24 June 2016: The UK has voted to leave the EU. Whilst this decision has immediate economic, political and social impact, the legal implications will be more gradual and will become clearer over time. There will be no immediate changes in EU or UK law. There will be a lengthy process whereby the UK negotiates the terms on which it will leave the EU and the terms of its future relationship with the EU. Both of these negotiations will result in changes to EU and to UK law. Businesses that have a presence in, or an exposure to, the UK do need to be prepared to deal with these legal changes.
In terms of next steps, Article 50 of the Treaty of the European Union is likely to be invoked by the UK to terminate its membership of the EU and to negotiate the financial and institutional changes that will be required in order for the UK to withdraw from the union. Article 50 anticipates that this will take up to two years. As a member state has not left the EU before, this process may take longer – a longer time can be agreed between the EU and the exiting member state. The British parliament must also decide what EU laws it intends to keep and which should be repealed. Given the very large volume of EU law currently in force in the UK, that process is likely to take a considerable time.
Arthur Cox has been closely monitoring developments on Brexit and we have been advising, and will continue to advise, our clients on the potential legal implications for their businesses of the UK leaving the EU.
The key areas in which we believe the principal changes will take place are:
- Banking and financial regulation
- Consumer law issues – sale of goods and supply of services
- Competition law
- Employment law
- Procurement law
- Data privacy
- Intellectual property
- Energy and natural resources.
We are also mindful of the implications of Brexit for Northern Ireland and free movement of goods and people across the border.