Mr Johnson's Conversation with Mr Varadkar

The Blarney Stone, Blarney Castle, Co. Cork, Republic of Ireland

Author Srieffler

Reproduced with kind permission of the author

Jane Lambert

Our new Prime Minister called the Taoiseach of the Irish Republic today.  Both heads of government's issued press releases.  The PM's is here and the Taoiseach's is here,

Both agree that The Taoiseach congratulated the PM on his appointment but that is where the resemblance between the two communuqués ends.

On brexit, the British press release states that that the PM made clear that the UK will be leaving the EU on 31 Oct, no matter what. The Irish one says:

"the Taoiseach emphasised to the Prime Minister that the backstop was necessary as a consequence of decisions taken in the UK and by the UK Government. Noting that the Brexit negotiations take place between the UK and the EU, the Taoiseach explained that the EU was united in its view that the Withdrawal Agreement could not be reopened. Alternative arrangements could replace the backstop in the future, as envisaged in the Withdrawal Agreement and the Political Declaration on the future relationship, but thus far satisfactory options have yet to be identified and demonstrated."

Nothing like that in No. 10's.

On the other hand, there is nothing much about Johnson's visit to Northern Ireland or his attempts to restore devolved government in Northern Ireland in the Irish press release.   Instead

"The Taoiseach restated the need for both Governments to be fully committed to the Good Friday Agreement, the protection of the Peace Process and the restoration of the Northern Ireland institutions. He recalled that the Agreement requires the sovereign government to exercise power with rigorous impartiality on behalf of all the people in full respect for their rights, equality, parity of esteem and just and equal treatment for the identity, ethos and aspirations of both communities."

He also invited Mr Johnon to Dublin which is not recorded in the British publication.

Anyone wanting to chat about this article can call me on 020 7404 5252 or send me a message.

Brexit - A Significant Change of Tone

Rt Hon Michael Gove MP

Author Chris McAndrew

Licence: Attribution 3.0 Unported
Source Wikipedia Michael Gove 

Jane Lambert

It is not often that a notice from the Cabinet Office publicizes a newspaper article even when that article has been written by a cabinet minister.  The arrival of the authored article No-deal is a very real prospect. We must ensure we are ready: article by Michael Gove in the mailboxes of subscribers to the "Immediate updates to Brexit" mailing list at 14:35 yesterday is therefore significant.  That article had appeared earlier that day in The Sunday Times.

HM Government has been publishing Guidance on how to prepare for Brexit if there's no Deal since 22 Aug 2018 (see Jane Lambert And if there is no deal .......... 24 Aug 2018). Until now, those guidance notes have emphasized the government's intention to leave the European Union in accordance with a withdrawal agreement negotiated pursuant to art 50 (2) of the Treaty on European Union and that it was planning for withdrawal without such an agreement just in case. Yesterday Mr Gove wrote:

"No deal is now a very real prospect, and we must make sure that we are ready."

The article still pays lip service to the hope of negotiating a withdrawal agreement with the remaining EU member states.  Gove writes:

"It’s our aim to ensure we can leave with a deal. We want to continue with warm and close relations with our friends, allies and neighbours in the EU. We will do everything in our power to conclude a good agreement that honours the referendum result and secures a brighter future for us outside the single market and the customs union." 

But since the government's precondition for recommencing negotiations is abandoning the backstop which would mean sacrificing the interests of one of the remaining 27 member states in favour of those of the governing party of the departing state, it is hard to see that happening. 

As I noted in Irish Preparations for No Deal 20 July 2019, "The rationale for keeping the threat of leaving the EU without a withdrawal agreement is that the prospect of disruption and other negative consequences for the economies of the 27 remaining member states will force the governments of those countries to require the Commission negotiators to make concessions." As Ireland is geographically separated from the other remaining member states by us to the east and north and a longish sea crossing to Britanny to the south the calculation must be that pressure on Ireland even tacitly and gently applied will yield concessions.   As I also said in that article: "It is not a very attractive negotiating position either for us or for our trading partners and it may well do a lot of long term harm, but, for some in the UK, that will not matter if the threat is effective." 

In EU Preparations for a "No Deal Brexit" 2 July 2019, I noted the Commission's press release of 12 June 2019 ‘No-deal' Brexit: European Commission takes stock of preparations ahead of the June European Council (Article 50).  The Commission acknowledged that a withdrawal without an agreement in accordance with art 50 (2) of the Treaty on European Union "will obviously cause significant disruption for citizens and businesses and would have a serious negative economic impact" but such serious negative economic impact will "be proportionally much greater in the United Kingdom than in the EU27 Member States."  In Irish Preparations for a No Deal 20 July 2019 I concluded that no deal is "clearly not an outcome that anyone in Ireland wants (even though there may be some benefits for Ireland such as the transfer of some financial services businesses from the City of London to Dublin) but it is one that the government of the Republic seems at least as able to handle as that of the United Kingdom."

As for British preparedness, the Institute for Government which describes itself as "the leading think tank working to make government more effective" has today published Preparing Brexit: No Deal  by Joe Owen, Maddy Thimont and Jack Jill Rutter.  The report states:

"With huge barriers to agreeing and ratifying a deal by the end of October, the prospect of a no-deal exit is rising. But no deal would not be the end of Brexit. The UK will be out of the European Union, but the all-encompassing job of adapting to the new reality and building a new relationship with the EU will still be incomplete. The biggest questions Brexit will still need to be settled. The difficult choices that have been unresolved for the last three years will not evaporate overnight on the 31 October. And Brexit will remain the key dividing line in a Parliament in which Johnson’s government has a wafer-thin majority, and one that is constantly under threat."

The tasks for the new government in the next few months are herculean. They include putting the whole government on a no-deal footing, introducing new legislation for the government of Northern Ireland and probably an emergency budget.  The report warns that no deal is a step into the unknown, that there is no such thing as "managed no-deal" and peak preparedness for brexit may have passed.

The government has announced a massive advertising campaign to sell no deal to the British public (see Christopher Hope Boris Johnson to unveil biggest ad campaign since Second World War to prepare for 'no deal' 29 July 2019 Daily Telegraph).  If despite that campaign brexit proves to be unpopular with the public the government can always blame the obduracy of its former trading partners.  That has always worked in the past though it may not do so in the future as the EU has less and less to do with our affairs.

Anyone wishing to discuss this article, the Cabinet Office's email, the Institute for Government's report or the legal consequences of brexit generally should call me on 020 7404 5252 during office hours or send me a message through my contact form.

Litigating in London after Halloween

Basher Eyre / Junction of Fetter Lane and Rolls Buildings / CC BY-SA 2.0

Jane Lambert

Unless the government loses a vote of confidence in accordance with s.2 (3) of the Fixed Term Parliament Act 2011, there is a strong possibility that this country will leave the European Union at 23:00 on 31 Oct 2019 without concluding an agreement in accordance with art 50 (2) of the Treaty on European Union. The reason I say that is the new administration has announced that it will not enter negotiations for such an agreement unless the remaining make concessions that they have so far refused to make (see Patrick Walker UK on course for no-deal Brexit as Johnson rejects EU agreement 26 July 2019 The Guardian).  That is a consideration to be taken into account by those who are contemplating proceedings in the Business and Property Courts of England and Wales or indeed the proper law of any contract that they may be negotiating.

One of the reasons for choosing London as a forum for the resolution of civil or commercial disputes is that the following legislation applies to the United Kingdom:

• Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters OJ L 351, 20.12.2012, p. 1–32;
• Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings OJ L 141, 5.6.2015, p. 19–72;
• Regulation (EC) No 1393/2007 of the European Parliament and of the Council of 13 November 2007 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (service of documents), and repealing Council Regulation (EC) No 1348/2000 OJ L 324, 10.12.2007, p. 79–120;  
• Council Regulation (EC) No 1206/2001 of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters OJ L 174, 27.6.2001, p. 1–24;  
• Regulation (EU) No 606/2013 of the European Parliament and of the Council of 12 June 2013 on mutual recognition of protection measures in civil matters OJ L 181, 29.6.2013, p. 4–12; 
• Regulation (EC) No 861/2007 of the European Parliament and of the Council of 11 July 2007 establishing a European Small Claims Procedure OJ L 199, 31.7.2007, p. 1–22; 
• Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims OJ L 143, 30.4.2004; and 
• Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain aspects of mediation in civil and commercial matters OJ L 136, 24.5.2008, p. 3–8.

The benefits of this legislation were spelt out by the Bar Council's Brexit Working Group in paragraphs 4 and 5 of Paper 4 (third edition) of the Brexit Papers:

"4.1. Judgments of the courts of EU Member States are to be enforced throughout the EU as if they were judgments of a court of the Member State in which enforcement is sought. This includes “protective measures” such as injunctions freezing assets.
4.2. The courts of one Member State may apply “protective measures” to assist with proceedings in another Member State.
4.3. Subject to a number of notable exceptions, persons domiciled in an EU Member State should be sued in that Member State and where this is not what has happened courts are required to decline jurisdiction.
4.4. Where the parties have specified in their contract that disputes should be heard in a particular jurisdiction (an exclusive jurisdiction clause), the courts of other Member States are required to abide by the terms of that jurisdiction clause and to decline jurisdiction.
4.5. Where a person is one of a number of Defendants, he may be joined to proceedings which are commenced in another Member State where he is not 4 domiciled if those proceedings are “so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments”.
4.6. Where proceedings have already been commenced in one Member State, the courts of other Member States are required to stay any subsequent proceedings dealing with the same subject matter until jurisdiction has been decided by the court first seized of the matter (the lis alibi pedens principle).
4.7. Clarifies the scope of the exclusion of arbitral proceedings from the jurisdiction rules. 

5. Another vital element of legal process is the service of claims by claimants on defendants. Without proper service, as a general rule, a claimant cannot bring a claim against a defendant. The position as to service has also been regularised within the EU. The current position with regards to service is governed by the Service Regulation1, which has applied in the UK since 13 November 2008. It creates a ‘European judicial area’ for the free movement of judicial and extra-judicial documents."

Under the Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the EuropeanAtomic Energy Community 14 November 2018, this legislation would have continued to apply to the UK until 31 Dec 2020 at the earliest.  If the UK leaves without ratifying that draft agreement or renegotiating another in accordance with art 50 (2) of the Treaty on the Functioning of the European Union, this legislation simply falls away.

In its guidance note Handling civil legal cases that involve EU countries if there’s no Brexit deal 13 Sept 2018 the Department for Business, Energy and Industrial Strategy and the Ministry of Justice spelt out the consequences of the UK's departure from the EU without a withdrawal agreement:

"In the event of ‘no deal’, there would be no agreed EU framework for ongoing civil judicial cooperation between the UK and EU countries. Most of the EU rules operate on the basis of reciprocity between EU countries. If the UK continued to apply the rules unilaterally after exit, the UK’s status as a third country would mean that EU countries would not consider the UK to be covered by these rules. As a result, UK citizens, businesses and families would not benefit from these rules,"

The government warns that the following would be repealed in those circumstances:

• Regulation (EU) No 1215/2012 which provides rules to decide where a case should be heard when it raises cross-border issues between the UK and other EU countries, and the recognition and enforcement of civil and commercial judgments between EU countries; 
• Regulation (EC) No 805/2004 which establishes EU procedures for dealing with, respectively, uncontested debts and claims worth less than €5,000;
• The EU/Denmark Agreement: which provides rules to decide where a case would be heard when it raises cross-border issues between Denmark and EU countries, and the recognition and enforcement of civil and commercial judgments between the EU and Denmark; and
• The Lugano Convention: which is the basis of our civil judicial relationship with Norway, Iceland and Switzerland: This would not prevent us applying to re-join the Lugano Convention in our own right at a later date.

Thereafter the UK would revert to the existing domestic common law and statutory rules, which currently apply in cross border cases concerning the rest of the world.  The UK would continue to apply existing international agreements, such as the Hague Conventions, which in many areas provide alternative rules covering the same areas as the above instruments, although they are not always as comprehensive. The UK, which is currently a party to the Conventions as an EU member state. would apply for membership in its own right.

There is bound to be a consequence for businesses and individuals,  The government advises:

"Any party to a cross-border legal dispute, including businesses, consumers and families, would need to consider the effect that these changes would have on any existing or future cases involving parties in EU countries. Where appropriate you may wish to seek professional legal advice on the implications of these changes for your individual circumstances."

The following advice applies to those negotiating or drafting contracts:

"Businesses, individuals and legal practitioners would need to consider how these rules interact with the domestic rules of relevant EU countries to determine how jurisdiction in cross-border disputes should be established and whether any judgments should be recognised and enforced."

Finally, they should bear in mind that in certain cases, the interaction between the common law rules and national legislation may not be clear.  It is possible that certain countries may not recognize judgments from the UK#s courts. Businesses and individuals are advised to take legal advice about how these changes may affect them.

I can certainly provide such advice.  Anyone wishing to discuss any of these matters should call me on 020 7404 55252 or send me a message through my contact form.

Irish Preparations for 'No Deal'

Original uploader Jonto
Licence: Creative Commons Attribution-Share Alike 3.0 unported
Source Wikipedia

Jane Lambert

The rationale for keeping the threat of leaving the EU without a withdrawal agreement is that the prospect of disruption and other negative consequences for the economies of the 27 remaining member states will force the governments of those countries to require the Commission negotiators to make concessions.  It is not a very attractive negotiating position either for us or for our trading partners and it may well do a lot of long term harm, but, for some in the UK, that will not matter if the threat is effective.

Probably no country in the EU stands to lose more from a disorderly brexit than the Republic of Ireland for two reasons.  First, the UK is Ireland's top trading partner in the EU importing €18,868 million worth of goods from the UK in 2017 and exporting €16,455 million to the UK in the same year according to the Irish Central Statistics Office  (Ireland's Trade in Goods 2017). Secondly, it shares a land border with the United Kingdom that has to be kept open in accordance with the Belfast and St Andrews agreements.  If the threat of 'no deal' in order to extract concessions is to work anywhere, it will have to work in Ireland.

It is therefore worth looking at the preparations the Irish government is making for a 'no deal' brexit.  On 9 July 2019, the Republic published an Update to its Brexit contingency plan Getting Ireland Brexit Ready which was published last December.  The government recognizes that:

"The consequences of a no deal Brexit will be profound, including macroeconomic, trade and sectoral challenges. It will also have implications for trade on the island of Ireland, North and South cooperation and will pose risks for the Good Friday Agreement and political stability. It could have lasting societal impacts for Northern Ireland."

That is clearly not an outcome that anyone in Ireland wants (even though there may be some benefits  for Ireland such as the transfer of some financial services businesses from the City of London to Dublin) but it is one that the government of the Republic seems at least as able to handle as that of the United Kingdom.

In short, there seem to be no signs of panic in either the main report or the update and therefore no indication that in bare-knuckle negotiations the Irish government will blink first.  The value for the British government of keeping 'no deal' on the table as a bargaining chip is less than obvious, to say the least.

Anyone wishing to discuss this article or the IP or other legal issues relating to brexit generally should call me on +44 (0)20 7404 5252 or send me a message through my contact page.

Brexit Briefing - June 2019

Standard YouTuve Licence

Jane Lambert

As the purpose of this website is to advise rather than to exhort, I will leave it to others to decide whether a Conservative leadership election is the best use of the time that the remaining 27 member states of the European Union allowed this country under art 50 (3) of the Treaty of European Union.  Having said that, the leadership contest cannot be ignored because both candidates seek to renegotiate the draft withdrawal agreement before that extension runs out.  Their respective plans for Bexit have been analysed succinctly by the YouTube channel TLDR (see Boris Johnson's Brexit Plan - Brexit Explained and Jeremy Hunt's Brexit Plan - Brexit Explained).

Even though both candidates stress that they hope to conclude a withdrawal agreement with the EU, preparations for the UK's departure without such as agreement are continuing in both the UK and the remaining member states.  On the whole, the EU appears to be more relaxed than the UK about the prospect probably because it believes that the UK will be hurt by a no-deal departure much more than the remaining member states (see my article EU Preparations for a "No-Deal" Brexit  2 July 2019). According to the Bank of England's Financial Stability Report and Record for July 2019, British financial institutions could probably survive the economic disruption and market volatility that is likely to result from a disorderly brexit. Indications of the preparedness of the rest of British industry are a lot less encouraging (see George Parker UK not ready for a no-deal Brexit, confidential cabinet note warns 12 June 2019 Financial Times).

One of the principal economic arguments for brexit has been that the UK could greatly increase its trade with the rest of the world if it were not obliged to impose the common external tariff (see Martin Howe QC Leaving the EU on WTO terms will pull down the barriers to world trade and cut prices for consumers 20 Aug 2019 Brexit Central).  Since the UK government served notice of its intention to leave the EU the Department for International Trade has concluded the following trade agreements:

• Andean countries
• CARIFORUM trade bloc
• Chile
• Eastern and Southern Africa (ESA) trade bloc 
• Faroe Islands
• Iceland and Norway
• Israel
• Liechtenstein
• Pacific states
• Palestinian Authority
• South Korea (agreed in principle and expected to sign shortly)
• Switzerland.

Note that those agreements make provision for intellectual property and geographical indications the latter of which I discussed in Geographical Indications after Brexit on 22 June 2019. The UK has also signed mutual recognition agreements with the United States, Australia and New Zealand.

Anyone wishing to discuss this article or brexit, in general, should call me on 020 7404 5252 during office hours or send me a message through my contact form.

EU Preparations for a "No Deal" Brexit

Jane Lambert

Hardly a day goes by without an avalanche of emails from the Department for Exiting the European Union on HM Government's preparations for a "no-deal" exit from the European Union. By contrast, the European Commission's output is much smaller.  The reason for the disparity in volume is obvious.  As the Commission's press release of 12 June 2019 points out, a withdrawal without an agreement in accordance with art 50 (2) of the Treaty on European Union "will obviously cause significant disruption for citizens and businesses and would have a serious negative economic impact." However, the press release also notes that such serious negative economic impact will "be proportionally much greater in the United Kingdom than in the EU27 Member States."

According to its press release, the Commission has been preparing for such a scenario since December 2017:

"To date, the Commission has tabled 19 legislative proposals, 18 of which have been adopted by the European Parliament and Council. Political agreement has been reached on the remaining proposal – the contingency Regulation on the EU budget for 2019, which is expected to be formally adopted later this month. The Commission has also adopted 63 non-legislative acts and published 93 preparedness notices."

It summarized its preparations in a press release of 10 April 2019.

The Commission has reviewed its preparations in view of the extension of the notification period until 31 Oct 2019 and "concluded that there is no need to amend any measures on substance and that they remain fit for purpose." The press release adds that the Commission does not plan any new measures ahead of the new withdrawal date.   The Commission has also completed a tour of the capitals of the 27 remaining states and found a high degree of preparation by member states for all scenarios.

The press release has focused on the following topics that require continued and particular vigilance:

• Citizens' residence and social security entitlements, 
• Medicinal products, medical devices and chemical substances,
• Customs, indirect taxation and border inspection posts,
• Transport,
• Fishing, and
• Financial services.

For British citizens residing in the EU, the Commission has published a useful webpage on EU27 Member States measures on residence rights of legally residing UK nationals and social security entitlements related to the UK in case of no deal. As for other matters, border posts are in place, planes will continue to fly and land unhindered between the UK and EU member states for the time being and financial institutions in London are making such preparations as may be necessary to continue operations in the EU.

As many of these preparations will have to be implemented by member states, the Commission has a convenient portal to the national brexit preparedness websites of each of those countries.

Anyone wishing to discuss this article or brexit, in general, can call me during office hours on 020 7404 5252 or send a message through my contact page.