New law: Brexit – immediate considerations for businesses

Friday 12th August 2016

Businesses should start thinking now about the legal and other implications of the UK leaving the European Union (EU) on their business, and consider taking certain steps now.


Following the referendum vote in favour of the UK leaving the EU ('Brexit'), there are no immediate changes to the law in any part of the UK. Such changes can only come after a minimum two-year negotiation period (yet to be triggered), and will depend on the deal negotiated with the EU.


However, there are legal issues businesses can consider now, including:


  • Terms of business, and contracts with suppliers, customers, investors and others, may contain clauses that assume continued membership of the EU. For example, you may have appointed agents or distributors to sell your goods 'in the EU'. What effect will that clause have following Brexit? Such clauses should be identified, and a view taken on what changes may be required.
  • Do clauses in your contracts, whether expressly or impliedly, allow you or the other party to terminate them when the UK leaves the EU?  Is such a clause required?
  • If you have trade marks, designs and/or other intellectual property rights registered at the relevant European registries, they are currently protected throughout the EU, including the UK. If the UK leaves the EU, the protections could cease to apply in the UK. You may wish to consider also registering trade marks, designs, etc, separately in the UK national registries
  • If you import personal data about customers, employees, etc from other countries in the EU, current law makes this unlawful unless UK data protection laws provide 'adequate safeguards' to protect that data. They currently do but, once the UK has left the EU, the situation may change. Should alternative data arrangements be considered?
  • Do you have a subsidiary, branch establishment or presence in another EU member stage? Or are you owned by an EU parent company? What consequences might Brexit have on these arrangements?
  • Could you replace employees who are EU member state nationals if their entitlement to work in the UK ceases? Will Brexit make it difficult to employ a workforce?
  • What is the economic impact of a possible downturn in the economy – have you planned for possible re-organisation and/or redundancies?
  • In the meantime, have you ensured any employees from EU member states (or elsewhere) are protected from harassment, victimisation, discrimination, etc in the workplace?


These are examples of the legal issues business should now be considering, depending on the nature of your business.  There are also commercial considerations, for example, how a UK exit from the EU could affect:


  • Your pricing (given the possibility of tariffs on imports or exports, and possible changes to VAT)
  • The financial performance/stability of your customers, suppliers and competitors, and third parties such as lenders, landlords and investors
  • The overall impact on your business of another possible downturn, if the economy is affected by Brexit as forecast by many


Note that there will be special considerations if you are in sectors that may be particularly affected by Brexit, such as farming, fishing or science.


Operative date

  • Now



  • Businesses should start thinking now about the possible legal and other implications of the UK ceasing to be part of the EU, and develop contingency plans and budgets accordingly.



Atom Content Marketing 2016

Author: Peter Hine

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