in circumstances where identification of the relevant data subjects is key to the reason for processing. But where data can be anonymised before it is transferred, it will no longer be subject to the GDPR (although be careful when anonymising data to ensure it is truly anonymised and not simply pseudo-anonymised or ‘pseudonymised’).
- Incorporate SCCs into the transfer agreement. Where the continued transfer is necessary for business purposes, SCCs could be entered into between the relevant parties or the existing agreement could be amended to incorporate these clauses. The use of SCCs in relation to transfers to the USA is still valid, although it has been called into question by the CJEU judgment and deferred to supervisory authorities to police. Analysis of the risk associated with such transfers should therefore be carefully considered and SCCs should not be seen as a catch-all approach. In any event, the European Commission has never approved SCCs for processor-to-processor transfers.
- Adopt binding corporate rules. Binding corporate rules are a potential solution in some circumstances, although their use is limited in practice as they apply only to intra-group transfers and the application process for adopting them is lengthy. Another method – possibly SCCs – would likely be needed as an interim measure while the necessary administration was undertaken.
What does the future hold?
European Commission Vice President Vera Jourová confirmed in a statement following the judgment that the Commission will continue work to modernise the SCCs and engage with counterparties in the USA to ensure continued options for safe transatlantic data flows. However, the EU and the USA have fundamental differences when it comes to the conflict between individuals’ rights to privacy and the ability of the security services to obtain and intercept personal data, and these may difficult to align.
US Secretary of Commerce Wilbur Ross also issued a statement, commenting that the Department of Commerce will study the decision to fully understand its practical impacts but that it hopes to be able to limit the negative consequences. He said the Department of Commerce will continue to administer the Privacy Shield programme notwithstanding the recent decision. US organisations that are certified with the Privacy Shield must therefore continue to operate in accordance with its principles.
Comments made in the judgment, and the EU’s general aversion to surveillance, could also pose issues for the UK in relation to Brexit. As part of the Brexit negotiations, the UK is seeking an adequacy decision from the EU – a statement that UK law upholds the same standard for data protection as the EU – to allow uninterrupted data transfers between organisations in the EU and those in the UK once the UK becomes a third country.
However, the UK is also seeking to negotiate a data trade arrangement with the US. If this happens, the EU will be sure to question how personal data can be safely transferred from the EEA to the UK if it may then be freely transferred to the USA. The European Commission believing the UK may simply be used as an outpost between the EEA and the USA for data transfers could inhibit the UK’s ability to obtain an adequacy decision.
The UK Government has also historically had a more relaxed approach to surveillance by public authorities than the EU, which places more emphasis on the rights of individuals. The UK’s Regulation of Investigatory Powers Act 2000, Investigatory Powers Act 2016 and its membership of the Five Eyes programme will be scrutinised by the EU in any adequacy decision process, particularly in light of the Schrems II decision.
It is hoped that the European Data Protection Board will publish clear guidance on this issue in short order as companies seek to understand the wider ramifications. Walker Morris will continue to monitor the evolving situation and provide updates as they develop.
For more details on the specific reasons behind the invalidation of the Privacy Shield or for help and advice on what to do now, please contact any of our specialists who can advise and guide you through the necessary process.

WM video nuggets: Preparing for Brexit: Business Immigration
We recently held a live webinar “Preparing for Brexit: Business Immigration” covering the forthcoming changes […]
We recently held a live webinar “Preparing for Brexit: Business Immigration” covering the forthcoming changes to the UK immigration system and how organisations should prepare.
Below are a range of bitesize videos taken from the Q&A section of the webinar covering some very important questions.
- Will the removal of the resident labour market test and expansion of the SOC code be relevant to all?
- What’s the process for a sponsor application for a group of companies, by head office or PAYE No.?
- If an employee has expired ID, but was hired when it was still valid, after 2021 can we require new valid ID following proof of settlement document being received?
- The timescales for processing and making applications etc, are obviously quite long. Are there any fast track options available?
- Is there any chance at all that the new system is going to be delayed by the pandemic?
- Is it possible for sponsored employees to be furloughed and have their wages reduced under the Job Retention Scheme?
- Will the Immigration Health Surcharge still apply under the new system?
Click here to watch our full webinar recording.
Will the removal of the resident labour market test and expansion of the SOC code be relevant to all?
What’s the process for a sponsor application for a group of companies, by head office or PAYE No.?
If an employee has expired ID, but was hired when it was still valid, after 2021 can we require new valid ID following proof of settlement document being received?
The timescales for processing and making applications etc, are obviously quite long. Are there any fast track options available?
Is there any chance at all that the new system is going to be delayed by the pandemic?
Is it possible for sponsored employees to be furloughed and have their wages reduced under the Job Retention Scheme?
Will the Immigration Health Surcharge still apply under the new system?

Dealing with Migrant Workers in the COVID-19 Pandemic
Visit our Business Immigration hub to watch a series of short videos on current topics. […]
Visit our Business Immigration hub to watch a series of short videos on current topics.
Employers up and down the country have been grappling with the COVID-19 pandemic and the impact that the resulting Government imposed lock-down has had on their workforce for a number of weeks now. Furloughing, laying-off and requiring staff to work from home have already become widespread, and many employers have now been upskilled in the correct employment law processes to follow before implementing such changes. As the economic downturn caused by the current crisis continues to tighten its grip across the UK, many employers are now being forced to consider more permanent workforce reduction measures to reflect the potential continuation of decreased business demand, including redundancies.
However, where employees are sponsored migrant workers working in the UK under Tier 2 or Tier 5 visas, there is an additional layer of legal compliance in the form of immigration considerations which employers may be less aware of. In this article, we consider the specific immigration considerations which need to be borne in mind when dealing with sponsored migrant workers in the current COVID-19 crisis, including:
- the obligations associated with them;
- the rules around furloughing and laying off;
- considerations around salary reductions;
- working from home;
- considerations when undergoing a redundancy process; and
- visa extensions;
We will also consider temporary changes to right to work checks which have been introduced during the COVID-19 crisis, and the new points based immigration system.
Sponsored Migrants
Where an employer sponsors a migrant worker to work in the UK, that sponsorship carries with it onerous monitoring and record keeping obligations in relation to the migrant worker, as well as obligations to notify the Home Office in the event of certain circumstances changing. Under normal circumstances, any failure to comply with these obligations can carry significant consequences, including the possible revocation of the sponsor licence pursuant to which migrant workers are sponsored.
For the migrant worker, their right to live and work in the UK is generally contingent upon their continued employment on the terms under which they were first sponsored. Therefore any changes to the migrant worker’s role during the current COVID-19 pandemic have the potential to impact on the continued sponsorship of the individual.
Furloughing and Lay-Offs
Employers with an existing contractual right to lay-off have been making use of these provisions as a means of managing costs during these difficult times, and those without such a right have been seeking the agreement of their workforce to temporary lay-offs both under the Government’s Coronavirus Job Retention Scheme (“CJRS”) and otherwise. Under the CJRS, employees can agree in writing to be “furloughed” (i.e. not required to work but remain employed) in return for 80% of their salary, up to a maximum of £2,500 per month, which the Government will repay to their employer. The employer has the option to top-up the salary to full pay, but is not required to do so, and any top up will not be recoverable under the CJRS.
The Government’s guidance on the CJRS makes it clear that individuals who are working in the UK under visas are eligible to be furloughed and employers are entitled to have their salary reimbursed under the scheme (subject to compliance with the terms of the scheme). However, employers should be cognisant of the fact that the CJRS only applies to employees who are covered under the employer’s PAYE system. Therefore the salary of any migrant workers working under a Tier 2 (Intra-Company Transfer) visa whose salaries are paid overseas will not be recoverable by the employer under the CJRS. Further, any decision to furlough individuals on the grounds of their immigration status is likely to be discriminatory.
Salary Reductions
Under normal circumstances, any changes to the salary of sponsored migrants which takes the salary level below £30,000 for a Tier 2 (General) visa or £41,500 for a Tier 2 (Intra-Company Transfer) visa, or the threshold in the relevant SOC Code applicable to the role, whichever is higher, would jeopardise the continued sponsorship of the individual. However, the Home Office has issued guidance which states that sponsors can temporarily reduce the pay of sponsored workers to 80% of their salary or £2,500 per month, whichever is lower, if the reduction is due to the COVID-19 outbreak. The reduction must be part of a company-wide policy to avoid redundancies and must be temporary. The employer should make a written record of the reason for the reduction in case evidence subsequently needs to be presented to the Home Office, and the sponsored worker’s pay must return to its previous level when the company-wide arrangements end.
Although the Home Office’s concession on salary reductions appears to be intended to cover sponsored workers who are furloughed under the CJRS, the guidance does not refer to furloughing specifically, therefore it could also cover sponsored workers who are still working and who agree to reduce their working hours and salary by up to 20%, or those who agree to a pay cut without reducing their hours, in response to business needs.
Further, although the Home Office has not issued specific guidance on whether any salary reduction applicable to a migrant worker who was granted leave under the Tier 2 (General) route as a “high earner” (i.e. with an annual salary of £159,600 or more) which takes them below the “high earner” threshold will require a new application for leave as would be the case under normal circumstances, it is expected that similar concessions will be made.
Where employers are laying-off workers without pay (in order to avoid redundancies), the general position is that an employer must stop sponsoring a migrant who is absent from work without pay for 4 weeks or more in total in any calendar year (unless the leave is for one of a specified number of reasons). The Home Office has, however, issued specific guidance which confirms that sponsors are not required to withdraw sponsorship where migrants are absent without pay for 4 weeks or more if the absence is related to the COVID-19 crisis. Further, absences related to COVID-19 do not need to be reported to the Home Office in the normal manner. In each case, the employer should keep a written record confirming that the time away from work has arisen as a result of COVID-19.
Changes to salary or working hours should still be notified to the Home Office via the on-line sponsor management system within 10 working days of the change, as per normal notification requirements.
Working from Home
Although under normal circumstances a change to the migrant worker’s place of work would be a reportable change of circumstances, the Home Office has issued guidance to confirm that employers do not need to report a change to a migrant worker’s workplace to their home address for the purposes of complying with Government guidance on social distancing. Clearly if a migrant worker continues to work from home after the COVID-19 crisis is over (for example as part of an employer’s increased use of agile working), then a report would be required. Further, employers may need to take extra steps to monitor attendance at work for migrant workers who are working from home in the event that a reportable situation does arise (e.g. an absence from work which is not related to COVID-19).
Redundancy
When conducting redundancy exercises, employers should be aware that there may be specific considerations and limitations around their treatment of migrant workers. For example, if the fact that an individual is a migrant worker influences any decision to make them redundant, this could give rise to an unfair dismissal and race/nationality discrimination claim. When making offers of alternative employment as part of the redundancy process, the alternative role would need to be within the same SOC Code as the role for which the migrant was initially sponsored, and at the requisite salary level, otherwise the individual will require a new visa and the employer may be required to undertake a new resident labour market test before offering the role, if applicable. However, even where an employer is confident that an alternative role requiring a new visa would not meet the requirements of fresh sponsorship, they would be well advised to tread very carefully before deciding not to offer the role to the migrant to mitigate against the risk of an unfair dismissal or discrimination claim, and bespoke legal advice should be taken before any decisions are made.
Sponsors of migrant workers will no doubt be aware that if they terminate the employment of a migrant worker earlier than the end date shown on the certificate of sponsorship, they are under a duty to report this to the Home Office within 10 working days via the on-line sponsor management system. This includes where a migrant worker is made redundant as a result of a down-turn in work caused by the COVID-19 outbreak.
For the individual, the redundancy would result in their leave to remain in the UK being curtailed to 60 days. If they have not found alternative employment with another sponsor (or found another lawful basis for remaining in the UK) by the end of this period, they will be required to leave the UK.
Visa Extensions
Where a sponsored worker’s visa is due to expire, an employer will normally work with the migrant to secure an extension of the visa, or look to terminate their employment if their services are no longer required. However, in light of the current COVD-19 crisis, the Home Office has granted visa holders whose visa expires between 24 January 2020 and 31 May 2020 (and who were not otherwise intending to apply to extend their leave) an extension to their visa until 31 May 2020 if they cannot leave the UK because of travel restrictions or self-isolation requirements. Although there have not been any formal announcements at the time of writing, it is likely that this concession will be extended beyond 31 May if the current situation continues. In order to benefit from this extension, affected individuals are required to contact the COVID-19 Immigration Team and complete a COVID-19 UK Visas & Immigration form to provide certain information, including their name, date of birth, visa reference number and the reason why they intend to remain in the UK.
However, those migrant workers who do require a continued presence in the UK when their current visa expires will still need to make a visa extension application (or other application to remain lawfully in the UK beyond the date of their current visa), and should make this application on-line before their current visa expires in the normal manner. Those whose visa expires between 24 January and 31 May who are looking to switch into a different long-term visa category and who would otherwise need to make the application from outside the UK are currently permitted to make in-county applications. However, it is not currently possible to progress applications to the next stage, which requires an appointment to submit biometric information and upload supporting documents, as all UK Visa and Citizenship Application Centres are temporarily closed due to the COVID-19 outbreak. In addition, the Government’s proposals to introduce a 14 day quarantine period for those coming into the UK will impact on the ability of migrant workers arriving from overseas to start work (although there is currently no date for when this proposal will come into effect). Those wishing to use priority or super priority services for a faster decision on their application should be aware that these services are also temporarily suspended. If their visa is due to expire imminently, they should submit their application and seek to add a priority or super priority service at a later date once the services are back up and running.
The Home Office has also introduced free automatic one year visa extensions for frontline health and social care workers working for the NHS and in the independent sector. The provisions cover workers and their family members whose visas expire between 31 March 2020 and 30 September 2020. In addition, the Home Office has confirmed that the family members of frontline workers who die from COVID-19 will be offered immediate indefinite leave to remain.
Right to Work Checks
Another challenge employers are currently facing is in relation to carrying out right to work checks for new recruits or those requiring follow-up checks while their workforce works from home, given that the normal process involves obtaining physical identity documents and verifying these during a meeting with individuals in person. Without such checks being carried out in a legally compliant manner, employers have no statutory excuse in the event that they are found to be employing illegal workers. The Home Office has confirmed that from 30 March 2020, right to work checks can temporarily be carried out over video calls (e.g. Zoom, Skype or Facetime) with the individual submitting scanned copies or photos of their original documents. The written record of such a check should state that it is an adjusted check due to COVID-19. If an individual has a biometric residence permit, biometric residence card or status under the EU Settlement Scheme, then the employer can use the Home Office’s online right to work checking service provided that the individual has given permission for their details to be viewed. For individuals who are unable to provide the required documents, the Home Office’s employer checking service is still operational and a “positive verification notice” will provide a statutory excuse against liability for a civil penalty or criminal sanctions for employing a worker illegally for 6 months.
The Home Office have confirmed that once the temporary COVID-19 measures end, employers will have eight weeks to carry out retrospective right to work checks in the usual way on employees who commenced employment or required a follow-up check while these measures were in place. The Home Office will give notice in due course of when the measures will end. On the copy of any documents reviewed as part of the retrospective check, the employer should note: “The individual’s contract commenced on [insert date]. The prescribed right to work check was undertaken on [insert date] due to COVID-19”. Copies of both checks should then be held on file.
New Points Based System
In addition to factoring in the above when dealing with migrant workers during the current crisis, employers should not forget the Government’s proposed introduction of a new points based immigration system from 1 January 2021 which will apply to EU and non-EU nationals alike. At the time of writing, there have been no indications that the proposals to extend the requirement for sponsorship to EU nationals (who currently have the right to work without being sponsored) from 1 January 2021 will be postponed as a result of the global pandemic. The Immigration Bill which sets out the legal framework for these changes passed its second reading in the House of Commons on 18 May 2020, and looks set to be on course to become law. Therefore employers who do not currently have a sponsor licence because they have only needed to recruit from within the UK and EU in the past are being urged to make applications for a licence as soon as possible, to ensure they are in a position to sponsor individuals from the EU from 1 January if required. Further, the requirement for EU nationals to register under the EU settlement scheme in order to gain longer-term rights to remain living and working in the UK remain in place.
We will shortly be issuing more detailed guidance on the new points based system and the impending changes to the recruitment of nationals from the EU from 1 January 2021.
Next Steps
At Walker Morris, we have a dedicated Business Immigration team which can assist with any of the issues raised above. Please do not hesitate to get in touch with your usual contact or one of the individuals below for further advice.

Webinar Recording: Employee engagement and future HR trends[...]
Andrew Rayment and Charlotte Smith (both Employment) presented a live Q&A webinar discussion on ‘Employee […]
Andrew Rayment and Charlotte Smith (both Employment) presented a live Q&A webinar discussion on ‘Employee engagement and future HR trends’. Walker Morris employment lawyers were joined by Lisa Rowlinson-Brown, People Director at Symington’s, Steve Joyce, HR Director at Airedale International Air Conditioning and Catherine de la Poer, Leadership Developer at Halcyon Coaching.
The webinar included discussions around topics such as:
- Agile and flexible working
- The use of technology and its impact on the workforce
- Mental health and well-being
- Employee engagement and representation
- Equality and diversity
- Incentivising and retaining employees
You can also find a one page downloadable summary of the webinar here.

Changes to Competition Law and State Aid Rules[...]
The implications of coronavirus (Covid-19) and measures taken to contain the spread of the virus […]
The implications of coronavirus (Covid-19) and measures taken to contain the spread of the virus are having a significant adverse impact on many businesses and the economy at large. It is becoming increasingly difficult for companies involved in the manufacture and supply of essential goods and services to meet current demand and as such it has become apparent that businesses must work together to adapt to the current situation and ensure security of supply.
The UK’s Competition and Markets Authority (CMA) and, at European level, the European Commission (Commission) continue to enforce competition law to deter companies from engaging in anti-competitive practices. However, recognising the serious impact of Covid-19 and the pressing need for businesses to collaborate in certain areas, competition laws have been relaxed to some degree. This article details some of the key developments.
Distinction between unlawful cartels and lawful “necessary and temporary” co-operation
Agreements between competing businesses that prevent, restrict or distort competition using practices such as price-fixing, market sharing, limiting production or rigging bids (also known as cartels) are prohibited under competition law. Businesses breaching such laws can face heavy fines. Under UK competition law it is also a criminal offence for competitors to engage in such cartels.
These rules continue to apply in the Covid-19 crisis, however, given the exceptional circumstances that we are facing, governments and the competition authorities have acknowledged that a relaxation of competition laws is necessary to enable enhanced collaboration between businesses to facilitate the supply of essential goods and services, particularly to vulnerable customers. The UK Government recently announced plans to pass legislation which will allow cooperation between supermarkets to ensure the continued supply of groceries in stores (covering matters such as the sharing of staff, distribution depots and transport and sharing of data such as stock levels). The UK Government has also decided to waive competition enforcement and allow cooperation to secure essential ferry transport between the mainland and the Isle of Wight. The ferry operators will be able to discuss and agree routes and coordinate staff resourcing and they can also cooperate to allow the transportation of essential food, freight and medical supplies.
The CMA published a guidance document titled “CMA approach to business cooperation in response to Covid-19”. This guidance explains that the CMA will not be taking action against competing businesses which are cooperating or coordinating their efforts provided that “any such coordination is undertaken solely to address concerns arising from the current crisis and does not go further or last longer than what is necessary“. This relaxed approach is not limited to collaboration in the grocery sector but also extends to other sectors manufacturing or supplying essential goods and services.
The guidance clarifies that enforcement action will not be taken against competitors choosing to collaborate, provided that such actions are temporary and:
- appropriate and necessary in order to avoid a shortage, or ensure security, of supply;
- clearly in the public interest;
- contribute to the benefit or wellbeing of consumers;
- deal with critical issues that arise as a result of the COVID-19 pandemic; and
- last no longer than is necessary to deal with these critical issues.
However, the CMA has warned that it will not tolerate businesses exploiting the crisis as a ‘cover’ for non-essential collusion, such as the exchange of commercially sensitive information or denying rivals access to supplies or services.
Action against Excessive Pricing
Dominant businesses are those with a position of such economic strength in a market that they can act independently of customers and competitors. For a dominant business, it is unlawful under competition law to charge an excessive price for goods or services, i.e. a price bearing no reasonable relation to the cost of supply. The CMA has established a Covid-19 taskforce to identify businesses seeking to exploit customers through excessive pricing and has warned against such practices in key sectors such as pharmaceuticals and food and drink. Already the CMA has contacted traders and platforms regarding potentially excessive pricing of hand sanitiser.
State Aid and the Temporary Framework
The UK remains subject to EU State aid regulations until the end of the transition period (currently 31st December 2020). State aid is financial assistance provided by governments or local authorities to companies that has the potential to distort market conditions by providing an unfair advantage. Under the existing regime, unless it falls within an exemption (see below), financial aid granted by the UK Government or other public bodies must be notified to the Commission and approved before it can be administered. The potential issue here is that the UK Government has launched an unprecedented level of economic support and will continue to do so to combat the economic effects of the Covid-19 crisis. Measures which have already been announced include: support to cover up to 80% of the salary costs of furloughed employees; support for small and medium-sized enterprises (SMEs); deferring income tax and VAT payments; loans for SMEs and larger businesses and support to cover statutory sick pay payments for SMEs.
The vast majority of aid which will be issued in the coming months will not require notification because such aid is covered by a relevant exemption, either because it is “de minimis” (i.e. below €200,000 over a three year period) or falls within the Block Exemption Regulation (an exemption which applies to a wide variety of aid including regional aid, aid to SMEs, aid for research and development and aid for certain types of infrastructure). Furthermore, measures which apply to the economy as a whole (e.g. do not confer any advantage on selective businesses) will not constitute State aid. Current State aid rules also allow Member States to grant compensation to businesses for damage which has been directly caused by exceptional circumstances and this would include the COVID-19 pandemic. This could be used to support badly hit sectors including transport, tourism and retail.
In addition, the Commission has adopted a temporary State aid framework (the Temporary Framework) to increase member States’ abilities to support their economies in light of the Covid-19 pandemic – the Commission took the same flexible and responsive approach in 2008 during the global financial crisis. The Temporary Framework will remain in place until the end of 2020, when the Commission will take a view on whether this needs to be extended.
The Temporary Framework specifically allows authorities to provide five types of aid to qualifying companies:
- Direct grants, selective tax advantages and advance payments – Member States may set up schemes to grant up to €800,000 to companies to address urgent liquidity needs (the business must not have been in difficulties on 31 December 2019).
- State guarantees for loans taken by companies from banks – Member States will be able to provide State guarantees to ensure banks keep providing loans to the customers who need them (maximum six year term and the business must not have been in difficulties on 31 December 2019).
- Subsidised public loans to companies – Member States will be able to grant loans with favourable interest rates to companies. Such loans may be used to cover immediate working capital and meet investment needs (maximum six year loan term and the business must not have been in difficulties on 31 December 2019).
- Safeguards for banks that channel State aid to the real economy – Some Member States plan to build on banks’ existing lending capacities, and use them as a channel for support to businesses – in particular to SMEs. The Temporary Framework provides that such aid is considered to be direct aid to the banks’ customers rather than to the banks themselves.
- Short-term export credit insurance – The Temporary Framework introduces additional flexibility on how to demonstrate that certain countries are not-marketable risks, which may enable short-term export credit insurance to be provided by the State where needed.
Where measures do amount to State aid and are not exempted, the Commission has taken a flexible approach so that Covid-19 related aid is typically being approved very quickly (generally within 24 – 48 hours). The Commission has already approved under the Temporary Framework an umbrella measure to allow GBP 50bn (EUR 57bn) aid to support SMEs and large corporates affected by the Covid-19 outbreak in the UK.
It is possible we may see some further developments to the competition and state aid regimes in the next few months but these initial measures take pragmatic steps to ensure that competition law does not hamper the provision of essential goods and services to consumers or a financial lifeline for businesses.

Countdown to Brexit Series
Welcome to our dedicated webpage for our weekly Countdown to Brexit Series. …………………………………………………………………………………………………………. Week 1 […]
Welcome to our dedicated webpage for our weekly Countdown to Brexit Series.
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Week 2 – New Market Surveillance Rules for Suppliers into the EU
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Week 4 – The effect of Brexit on the food and drink sector
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Week 8 – Dispelling the dispute resolution myths of a no-deal Brexit
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Week 9 – Keeping trade moving – Can I modify a contract orally?
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Week 10 – Keeping trade moving: Electronic signatures and e-mail footers
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How will annuity providers be impacted by Brexit?
This article was first published on Lexis®PSL Pensions on 12 March 2019. Click for a free […]
This article was first published on Lexis®PSL Pensions on 12 March 2019. Click for a free trial of Lexis®PSL.
Annuities are financial products which are provided by insurance companies. The insurance sector is part of the financial services sector. This sector as a whole is very highly regulated and, at present, the majority of the UK’s financial services legislation derives from EU law.
Broadly speaking a financial services firm (including an insurer) which is authorised in any European Economic Area (EEA) country may carry out its activities in any other EEA country through a process known as “passporting” as a result of their EU authorisation (or similar arrangement).
The UK’s proposed Withdrawal Agreement provides that during the transition period the UK would continue to be treated as if it was a Member State except in relation to participation in EU institutions. This means that if the Withdrawal Agreement is approved by Parliament, annuity providers would not immediately be impacted by Brexit. They would have the transitional period to obtain any authorisations necessary or to take any other appropriate steps to ensure the smooth continuation of their business post-Brexit.
If there is a “no deal” Brexit, the European Union (Withdrawal) Act 2018 incorporates the whole of EU law into UK law with effect from 29 March 2019. This Act also gives the Government the power to amend UK law to ensure that there is a fully functioning financial services regulatory regime on Brexit.
The Government has confirmed that it intends to introduce a temporary permission regime to allow EEA firms to continue to operate in the UK for up to three years post-Brexit whilst they apply for full UK authorisation. UK firms’ position in relation to operating in the EU would be determined by relevant Member States and applicable EU rules that apply to non-EEA countries.
Has the government taken any steps to ensure annuitants living in a Member State can continue to receive UK annuity payments?
The Government has acknowledged that annuitants who live in the EEA may lose their ability to receive their annuities in the event of a “no deal” Brexit. This is because UK firms will lose their passport to operate in the EEA which in turn may affect these firms’ ability to continue to provide their services.
In guidance (updated on 8 January 2019) the Government stated that it was committed to taking unilateral action, if necessary, to resolve issues for annuitants living in EEA states as far as possible on the UK side. However the Government acknowledges that its own unilateral action is not sufficient to address the risks to EEA annuitants of UK firms currently providing services into the EEA using the current passport system. The Government comments that it is committed to working with EU partners both to identify and address the risks.
It is important to note that this guidance does not apply to UK citizens living in EEA countries who are in receipt of the State pension. The Government confirmed in guidance (updated on 15 February 2019) that Brexit will not affect anyone’s entitlement to receive the State pension. The Government is also committed to uprating the State pension across the EU until 2020. Any uprating beyond 2020 will depend on whether or not reciprocal arrangements are in place with the EU.
Are these steps sufficient?
It is helpful that the Government has issue the guidance which it continues to update. It will be interesting to see how the Government’s guidance is updated in light of the EIOPA’s recommendations published on 19 February 2019. However, it is important to note that the Government cannot act unilaterally, steps must be taken by the EU as well.
Has EIOPA made any recommendations to Member States in this respect?
On 19 February 2019 the EIOPA issued its recommendations for the insurance sector in light of Brexit. These recommendations emphasise the importance of safeguarding policyholders in the event of a “no deal” Brexit.
In some areas the EIOPA has provided specific guidance on the approach it expects individual Member States to take. An example of this is that UK insurers should not be allowed to write new insurance contracts in the EEA (including renewals, extensions or increases in cover) without being EEA authorised (paragraph 16 of the EIOPA recommendations).
At the same time it is helpful that the EIOPA has acknowledged the position of annuity policies and annuitants. Paragraph 16 of the EIOPA recommendation specifically provides that whilst UK insurers are not allowed to write new insurance contracts etc, policyholders who exercise an option or a right in an existing policy to start taking their pension should not be prejudiced.
It is important to note that the EIOPA recommendations which apply from the time the UK leaves the EU, are not binding. The EIOPA has given national regulators two months to state if they will comply with each recommendation or explain their non-compliance. This two months take us past the current Brexit date of 29 March 2019.
It is helpful that the EIOPA has issued these recommendations. However, it would have assisted both the insurance industry, and annuitants, if these recommendations had been published earlier.

Newsflash: Canary Wharf Brexit frustration decision to be[...]
We reported, at the end of last month, the High Court’s decision in Canary Wharf […]
We reported, at the end of last month, the High Court’s decision in Canary Wharf v EMA [1] that Brexit will not frustrate (and therefore effectively terminate) the European Medical Agency’s lease at Canary Wharf.
The High Court’s decision was generally welcomed because, had the High Court found for the EMA, countless leases and commercial contracts throughout the UK and even internationally would also have been immediately vulnerable, as other parties may have been tempted to rely on the case to seek to terminate arrangements which Brexit rendered unfavourable.
However, whilst the High Court’s decision was thorough and carefully reasoned, this is a high profile case which has very significant, far-reaching practical implications and we now understand that the EMA has been granted permission to appeal to the Court of Appeal.
Walker Morris will monitor and report on developments.
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[1] [2019] EWHC 335 (Ch)

Data Protection – February 2019
‘No deal’ Brexit guidance; latest from the ICO, including recent enforcement action; news from Europe; […]
‘No deal’ Brexit guidance; latest from the ICO, including recent enforcement action; news from Europe; and more.
Latest ‘no deal’ Brexit guidance
- On 6 February 2019, the government issued guidance on using personal data post-Brexit.
- The Information Commissioner’s Office (ICO) published guidance for law enforcement authorities on preparing for data protection compliance in the event of a no deal Brexit.
- Amendments were made to the relevant draft Brexit legislation to reflect arrangements made for personal data to continue to be transferred from the UK to US organisations participating in the Privacy Shield Framework, where the participating organisation’s privacy policy includes personal data transferred from the UK in its Privacy Shield commitments. UK companies will need to ensure that their US counterparts have made the necessary changes. Further details can be found in the ‘international data transfers’ section of the ICO’s no deal Brexit guidance and in the Privacy Shield and the UK FAQs section of the official Privacy Shield website.
- The European Data Protection Board (EDPB) published information notes on data transfers under the General Data Protection Regulation (GDPR) in the event of a no deal Brexit and on Binding Corporate Rules (BCRs) for companies which have the ICO as their BCR Lead Supervisory Authority. Using BCRs is one of the ways in which personal data can be transferred to the UK from the European Economic Area.
More news from Europe…
- Towards the end of January 2019, the Committee of the Council of Europe’s data protection treaty “Convention 108” published Guidelines on artificial intelligence and data protection. They contain: general guidance; guidance for developers, manufacturers and service providers; and guidance for legislators and policy makers. The UK was among the 21 states that signed up to a modernised version of Convention 108 – the only legally binding international agreement on data protection – on 10 October 2018.
- On 6 February 2019, the European Commission presented a set of recommendations for the creation of a secure system that will enable citizens to access their electronic health files across EU Member States. See the press release for more details and a link through to a fact sheet.
- The EDPB is consulting until 2 April 2019 on guidelines on codes of conduct and monitoring bodies under GDPR. See the relevant section of the ICO’s Guide to the GDPR for useful summary information on this topic.
- The EDPB is also consulting until 29 March 2019 on Annex 2 to its guidelines on certification under GDPR (adopted on 23 January 2019). Annex 2 identifies topics that a data protection supervisory authority (such as the ICO) and the EDPB will consider and apply for the purpose of approval of certification criteria of a certification mechanism. See the relevant section of the ICO’s Guide to the GDPR for useful summary information on this topic. The ICO says that it has no plans to accredit certification bodies or carry out certification at this time.
…and back in the UK
- The Phone-paid Services Authority, the UK regulator for content, goods and services charged to a phone bill, is consulting until 3 April 2019 on guidance on the retention of data.
- On 13 February 2019, the Institute of Fundraising published a free guide for charities and fundraisers providing information on telephone fundraising. It includes guidance on data protection compliance, with helpful flowcharts and links to the relevant resources.
Latest from the ICO, including recent enforcement action
- EU referendum campaign Leave.EU and Eldon Insurance were fined a total of £120,000 after they committed serious breaches of electronic marketing laws. The Information Commissioner said: “It is deeply concerning that sensitive personal data gathered for political purposes was later used for insurance purposes; and vice versa. It should never have happened. We have been told both organisations have made improvements and learned from these events. But the ICO will now audit the organisations to determine how they are using customers’ personal information”.
- A housing developer was fined after it ignored a data subject access request and failed to comply with an enforcement notice issued by the ICO.
- A former senior local government officer, whose partner was applying for an administrative job at the council where he worked, was fined after he emailed the personal information of nine rival shortlisted candidates to his work address and to his partner’s Hotmail account.
- The ICO reports that investigations into nuisance marketing have resulted in 16 company directors being banned from running a company for more than 100 years in total.
- A recent ICO blog post explains to small businesses why they need to pay the data protection fee.
- The ICO has made a short film setting out how organisations can benefit from its regulatory sandbox. See the blog post for details.
- Finally, in another recent blog post, the ICO’s Executive Director for Technology Policy and Innovation talks about how technology has completely transformed the way advertising is bought, sold and delivered. He says that, in respect of adtech, the ICO is currently concentrating on programmatic advertising and real-time bidding. The three key areas of interest are: transparency and personal data; lawful basis for processing personal data; and security. A fact-finding forum will take place on 6 March 2019.

Health and Safety – February 2019
‘No deal’ Brexit guidance; new UK product safety mark; sentencing and ‘linked organisations’; and more. […]
‘No deal’ Brexit guidance; new UK product safety mark; sentencing and ‘linked organisations’; and more.
‘No deal’ Brexit guidance and new UK product safety mark
- On 2 February 2019, the government published the design for the new UK product safety marking (‘UKCA’) that will apply to certain products sold in the UK if the UK leaves the EU without a deal. See the press release which links through to guidance on how to use the new marking, and the current European CE marking, in the event of a no deal scenario.
- On 5 February 2019, the government issued updated guidance on food and drink labelling in the event of a no deal Brexit. See the press release.
- On 15 February 2019, the government published further guidance bringing together sector-specific information across the different areas of goods regulation with the aim of helping businesses to understand the impacts of Brexit for their products and supply chains.
The sentencing guideline and ‘linked organisations’ – fine reduced on appeal
A company has successfully appealed a health and safety fine of £370,000 for failures relating to the identity and safe removal of asbestos at a school. The decision is of particular interest because it considers the correct application of the sentencing guideline where there is a ‘linked organisation’ such as a parent company [1].
In this case, NPS London was a joint venture company, 80% owned by its parent company (the NPS Parent) and 20% owned by the London Borough of Waltham Forest. The NPS Parent was ultimately controlled by Norfolk County Council (the Council).
At step one of the sentencing guideline, the sentencing judge assessed the culpability of NPS London as high and the risk of harm created as falling within harm category 2. This was not challenged on appeal. At step two, when the court is required to focus on the organisation’s annual turnover or equivalent to reach the starting point for a fine, the judge did not treat the table for ‘small’ organisations as the relevant one (NPS London had a turnover of £5-6 million which would have placed it in that table), but instead considered that the relevant table was the one applicable to ‘large’ organisations. He reached that conclusion on the basis of the passage in the guideline which states that, exceptionally, it may be demonstrated to the court that the resources of a linked organisation are available and can properly be taken into account. The annual turnover of the NPS Parent was around £125 million. For a ‘small’ organisation, the starting point for a fine for an offence in the relevant category is £100,000. It is £1.1 million for a ‘large’ organisation.
The Court of Appeal disagreed. It found that the judge had been wrong to read the guideline as entitling him to treat NPS London as, or as if it were, a large organisation for the purpose of sentencing. It is the offending organisation’s turnover, not that of any linked organisation, which, at step two of the guideline, is to be used to identify the relevant table. This reflects the basic principle of company law that a corporation is to be treated as a separate legal person with separate assets from its shareholders. The mere fact that the offender is a wholly owned subsidiary of a larger corporation, or that a parent company or other ‘linked’ organisation is in practice likely to make funds available to enable the offender to pay a fine, is not a reason to depart from established principles of company law or to treat the turnover of the linked organisation as if it were the offending organisation’s turnover at step two of the guideline.
The Court of Appeal went on to say that, by contrast, whether the resources of a linked organisation are available to the offender is a factor which may more readily be taken into account at step three of the guideline when examining the financial circumstances of the offender in the round and assessing “the economic realities of the organisation”. This reading and application was consistent with the Court of Appeal’s decision in R v Tata Steel UK Ltd [2].
The most recent accounts for NPS London showed that it was loss-making and insolvent on a balance sheet basis. However, under the heading “going concern”, the directors’ report stated that any finance required was provided by the NPS Parent and that another company (which was the ultimate parent, controlled by the Council), had confirmed that it would continue to provide any financial support required for a period of at least 12 months. On that basis, the directors believed that it remained appropriate to prepare the financial statements on a going concern basis.
The fact that NPS London was an enterprise with low profitability and no resources of its own from which to pay a fine was not a reason to reduce the amount of the fine, because it was proper to regard the NPS Parent as a linked organisation which could be counted on to provide the required funds. Taking account of relevant mitigating factors and giving full credit for NPS London’s guilty plea reduced the fine to £50,000.
In a separate decision [3], the sub-contractor engaged to carry out demolition work at the school also had its fine reduced by the Court of Appeal, from £400,000 to £190,000. The Court found that there was no justification for assessing the likelihood of harm in the case as medium. The best estimate of the sub-contractor’s expert, whose evidence went unchallenged at trial, was that exposure to the asbestos would result in about 90 deaths out of 100,000 people. The sentencing judge had been wrong not to give any reason for disregarding or disagreeing with the expert evidence of risk and the only reasonable conclusion on the available evidence was that the likelihood of harm arising from the offence was low. The Court said that “the likelihood or otherwise that exposure to asbestos at a particular level for a particular period of time will ultimately cause a fatal disease is not something which is rationally capable of being assessed simply on the basis of supposition, impression or imagination. It is a scientific question which should be answered, if possible, with the assistance of scientific evidence”.
Other sentencing news
- Two construction firms were fined a total of £860,000 (and one of them was ordered to pay costs of over £40,000) after a worker died when the temporary platform he was walking on collapsed and he fell from a height of approximately 14 metres. There was a failure to manage the risks associated with temporary works and work at height and the death was “entirely preventable”.
- A furniture manufacturing company, had it not been in administration, would have been fined £800,000 for failing to prevent exposure to asbestos at its factory. See the HSE press release. The clear breach of the law by the company required the HSE to prosecute, even though the company was in administration. The fine was reduced to £1.
- Two companies were fined a total of £700,000 after a worker was fatally crushed at a paper mill when he was struck by a shovel loader. The HSE investigation found that there was no safe system of work to segregate pedestrians and vehicles and drivers had limited visibility. The HSE inspector said: “This death would have been prevented had an effective system for managing workplace transport been in place. This is a reminder to all employers to properly assess and apply effective control measures to minimise the risks from moving vehicles in their workplaces”.
- The principal contractor on a major construction project was fined £600,000 after a worker died when he was struck by a wheeled excavator slewing round after being refuelled. The company had failed to ensure that the safe system of work for refuelling of all plant and equipment was fully implemented at the site. The HSE inspector said: “This was a tragic and wholly avoidable incident, caused by the failure of the civil engineering company to implement safe systems of work, and to ensure that health and safety documentation was communicated and control measures followed”.
- Another principal contractor was fined £600,000 after an agency labourer was run over and killed by a dumper truck being driven by an employee. The HSE investigation found that the company had failed to organise the site in such a way to ensure that pedestrians were not carrying out work on or near traffic routes whilst vehicles were in operation.
- A steel cladding company was fined £600,000 (and ordered to pay costs of over £23,000) after a worker suffered life-changing crush injuries to his hand while using an electrically-powered folding machine. The HSE investigation found that the company had failed to ensure workers only used the machine when the guards were in place, to prevent them from reaching dangerous parts whilst it was in operation.
For a recent quote by one of the team in the Food Manufacture publication in relation to health and safety click here.
HSE issues welding fume safety alert
The HSE issued a safety alert following new scientific evidence from the International Agency for Research on Cancer that exposure to mild steel welding fume can cause lung cancer and possibly kidney cancer in humans. It says that, with immediate effect, there is a strengthening of HSE’s enforcement expectation for all welding fume, including mild steel welding, because general ventilation does not achieve the necessary control. The alert sets out the action required.
Legal ‘duty of care’ for social media companies to protect young people’s health
In its recently published report entitled ‘Impact of social media and screen-use on young people’s health’, the House of Commons Science and Technology Committee concludes that social media companies must be subject to a formal legal duty of care to help protect young people’s health and wellbeing when accessing their sites. See the press release with a link through to the report, conclusions and recommendations.
News from Europe
- European Parliament and Council negotiators have reached provisional agreement on new rules which will entitle consumers buying online or over the counter in a local store to equal remedies if they purchase faulty products. Goods with digital elements, such as smart fridges and connected watches, will also be covered by the new rules. See the press release for more details.
- On 15 February 2019, the Council of the EU announced that the EU is introducing new rules which will ensure that products placed on the single market are safe and compliant with EU legislation protecting public interests, such as health and safety in general, health and safety at the workplace, consumers, the environment and public security. See the press release.
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[1] R v NPS London Ltd, [2019] EWCA Crim 228
[2] [2017] EWCA Crim 704 – see the May/June 2017 edition of the Regulatory round-up.
[3] R v Squibb Group Ltd, [2019] EWCA Crim 227
Contains public sector information published by the Health and Safety Executive and licensed under the Open Government Licence.

Brexit – what happens next?
Now that the House of Commons has overwhelmingly rejected the government’s Brexit deal, we take […]
Now that the House of Commons has overwhelmingly rejected the government’s Brexit deal, we take a look at what happens next and what it means for businesses.
On Tuesday 15 January 2019, the House of Commons voted overwhelmingly to reject the Brexit deal negotiated between the government and the European Union. The Prime Minister will make a statement on the way forward and table an amendable motion in the House of Commons on Monday 21 January 2019.
After the Withdrawal Agreement was rejected, the Prime Minister said that meetings would be held across the House of Commons to identify what would be required to secure its backing for a deal with the EU. If there are ideas which are “genuinely negotiable” and have sufficient support, these will then be explored with the EU. The extent to which the EU is prepared to re-open negotiations is another matter. So far, the indications are that they are not willing to do so. Any major renegotiation would likely require an extension of the Article 50 exit process to delay the UK’s departure from the EU – currently set for 29 March 2019. A request for an extension for any reason would have to come from the UK, and the EU would have to agree it. With European Parliament elections coming up in May 2019, this has its own complications.
The Prime Minister sought to provide reassurance that it is not the government’s strategy to “run down the clock to 29 March”. However, with a deeply divided House of Commons, all options remain on the table. That includes the very real prospect of a “no deal” Brexit. Other possibilities are a second referendum and the UK unilaterally revoking its Article 50 withdrawal notice, effectively cancelling Brexit, something which it is legally entitled to do.
While the vote was historic and momentous, in practical terms it changes little for businesses, which face ongoing uncertainty. It has been widely predicted for some time that the government’s deal would be voted down. The impact of a no deal Brexit will depend on a range of factors, including the size, nature and location of the business, the sector in which it operates, the relationships it has with suppliers and customers, the extent to which it trades across borders, and other commercial considerations. With the level of uncertainty showing no sign of changing any time soon, businesses should continue with their contingency planning. The government has launched a website Prepare your business for EU Exit. Watch out for our upcoming guidance on a range of commercial legal matters arising under a no deal Brexit, which will be issued shortly. Should you wish to discuss the potential implications of Brexit for your business, please get in touch in the first instance with your usual contact, who will be very happy to coordinate the necessary response.

The legal view: Will Brexit affect regulation?
First published by Pensions Expert on 1 January 2019, copyright FT Brexit continues to dominate […]
First published by Pensions Expert on 1 January 2019, copyright FT
Brexit continues to dominate the headlines, and the unknowns seem to multiply constantly. Will parliament pass the deal agreed by the EU? Will there be a hard Brexit? Will the UK remain? Will there be a second referendum?
To read the full article on Pensions Expert please click here.

Immigration to the UK post-Brexit and impact upon[...]
Immigration to the UK post-Brexit The Government last week updated the information publicly available about […]
Immigration to the UK post-Brexit
The Government last week updated the information publicly available about immigration to the UK post-Brexit[1]. The new system will not come into force immediately post-Brexit but after an “Implementation Period” during which further changes and refinements to the proposals will be made.
The Implementation Period will run from 29 March 2019 to 31 December 2020, during which the current immigration rules will continue to apply. During that time, EU citizens will be able to enter and reside under the terms of the UK Regulations which implement the current, pre-exit rules.
The Government has agreed with the EU on rights for EU citizens already living in the UK to enable them to carry on with their lives broadly as now. The Government is still finalising arrangements with European Free Trade Association (EFTA) States – Norway, Iceland, Liechtenstein and Switzerland – to bring about similar arrangements for their citizens.
The key concept behind the new immigration system is that there will be one immigration standard for all non-UK nationals rather than the dual system currently in place for EU/EFTA nationals and workers from outside those countries; admitting workers of all skill levels from the EU but only highly skilled workers from outside the EU.
EU Settlement Scheme
The EU Settlement Scheme will give EU citizens already here, and also those who arrive in the UK during the Implementation Period, the opportunity to secure their future residence in the UK.
Under the EU Settlement Scheme, EU citizens (and their family members) will be required to obtain a specific, individual permission to stay on in the UK after the end of the Implementation Period, in contrast to the current position under EU free movement. They will have until June 2021 to do so (if the Implementation Period ends on 31 December 2020).
EU citizens who have been living in the UK continuously for 5 years before the end of the Implementation Period will be eligible to apply for “settled status” (also known as indefinite leave to remain) meaning they will be free to live in the UK, have access to public finds and services and go on to apply for British citizenship.
EU citizens who have been in the UK for less than 5 years by 31 December 2020 will be entitled to “temporary status” (also known as pre-settled status) until they acquire the necessary 5 years residence to obtain settled status. This means that they will be able to continue working until they have reached the 5 year point.
The Government state that the EU Settlement Scheme will be easy to access and will be fully digital. Dedicated links between the Home Office, HM Revenue and Customs, and the Department for Work and Pensions have been created to enable quick searches of employment records which should reduce the documentary burden on the applicant.
Impact of the above on domestic football clubs
In the event the Government’s proposed single immigration system comes into force, the ability to employ footballers from within the EU will be subject to the same restrictions as employing those from outside the EU; clubs will need to be registered with the Home Office as a sponsor to employ overseas workers.
A large number of EFL clubs are not currently registered as sponsors with the Home Office due to the unlikelihood of ever employing a player who would meet the existing criteria to receive a Governing Body Endorsement (GBE) and they will need to be mindful of this and the application they will need to make to the Home Office to become a sponsor when the migration policy for employing overseas footballers is agreed.
The skilled migration policy has yet to be finalised, and the Government have acknowledged the benefit of having highly skilled migrant footballers employed in this country, however in the event that clubs need to apply to The FA for a GBE (or a similar validation) prior to any overseas player being employed, there will be a significantly increased burden on The FA for processing applications of this nature.
It remains to be seen whether the existing GBE requirements will remain in place; if they do, this will drastically reduce the number of overseas players seen in our leagues. Clubs currently wishing to employ footballers from outside the EU need to demonstrate that[2] the player is internationally established at the highest level and the player’s employment will make a significant contribution to the development of football at the highest level in England. In the event that a player does not meet the automatic criteria to be granted a GBE, the thresholds in terms of wages and transfer fees are hard to achieve for all but the biggest Premier League and EFL Championship clubs.
The existing GBE requirements would rule out the employment of many talented footballers outside of the top leagues who have not yet reached international level, but that is exactly the situation at the moment for players coming from outside of the EU. The Government has stated that it wants one immigration system regardless of nationality, therefore it is likely that there will be significant changes in this area going forward.
Clubs should also bear in mind the potential impact that our withdrawal from the EU will have under FIFA’s Status and Transfer of Players Regulations and keep in touch with The FA as to how these changes will impact them:
- Under Art. 19.2(b) the exception relating to minor players being able to move prior to the age of 18 is limited to a transfer taking place within the EU or European Economic Area (EEA) and certain other obligations being met.
- Under Annexe 4 Art. 6 there are special provisions relating to training compensation for players moving between associations inside the EU/EEA.
Unless the UK is treated the same as the existing EEA countries, these provisions will no longer apply to domestic clubs.
It is suggested that clubs consider including warranties in their contracts with EU players pre-Brexit and also during the Implementation Period whereby the player warrants and represents to the Club that he:
- is entitled to work in the UK as an EU national;
- will to do all things necessary to ensure compliance with any post-Brexit requirements for EU national migrant workers; and
- will notify the Club immediately if he ceases to be entitled to work in the UK at any time during his employment with the Club.
The existing Sponsorship Management System will be substantially reformed during the Implementation Period to provide a more streamlined system which is easier for employers to use.
If you have any queries relating to the above, please do not hesitate to contact us via the contact details below.
[1]https://www.gov.uk/government/publications/the-uks-future-skills-based-immigration-system?utm_source=948b0c8c-f0cd-4ec8-b861-d79fceebe549&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate
[2] http://www.thefa.com/football-rules-governance/policies/player-registration/points-based-system

Are you up to speed with the Government’s[...]
The Government has set out its plans for the future status of EEA nationals and […]
The Government has set out its plans for the future status of EEA nationals and their family members after Brexit. Our business immigration team can assist you with any queries.
The Government plans to require EEA migrants and their family members to apply for settled status under a new process. The type of status that an individual will be eligible for will depend on the amount of time they have lived in the UK and the date they arrived.
It is inevitable that HR teams will be asked for guidance from concerned employees so it’s important to be up to speed and we can help you with this. Our business immigration team can assist with any queries you or your staff may have.

Procurement and state aid update: preparing for Brexit
On 13 September 2018, the UK government published further guidance on the future of public […]
On 13 September 2018, the UK government published further guidance on the future of public procurement in the UK in the event of a “no deal” Brexit.
What next for UK public procurement?
Under current rules, all procurement opportunities that fall within the scope of the EU procurement rules are advertised in the Official Journal of the European Union (OJEU) via Tenders Electronic Daily (TED). This provides contractors with notice of new available opportunities and enables contractors to identify and bid for relevant contracts.
Procurement opportunities below the relevant EU thresholds can be advertised on a number of domestic UK portals including Contracts Finder, Public Contractors Scotland, Sell2Wales and eTendersNI.
In its guidance on “Accessing public sector contracts if there’s a no Brexit deal” available here, the UK government sets out its advice in relation to how existing bidders for UK public contracts and public sector buyers would be able to access and publish future UK public procurement contract opportunities in the event of a no deal Brexit.
Deal – if there is a Brexit deal UK public authorities might continue to be able to access the OJEU depending on the agreement that is reached in relation to public procurement;
No Deal – the UK would no longer be able or required to publish public sector contracts in the Official Journal of the EU via Tenders Electronic Daily (TED). The UK would then need to establish its own procurement database which would be used by the public sector to advertise tenders after Brexit. The guidance states that “a replacement UK-specific e-notification service will be made available.” All contracts that are currently advertised in the OJEU/TED would then be advertised instead on the new UK e-notification service.
In particular, the guidance states that in relation to public procurement:
- public sector authorities which procure via OJEU/TED will be contacted to ensure that they are familiar with the new UK e-notification should one be required in the event of a no deal Brexit
- private sector suppliers wishing to access relevant UK procurement opportunities will need to access the new UK e-notification service. Suppliers will able to continue to access Contracts Finder, Public Contractors Scotland, Sell2Wales and eTendersNI
- private sector suppliers wishing to access contract opportunities from the EU may continue to do so via OJEU/TED.
In either scenario (deal or no deal), it is likely that public procurement rules will continue to apply in substantially the same form as the Public Contract Regulations 2015. The UK government has announced that it is aiming to accede to the WTO Agreement on Government Procurement (GPA) in the event of a no deal. Many of the rules under the GPA align with existing EU rules on public procurement. In the event of a deal, the EU is likely to require substantial compliance with EU procurement rules.
What next for UK state aid?
In relation to state aid, the UK government announced in March 2018 that state aid regulation will continue to apply in the UK post Brexit and has announced that the Competition and Markets Authority will become the new regulator for state aid. Unlike the EU, the WTO has no procedure under which subsidies and other forms of state support (countervailing measures) are notified and approved. It can however impose sanctions and the assumption must be that nothing of underlying substance will necessarily change.
Deal/No Deal – there is still some uncertainty as to which rules precisely will apply and the detail, for instance, in how disputes between the EU and the UK/CMA will be settled and how disputes between the CMA and the UK government will be settled (perhaps by judicial review).
We expect the CMA to continue to gear up its state aid function by recruiting staff and that the UK government will enact secondary legislation for new UK state aid rules to apply. Again, any new UK rules are likely to mirror EU state aid rules broadly in either scenario.
If you require any advice or assistance on any of the points raised above, then please contact us.

Food safety after Brexit
The EU Energy and Environment Sub-Committee has issued a press release stating that it is […]
The EU Energy and Environment Sub-Committee has issued a press release stating that it is considering how food safety risk management decisions will be made once the UK has left the European Union. Currently, decisions about issues which pose a threat to food safety are made at an EU level.
The committee will explore:
- To what extent food safety risk management is monitored at an EU level, and how that process works
- If the UK could remain part of the EU process after Brexit
- Identifying any gaps that would be created by the UK leaving the EU’s process and ways to fill them domestically.
WM Comment
We will keep you updated with any proposals that come out of the discussions.

Currency, cost calculations and contractual clarity
Walker Morris’ Head of Commercial Dispute Resolution, Gwendoline Davies, highlights the importance of dealing comprehensively […]
Walker Morris’ Head of Commercial Dispute Resolution, Gwendoline Davies, highlights the importance of dealing comprehensively and clearly with matters of currency and calculation in cross-border contracts.
Currency confusion in an array of cases
Retailers and contract managers will recall the “Marmite Row”, during which Unilever (the Netherlands-based supplier of household brands) sought to impose on supermarkets around a 10% price increase, allegedly in response to post-referendum falls in the value of the pound. That dispute was resolved before it hit the courts, as Unilever and Tesco came to a private settlement, but the issue of Brexit-related currency fluctuation disputes suddenly became very real. Since then, a number of other cases have considered the questions of currency and contractual clarity.
In the context of cross-border legal costs payments, the High Court in the November 2016 case of Elkamet v Saint-Gobain [1] ordered, without any prior authority on the point, that if a foreign company had to exchange currency into sterling in order to pay costs in UK litigation, then it was entitled to be compensated for exchange rate losses in the same way that it was entitled to be compensated for loss of interest. On the same point in the 2017 case of MacInnes v Gross (2) [2], however, the High Court declined to make such an order. In the latter case the judge reasoned that there were inherent differences between the costs and interest regimes; currency fluctuations are uncertain and wholly outside a party’s control (and can go up, as well as down); and, in any event, any “generous” interest rate ordered, such as 4% above base, is designed to provide at least some protection for payees against such matters.
More recently, the June 2018 case of Aras v National Bank of Greece [3] concerned a commercial contract dispute. As a fall-out from “Grexit”, the parties entered into agreements for the sale, by the National Bank of Greece, of shares in Finansbank (a Turkish bank). The agreements provided that the buyer would purchase in Euros and they contained a mechanism for calculating the purchase price and fees by reference to book value. However, Finansbank’s book value was denominated in Turkish lira and the agreements were silent on when the currency conversion to calculate the price should occur.
The Commercial Court, following a trial conducted under the Shorter Trials Scheme, undertook a comprehensive contractual interpretation exercise to resolve the dispute:
Correct approach to contractual interpretation
- Since the 2015 Supreme Court decision in Arnold v Britton [4], the courts will strive to uphold the clear wording of the clause wherever possible, applying the objective test of what the reasonable businessperson would understand the clause to mean, even if that results in a bad bargain for any party.
- The court’s task is to ascertain the meaning of the language which the parties have chosen to express in their agreement when read in the context of the factual background known or reasonably available to the parties at the time of the agreement [5].
- However, where a contract term might be interpreted in different ways, the court is entitled to prefer the interpretation which is consistent with business common sense [6].
- Alternatively, where it is commercially and practically necessary, a court may imply terms into the contract to ensure business efficacy [7].
In short, a literal approach to contractual interpretation is to be preferred over a more purposive approach wherever possible. However, there may sometimes be provisions in even a detailed, professionally drawn contract which lack clarity. A court interpreting such provisions may take into account the factual matrix to ascertain the objective meaning. The lack of clarity in this case led the court to do just that.
The court asked itself what a reasonable person with the parties’ background knowledge would have understood the parties to have intended. It decided, in line with business common sense, that, to allow a valid valuation comparison and to remove uncertainties surrounding currency fluctuations, it was most likely that the parties intended that the relevant calculation, and the currency conversion, should be made by reference to a fixed date (which, in this case, was found to be the relevant accounting date).
WM Comment
As the UK moves towards its departure from the EU we are likely to see more and more cases in which currency fluctuations influence pricing, payments and contractual provisions and disputes in a myriad of ways.
In many situations, there will be practical steps that parties can take to protect their own position. For example, in the supply agreement/commercial contract context, much is likely to depend on the terms of individual contracts, including whether pricing structures and/or so-called Brexit clauses provide sufficient flexibility and clear mechanisms for changing market forces and for resolving disputes. In the legal costs context, pending any appellate court’s authority, it might make sense for claimants in proceedings with non-UK based parties to include exchange rate losses as a head of claim so as to keep the Elkamet option open; and international costs claimants may be best advised to fully quantify any exchange rate losses claimed, so as to avoid having to ask the court for an open-ended order (as was the case in MacInnes).
In an otherwise largely uncertain economic environment, it is certain that contracting parties will now be well advised always to consider questions of currency fluctuations and calculations – and to address them specifically and clearly – in their contractual arrangements.
If you have any concerns arising from currency fluctuations in the current climate, if you would like any advice or assistance in connection with the drafting or review of your contractual terms, or if you have any more general Brexit-related queries or training requirements, please do not hesitate to contact Gwendoline Davies or any member of the Commercial Dispute Resolution team and Commercial team.
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[1] Elkamet Kunstofftechnik GmbH v Saint-Gobain Glass France SA [2016] EWHC 3421 (Pat)
[2] [2017] EWHC 127 (QB)
[3] [2018] EWHC 1389 (Comm)
[4] [2015] UKSC 36
[5] Wood v Capita Insurance Services Ltd [2017] UKSC 24
[6] Rainy Sky SA v Kookmin Bank [2011] UKSC 50
[7] M&S v BNP Paribas [2015] UKSC 72

CMA to be appointed as post-Brexit UK State[...]
The Government has indicated that it intends to appoint the Competition and Markets Authority (CMA) […]
The Government has indicated that it intends to appoint the Competition and Markets Authority (CMA) as a newly appointed regulator to monitor State aid enforcement following Brexit.
The appointment was detailed in a letter from the Minister for Small Businesses, Consumers and Corporate Responsibility, Andrew Griffiths, to Lord Whitty, the Chair of the House of Lord’s EU internal market sub-committee on 28 March 2018 following a request by the sub-committee for further clarity on how State aid policy would be managed following Brexit.
The letter states that the Government has concluded that an independent State aid authority would be required following Brexit and that the Government has concluded that the CMA would be “best placed to take on the role of State aid regulator. This reflects its experience and understanding of markets as the UK’s competition regulator and the independence of its decision-making from Government.”
In the Brexit transition period (between March 2019 and 31 December 2020), existing EU State aid rules and regulations will continue to apply and the European Commission will continue to be responsible, as now, for approving and monitoring aid.
Following the transition period, the CMA will take over the role of the newly appointed State aid regulator under a new State aid regime. The letter states that the Government intends to transpose the EU State aid rules under the European Union (Withdrawal) Bill and that the new regime will replicate existing exemptions from State aid rules.
Comment
State aid is often a politically sensitive area and the new role may put the CMA further in the political spotlight. State aid rules are designed to prevent governments from giving financial advantages to firms in a way which could distort competition. The new regime may lead to the CMA needing to challenge government and/or local government policy in future where it considers that competition is being distorted. For instance, these issues could arise where the Government steps in to rescue failing companies or where local authorities provide subsidies to certain companies.
News of the appointment will also mean that the CMA will likely require further resources to deal with its additional workload following Brexit. The CMA has indicated in a statement that it has appointed two directors to assist in preparing for exercising its new powers and that it will provide details of how it will exercise this function in due course. We would expect to see a newly established State Aid Team to be set up within the CMA over the coming year and further consultations on the proposed new regime.
If you require any advice or assistance on any of the points raised above, then please contact a member of our Competition team.

Brexit: what now?
We know that the people of the UK voted to leave the EU on 23 […]
We know that the people of the UK voted to leave the EU on 23 June. What is less clear is what comes next.
The future of the UK/EU relationship
Brexit will not occur immediately. The exit process is triggered by a notice issued by the UK Government under Article 50 of the Treaty on the European Union. In his resignation speech, David Cameron, said that it would be for the new Prime Minister to carry out negotiations with the EU and invoke Article 50. Service of the Article 50 notice triggers the start of a two-year timetable for the UK to secede from the EU during which time the UK and EU will negotiate the terms of the withdrawal agreement. The term can be extended provided all the other remaining Members States agree but, if there is no agreement to extend and no agreement has been reached, the UK will leave the EU at the end of the two-year period. (During the referendum the “Remain” camp argued that negotiations could take at least 10 years, as the trade negotiations between Canada and the UK did).
At the heart of the early discussions will be whether the UK should be a member of the European Economic Area (EEA) and/or the European Free Trade Area (EFTA). Three of the existing EFTA states – Norway, Iceland, Liechtenstein – joined with the EU to form the EEA which constitutes the internal market. The EEA Agreement includes legislation covering the four freedoms (of movement of goods, services, persons and capital) and co-operation in some areas (e.g. the environment, consumer protection) but not in others (e.g. common trade policy, foreign and security policy).
The options facing the UK are to:
- become a member of the EEA – what may be termed the “Norway” option. This would allow the UK to retain access to the single market and EU businesses to have access to the UK. However, the UK would have to contribute to the EU budget and maintain and adopt EU regulations and standards in order to take advantage of the single market, whilst having no formal input in the formulation of those standards. Additionally, the UK would have to accept free movement of persons, freedom to provide services and freedom of establishment from other EEA states. Given the argument in the last month of the referendum was largely around the immigration issue, this may prove politically untenable.
- negotiate a series of bilateral agreements with the EU – the “Swiss” option, giving access to the single market on a sector-by-sector basis. The UK would not have full access to the single market as access is given on a case by case basis. Switzerland is not part of the EEA but is part of the EFTA. Switzerland has less access than Norway does to the single market. The extent to which Switzerland must accept free movement of persons from the EU has proven to be a sticking point in negotiations between the two.
- negotiate a new “Free Trade Agreement” with the EU – as the Canadians have done. Similar to the Swiss model (above) but involving a single comprehensive agreement with the EU rather than multiple agreements on a sector-by-sector basis. This will mean fewer (though still some) tariffs and an ability to compete in the supply of goods and services with EU competitors within the EU. However, the Canadian experience showed that the negotiations can take years – although there is an argument that our negotiations would be swifter as we are starting from a common starting point – and that the final agreement still omits a number of very important services from its scope
- join a customs union – as the EU and Turkey have done. Turkey has a customs agreement with the EU, which is limited to trade and industrial products and certain agricultural products and does not apply to services. The benefit would be that goods could be exported to the EU without the need to comply with tariffs or customs restrictions but there would likely be an obligation to comply with minimum EU regulatory standards and the agreement would be unlikely to cover every sector – in particular, the UK’s leading service industries, notably financial services, may very well not be covered
- rely on its existing World Trade Organisation (WTO) membership. This does not involve independently negotiated agreements with the EU or individual EU states. The UK would have control over its trade policy and borders within existing WTO rules. All UK exports to the EU would be subject to import tariffs and EU technical standards (e.g. regarding product safety,) and/or restrictions to the extent permitted under the WTO rules…
The short answer at the moment is that we simply do not know to what extent UK businesses trading with countries within the EU will be subject to customs, tariffs or future EU regulatory standards. It is very probable though that the end result will disappoint the most ardent “Brexiteers” and that UK businesses, if they want to continue to trade with our erstwhile EU partners, will find that they have rather a lot of EU regulations to contend with.
As well as negotiating its future relationship with the EU, the UK Government will have to renegotiate agreements with third countries, where these have been entered into with the EU rather than individual Member States.
The application of EU law more generally
One thing that is clear is that the EU Treaties will no longer apply to the UK after the UK leaves the EU and that any provisions of the Treaties that the UK wants to retain will require new legislation. The same is true of EU Regulations, as these are directly applicable and do not need national legislation to be implemented into domestic law. A topical example is the Market Abuse Regulation (which materially rewrites the existing law on market abuse – e.g. insider dealing and the disclosure of information to the market, which comes into effect on 3 July 2016). This legislation requires no implementing legislation in the UK, though it will be policed by the Financial Conduct Authority. If no action is taken between now and the date the UK leaves the EU, such as a decision to adopt the Regulation, the Market Abuse Regulation would simply fall away on that date. The creation of voids like this in UK legislation will need to addressed before we leave. Some Regulations may be considered to be unnecessary but most will not be. To take the market abuse example again, if the UK wishes to remain an attractive destination for foreign investors, it will need to be able to compete with EU Member States, which will mean having a regime that is every bit as rigorous in stamping out abusive practices as that envisaged under the Market Abuse Regulation.
The same is not true of EU Directives, as these are implemented into national law by domestic legislation.
The Court of Justice of the European Union (CJEU) will no longer be part of the UK judicature. To the extent, however, that its rulings have been reflected in the decisions of the UK courts, those rulings will continue to apply. In time, as the UK courts are no longer obliged to apply CJEU rulings, a divergence may begin to emerge between the decision of the UK courts and the CJEU. This could become problematic where the UK continues to apply EU legislation as businesses may find that a course of action is approved in Strasbourg but not in London. But that is for the future.
In practical terms, if the UK wants to continue to trade with the EU, it will have little choice other than to comply with some EU laws. Examples where existing EU legislation is likely to continue to be relevant are competition law, financial services law, product liability, consumer protection, environment, food safety and data protection, some of which are considered further in this newsletter.
What should I do now?
The most important message for business is that nothing will happen overnight. There will be time to develop and implement strategies as the nature of the UK’s relationship with the EU and with EU law emerges over the coming months, and maybe years. We will keep you updated with relevant developments.

Brexit: What does this mean for employment law and HR?
Implications of Brexit on employment law and HR The referendum is decided and the UK […]
Implications of Brexit on employment law and HR
The referendum is decided and the UK is to leave the EU. One thing that both sides of the In/Out debate agree on is that there will now be a huge period of uncertainty about what happens next. So, do we need to ‘do anything’ HR-wise to prepare for leaving the EU? Will day-to-day life in the workplace carry on much as before (with a few less political debates at the water cooler)? One thing’s for sure, it’s all a bit unprecedented. To assist employers, our employment team have prepared some key points to note for employers in the immediate aftermath of the Brexit vote.
Nothing will happen overnight
Legally the result of the referendum is ‘advisory’ rather than mandatory. The UK will remain a member of the EU until an exit is negotiated, which will be a complex political process. The UK has two years to negotiate its departure after triggering the exit provisions of the Lisbon treaty. So really, anything could happen. Some commentators have noted the possibility that the negotiation process may lead to the UK not actually exiting after all (although query whether that would require another referendum). It will be a case of ‘watch this space’ for a rather long time.
Action: For most employers there is unlikely to be a business case to take any immediate action as a result of the referendum outcome other than to stay up to date with developments and keep an eye on the horizon (more on this below).
UK employment laws may be modified or repealed
Jeremy Corbyn predicts a ‘bonfire of workers’ rights’. Other commentators predict very little practical change. Our view is that there will, over time, be some deregulatory changes. Fundamental ‘vanilla’ employment protection as we know it, however, is likely to remain largely untouched. We are not about to become the US with firing at will and no right to claim unfair dismissal. Nothing will happen fast as the political and trade machinations must first happen as a precursor to any employment law changes.
As we know, much of UK employment law derives from Europe (equality laws, protection on transfer of undertakings, pregnancy and maternity protection, working time provisions, fixed-term, part-time and agency worker protections to name but a few). Many of these rights are embedded into British culture – for example, could we imagine the right to paid holiday being axed? Some of the rights, however, may well be more vulnerable if the government pursues its drive towards deregulation. Agency worker protection, rights to collective information and consultation, health and safety protection are likely to be in the immediate firing line. Some legal commentators believe that we may see caps on discrimination compensation (something that would have been impossible prior to Brexit as it would breach the principle that domestic law must not make it impossible to exercise rights conferred by EU law). The bottom line is that UK employment laws cannot be repealed overnight. Any significant changes would normally follow a period of public consultation; if (and when) things do change employers will have a reasonable amount of time to prepare.
Action: Stay up to date with proposed changes as they are announced. You may wish to subscribe to our employment newsletter please see our ‘Sign up to our publications’ at the bottom of this page and bookmark our employment legislation tracker. We will also be covering any changes on the horizon at our next Breakfast Briefing on 6 October 2016 register with kiri.richardson@walkermorris.co.uk.
Some corporates may relocate HQs and reduce UK headcount
This particular consequence of an ‘Out’ victory was widely publicised by the Remain campaign. The automotive and financial services sectors, in particular, may well scale back UK operations and other multinationals may take similar action. If this ‘scaling back’ comes to pass, suppliers and customers of such businesses and their workforces will be affected by the inevitable and much talked about ‘ripple effect’. Whilst this uncertainty may be enough in itself to have an impact, much will depend on forthcoming trade negotiations.
Action: If your organisation could be affected either directly or indirectly by suppliers or customers scaling back operations in the UK it would be wise to carry out an initial impact assessment looking at potential worst/best case scenarios. Health-check the organisation’s collective redundancy procedures if the prospect of headcount reduction or restructuring is on the horizon. Taking time to plan a route-map for this could save huge amounts of time and expense not least because it reduces the risk of potential tribunal claims.
Business uncertainty may affect hiring and investment decisions
A recent report found that growth in permanent hires has slowed as companies take a ‘wait and see’ approach and that demand for temporary staff and interims is growing at a much sharper rate.
Action: How the Brexit vote impacts each organisation will differ and it will be up to each employer to decide how best to manage the impact. Wise employers will obviously base their hiring and investment decisions on what is best for their organisation rather than reported trends or media scaremongering.
Immigration rules will be tightened
Inevitably, there will be significant changes to immigration rules and requirements over the next few years as Brexit plays out. For example, it may be that we see the introduction of an Australian/Canadian style points system to facilitate the employment of overseas workers with ‘in-demand skills’. New trade deals are likely to come with strings attached in terms of worker movement. This is one area where nothing less than a crystal ball is required!
Action: Affected employers (those hiring from overseas or whose workers move around within the EU) will need to stay bang up to date with immigration changes. If you are affected, Walker Morris have a business immigration team who can assist with this and act as a ‘first alert’.
If you have any questions or would like to discuss anything in this article please contact David Smedley or Andrew Rayment.

Brexit: The implications of the vote to leave the EU for intellectual property laws
In common with other subject matters considered in this newsletter, the short answer is that […]
In common with other subject matters considered in this newsletter, the short answer is that we don’t know yet what the impact of the UK decision to leave the EU will be. Withdrawal does not take effect immediately and there will now follow a period of time – the EU Treaty stipulates two years though this may be extended – during which the post-Brexit trading terms will be negotiated.
EU Trade Marks and Registered Community Designs
The UK Intellectual Property Office (UK IPO) administers national intellectual property rights but many UK businesses seek protection at the EU level, notably through the EU Trade Mark (EUTM) (formerly known as the Community Trade Mark) and the Registered Community Design (RCD). An EU registration is a cost-effective means of obtaining protection both in the UK and wider EU. Once the UK leaves the EU, EUTMs and RCDs will cease to have effect in the UK. Transitional conversion provisions will be needed for existing EUTMs and RCDs to cover the UK. Assuming that does happen, thought will need to be given to how those “successor rights”, for want of a better phrase, impact existing agreements, such as licences or security documents.
Applicants will need to decide whether to pursue separate applications in the UK and the EU and, where dual applications are pursued, there will be an increase in costs compared to what applicants are currently paying. We may also see UK-only applications start to take longer as the UK IPO finds itself suddenly responsible for the registration of many more marks than is currently the case.
There is a related issue around proof of use. Where the use of an EU trade mark is primarily in the UK, and the UK no longer forms part of the EU, the validity of the EU registration may be called into question. It is to be hoped that this will be addressed in legislation to be finalised before the UK finally leaves.
In similar vein, UK-based reputation/goodwill (where the reputation/goodwill in the EU is negligible) or a UK trade mark may not be able to prevent the registration of a competing EUTM.
Another consequence of Brexit for trade mark proprietors will be that it will not be possible to obtain an EU-wide trade mark injunction from a UK court. Proprietors will have to bring proceedings in an EU member state to get an injunction that covers the EU.
Over time, we can expect to see UK trade mark and design law diverge from their EU counterparts.
Existing UK registered rights – for trade marks, designs and patents – will not be affected by Brexit as these are UK rights only.
Copyright
Copyright is less obviously impacted by Brexit. There is no system of copyright registration in the UK or EU and copyright laws are national laws, albeit often implementing EU directives, notably the Information Society Directive [1]. At the moment there is a substantial degree of harmonisation of copyright laws among EU Member States – although the European Commission would prefer to see more. In time though, we can expect to see UK copyright law tread an increasingly divergent path.
Patents
Patents too will be less affected by Brexit than trade marks. This is because, contrary to what one might think at first glance, the European Patent Office (EPO) is not in fact an EU institution but rather originates from the European Patent Convention. The EPO creates a single patent grant procedure such that once a patent is granted by the EPO it is effectively converted into a bundle of national patents. A patent granted by the EPO that is effective in the UK now will therefore continue to be effective post Brexit. The same cannot be said of the EU Unitary Patent (which provides for an EU-wide patent), something of an irony given how long it has taken for the Unitary Patent to come to fruition and given how close it now actually is. The Unitary Patent would not cover the UK (although UK inventors would still be able to apply for one) and, from the European perspective, the whole project loses some of its lustre if the UK is not covered,
Licensing agreements
Licensing agreements should be reviewed for an assessment of the consequence of the UK leaving the EU. For example, is there a defined term “EU”, which could mean the loss of exclusivity in the UK for a licensee of intellectual property, should the UK leave (the same consideration would apply to a distributorship agreement and other types of commercial contract)?
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[1] Directive 2001/29/EC

Brexit: Implications for competition law
Introduction and the alternatives to EU Membership This note examines the impact of the decision […]
Introduction and the alternatives to EU Membership
This note examines the impact of the decision to vote for Brexit on competition law.
The effect on Brexit will depend on how the UK defines its post-Brexit relationship with the EU. The most commonly proposed models for the UK’s post-Brexit relationship with the EU are:
- Apply to join the European Economic Area (EEA) – the Norwegian option: The UK might apply to join the EEA (which includes the 28 Member States plus Iceland, Liechtenstein and Norway) to participate in the internal market without the obligation to participate in EU policies on agriculture, foreign policy etc. To do so, the UK would also have to join the European Free Trade Association (EFTA). Under this model, all the single market rules (including competition law) would still apply after a Brexit.
- Apply to join the EFTA – the Swiss option: Switzerland is a member of the EFTA, but not the EEA. Accordingly, the UK might join the EFTA but not remain within the EEA, and negotiate a series of bilateral agreements with the EU to secure (some) single market access. Switzerland has negotiated about 100 bilateral agreements with the EU, although none of these concern financial or other services. In areas covered by bilateral agreements, Switzerland has had to incorporate EU law and make a financial contribution to the EU. However, the EU is unhappy with the Swiss model, partly as a result of recent Swiss restrictions on freedom of movement, and is trying to negotiate a new stricter agreement as a quid pro quo for Swiss access to the single market. Consequently, the current Swiss model may not be available to the UK.
- Total exit from the EU and EU single market: The UK could either rely on the rules of the World Trade Organisation to continue trading with the EU or seek to negotiate a new free trade agreement (similar to that recently negotiated between the EU and Canada).
How a Brexit could affect competition law
For the purposes of this note, we are assuming that the UK pursues a Brexit option which gives it significant freedom from existing EU competition rules. On that basis, a Brexit could affect competition law in the following ways:
- Merger control: The EU Merger Regulation (EUMR) introduced a so-called one-stop-shop regime, under which a transaction that qualifies under the EUMR is no longer subject to the merger control regime(s) of the relevant Member State(s) (subject to some exceptions). If the UK is no longer a Member State, the EUMR and UK merger control regimes could run in parallel. A transaction that qualifies under the EUMR may be subject in addition to UK merger control post-Brexit (provided the jurisdictional threshold for UK merger control is met). This could add a burden and cost for businesses, in particular in view of the UK merger fee (ranging from £40,000 to £160,000 depending on the UK turnover of the enterprises acquired) and the longer time frames for UK merger control clearance.
- Competition compliance: One of the main consequences of a Brexit is that the UK Competition and Markets Authority (CMA) and UK courts would no longer be bound by EU competition jurisprudence. Over time, this may result in increasing divergence in the application of UK and EU competition rules. In turn, this may increase the cost of competition law compliance for companies active in both the UK and EU markets.
- Competition investigations: Currently, the European Commission (EC) has jurisdiction to investigate potential competition law infringements that have an impact in the EU or EEA, and if it does so, the CMA can not investigate the matter. Following a Brexit, companies could face parallel investigations. The EC would investigate the conduct of a business affecting trade within the EU, while the CMA investigates conducting affecting trade within the UK. This would lead to separate fines and additional costs for the parties, as well as uncertainty as to the outcome (the EC and CMA could produce inconsistent decisions).
- Legal privilege: At present, advice given by EEA qualified lawyers is privileged for the purpose of EU competition law. After a Brexit, advice to clients from external UK-qualified lawyers (who are not qualified elsewhere in the EEA) will not be protected by privilege and can be read/copied by the EC when investigating companies.
- State aid: The state aid rules prohibit Member States from distorting competition by granting aid to specific businesses. There is no equivalent provision in UK competition law. The obligations only apply to Member States, so the UK outside the EU would be able (subject to World Trade Organisation rules) to provide aid to businesses in the UK without fear of EU action. Conversely, the UK would have no scope to oppose the grant of unlawful aid by other Member States.
- Private enforcement: Follow-on damages actions for breach of competition law, in which the claimant relies on an existing infringement decision, are increasingly common in the UK. Following a Brexit, EU infringement decisions will cease to have a binding effect on the UK courts. This may affect the ability of UK claimants to bring follow-on damages in the UK in reliance of an EU infringement decision, although follow-on claims will still be possible following a UK infringement decision.
- Single market: The EU competition rules are designed to remove, as far as possible, national barriers to cross-border trade (e.g. exclusive territorial protection and restrictions on purchasing parallel traded products). Following a Brexit, UK businesses may have more scope to ring-fence the UK market from EU competitors through contractual provisions and commercial practices.
- Competition policy: The CMA is an active member of international bodies such as the ICN and the OECD and is committed to cooperation with competition agencies around the world. Therefore, after a Brexit the CMA would be likely to continue to cooperate with DG Competition and the competition authorities of EU Member States in enforcing the UK competition rules. However, that cooperation would not be as close as that which currently takes place within the ECN, from which the UK will be excluded. Divergent enforcement policies and priorities could well emerge as the UK fashions its own competition policy outside the EU structure and processes.
Conclusion
To conclude, the impact of a Brexit will depend on the terms of any final agreement reached by the UK Government with the EU. If the UK were to join the EEA and have a status similar to Norway, it is likely that UK businesses would be more affected by EU competition law decisions, but without the UK being involved in the institutional process leading to these decisions being adopted. One area where the UK is likely to enjoy greater freedom is in the area of state aid control. But even this might be limited under the terms of an eventual agreement between the UK and EU.

Brexit: The implications for data protection
Transfers of data outside the EEA The starting point when considering the implications for data […]
Transfers of data outside the EEA
The starting point when considering the implications for data protection of the UK decision to vote to leave the EU is whether or not the UK will be a member of the European Economic Area (EEA). This may not become apparent for some time and – for the moment – the advice cannot be anything other than to “wait and see”.
Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data, implemented in the UK by the Data Protection Act 1998, prohibits transfers of personal data to countries outside the EEA unless they ensure an “adequate level of protection” to personal data. If the UK failed to meet this “adequate protection” threshold, alternative arrangements, none of which are straightforward and which are considered below, would need to be implemented before businesses based in the remaining 27 EU Member States could transfer personal data to their UK counterparts. One would expect the UK to meet the threshold but there is no guarantee that it would do so – the Commission has criticised the UK Government in the past for failure to implement the Directive in full.
Additionally, and critically, the EU General Data Protection Regulation will come into force in the EU on 25 May 2018. The Regulation substantially builds on the Directive and if the UK chooses not to adopt the Regulation in its own laws but to continue with the existing regime under the Data Protection Act 1998, it will increase the possibility that the UK will, from the European perspective, no longer be a “safe third country” in terms of the transmission of personal data. Indeed the possibility becomes more of a probability.
There are ways around the problem if the UK is considered not to be “safe”:
- the adoption of binding corporate rules. These allow multinationals and other international organisations and groups to transfer personal data across borders in compliance with EU data protection law. To date, however, take-up has been very modest largely because they are cumbersome and time-consuming to implement
- the use of “model contracts”. These too have not been popular, as they add an additional administrative burden to data transfers and cannot be negotiated
- a EU-UK privacy shield, akin to the EU-US privacy shield (the proposed replacement for the Safe Harbor which was declared invalid by the Court of Justice of the European Union last year). However, as is clear from our recent article on the subject, establishing a privacy shield is also a difficult task and the EU-US privacy shield has yet to be finalised.
In time, in the light of a decision not to remain in the EU, UK businesses operating in the EU will need to review internal data transfers, online operations and other activities that are impacted by privacy laws. Conversely, businesses involved in data transfers to and from non-EU jurisdictions only, notably the US, may welcome a more relaxed regime.
A lighter touch regime?
Outside the EU, the UK will have the option of adopting a lighter touch data protection regime than the existing one, a move that many businesses would watch with interest, as the data protection burden can be a trying one. The decision not to adopt the General Data Protection Regulation (or parts of it) could be a part of this.
There are three major caveats to this, however. First, UK businesses trading in the EU will in any event be subject to the Regulation, where they offer goods or services to EU citizens or monitor their behaviour (e.g. for online marketing). Secondly, notwithstanding Brexit, the Regulation will come into effect before the UK is able to leave the EU (as noted in our introductory article, this is likely to take two years) and reverting back to a different regime may prove extremely confusing for businesses, which have only just got to grips with their compliance obligations under the Regulation. Thirdly, the point, already mentioned, that the approach taken by the Government to the Regulation is inextricably linked to the issues identified above regarding cross-border data transfers and, if consideration is given to the huge volumes of daily data flows between London and other European financial centres for example, the odds would be on a data protection regime that is close to that of other EU Member States. Having said that, the odds were on a Remain victory!
On 19 April 2016, the ICO issued a statement on the implications of Brexit, stating that:
“The UK will continue to need clear and effective data protection law, whether or not the country remains part of the EU.
The UK has a history of providing legal protection to consumers around their personal data. Our data protection laws precede EU legislation by more than a decade, and go beyond the current requirements set out by the EU, for instance with the power given to the ICO to issue fines. Having clear laws with safeguards in place is more important than ever given the growing digital economy, and is also central to the sharing of data that international trade relies on.”
This is a clear indication that the data protection laws are unlikely to be relaxed.

Brexit: The implications of the vote to leave on the UK’s financial services industry?
For UK firms with a purely UK focus, it is unlikely that the results of […]
For UK firms with a purely UK focus, it is unlikely that the results of the EU referendum will have much of an impact. The extent to which that can be said of firms carrying on business in EU Member States will depend on the post Brexit model that the UK Government decides to adopt. At the moment we do not know what model that will be so, for now, firms have to wait and see, a frustrating and worrying position, but matters will eventually start to become clearer than they are today. One point that is worth bearing in mind is that the financial services is a sector that is highly regulated the world over – not just in the EU and UK. Whilst some regulations may fall away or change, we can be pretty confident that, post Brexit, there will still be a good deal of regulation to contend with.
Financial services
Under the current regime, a UK investment firm authorised under an EU directive has a ‘passporting’ right to carry on business in any EU Member State, irrespective of whether or not it has a branch in that state, so long as it has a base in the UK. US and Swiss banks are also able to make use of the passporting right from their branches or subsidiaries in London to carry on business in the EU.
Should the UK leave the European Economic Area (EEA), the passporting right will be lost unless some sort of special arrangement can be negotiated. There are political sensitivities around whether the UK stays in the EEA or not, but the importance of the financial services sector to the UK economy and the importance of the passporting right to the financial sector will weigh heavily in the argument that is to come.
The loss of the passporting right would leave UK firms with restricted access only. Firms would have to consider relocating part of their UK operations to the EU or setting up EU subsidiaries.
UK amendments to the existing EU legislation which forms the basis of the UK’s financial services regime would be probable; a complete rewrite would not be. Some EU-based legislation of recent vintage, MiFID II for example, which has been/is being costly to implement, would almost certainly remain, at least in the short to medium term. In any event, if UK firms want to continue to do business with the EU, they will need to comply with EU law (although the UK Government will in future have no say in shaping these). In due course, one would expect UK law and EU law to begin to diverge and compliance managers of firms that trade in Europe will need to be familiar with parallel regimes. But that is for the future.
Existing contracts should be reviewed to see whether they contain obligations to comply with EU law. Compliance with any such provision may become impracticable when UK leaves.
Capital markets
The UK has already implemented the Prospectus Directive and the Transparency Directive and the Market Abuse Regulation (the MAR) will become law on 3 July this year. If the UK Government wants the London Stock Exchange to maintain its reputation as a major international trading platform it is likely that the key provisions of these directives and the MAR will have to remain a part of English law. As a Regulation, the MAR will cease to have effect upon Brexit so legislation would be required for its provisions to continue to have effect. Historically, the UK has exceeded EU requirements in its insider dealing legislation, in order to ensure investor confidence, so it seems inconceivable that the MAR will not be adopted in substantially similar form to the form it currently bears.
An EU exit may result in the loss, in whole or in part, of the UK’s ability to participate in mutual recognition between Member States with regard to prospectuses and announcements. Where an issuer is based outside the EU, Member States have the power to approve a non-EU prospectus if it is drawn up in accordance with international standards that are equivalent to the requirements set out in the Prospectus Directive. The Commission has the power to decide whether a third-country’s laws and practices (in this case, the UK would be the third country) satisfy the equivalence test. The UK will no doubt seek to convince the Commission that it satisfies this test.

Brexit: What does Brexit mean for planning and environmental law?
Planning and development On first glance, there appears little direct impact on planning and development […]
Planning and development
On first glance, there appears little direct impact on planning and development from the UK exit. However, subsequent changes within the UK economy due to its altered position within global financial markets and the international business scene will be a key determinant on the level of development going forward. Any adverse economic reaction is likely to lessen construction, limit ongoing development, and reduce planning applications. Correspondingly, the loss of EU funding will certainly be felt in the delivery of major infrastructure projects (such as Crossrail and HS2) – unless subsequent exit negotiations ensure continued provision.
EU Directives incorporated into UK law relating to environmental assessments on development plans and major planning applications could now be abandoned. This may mean that Environmental Impact Assessments (as required for major development applications) and Strategic Environmental Assessments (needed for local and neighbourhood plans) will either no longer be required or – more likely – be subject to altered thresholds.
Dependent on how the Government exercises its ability to control immigration from EU Members States, it seems that predicting demographic change will be easier. The pressure for increased housing and development on green belt land may lessen, with housing forecasts generally becoming more predictable and less unreliable. For developers and builders, construction costs are likely to increase, with EU migrant labour becoming less available and not as heavily relied upon as previously.
Environmental law
The environmental sector will feel considerable impact from the leave vote, simply because approximately 50 per cent of our environmental law originates from Europe. This includes law on water, air quality, waste, chemicals, noise, energy efficiency and climate change.
There is considerable uncertainty regarding both how long it will take for the UK to withdraw and what type of relationship / agreement will be established going forward. An average of two years for the withdrawal seems likely, during which time the status quo on environmental matters is expected to continue. If a bespoke arrangement is implemented, there may be some continuing relationship and an ongoing requirement for the UK to apply much EU environmental law, but without having the ability to influence its development. Ultimately, it will be a case of ‘watch this space’. Whatever the nature of the settlement, there will need to be a comprehensive review of environmental law to establish (1) what regulation is derived from the EU and then (2) whether this should be repealed (in whole or part) or amended. This will be a substantial and extensive undertaking.
Climate change
- The UK has its own carbon reduction schemes (the CRC Energy Efficiency Scheme and climate change levy, for example) and legally-binding emission reduction targets under the Climate Change Act 2008. It seems unlikely these will change.
- The validity of the EU Emissions Trading System could be open to query, particularly in relation to required targets and existing allowances. However, there are already well-established national implementation and compensation measures in place linked to the EU scheme. Some form of emissions trading scheme will therefore no doubt continue, but whether this will reflect / be joined to the EU scheme in some way or entirely independent is unclear.
Waste management
- EU legislation and policy has provided much in this area – including recycling targets, the principle of diversion from landfill, and the waste hierarchy concept. As the UK waste management sector is strong and well-established, it seems unlikely the UK Government will now dramatically alter waste management law. EU regulation has indeed been credited for improved standards and achievements in this sector.
- However, looking further into the future, recycling and waste reduction targets could be altered. This raises the concern that long-term investment in and development of waste infrastructure will lessen.
- Questions also arise around ongoing application of national waste law that was passed to implement EU legislation. For instance, the UK definition of ‘waste’ (such as in the Environmental Protection Act 1990) directly references the EU Directive – highlighting the potential legal complexities now faced.
- One thing that is clear, is that UK courts will no longer be bound by rulings of the Court of Justice of the European Union (CJEU). This is likely to lead to challenges. The ‘waste’ definition has also been strongly shaped by a series of CJEU decisions, but is now open to fresh interpretation and consideration. Only where certain interpretations and approaches have become so imbedded in UK law will there be little impetus for change.
Habitats protection
- The Habitats Directive and the Wild Birds Directive are the main EU environmental policy instruments. They have had an important influence over urban development in the UK, particularly linked to the requirement on Member States to designate Special Areas of Conservation and Special Protection Areas. Development likely to impact on these areas’ integrity previously faced considerable restrictions.
- Protection of ‘worthy’ natural areas has a well-established pedigree in UK law. Hence it is foreseeable that these will continue to be specially-managed and protected. But the UK Government could now alter the level and type of protections, leading to less stringent habitat conservation regimes.
- The Government will still need to take into account its international treaty obligations for habitat protection. Several important international environmental conventions are currently implemented via EU legislation. Consideration will have to be given to how obligations under and adherence with UN requirements is to be ensured. As well as habitat protection, this includes areas such as access to justice in environmental matters (Aarhus Convention); climate change (the Framework Convention, Kyoto Protocol and Paris Agreement); and protection of endangered species.
REACH regulations
- In comparison to the case with EU Directives, environmental Regulations were directly applicable in the UK and did not need implementing legislation. For example, the REACH Regulations governing chemical control and handling. This means a regulatory ‘gap’ will now arise and such regulation is lost.
- The option of not legislating afresh in this area may seem tempting, lessening the previously burdensome restrictions and bringing scope for simplification. However, operators and businesses continuing to interact with EU countries would still be expected to comply with existing EU regimes to ensure access to the EU market.
- EU standards have also ensured considerable environmental and safety protection to date, which it would be desirable to maintain – both from a business / reputational and public-protection perspective.
- Depending on the settlement arrangement, the UK may now adopt its own, independent regulatory approach here. Yet this could lead to different compliance obligations and further increase the regulatory burden. For example, companies manufacturing, importing or using chemicals in both the UK and the EU would need to comply with REACH and the UK’s REACH-equivalent.
- Another difficulty in relation to Regulations, is that enforcement and penalties are largely under the remit of national legislation. This will need to be revoked. Otherwise, there could be the unusual situation whereby a company is found guilty of the offence of failing to comply with REACH under the UK’s enforcement legislation, despite the fact that REACH is theoretically no longer applicable.
Contaminated land
- Some environmental legislation is purely catered for under domestic law and so will probably feel no impact. This includes the Environmental Protection Act 1990 and contaminated land regime.
If nothing else, the next year or two look to be full of uncertainty from an environmental perspective due to the intertwined nature of the UK and EU legal regimes. There are opportunities for reappraisal and possible reduction of environmental legislation. However, a different regulatory approach could bring fresh and different challenges. The UK is also likely to have less influence on international laws and agreements going forward. Reviewing and responding appropriately to whatever situation arises is likely to incur considerable time, monetary and emotional resources.

Brexit: Will Brexit affect choice of English law and jurisdiction clauses?
As the country gets to grip with the vote Leave decision, an area of particular […]
As the country gets to grip with the vote Leave decision, an area of particular interest in Brexit discussions is the impact of the decision to Leave on choice of law and jurisdiction clauses in contracts.
Will a clause electing “English law” become uncertain following Brexit?
A key question is, having chosen English law as the governing law under the contract, whether the composition of English law will change now and therefore whether the law envisaged on entering into the contract will in fact be quite different once England has left the EU. If “English law” becomes significantly different from the “English law” in place at the time the contract was entered into, this could arguably have an impact on the enforceability of English governing law clauses, and lead to uncertainty as to the composition of the law chosen by the parties.
However most commentators consider that it is unlikely a Brexit will have a substantive impact on the enforceability of English governing law clauses. In the general context of commercial contracts, English contract law has been largely unaffected by the proliferation of EU law and key contractual issues such as offer, acceptance, consideration and implications of terms derive principally from English law. In most cases it is presumed that a choice of English law would be interpreted to mean English law as it stands from time to time, subject to any variations, including such variations as may arise from an EU exit. Businesses may nevertheless wish to check their contracts for provisions which they (or their counterparties) may seek to rely on where the UK’s departure from the EU affects the operation of the contract in a way which was not foreseen when the contractual arrangements were made (examples include material adverse change, force majeure and termination provisions).
As to the composition of conflict of law rules following a Brexit, the UK Government may decide to leave in place the Rome I rules [1] currently in force, but with the English courts as opposed to the Court of Justice of the European Union being the final arbiter of how these rules are applied. Alternatively, if Rome I were to no longer apply, the English courts may revert to applying the rules that were in force before the regulation was implemented – the Rome Convention – in relation to contractual obligations. The Rome Convention is very similar in respect of the parties’ choice of law (they both in effect enforce any choice of law made by contracting parties), so the law governing contractual obligations is unlikely to change materially.
Therefore, while there is still some uncertainty as to the exact composition of English law following the vote to leave the EU (and the effect on some specific legal obligations may be more unclear, e.g. financial services regulation and consumer protection), the English law that applies to commercial contracts between parties conducting business internationally is likely to be, for the most part, unaffected by uncertainty.
Are parties less likely to choose English law to govern contractual relationships?
The answer to this question will depend on how much of a factor the UK’s membership of the EU was to people who use and choose English law to govern their contracts. It appears that the general consensus is that English law’s attractiveness and the reasons why parties choose English law to govern their relationships had little to do with the UK’s EU membership.
English law, as one of the oldest and universally respected legal systems in the world, is commonly viewed as reliable, its principles having been developed alongside centuries of commercial activity and reflecting commercial common sense. It is not clear that a Brexit would undermine this, and there is no reason to think that English law will be any less flexible post-Brexit. In the run up to the referendum the risk of Brexit had not caused English law to stop being used for international contracts.
Will choice of jurisdiction clauses be affected?
Under EU law, the position is that the courts should recognise the parties’ election of a specific jurisdiction. If there is no election, then generally the country in which the opposing party is based should deal with the dispute. EU law also provides for the cross-border recognition of judgments from the courts of EU Member States within the EU.
Whatever is decided in relation to the composition of English law following Brexit it is likely that English courts will continue to respect provisions in contracts which confer jurisdiction on the English courts by agreement. Other EU Member States will decide how such clauses will be treated, which could give rise to uncertainty, depending on how jurisdiction clauses are viewed by the courts of different EU Member States.
However, while in some cases the courts of a counterparty domiciled in another EU Member State may be reluctant to cede jurisdiction to the English courts even if that is what the parties have agreed, it is generally felt that a similar regime will be adopted post-Brexit. Internationally there is unlikely to be a significant change in attitude to choice of jurisdiction clauses following Brexit.
What should clients and law firms consider when drafting new choice of law and jurisdiction clauses?
As stated above, it is generally agreed that clients should not be overly concerned about the effects of a Brexit on English choice of law and jurisdiction clauses in commercial contracts governed by English law. UK businesses should review their contracts to ensure they are governed by English law and contracts may also require updating where reference to European legislation or use of European concepts is made.
Walker Morris Commerical lawyers can provide further assistance and guidance.
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[1] The Rome Regulation on the law applicable to contractual obligations (EC No 593/2008). It determines the law governing contracts concluded from 17 December 2009 and applies to all EU Member States except Denmark. The Rome Convention applies to contracts concluded before that date.

Brexit: The impact of the vote to leave the EU on the energy sector
The short answer is that it is too early to give a definitive answer to […]
The short answer is that it is too early to give a definitive answer to an assessment of the impact of a Brexit on the UK energy sector. The key issue is whether the UK chooses to remain within the Internal Energy Market (IEM) made up of the existing EU Member States and the additional States forming part of the European Economic Area (EEA). It is not clear, at this admittedly very early stage, what the preference among Leave politicians is; having campaigned on an “out” message, it may not be easy politically to “sell” an EEA deal to the public, given this option would continue to mean a contribution to the EU budget and adherence to EU laws (e.g. Competition, State aid) without any say in the making of those laws – although the alternatives are far from straightforward either. If the UK does remain part of the IEM, the effect of a Brexit may, in practice, not be too dramatic. If it does not, the landscape may change considerably.
Interconnectivity and participation in the EU project
In view of the increasing interconnectivity with the EU and the proactive approach of UK Governments in liberalising energy markets, a retreat from participation in the EU energy project seems most unlikely, notwithstanding the result on 23 June. In particular, the position of Ireland will require the UK’s participation in a common regulatory network and trading rules across the EU, given the reality of the interconnectors between the UK and Ireland and Ireland and other EU Member States.
The UK will need to negotiate an appropriate partnership arrangement with the EU. The UK will not have any say in the applicable rules, unless it can negotiate terms that enable it to remain a part of the institutions coordinating EU energy regulation, notably the Council of European Energy Regulators (CEER) and the Agency for the Cooperation of Energy Regulators (ACER).
Again, given the UK’s lead in pushing a liberalised energy policy, it would be a surprise if the Government did not go ahead with implementation of the EU’s Third Energy Package, designed to liberalise the gas and electricity markets, and which measures include the unbundling of Transmission System Operators (TSOs) from generation, production and supply interests, and enhanced transparency requirements. For the time being at least, it is safest to assume that this will become law.
Climate Change
The UK’s climate change goals are established at national rather than EU level, so those goals will not change with the departure from the UK from the EU. However, there will be matters to sort out, such as separating out the UK’s emissions reduction commitment from the EU target under the UN Framework Convention on Climate Change and the recent Paris Agreement so that the UK is allocated its 2030 decarbonisation own target.
Businesses will be watching to see whether the UK will continue to be able to participate in the EU Emissions Trading Scheme. If the UK remains in the EEA then it will be able to participate in the scheme. If not, then transitional arrangements will need to be finalised which will clearly be very important for companies holding a surplus of allowances. One possibility might be for the UK to attempt to establish its own carbon trading scheme.
The target of closing all coal-fired plants in the UK by 2025 is a UK initiative rather than an EU one and, as such, is unaffected by the vote to leave.
Renewables
The EU Renewable Energy Directive requires the UK to generate 15 per cent of its energy from renewable sources by 2020 and, should the UK leave the IEM, it will be released from this target, although it would be very surprising if the pursuit of renewables and low carbon energy solutions did not continue to form a central part of the Government’s energy policy.
Oil and gas
Oil and gas initiatives are primarily of an international rather than EU nature so it is likely that the oil and gas sectors will be less affected by Brexit than other parts of the energy sector. The EU largely applied the UK Continental Shelf (UKCS) system when legislating in this arena. In practice, the development to watch in this context may well prove to be calls for another referendum on Scottish independence, given most Scots favoured remaining in the EU, with the consequences that Scottish independence would have for North Sea oil operations. That though is thinking too far ahead – there is enough fall-out from one referendum to sort out first, without worrying about another!

Brexit: Public Procurement
What will be the impact be on procurement law? The short answer is we don’t […]
What will be the impact be on procurement law? The short answer is we don’t know as there will be decisions to be taken, in due course as exit negotiations and strategies evolve. However, for the time being the three sets of procurement Regulations; Public, Utilities and Concessions, that implement the EU Procurement Directives in England Wales and Northern Ireland, remain in force. Parallel Regulations apply in Scotland.
If the solution which emerges is that we are to be a member of the European Economic Area (EEA), then the UK will, have to continue to abide by EU procurement law, as do those countries that currently are in EFTA rather than the EU. So, the Regulations would stay.
If we totally go it alone then, in principle, the Regulations could be repealed. But that does not necessarily mean that public procurement would be unregulated. The United Kingdom, by virtue of EU membership, is also a signatory to the World Trade Organisation’s Agreement on Government Procurement (GPA). It is likely to want to retain this status so would be required to have legislation covering procedural fairness, transparency and domestic review. Even if the UK rejected the GPA membership, which seems unlikely as most of the countries we would want to trade with are members or observers, then most public bodies have long had internal rules to regulate their procurement to ensure value for money and propriety, so some type of regulation would likely exist. Indeed, many will stay with rules similar to those used now as they are familiar with them. In England, the Government has already legislated to regulate procurement not caught by the EU rules[1] so there is clearly precedent for further statute to create a UK regime. In Scotland Wales and Northern Ireland the respective governments may impose their own rules. Thus outside the European Union, the United Kingdom could have four, or more, different sets of rules which businesses supplying the public sector would need to take into account as well as case law emanating either from procurement legislation or judicial review.
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[1] Public Contracts Regulations 2015 ( Part 4) ;National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013/500

An employers’ guide to handling post-Brexit workplace tensions
There is a cartoon currently doing the rounds on Facebook of a slightly jaded looking […]
There is a cartoon currently doing the rounds on Facebook of a slightly jaded looking character muttering, ‘Here we go – suddenly everyone is an expert on politics’. Certainly, the EU referendum has both engaged and divided the UK population in a way seldom seen. In the current climate of political upheaval, emotions (and in some cases unacceptable bigotry) are running close to the surface. In extreme cases, the divisions may be manifested as racial or religious abuse. According to statistics from the National Police Chiefs’ Council there was a 57% increase in reported race related incidents between Thursday 23 June and Sunday 26 June 2016 compared with the same period four weeks earlier. So, if a ‘Brexit related’ argument, fracas or incident of discrimination should occur in the workplace how should an employer best respond?
We have prepared some pointers for managing staff in the current climate.
Deal immediately with any ‘murmurings’ of racial or religious harassment.
The Equality Act 2010 makes employers liable for the actions of their employees in relation to other staff even if the employer does not condone the conduct. An employer has a potential ‘statutory defence’ if it can show that it took all reasonable steps to prevent the discrimination from occurring but these steps must have been taken before the discrimination occurred. It is not possible to shut the stable door after the horse has bolted. The statutory defence is a relatively high hurdle to clear which requires more than just having an Equality or anti-discrimination policy or giving staff training on discrimination during induction. The employer must be able to show that it actively took steps (on an ongoing basis) to prevent discrimination from happening in the workplace. This might include ongoing diversity awareness training, engaging staff in anti-discrimination initiatives, internal communications advocating and celebrating diversity and monitoring and dealing with concerns raised in an effective and timely way.
Be aware that staff making negative or disparaging comments about ‘immigrants’ in the aftermath of the Brexit vote should sound real warning bells. Take action straight away if you become aware that this is going on. Turning a blind eye is a recipe for disaster. Yes, staff are entitled to freedom of speech but as soon as this infringes another employee’s right not to be discriminated against the risk of a legal claim arises. In any event, few would disagree that any level of bigotry in the workplace is simply not good for business.
Remember that employers can be liable for discrimination occurring outside of the workplace.
It is well established that employers can be held liable for acts of discrimination occurring outside the workplace at events connected with work such as office outings, organised social events or even, in some cases, between colleagues on social media. Whether an employer is liable will always be fact specific but the golden rule is to advise employees that the same standards of behaviour towards colleagues are expected at workplace events and in interactions on social media. It is worth checking that your Equality policies and procedures spell this out too. If a concern is raised, do not automatically dismiss it on the basis that it happened off-site. If there is a work connection (even if it seems a little tenuous) then the employer may potentially be on the hook.
Manage political disagreements effectively
Everyone is entitled to their opinion and there is no law against discussing politics at work (as long as the discussion does not amount to discrimination or harassment on grounds of a protected characteristic such as race, religious belief, sex, sexual orientation etc).
That said, if a political discussion becomes unduly heated, disruptive or has an impact on employees’ ability to do their work effectively and within required timescales then the employer is quite entitled to step in and request that the discussion stops and that people get on with their work. Never forget that the ‘employment bargain’ (i.e. a day’s work for a day’s pay) means that an employer is entitled to manage staff, make reasonable requests and apply a consequence if the employee does not comply. If an employee fails to comply with a reasonable request (e.g. stop arguing with a colleague and get on with their work) then the employer is entitled to treat it as a potential disciplinary matter. If the employee is on a formal warning and repeats the conduct then the employer is entitled to move to the next stage of the disciplinary process and so on (following the disciplinary procedure) until dismissal becomes a potentially fair outcome. It may seem obvious but it bears repeating!
If you feel that your managers lack confidence or are unsure of their footing when dealing with political (or other) disagreements between staff at work then now may be a good time to consider providing some refresher training in this area. Managers need to feel empowered and confident in managing the day to day ‘rough and tumble’ of the workplace. Such managers are significantly more effective, respected and are good for morale. They can save an organisation thousands by deftly heading off issues that, badly handled, might morph into messy ‘he said, she said’ type grievances or expensive and morale-damaging discrimination claims.
Stay on top of current immigration and ‘right to work’ rules
These are turbulent times and now, more than ever, it is important to stay up to date with immigration and right to work requirements. For example, ensure that all new recruits are subject to immigration checks (not just those with English as a second language, who are non-white or with foreign accents). Never make an assumption based on appearances about who may or may not have the right to work in the UK. Immigration rules are complex and provide fertile ground for scoring an own goal so make sure that your recruitment processes are 100% sound and non-discriminatory. Walker Morris has a business immigration team who can assist you with any queries you may have in this area.
If you would like further advice or would like to discuss the training that our team can provide please contact David Smedley or Andrew Rayment.

Intellectual Property Rights: Impact of Brexit
As the UK digests the decision to leave the European Union, we consider the potential […]
As the UK digests the decision to leave the European Union, we consider the potential impact Brexit will have on EU Intellectual Property Rights (IPR’s).
No Immediate Loss of Registered EU Intellectual Property Rights
The decision does not have an immediate impact on EU registered rights; EU Trade Marks (formerly Community Trade Marks) and Registered Community Designs remain valid and subsisting in the UK.
It is anticipated that transitional provisions will be introduced to provide proprietors with a mechanism to maintain or re-register their EU Trade Marks in the UK. At this time we do not know what form (if any) the transitional provisions will take or when they will be introduced.
This period of limbo is unlikely to be palatable for businesses. An alternative option to waiting for transitional provisions to be introduced is to re-file core EU Trade Marks in the UK under a separate national application. We can assist you with this. However, it will not be possible to re-file Registered Community Designs in the UK, unless filing within the 6 month priority period.
The IP Team at Walker Morris
We will continue to advise on and manage your trade mark and design portfolios in the UK, Europe, and any other foreign jurisdictions. Depending on the route the UK takes, the way we effect the filing of EU Trade Marks and Registered Community Designs may change.
For the time being, it is business as usual for all UK based Trade Mark Attorneys and we remain able to file EU Trade Marks and Registered Community Designs directly with the European Union Intellectual Property Office (EUIPO). However, given the outcome of the referendum, it is a sensible strategy for any new filing programmes which cover the EU to also cover the UK separately.
Once the UK ceases to be a member of the EU, subsequent applications for EU Trade Marks and Community Designs will only have effect in the remaining 27 Member States of the EU. It will be necessary to file separate applications at the UK Intellectual Property Office if UK rights are required.
If the UK negotiates to remain a member of the European Economic Area (EEA), the Registered Trade Mark Attorneys within the IP Team will continue to represent clients before the EUIPO, and will retain the ability to file EU Registered Rights directly.
If the UK does not remain in the EEA, we can continue to file EU Trade Marks via the International Trade Mark filing route, if appropriate. In addition, we have established relationships with attorneys throughout the EU, whom we would instruct and manage on your behalf as we already do for all other overseas territories.
We will continue to update you on developments which will impact on your IP rights. If you have any questions in the interim, please get in touch.

Article 50 notification: High Court rules that parliamentary approval is required for the UK to withdraw from the EU
Background On 3 November 2016, the High Court ruled in R (on application of Miller) […]
Background
On 3 November 2016, the High Court ruled in R (on application of Miller) v Secretary State for Exiting the European Union [2016] EWHC 2768 (Admin) that Article 50 cannot be invoked without parliamentary approval.
The process for departure from the EU is set out in Article 50 of the Treaty on the Functioning of the European Union. This provides that a Member State may decide to withdraw from the EU in accordance with its own constitutional requirements. Once that decision has been made, the withdrawal process is initiated by the Member State giving notice to the European Council of its intention to withdraw. Withdrawal actually occurs on the date of entry into force of a withdrawal agreement between the EU and the (former) Member State, or failing that, two years after the notification unless the European Council (i.e. the Member States) and the withdrawing state decide unanimously to extend the period.
Miller concerned the UK’s constitutional requirements for making the decision to withdraw from the EU and, as a result, what authorisation the Government needs before it can give notice. The Government argued that it is entitled to use its prerogative powers to trigger Article 50. Prerogative powers are a body of discretionary powers held by the Crown and exercised by the Government in carrying out executive functions. The exercise of prerogative powers does not require prior parliamentary approval. In contrast, the claimants argued that the Government could not use its prerogative powers to act on behalf of the Crown to exercise Article 50 and needed the authorisation of Parliament to do so.
The High Court’s ruling
The High Court unanimously decided in favour of the claimants and against the Government. The key aspects of the judgment are:
- The High Court emphasised the significance of constitutional principles in play. In particular, the sovereignty of Parliament and secondly that the Crown has no power to alter the law of the land by using the royal prerogative.
- The High Court emphasised that these strong constitutional principles drive the interpretation of constitutional legislation, including the European Communities Act 1972 (“ECA”) which gives effect to EU rights and obligations in domestic UK law.
- It was agreed by both sides that the ultimate consequence of exercising Article 50 will be the removal of domestic UK rights created by virtue of the ECA. However, the Government contended, essentially, that the effect of the ECA was subject to whether the UK was bound by the EU treaties, which itself was an issue where the royal prerogative was in play. It claimed that the ECA had not removed its right to use the royal prerogative to withdraw from the EU treaties. The claimants, on the other hand, argued that the royal prerogative is limited to international affairs, and withdrawal from the EU affected domestic rights.
- The High Court held that the strength of the underlying constitutional principles was such that the intention of Parliament in enacting the ECA must be considered to have been not to allow the Government to use the royal prerogative to undo or override EU-derived rights in domestic UK law. Indeed, the High Court held that it should be strongly inferred that Parliament intended to remove such power.
The High Court therefore concluded that there is no power for the Government to use the royal prerogative to exercise Article 50.
In addition, the High Court stressed that its judgment addressed a pure question of law, as to the process for exercise of Article 50, rather than a political issue on the merits of leaving the EU.
Appeal to the Supreme Court
On 8 November 2016, the Supreme Court granted the Government permission to appeal against the judgment of the High Court. Given the constitutional importance of this case and the Prime Minister’s announcement that Article 50 will be triggered by the end of March 2017, the appeal will be heard between 5-8 December 2016 by the Supreme Court and leapfrogging the Court of Appeal, which is the usual venue for High Court appeals. The judgment is expected in the New Year.

Brexit: Prime Minister’s speech on the UK’s negotiating objectives
On 17 January 2017, the Prime Minister, Theresa May, gave her long awaited speech regarding […]
On 17 January 2017, the Prime Minister, Theresa May, gave her long awaited speech regarding Brexit and the UK’s negotiating objectives. The full text of the Prime Minister’s speech is available here.
The speech provided details of 12 policy aspirations. The following points are worth drawing attention to:
- The UK to leave the single market: The UK will not seek to be a member of the single market (as distinct from single market access) following departure from the EU. The Prime Minister said “I want to make clear that what I am proposing cannot mean membership of the single market.”
- The desire for a Free Trade Agreement with the EU: The UK will seek to agree a free trade agreement with the EU. This may “take in elements of current single market arrangements” in certain areas, such as freedom to provide financial services across national borders where it “makes no sense to start again from scratch when Britain and the remaining Member States have adhered to the same rules for many years.”
- Rejection of the EU Customs Union: The Prime Minister said that the UK wishes to negotiate trade deals with non-EU countries post-Brexit. Full membership of the EU customs union prevents the UK from negotiating its own trade deals because this lies within the exclusive competence of the EU. On that basis, the Prime Minister does not want the UK to be bound by the common commercial policy and the common external tariff. However, the Prime Minister announced that she wanted the UK to have a customs agreement with the EU. The Prime Minister stated that this could come in the form of a completely new customs agreement, or the UK becoming an associate member of the customs union in some way, or retain some parts of it.
- Rejection of the European Court of Justice: The Prime Minister stated that the European Court of Justice would not have jurisdiction over the British court system post-Brexit.
- The desire for an orderly phased process of implementation: The UK will seek a “phased process of implementation” and not “unlimited transitional status” after the conclusion of the two year process initiated by the triggering of the Article 50 The aim of this process will be to allow businesses to plan and prepare for any new arrangements agreed between the UK and the EU. The Prime Minister suggested that this process might apply to, amongst other things, the future legal and regulatory framework for financial services.
- Parliamentary approval: The Prime Minister declared that the Government will put the final deal that is agreed between the UK and the EU to a vote in both Houses of Parliament, before it comes into force.
- An end to the free movement of EU citizens in the UK: One of the main freedoms of the single market is the free movement of EU citizens to stay and work in another EU Member State. A key aim of the Government is to restrict the uncapped immigration of EU citizens in the UK. The UK has now committed itself to a position where it must be able to place limitations on free movement of EU citizens in the UK.
- EU citizens living in the UK: It was widely believed before the Prime Minister’s speech that the UK was refusing to guarantee the ability of EU citizens to continue to work and live in the UK and that this guarantee would only be forthcoming if reciprocal rights were granted to UK citizens living in EU Members States at the end of the negotiations. It seems from the text of the Prime Minister’s speech that the UK is prepared to give this assurance right away but that several EU Member States (not named) are currently refusing to make a reciprocal concession in favour of UK citizens in their countries.
- Existing UK law will be implemented into UK law: The Prime Minister confirmed that the existing body of EU law which has been implemented into UK law will remain part of UK law post-Brexit.
- No deal rather than a bad deal: The Prime Minister said that the UK will leave the EU without an exit deal, if no good deal is on offer.

Supreme Court judgment: Parliamentary approval is needed to trigger Brexit
On 24 January 2017 the UK Supreme Court, the highest court in the land, upheld […]
On 24 January 2017 the UK Supreme Court, the highest court in the land, upheld the judgment of the High Court in R (on the application of Miller and others) v Secretary of State for Exiting the European Union that an Act of Parliament is required to authorise ministers to give notice of the decision of the UK to withdraw from the European Union (EU). At the same time, the Supreme Court also held that the devolved administrations of Northern Ireland, Scotland and Wales do not have to be consulted on, and crucially cannot veto, the UK’s decision to leave the EU. A link to the Supreme Court’s judgment can be found here and to the press summary here.
Background: Brexit and Article 50
Following the Brexit referendum result on 24 June 2016, there has been controversy and uncertainty regarding the process for leaving the EU. Article 50 of the Treaty on the European Union (TEU) sets out the procedure by which a Member State may withdraw from the EU. It provides that a Member State may decide to withdraw “in accordance with its own constitutional requirements” and that it must then notify the EU Council of its intention (an Article 50 notice). Unless agreed otherwise, service of an Article 50 notice triggers a two year negotiating period, at the end of which the relevant Member State leaves the EU, whether or not a withdrawal agreement is in place.
The question in this case was whether the Government can trigger Article 50 without obtaining parliamentary authorisation, or whether it can rely on its royal prerogative powers [1] without the need for such authorisation. The Claimants, Mrs Gina Miller and others, argued for the former, and the Defendant, the Government, argued for the latter.
High Court judgment
On 3 November 2016, the High Court agreed with the Claimants’ submissions and held that the royal prerogative powers do not give the Government authority to trigger Article 50 without the approval of Parliament. The High Court held that there was a conflict of constitutional principles in this case, but that the supremacy of Parliament is constitutionally higher than the royal prerogative powers. Furthermore, the European Communities Act 1972 (ECA 1972) had a fundamental impact on domestic law, to the extent that it cannot have been Parliament’s intention for rights it created to have been subject to changes via the royal prerogative powers.
The Government appealed the High Court decision. The appeal “leapfrogged” the Court of Appeal and was heard by all 11 Justices of the Supreme Court (a constitutional first, at least in modern times) over four days in December 2016.
Supreme Court judgment
The Supreme Court confirmed that an Act of Parliament is required to authorise the Government to trigger the Article 50 process and it also held that UK ministers are not legally compelled to consult the devolved administrations before triggering Article 50.
Parliamentary approval is required to trigger the Article 50 process
By a majority of 8 to 3 judges, the Supreme Court ruled that:
- The Government cannot rely on its royal prerogative powers to give notice to leave the EU under Article 50 of the TEU, but must be authorised to do so by an Act of Parliament.
- This is because section 2 of the ECA 1972 made EU law a direct source of UK law. The Government argued that since section 2 authorised changes to UK law resulting from changes to EU law, it also caters for the situation where UK law changes because the UK withdraws from the EU. The Supreme Court held that this was incorrect because cutting off a primary source of UK law by withdrawing from the EU amounts to a fundamental change to the UK constitutional arrangements.
- Withdrawal from the EU will result in the removal of certain rights of UK citizens under UK law and so cannot be done without prior authorisation by an Act of Parliament.
- Neither the ECA 1972 nor the European Union Referendum Act 2015 contains such authorisation. Such a provision would require clear words – there are none and in fact the ECA 1972 indicates the absence of such a power.
- The resolution of the House of Commons of 7 December 2016 calling on the Government to exercise Article 50 was a political act only which does not constitute the required parliamentary authorisation.
- A new Act of Parliament is therefore required before the Government can trigger Article 50.
Lord Reed, Cranwath and Hughes issued dissenting judgments. Each of the Justices would have allowed the Government’s appeal. The Justices considered that the ECA 1972 only introduced EU law into UK domestic law on a conditional basis. That condition was the continued application to the UK of the EU’s treaties. Treaty making and withdrawal fell within the Government’s prerogative powers, so the Government controlled the condition.
No “legal veto” for the devolved administrations in Scotland, Wales and Northern Ireland
The Supreme Court also considered arguments that the Government is required to consult the devolved administrations in Scotland, Wales and Northern Ireland before exercising Article 50. The Supreme Court ruled unanimously that there is no such requirement:
- devolution legislation was enacted on the basis that the UK was a member of the EU but does not require it to remain a member
- membership of the EU is at a UK level and the issue is therefore one for the UK Parliament
- in relation to the Sewel Convention, which governs the relationship between Westminster and the devolved administrations, the Supreme Court held that this was a political convention only, without force of law, such that the courts do not have power to rule on its scope or operation.
This aspect of the decision, although widely expected, is important as it removes any suggestion that the devolved administrations will be able to exercise a veto over Brexit.
What happens next?
The court process in the Miller case is now exhausted. The next steps in the Brexit process are now for the Government to introduce legislation, which must pass through the Houses of Commons and Lords, to sanction the Article 50 withdrawal process and service of the trigger notice. By the expiry of two years following service of the Article 50 notice the UK will cease to be a member of the EU. The timetable and terms of the UK’s departure will be a matter of political negotiation, and the key messages from Theresa May’s speech regarding the UK’s negotiating objectives can be accessed here.
In response to the Supreme Court’s judgment, the Government immediately confirmed that it will comply with the decision. The Government announced that it will publish a White Paper (i.e. a detailed Government report) on its Brexit strategy and expects to lay a bill to approve the triggering of Article 50 “within days” with a second reading taking place next week, with a view to it being placed before the House of Lords by the beginning of March. There has been speculation that the bill could be short. The Supreme Court made clear that the form such legislation will take is entirely a matter for Parliament. The Government also reiterated that, irrespective of the need for legislation, it was still the Government’s intention to stick to its proposed timetable. It remains to be seen how long the parliamentary process will take and what conditions, if any, may be attached to parliamentary approval.
Meanwhile, other legal challenges continue in the UK and Ireland. In the UK, the Government faces a separate judicial review case of Yalland and Wilding and other v Secretary of State for Existing the European Union. In this case, Mr Yalland and Mr Wilding contend that the UK can only leave the single market through the process of Article 127 of the EEA Agreement (which provides for 12 months’ written notice to exit) which can itself only be triggered following Parliamentary approval. They also seek clarification of the Government’s stated position that the UK’s membership of the EEA will automatically cease on the UK leaving the EU. In Ireland, a legal challenge under the name of Jolyon Maugham QC, with crowd funding, is proposing to launch litigation against the Irish Government, European Commission and EU Council of Ministers. The basis of this litigation is to seek, amongst other things, clarification as to whether an Article 50 notice can be revoked: a question on which the European Court of Justice in Luxembourg is the ultimate decision-maker. The Supreme Court in the Miller case did not consider the issue of whether an Article 50 notice is revocable because it accepted the parties’ agreement that an Article 50 notice is not revocable.
Walker Morris will continue to report on developments.
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[1] Prerogative powers are a body of discretionary powers held by the Crown and exercised by the Government in carrying out executive functions. The exercise of prerogative powers does not require prior parliamentary approval.

Brexit and GMPs: the equalisation conundrum
The road to the UK’s Brexit is starting to become a little clearer. The Prime […]
The road to the UK’s Brexit is starting to become a little clearer. The Prime Minister, Theresa May, announced last week that she wants the UK to leave the single market. The Supreme Court decided on 24 January 2017 that Parliament, and not the Prime Minister, needed to trigger Article 50. Once Article 50 has been triggered the Government will bring forward the Great Repeal Bill designed to entrench EU law into UK law until such time as the Government decides to repeal certain aspects of EU legislation. However, as always, the devil will be in the detail and this is especially true in the case of the knotty problem of GMP equalisation. This Insight takes a brief look at the issues.
GMPs and equalisation: a quick reminder
GMPs (guaranteed minimum pensions) accrued in defined benefit schemes which were contracted out of the SERPS (an additional state pension) between 1978 and 1997. The method for calculating GMPs is set out in legislation. It is possible that GMPs for men and women may be unequal because they accrue at different rates for men and women and GMPs are payable at 65 for men and 60 for women reflecting the state pension age at the time.
EU law prevents discrimination on grounds of sex. There has been some uncertainty whether or not pension schemes had to remove the discriminatory effects of GMPs because the rules governing GMPs were set out in legislation. The Government maintains that it is for schemes to equalise GMPs and has consulted on more than one occasion on an equalisation methodology.
GMPS and equalisation: 2016 consultation
The Government’s latest consultation on GMP equalisation was published in November 2016. The proposed methodology involves a one-off calculation and actuarial comparison of the benefits a man and woman would have. The greater of the two amounts is then converted into an ordinary scheme benefit under the GMP conversion legislation. The Government is clear, however, that the proposed methodology does not comprise legal advice to schemes on how to equalise and there is no obligation on schemes to use the proposed methodology.
GMPs and Brexit
The extent to which EU law requires GMPs to be equalised is subject to uncertainty. The Government’s position that the proposed methodology “does not comprise legal advice to schemes on how to equalise” stems from the fact that UK law derives from EU law. It is a shame that the Government has not said that to the extent GMP equalisation is required as a matter of UK law and this is not incompatible with the requirements of EU law to the extent these apply to the relevant UK benefits from time to time, the published methodology is a legally permissible way of equalising GMPs. Unless the Government does this there is a risk that schemes may be required to equalise GMPs on a different basis in the future. Of course there is still the unanswered question as to whether schemes will need to equalise GMPs at all post Brexit!

Brexit Update
This note provides an update on Brexit-related matters in light of recent developments. The European […]
This note provides an update on Brexit-related matters in light of recent developments.
The European Commission publishes White Paper on the future Europe
On 1 March 2017, the European Commission (“EC”) proposed five different scenarios for a future European Union (“EU”) following the UK’s departure. How the EU operates after Brexit will have far-reaching consequences, not least for trade, financial services, competition and technology.
The EC’s ‘White Paper on the future of Europe’ puts forward five illustrative possibilities which are stated to be neither mutually exclusive nor exhaustive:
- The first, referred to as Scenario 1: Carrying On is likely to be a realistic possibility. In this option the status quo will largely be maintained, with the new EU focusing on delivering its reform agenda in the spirit of the EC’s New Start for Europe from 2014 and of the Bratislava Declaration agreed by all 27 Member States in 2016.
- In Scenario 2: Nothing but the Single Market, the EU becomes simply a trade bloc, which would mean free movement for goods, services and capital, but not for business people or tourism. The EU would not have a hand in international issues such as tax evasion and climate change and even eurozone cooperative projects would, in all likelihood, be pared back.
- Scenario 3: Those Who Want More Do More envisages a future EU which proceeds as today but allows willing Member States to do more together in specific areas such as defence, internal security or social matters. This scenario quite closely mirrors the “multispeed Europe” which German Chancellor Angela Merkel has called for, and could win significant support from the EU’s national governments, but this could mean that citizens’ rights would start to vary depending on in which Member State they reside.
- Scenario 4: Doing Less More Efficiently has been referred to in the press as the “divide and rule” option. It involves the future EU focusing on delivering more in selected policy areas (such as trade, security, migration, the management of borders and competition law), while withdrawing from some other areas. Ultimately this option could involve a clearer division of responsibility and a better understanding of matters handled at European and national level, but initially there could be difficulty in agreeing the areas which the EU should prioritise.
- A final option and one that is not considered likely, is Scenario 5: Doing Much More Together. In this scenario Member States decide to share more power, resources and decision-making across the board than ever before. While this could mean that decisions are agreed faster at European level and rapidly enforced, it could also result in the alienation of those who feel that the EU has already taken away too much power from national authorities.
EC President, Jean-Paul Juncker, has said that he has no preference for any of the scenarios and has asked Member State leaders to express their views at a summit meeting in December, with a view to the EC mapping out a path for the future of the EU in 2018.
The “Three Knights Legal Opinion” on Brexit
On 17 February 2017, advice commissioned by Bindmans, the “Three Knights Opinion” (Sir David Edward QC, Sir Francis Jacobs QC, and Sir Jeremy Lever QC – as well as Helen Mount QC and Gerry Facenna QC), was published. The legal opinion was submitted to the House of Lords just before the second reading of the EU (Notification of Withdrawal” Bill (“Bill”).
The legal opinion considers the UK’s constitutional requirements for withdrawing from the EU under Article 50 of the Treaty on European Union, and whether an Article 50 notice can be unilaterally revoked if those constitutional requirements are not met.
In brief, the legal opinion argues that:
- Article 50 states: “any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements”.
- It is a requirement of the UK constitution that Parliament’s authorisation is needed for either:
- the final terms of the UK’s withdrawal agreement with the EU; or
- the UK withdrawing from the EU without agreement being reached.
- If Parliament does not approve the final terms (or approve leaving the EU without a withdrawal agreement), the Article 50 notice will lapse and the UK will remain in the EU.
- Alternatively, Parliament could simply decide to revoke the Article 50 Notice and the UK would remain in the EU.
House of Lords Article 50 debate
On 1 March 2017, the House of Lords voted to amend the Bill to force the Government to guarantee the rights of EU citizens living in the UK. The amendment calls for the Government to bring forward proposals ensuring the rights of EU citizens living in the UK, within three months of triggering Article 50.
However, it has been reported that the Government is confident that the amendment will be rejected by Parliament later this month. The Government has also insisted the timetable for triggering Article 50 remains unchanged.
The House of Lords will vote on 7 March 2017 on a further amendment, which would give Parliament a “meaningful” vote on the outcome of the Government’s Brexit negotiations.
The amended Bill is expected to return to Parliament on 13 and 14 March 2017 when MPs will debate whether to accept the changes proposed by the House of Lords.
Article 50 Notice
It has been reported that the Government intends to notify the EU of the UK’s intention to leave on 15 March 2017, triggering two years of negotiation that would end with the UK leaving the EU in 2019 (unless this period is extended by unanimous agreement between the UK and all EU Member States).

Brexit: the Government triggers Article 50
Overview On 29 March 2017, nine months after the UK’s Brexit referendum vote of 23 […]
Overview
On 29 March 2017, nine months after the UK’s Brexit referendum vote of 23 June 2016, the UK Government gave notice of the UK’s intention to leave the European Union in accordance with Article 50(2) of the Treaty on the European Union. The notification took the form of a six page letter, which was given by Sir Tim Barrow (Britain’s ambassador to the EU) to Donald Tusk (the EU Council president). The Brexit process is now formally under way.
The UK and the EU will have two years to negotiate a withdrawal agreement (unless this timeframe is extended by agreement between the UK and EU Member States). For now, the UK remains part of the EU until exit. In practical terms, nothing has changed with the triggering of Article 50, except that the timetable has crystallised.
Article 50 letter
The six page letter triggering Article 50 sets out the Government’s approach to the discussions regarding the UK’s exit from the EU and the UK’s future partnership with the EU after Brexit. The main points to note in the letter are set out below:
- The letter states that the UK wants a “deep and special partnership” with the EU “as your closest friend and neighbour”.
- The letter confirms that the UK will no longer be part of a single market (as set out in the Prime Ministers Speech of 17 January 2017), but it is the Government’s desire to reach a comprehensive UK-EU free trade agreement. The Government recognises that it will be a challenge to reach such a comprehensive agreement within the two-year period set under Article 50 for withdrawal discussions, but says that this can be done. The Government acknowledges that failure to reach an agreement in relation to the future relationship prior to the UK’s departure would result in the UK and the EU trading on World Trade Organisation terms, but it indicates that this would also result in weakened co-operation on issues relating to security.
- The letter calls for negotiations on withdrawal and on the future relationship between the EU and the UK to take place in parallel, a point which has been rejected by the European Commission.
- The departure process should be “fair and orderly… with as little disruption as possible on each side”. The letter adds that both the EU and the UK would “benefit from implementation periods to adjust in a smooth and orderly way to the new arrangements”. In other words, there should be transitional arrangements.
- The letter confirms that the Government will publish a White Paper on 30 March 2017 on the Great Repeal Bill. The Great Repeal Bill will repeal the European Communities Act 1972 and will convert the existing body of EU law into domestic law in order to ensure certainty for both UK citizens and those doing business in the UK.
- In relation to the future legal and regulatory framework, the letter acknowledges that UK companies trading with the EU after Brexit will have to align with the rules agreed by institutions of which the UK is no longer a part, just as UK companies do in other overseas markets.
- The letter states that the EU and UK should reach an early agreement about the rights of EU citizens living in the UK and UK citizens living in the EU.
The European Council’s response to the UK’s notification
On 29 March 2017, the European Council issued an immediate statement acknowledging receipt of the UK’s Article 50 notice. The statement includes the following points:
- The first step for the EU is to adopt guidelines for the negotiations by the European Council. The UK will, naturally, not be part of this process. The guidelines will set out the overall positions and principles in light of which the EU (represented by the European Commission) will negotiate with the UK. Mr Tusk has said the draft guidelines will be ready by 31 March 2017. A special European Council meeting has been scheduled for 29 April 2017 to adopt the guidelines, which will need to be approved unanimously by the heads of the remaining 27 Member States. Once agreed, the European Commission will use the guidelines to draft a more detailed negotiating mandate.
- The first priority in these negotiations is to minimise the uncertainty for EU citizens, businesses and Member States caused by the UK’s decision. The initial focus will be on all key arrangements for an orderly withdrawal.
The process
The negotiations will begin once the detailed aims have been drawn up in the form of Council directives for approval by the remaining 27 EU Member States. This will probably take place in June 2017 or July 2017.
A Commission team, headed by Michel Barnier (a former French Minister and European Commissioner) and which is already in place, will lead the negotiations for the remaining 27 EU Member States. Their governments will input into the process through a Council Working Party chaired by Belgian diplomat Didier Seeuws. The European Parliament’s lead Brexit negotiator is Guy Verhofstadt (a former Belgian Prime Minister), who will have no formal role but is expected to be closely associated with the talks.
The negotiations will proceed against a backdrop of political uncertainty: the French presidential elections on 23 April 2017, with a likely second round on 7 May 2017, followed by parliamentary elections in June 2017; a general election in Germany on 24 September 2017; and an Italian general election early next year. Each of these events could potentially have a major impact on the negotiations.
In autumn 2017, the UK Government is expected to introduce the Great Repeal Bill to leave the EU and adopt the existing EU laws as British laws. A raft of other primary and secondary legislation will also be required to put in place new policies and administrative processes in a wide range of areas such as customs, trade and immigration. This must be done before the UK exits the EU, which poses a difficult challenge.
What will happen at the end of the two-year negotiation period is still unknown – talks could result in anything from a final agreement to an extension of time, or to the UK leaving the EU with no deal and years of negotiation to follow.
If you should like to discuss the above, or any implications for your business, please contact Trudy Feaster-Gee (Partner, Barrister) in the first instance.

Brexit: Government publishes the Great Repeal Bill White Paper
Background On 30 March 2017, the Government published a White Paper: Legislating for the United […]
Background
On 30 March 2017, the Government published a White Paper: Legislating for the United Kingdom’s withdrawal from the European Union (White Paper). The White Paper can be found here.
The White Paper follows the Government’s formal notification to the European Council on 29 March 2017 of the UK’s intention to leave the European Union, and its triggering of the procedure under Article 50 of the Treaty on European Union. You can read our analysis of the Government’s Article 50 withdrawal notice here.
The White Paper sets out the Government’s legislative strategy for preparing for Brexit, and primarily, the intended mechanics of the Great Repeal Bill (Bill).
Overview of the White Paper
The Bill has three main aims:
- To repeal the European Communities Act 1972 (“ECA 1972”) on the day the UK leaves the EU.
- To convert EU law (including case law) as it stands on the day the UK leaves the EU into UK law.
- To enable changes to be made by secondary legislation to those laws that would otherwise not function sensibly after the UK exits the EU.
In effect, the Government intends that, wherever practicable, the same law and rules will apply immediately before and immediately after the UK’s exit from the EU.
Conversion of existing EU law
Section 2 of the ECA 1972 gives effect to EU law in domestic law. The Government describes the repeal of the ECA 1972 as a “first step” in order to provide “maximum clarity” that, following Brexit, UK law and not EU law will have primacy in the UK. This will occur on the day the UK leaves the EU.
The White Paper estimates that “the necessary corrections to the law will require between 800 and 1,000 statutory instruments”, or about the same number of statutory instruments as are now made in a single year.
The White Paper observes that the UK will remain a full member of the EU in the intervening period and that the rights and obligations that entails remain in force until the UK formally leaves the UK. The Government intends to continue to negotiate, implement and apply EU law during this period.
Delegated powers
The Bill will contain delegated powers for the Government to make secondary legislation to enable “corrections” to be made to the statute book, to fill any gaps that arise as a consequence of leaving the EU in order to allow existing legislation to operate effectively. For example, this will be necessary where certain pieces of legislation make express reference to EU law or institutions.
Some commentators have criticised the proposed inclusion of these delegated powers as enabling a sweeping political power-grab. However, the White Paper refers to the powers as being limited to making technical changes rather than introducing any policy changes. This is likely to be the subject of significant ongoing political debate before the Bill is passed.
Court of Justice of the European Union
A declared aim of the Government in the Brexit process was that the judgments of the Court of Justice of the European Union (CJEU) would no longer bind the courts in the UK.
The White Paper outlines the nature of the UK’s interaction with the CJEU. The Bill will bring to an end the jurisdiction of the CJEU in the UK and will not oblige the UK courts to consider cases decided by the CJEU after the UK has left the EU.
However, the Bill will provide that historic CJEU case law be given the same binding, or precedent, status in UK courts as decisions of the Supreme Court. Any question as to the meaning of EU-derived law will be determined by the UK courts by reference to the CJEU’s case law as it exists on the day the UK leaves the EU.
When will the Bill come into force?
The plan is for the Bill to complete its passage through Parliament well before the time when the UK leaves the EU, but for it to include “commencement provisions” enabling ministers to bring it into force at the moment of their choosing. The Government has said that the Bill will come into force “from the day we leave the European Union”. This is likely to be 29 March 2019, being two years after the Government formally triggered Brexit by delivering the Article 50 notice to the European Council on 29 March 2017, although if Article 50 negotiations are extended, this may be later.
What next?
The Government’s intention is for the Bill to be introduced in the next Queen’s Speech and introduced in the parliamentary session. The session is due to begin in May or June 2017.
The progress of the Bill will run in parallel with the Article 50 negotiation process, but it appears it will be designed to operate effectively in the event no agreement is reached within the two-year period for negotiation. The Government also intends to introduce a number of other bills during this period, to cover such matters as the customs regime and immigration.
A significant amount of the next parliamentary session will be consumed by the mechanics of the Bill and the supplementary bills that follow it. There is little doubt that transposing EU law into UK law is a substantial task and will entail a huge amount of work.
If you should like to discuss the above, or any implications for your business, please contact Trudy Feaster-Gee (Partner, Barrister) in the first instance.

Pan-European litigation after Brexit: A return of the Italian torpedo
Since January 2015 parties within the European Union have been allowed to choose which courts […]
Since January 2015 parties within the European Union have been allowed to choose which courts to litigate in. This relatively new development has meant that litigants in Europe now have an effective and pragmatic system for resolving disputes. However, subject to the outcome of negotiations, the arrangements for litigation after Brexit may change.
Malcolm Simpson, partner in the Litigation & Dispute Resolution Group at Walker Morris, wrote an article for Corporate Disputes Magazine which outlines several possible scenarios and the practical steps that businesses can take in order to minimise the scope for jurisdictional disputes and unwelcome satellite litigation. Read the full article here. Pan-European litigation after Brexit – Corporate Disputes Jan-Mar 2017
First published in Corporate Disputes Magazine Jan-Mar 2017.

Brexit and the government’s proposal regarding ‘settled status’ for EU citizens
Brexit has led to major uncertainty for employers about the position of workers who are […]
Brexit has led to major uncertainty for employers about the position of workers who are EU citizens living and working in the UK. We analyse the government’s recent proposal regarding ‘settled status’ for qualifying EU citizens.
On 26 June 2017, the government published a policy paper titled, “The United Kingdom’s Exit from the European Union: Safeguarding the Position of EU Citizens Living in the UK and UK Nationals Living in the EU”. The paper (still at proposal stage and therefore subject to change) envisages a new residence status in UK law for qualifying EU citizens, described as “settled status”.
What is ‘settled status’?
Settled status appears to be very much like “permanent residence” under the current system. Those who obtain it will be free to reside in the UK in any capacity and will be able to apply for British citizenship when they become eligible.
The current proposal is that if an EU citizen has (and can evidence) five years’ continuous residence in the UK before a set cut-off date (the ‘Specified Date’) and they are still resident in the UK on the date they apply for their new immigration status, they will be eligible for settled status. We do not know what the Specified Date will be, but the government paper states that it will be no earlier than 29 March 2017 (the date that Article 50 was triggered) and no later than the date that the UK formally leaves the EU (the ‘Exit Date’). It could be the Exit Date itself if no agreement is reached with the EU for it to be an earlier date.
All EU citizens (and their families) in the UK at the point of the Exit Date, regardless of when they arrived in the UK, will have to apply to obtain an immigration status in UK law. Given that it would be impossible for all EU citizens residing in the UK to apply on the Exit Date, the government is proposing a period of blanket residence permission which will start immediately on the Exit Date and will run for a period of up to two years (the ‘Grace Period’). All EU citizens who want to remain in the UK beyond the end of the Grace Period must apply for an immigration status under UK law before the end of the Grace Period.
We have set out below what this means for EU citizens, depending on when they arrived in the UK, under the current proposals.
EU citizens who arrived in the UK before the Specified Date and who will have been here for five continuous years before the end of the Grace Period
These EU citizens will be eligible to obtain settled status subject to them being able to evidence the five years’ residence. They will have to apply for settled status under the new UK system and provide the documents specified under that new system in order to obtain settled status.
EU citizens who arrived in the UK before the Specified Date but will not have been here for five continuous years before the end of the Grace Period
These EU citizens will be able to apply for temporary status under the new UK system before the end of the Grace Period in order to remain resident in the UK. Once they have accumulated five years’ continuous residence, they will be eligible to apply for settled status.
EU citizens who arrive/arrived in the UK after the Specified Date but before the Exit Date
EU citizens who arrive after the Specified Date will be able to exercise treaty rights in the usual way up to the Exit Date (if the Specified Date is a date before the Exit Date). Once the exit takes place, free movement rights are likely to end. However, these citizens will not be required to leave the UK immediately – they will be able to stay on during the Grace Period and will need to apply for a temporary residence document in order to give them permission to stay in the UK beyond the Grace Period. If such citizens wish to stay after the temporary permission expires, further permission will need to be obtained but this further permission will be dependent on the rules in force in the UK at that time. This means that such EU citizens are not guaranteed to be eligible to apply for permission to stay in the UK permanently.
EU citizens who want to come and live in the UK after the Exit Date
The ability of such EU citizens to come to the UK to live/work will be subject to the new UK law immigration system which will be put in place once the exit takes place. We still do not know what such a system will look like.
What does this mean for those EU citizens who currently have a document certifying permanent residence?
It is proposed that all EU citizens in the UK who currently have a document certifying permanent residence will have to apply again under the new UK system for settled status. The government paper does mention that the process may be more streamlined for those who already have a document certifying their permanent residence (and such a document is likely to be of assistance in terms of the documentary evidence that EU citizens must provide under the new UK system). However, it suggests that a document certifying permanent residence under the current system may hold little weight following the Grace Period.
Those EU citizens who have obtained British citizenship will be treated in law the same as any other British citizen. An EU national must have a document certifying permanent residence before they can apply for British citizenship. It is therefore worth an individual applying for the permanent residence document if they are eligible (or will become eligible) to apply for British citizenship before the Exit Date. In addition, it may be worth EU citizens applying for the permanent residence document, even if they will not become eligible for British citizenship before the Exit Date, in the hope that it will assist with the settled status application.
Nothing is yet set in stone and we will publish further updates as the government makes further announcements on this topic.
If you have any queries please contact Shabana Muneer.

Brexit Competition Law Working Group: report on Brexit and competition policy
Background The Brexit Competition Law Working Group (BCLWG) was set up by Sir John Vickers, […]
Background
The Brexit Competition Law Working Group (BCLWG) was set up by Sir John Vickers, Professor Amelia Fletcher OBE, John Fingleton, Sir Nicholas Forwood QC, Ali Nikpay, Jon Turner QC and Professor Richard Whish QC (Hon), following the UK’s vote to leave the EU on 23 June 2016. The aim of the BCWLG is to foster public debate and inform government policy on the implications of Brexit for competition law and policy.
On 26 July 2017, the BCLWG published a report setting out its recommendations on the implications of Brexit for UK competition law and policy.
Summary of report findings
The report focuses on the impact of Brexit on the various elements of the UK competition regime and the consequent practical implications for enforcement of the competition rules. Its working assumption is that Brexit will result in the UK leaving the EEA and the “single market”. However, it notes that there is a possibility that the UK will remain in the EEA perhaps for a transitional period, which would require less change as most EU competition law and practice is replicated in the wider EEA.
The main conclusions and recommendations of the report are as follows:
- The BCLWG’s overall view is that the interests of the UK economy, business and consumers will be best served by continuity of UK competition law and policy, so far as possible following Brexit.
- The BCLWG does not consider that Brexit gives cause for radical reform of the principal UK competition statues, nor of the role of the UK competition authorities. However, the BCLWG considers that primary legislation will require amendment particularly section 60 of the Competition Act 1998 (CA 1998) (to require UK authorities and courts to “have regard to” EU jurisprudence). It also recommends repeal of section 10 of the CA 1998 so that future EU block exemptions from the competition rules (e.g. the Vertical Agreements Block Exemption) are not automatically imported into UK law; they would become a matter for the UK to decide.
- To preserve continuity of the ability of private parties to bring actions for damages in the UK for breaches of EU (as well as UK) competition law, the report recommends retaining sections 47 and 48 of the CA 1998.
- In relation to mergers, the BCLWG sees no grounds for amending the existing statutory criteria, in particular a change to the substantive assessment of mergers (the “substantial lessening of competition” test). The BCLWG also does not consider that the current regime regarding the ability of the Government to intervene in mergers that raise public interest issues needs to be changed.
- The BCLWG has identified various complex transitional issues for both antitrust and merger investigations. It makes a series of recommendations on the carrying forward of commitments from past antitrust and merger cases, and of leniency arrangements. The BCLWG also identifies ways to address issues relating to cases that “straddle” the Brexit period and parallel EU and UK investigations. It recommends, in particular, that the Government seeks to negotiate continued membership of the UK within the European Competition Network, absent which bilateral co-operation agreements will be required.
- The BCLWG also addresses the implications for the Competition and Markets Authority in terms of resources, workload and priorities.

Article 50 – the key implications of Brexit
Article 50 has been triggered marking the start of the formal process of the UK’s […]
Article 50 has been triggered marking the start of the formal process of the UK’s withdrawal from the EU. To help you understand what the possible effects for businesses might be, read our high level review of the practical implications of Brexit across a range of legal issues.
For further information on Brexit and the process, read our guide below.
To talk through any of the issues raised please contact Trudy Feaster-Gee.

The impact of Brexit on the public sector: an overview
First published by APSE Direct News August 2017 Introduction In June 2016, the UK voted […]
First published by APSE Direct News August 2017
Introduction
In June 2016, the UK voted to leave the European Union in a referendum. The exiting process was then initiated by an article 50 declaration by the UK government in March 2017. The UK now has 2 years within which to negotiate its exit. The negotiations will be complex and wide ranging due to over 40 years’ worth of legislation and related guidance needing to be considered. There are a variety of issues that need to be resolved including whether the UK remains in the single market, has membership of the customs union, whether the free movement of labour will continue, and how EU law will be adapted to apply domestically.
Of particular interest is the impact of this decision on the public sector, one of the sectors most highly regulated by European law. According to the Office for National Statistics the public sector employs 17.1% of the national workforce including teachers, doctors, police officers, and public administrators. With such a large sector, the potential impact of changes resulting from Brexit is significant. Potential impacts arise in relation to key areas of financing, resource availability, regulation, and employment. The focus of this article will be on the impact of Brexit for the public sector in relation to these key issues.
Uncertainty
With negotiations still at an early stage, there are a lot of unknown future decisions that will need to be made affecting what the final outcome of Brexit will be. Clarity will emerge as the negotiations continue. This means that the issues outlined here have the potential to change very quickly in the future, altering the whole outlook of the impact of Brexit on the public sector.
In the short term, these high levels of uncertainty combined with continued austerity could lead to further budget cuts. This lack of clarity over the implications of Brexit is especially pronounced in the public sector as services will continue to operate in parallel alongside the negotiations allowing little scope for delaying decisions to wait for that clarity.
Financing the public sector
Current situation
Currently the UK contributes roughly £16.8 billion each year into the budget of the EU. The UK does receive a rebate due to its funding of various EU initiatives, meaning that in reality the average annual net fee paid is closer to £8.8 billion. This constitutes a share of 0.5% of GDP. These fees will continue to be paid for the whole negotiation period. The UK also is the largest recipient of foreign investment from the EU and some of this goes into funding public sector initiatives.
How will this change?
Upon leaving the EU, the UK will no longer be required to make contributions to the European budget but it is expected by the EU that the UK will make payments towards the residual costs of EU Institutions and programmes which are likely to be amortized over a number of years given the potential scale of the sums involved. This means that promised ‘savings’ might not materialise for some years and that monies to support additional investment in public services will need to come from other sources: prosperity, additional taxes, printing money or public borrowing increases. It may be that as part of the deal negotiated, annual contributions are required for access to various EU institutions. This would likely be less than the current membership contribution but overall will not deliver any windfall benefit unless funded by other means.
In relation to EU investment directly into the public sector, Brexit will result in this ending. Amelioration of the effect of removing investment depends on any attempts by the UK government to replace these funds. This is certainly true in areas such as Further and Higher Education (e.g. universities) where EU investment helps to fund research. If this finance is not replaced, there is a risk to the reputation and research quality of universities as well as longer term financial support from donors and industry. It has been suggested that this potential shortfall could be avoided using the money saved from EU membership fees. The problem with this suggestion is that recent government spending shows a London-centric bias, indicating that this money may not be invested evenly around the country impacting the public sector outside London more severely. This would need a major change in government policy to resolve. There will also be an end to funding from the European Regional Development Fund which may exacerbate this problem in poorer regions of the UK and the government will also need to seek to replace this funding.
The practicality of re-investing money saved from not having to pay EU membership fees does depend on the economic impact of Brexit. If there is a period of economic instability, it may (subject to the influences described above) result in less government money being available and may reduce public sector spending. This would then result in difficulty for the public sector in attracting and retaining employees. It is widely agreed that there may be an economic shock resulting from Brexit and so the potential impact of this on public sector budgets needs to be avoided to reduce the potential impact. Already the falling value of the pound has led to rising inflation increasing operating costs. Even if a major shock was avoided, there will still be some economic difficulties stemming from Brexit due to high costs administering the change. The costs associated with administering and implementing Brexit are expected to be the single greatest contributor to government borrowing over the next five years and this cost means that the financial benefit to the public sector of Brexit may not be as high as may have first been estimated when the potential savings were considered alone.
Procurement
Procurement costs
The public sector relies on effective procurement within its supply chain to deliver the efficiencies and outcomes it requires. Access to particular overseas markets without the disruption of cost or other distortions may be essential to optimise value or deliver particular goods. The potential impact of leaving the single market and the EU customs union is that the public sector may find itself subject to tariff limited access to the European markets, increasing the cost of goods, delaying their delivery and potentially at odds with diverging UK/British Standards. This will have a significant impact on the public sector.
It was suggested by some campaigners for Brexit that the costs saved from not having to follow EU procurement law would be considerable and could be reinvested. These savings seem unlikely because successful procurement is an efficient and effective means of creating market opportunity and achieving lower overall transaction costs. It needs a clear and secure environment to take place in. This means that it is essential that confidence in the system is maintained and so even if the EU rules were removed, there would need to be a domestic system with which to replace them with. For example s.135 Local Government Act 1972 has always required Local Authorities to have standing orders which secure competition for some contracts and regulate the manner in which tenders are invited. Further the Public Contracts Regulations 2014 introduced provisions for sub-threshold procurements beyond the requirements of EU rules. The NHS had also regulated other areas not covered by the previous EU regime (see the Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013/500). The world has moved on since the 70’s and requirements for good governance now requires more comprehensive procurement processes.
Furthermore, membership of the WTO-GPA rules is likely to be a condition of any trade deal that the UK has with the USA, Canada or other trading partner. This will require a public procurement regime that is non-discriminatory, open, transparent and judicially reviewable. Looking forward, authorities are unlikely to have the ability to favour UK or regional suppliers.
In terms of challenge, although the current specific challenge process under the Regulations might go, decisions of a public body are potentially subject to judicial review. There is also precedent for the courts intervening where an authority failed to comply with its internal or published rules for tendering on the basis that they form an implied contract. Of course, another change which has occurred in recent years is a tendency amongst contractors to seek redress in the courts if they believe they have been wrongly treated. So procurement challenge are likely to remain firmly on the agenda.
Labour accessibility
Current situation
The free movement of people is one of the central freedoms of the EU. This means that the public sector is able to employ anyone who is an EU citizen, giving access to a large pool of potential employees. According to the Chartered Institute of Public Finance and Accountancy, 10% of NHS and social care workers originate from within the EU. This indicates the size of the group that these people make up in the public sector workplace.
Labour markets after Brexit
After leaving the EU, free movement will end. This will mean that the public sector will need to adjust to a major reduction in the talent pool. This will increase the difficulty of recruiting enough workers to fill vacancies, especially considering the constant need for employees to alleviate pressure on modern public services.
The potential difficulty in attracting overseas workers is further increased by a perception that the UK is a less welcoming place after the Brexit vote. This suggests a possible further reduction in potential employees willing to come to the UK from abroad. The public sector will therefore need to focus more closely on attracting domestic workers. The risks of squeezed budgets in the case of economic difficulties could also mean that there a lack of funding for the training of these workers which might lead to resourcing issues.
Currently there is no deal in place to allow EU citizens who currently work within the UK to remain in the country after Brexit. If this remains the situation, a large number of the current workforce will have to leave the UK making it very hard for the public sector to deliver services to the required standard. It is likely that the rights of current residents to remain are high on the agenda of both sides in the negotiations so there should be progress on resolving this issue in the near future.
If the incoming labour stream is reduced due to the reasons suggested above, there is evidence that the remaining incoming workers would become overly concentrated in London. This would exacerbate skills shortages elsewhere in the country, having a serious impact on employee availability in the public sector. This will need to be considered by the government in formulating its new immigration policy and exceptions or quotas may need to be considered in areas where there are skills shortages (e.g. doctors, midwifes, nurses).
Legal Regulation
General EU legal issues
The Repeal Bill will repeal the European Communities Act 1972, converting existing EU law into domestic law. Each piece of legislation will then be assessed to see if it needs amending in the UK context. This will result in a large administrative cost for government assessing what needs changing. This cost is especially significant considering the level of lobbying that there is likely to be from some parties trying to get particular changes made. This process does mean that at least in the short term, the public sector will still be bound by current EU law. This means that regulations for workers such as the Working Time Regulations 1998 will still have effect, as will requirements such as data protection laws and environmental regulation. There is a further need for clarity where legislation requires access to EU institutions such as in relation to health and safety law as it is unclear what will happen when access to these institutions is withdrawn. It is impossible to say what changes will occur moving forward. Any changes will have a potential significant impact if the public sector has to change working practices to accommodate them.
Conclusion
The potential impacts of Brexit to the public sector are potentially significant albeit in the short term the Repeal Bill will minimise immediate changes based on a degree of continuity of legal requirement. The acceptance, for example, of the new EU wide approach to Data Protection (General Data Protection regulations) is also an example. In the short term, the removal of free movement of goods and people and the loss of EU funding streams will likely be the more obvious areas of impact – causing current ‘EU’ employees to reconsider their position or deter inward job migration.
Longer term impacts will include the demand of the costs of Brexit on the public purse, the potential negative effect on the economy overall, the effect on the demand for public services as well as the sheer distraction of dealing with Brexit. A successful outcome in the negotiations is crucial and rests very much with HM Government and to the extent the Government determines along the way, Parliament. Local Government will have views and a voice – whether it will be heard in the cacophony of Brexit noise is another thing. It is perhaps more important than ever that in this crucial period of change that the quality and delivery of essential public services is maintained and this arguably should be the sector’s primary focus.

Draft Withdrawal Agreement and Political Declaration
On 14 November 2018, the UK Government and the EU Negotiation Team agreed the draft […]
On 14 November 2018, the UK Government and the EU Negotiation Team agreed the draft Withdrawal Agreement on the UK’s exit from the Union, accompanied by a draft outline of the Political Declaration on the future of the UK-EU relationship.
The draft agreement can be found here.
The withdrawal agreement covers:
- the UK’s ‘divorce settlement’ (approx. £39bn)
- the future for UK citizens living in the EU, and equally, EU citizens living in the UK
- how to avoid the return of a physical border between Northern Ireland and the Republic of Ireland when it becomes the frontier between the UK and the EU
The shorter draft political declaration has also been published.
This expands on the political statement issued alongside the draft Withdrawal Agreement and reiterates earlier announcements.
The UK Parliament will be asked to give their approval to the deal on Tuesday 12 January.