Advocacy
European conventions and regulations will no longer apply to Britain post-Brexit , making distinction of jurisdiction important
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The reset relationship between the UK and the EU , and how it affects trade and innovation , will evolve over time
For existing contracts , the parties need to ask the following questions :
• Do any clauses need renegotiating ?
• If the other side won ’ t renegotiate or we can ’ t agree the changes , should I terminate on notice ( if I can )?
• Is there any scope to get out of the contract by relying on force majeure or break clauses ?
• How much scope will there be to mitigate ( and maybe even reverse ) any disruption by shifting focus to operations and markets outside the EU ? Does the contract allow this ?
All of these issues should also be considered when new contracts are entered into .
As the ultimate outcome of Brexit is unknown and will be anybody ’ s guess , contracts should ideally be drafted to incorporate maximum flexibility across a complete range of scenarios to accommodate any potential situation .
Law and jurisdiction Currently , if a contract between parties in different countries is silent on what law and jurisdiction will apply , the issue is addressed by European conventions and regulations which will no longer apply to Britain after Brexit .
It will therefore be doubly important to include clauses in the agreement which make clear which state ’ s law and jurisdiction will apply .
Once the UK has left the EU :
• It may be harder for a successful UK litigant to enforce a judgment in the EU ; and …
• If it litigates in the courts of an EU Member State it may find itself getting less favourable treatment than before as an outsider , especially if …
• Brexit negotiations end up being fraught and acrimonious .
Consequently , picking partners carefully , managing contractual relationships and only signing up to attainable obligations will be critical .
Conclusion It will be hard to plan for all of the above eventualities since the ultimate destination of the Brexit train is unclear . On the plus side , the train is moving slowly . The reset relationship between the UK and the EU , and how it affects trade and innovation , will evolve over time . That will give those who are prepared for the new climate the opportunity to adapt and make the most of the coming challenges and opportunities . ■
22 | UKSPA breakthrough | SPRING 2017