Political Lessons for Legal Risk Managers From the Brexit Vote
It would not be an understatement to say that the outcome of the Brexit vote surprised many legal risk managers worldwide.
1. Keep calm and carry on
Legal risk managers should not make any bold or brash decisions concerning operations or investment in the United Kingdom until things calm down and there is a clear political, economic and social understanding of what the true impact of Brexit will be for both the United Kingdom and the European Union as a whole.
2. It ain’t over til its over
There will be tough negotiations ahead between the United Kingdom and the European Union 27 remaining Member States to work out the divorce terms. This may take years to resolve. It is clear that the stumbling block is that there can be no access to the Single Market by the United Kingdom without freedom of movement for European Union workers. However, the cut from this hard and fast line will hurt French farmers and German automobile manufacturers as much as it does British bankers and airlines.
However, until Article 50 of the Treaty on the European Union (“TEU”) is triggered by the United Kingdom, the divorce is not a done deal. While the UK Government suggests that the Prime Minister has the authority to trigger Article 50 of TEU, it is clear that Parliament would have to pass an act repealing the European Communities Act 1972. The United Kingdom courts would then have to give effect to and follow such a major constitutional act. The question to be asked remains what aspects of European law will remain incorporated into United Kingdom law (England and Wales, Scotland and Northern Ireland) after a Brexit? Nobody knows.