Brexit is bringing new challenges for businesses. Liz Appleyard, Partner at leading regional law firm Tollers looks at some of the issues.
WITH the UK general election coming up it is difficult to say how the UK government’s Brexit negotiations will go. The new pro-EU French president is said to believe that the four freedoms of goods, services, capital and people are indivisible so the UK is unlikely to find a new ally at the negotiation table. Despite the political uncertainty there are some issues that will come up when the UK leaves the EU in 2019 and businesses should start planning now.
Finances
Tariffs may well be applied to goods and services provided to and from the EU and the possible introduction of customs checks at EU borders will create scope for both cost and delay.
Exchange rates have already been affected and businesses should keep an open dialogue with their currency providers to ensure that steps are taken where possible to manage the risk.
Commercial agreements
Check your agreements to make sure that the territory is not defined as ‘the EU’. Following Brexit, the UK will automatically be excluded from the territorial scope of such agreements.
Issues arising from Brexit may lead to contracts becoming loss making or more difficult to perform. You may think that your force majeure clause will help in these circumstances but unexpected economic hardship is not a force majeure event. To provide protection, consider including a Brexit clause. These clauses can deal with specific events or consequences of Brexit or can provide that if certain trigger events occur then either party can seek to renegotiate key terms in the contract and, if agreement cannot be reached, the affected party can terminate the agreement. Now is the time to negotiate with the other parties to deal with these issues.
Trade Marks
Proprietors of EU Trade Marks should talk to their trade mark agents now to plan what action to take. Registered proprietors of those marks may want to consider converting their registrations into national rights.
Employment contracts
In employment contracts involving the employment of individuals based outside the UK but within in another EU country, companies can choose what employment law jurisdiction applies to that employment contract.
Following Brexit which law the employee is governed by will be a question of fact and degree. This would have an impact on UK companies who employ staff abroad, as they would have to ensure that their staff are being managed fairly under the correct legal jurisdiction, which may not be that of the UK.
If you would like to talk to one of our experts talk to Tollers on 01604 258558 or visit the website www.tollers.co.uk
