Today is a historical milestone: the UK has voted to leave the European Union in a country-wide referendum. The electorate turnout was 71.8% - with more than 30 million people voting - the highest turnout at a UK-wide vote since 1992. While London and Scotland voted overall to Remain a member of the EU, results from Wales, and the majority of England secured a Leave victory. Scotland voted to Remain by a margin of over 20%.

The country has spoken, consequently Prime Minister, David Cameron, has announced he will step down from his duties by October once he has made all the possible efforts to ‘steady the ship’.

In overnight trading the pound is down against the dollar at $1.33, its lowest level in over 30 years. The ensuing economic uncertainty has sent the City into a tailspin with the FTSE 100 index initially falling more than 8% before regaining some ground by mid-morning. The question on everyone’s lips is: What happens next?

At Charles Russell Speechlys we work with clients from a range of backgrounds. Today’s referendum result will have significant implications for clients in a variety of ways across a range of industries. Our sector experts are working closely with clients to advise on the legal considerations for businesses and individuals and how best to manage their operations and investments in the short term within the current regulatory framework and beyond.

At this early stage no one can accurately predict the long-term outcomes of the UK’s official Brexit. But here are the likely implications for some of the key UK sectors as forecast by our industry experts:

Private Wealth

The Brexit fallout may be very different for international private clients depending on whether they are independently wealthy ultra-high net worth individuals who do not have to work, or high net worth individuals employed with London’s financial services sector.

The ultra-high net worth international individuals have the luxury of being able to decide on their own destiny – and Brexit does not seem to provide any reason for them to leave the UK, unless the Government decides to embark on a new round of changes to the taxation of non-domiciliaries, which would be ill-advised and seems unlikely at a time when the onus must be on encouraging contributors to the UK economy to stay here. Those employed in the financial services sector may of course have their futures decided for them by their employers.

There may also be a distinction to be drawn between the Brexit impact on those who live in the UK at the moment, and those living outside the UK investing into the UK, who now have to decide whether to continue to invest. The fall in sterling makes investing in the UK better value, and it may be that we will now see an increase in investment activity in the London property market, with the associated opportunities for structuring advice that provides to private client advisers. Perhaps, too, some of the more technical tax changes affecting the inheritance tax treatment of some UK residential property structures, which were announced in summer 2015, and of which we were awaiting further details shortly, may now be deferred or abolished as the Government’s legislative priorities have to move elsewhere because of Brexit. Such a move would certainly be welcomed by international investors who dislike frequent change in UK tax law.

Commercial

Without understatement, this is one of the most fundamental legal and constitutional developments in the history of these islands. The effects for business will be similarly far-reaching, as many sectors face a complete sea change in the way their industries are regulated. They will watch with extreme interest as the EU forges a new relationship with the UK and may wonder whether tariff and regulatory barriers may now emerge which block the way between them and their continental customers and trading partners. They may be extremely concerned about their ability to recruit and retain EU workers, who make a highly valuable contribution in many sectors.

We do not know when HM Government will invoke its withdrawal right under Article 50 of the EU Treaty. Political pressures may dictate that is done sooner rather than later. When it is activated, within the space of two years, they may face the disappearance of regulations and legal requirements which impacted upon the way they purchased and sold goods and services. They must move quickly to take advice on how the UK’s departure affects their business and on the steps they should take in order to safeguard their commercial interests. Yet in the face of these challenges also lies an opportunity, as business has the chance to influence much of the home-grown regulation which now has the freedom to emerge as a result of Brexit.

Businesses will need to look in detail at their distribution and sales arrangements and assess the effect of Brexit on these. Consider for example which party may be responsible for tariffs or other new import and export costs and the scope of territorial clauses.

Whatever their views on the pros and cons of today’s events, business must lose no time in seeking advice.

Employment

One significant implication for the UK's withdrawal from the EU is how the NHS can maintain its levels of recruitment, now that it has to compete in a global recruitment market. One effect of this could be that UK immigration hurdles for non-EU nationals that work as care assistants, nurses and doctors could fall. However, increased competition may mean that increased investment to guarantee attractive salaries is necessary, and may similarly lead to longer timelines to recruit skilled overseas staff. This may cause a shortfall in applicants willing to go through a quota system to move to the UK."

As for less skilled workers, essential for care homes and elsewhere, the UK may similarly need to increase salaries to make the country a more attractive place to work. Again, that would push up costs for health service employers.

While many of our employment rights derive from Europe, it is unlikely that they will be repealed en mass since they are sufficiently embedded in our culture to be reversed. In particular, those relating to rest periods and holidays and family-friendly rights, are likely to stay. However, the ones creating grey areas and satellite litigation may be cut back to provide certainty such as Transfer of Undertakings (Protection of Employment) regulations (TUPE) and holiday pay.

Immigration

Following today’s vote, any substantive action to withdraw from the EU will take two years of negotiating from when the UK gives notice to the EU. Only with agreement from all the other member states could this two year period be extended. Until the UK formally leaves the EU, in the short term the same provisions – including free movement – will still apply. Transitional arrangements are likely to protect people from the European Economic Area and Switzerland already living in the UK up until Brexit is implemented to acquire permanent residence.

The same should apply to British nationals living in EU member states. Following Brexit, if there is no agreement on free movement with the EU, immigration controls would be introduced - meaning people from the EEA and Switzerland may need a visa to live and work in the UK. It is very difficult for the UK to have access to the single market without agreeing to free movement. It is feasible therefore that we could Brexit the EU and end up like Norway or Switzerland and still have free movement.

Real Estate

In the lead up to the EU referendum the UK commercial real estate market experienced a period of decreased transactional activity and this trend is likely to continue in the short term as investors hold off on decisions in light of the market volatility and uncertainty concerning the negotiation of the exit process from the EU. There is also the potential for a drop in occupier demand and the uncertainty in the financial markets will inevitably have an impact.

However, such unique circumstances also present opportunities for informed investors particularly international investors who may wish to take advantage of the devaluation of the pound. The underlying fundamentals of the UK commercial property market also remain positive. The UK is internationally recognised for its sense of political stability, rule of law, democratic institutions, overall transparency in the real estate market and is a destination of innovation and business in its own right. In the medium to long term, the market is expected to demonstrate its resilience, which will be aided by the prospect of a clear policy direction by the government. In the long run, it is also possible that the Brexit vote may bolster London’s global reputation by discharging it of the financial regulations driven by the EU.

Construction

The impact the “Leave” vote will have on the UK construction industry is at this stage largely unknown. The mechanism for leaving the European Union involves a minimum of two years’ negotiation between the UK and the EU on Britain’s exit terms. Therefore, during this period there will be significant uncertainty in a number of areas within the construction industry.

The UK construction sector has always relied heavily on workers from outside the UK to fill both skilled and non-skilled roles. Under current EU treaties, workers in member states can travel freely to the UK in order to seek work, with no work permits or visas currently required. The Brexit vote could lead to a shortage of skilled workers that would create significant uncertainly in the market, as there is a chance it may lead to an acute skills crisis. Given the importance of access to labour and flexible working, the construction industry may stand to lose more from Brexit than any other industry.

Family matters

Sometimes relationships end in separation and divorce and couples have to go their separate ways. The UK has two years to make its divorce settlement on its departure from the EU but that is completely separate from any framework agreement for longer-term future arrangements with the EU. The question to be asked is whether the divorce will be an elegant disengagement or messy? A major change, or withdrawal from the EU instruments relevant to family law, risks disruption, considerable confusion and years of uncertainty.

This is particularly problematic given that family law is rarely a legislative priority, and at a time in the UK when the availability of legal aid has been greatly reduced. As EU law had permeated family law and practice across the EU, families will be asking whether they can continue to benefit from EU rules in relation to enforcement of matrimonial orders (divorce, separation) and parental responsibility orders (residence and contact). Some may be advised to take pre-emptive steps now rather than wait for the uncertainty following the two year withdrawal.

Sport

While the focus of the UK's withdrawal from the European Union is likely to be on the impact on the City and migration, the impact on the sports world could be significant. However, we will not know how significant this will be until we have a clearer idea of the terms the UK negotiates for its continued relationship with the EU. If the agreement with the EU includes broad free movement obligations, such as those currently in place with EEA members, the current position regarding the movement of players between the continent and the UK will most likely continue. If, instead, an agreement is reached which includes restrictions on the movement of persons and services, the impact on the sports world would be more significant. Firstly, English players may not be able to move to the continent freely and EU nationals could be subject to entry restrictions when seeking to play in England, if post- Brexit they are treated in the same way as current non-EU nationals.

In addition, British football clubs may find themselves only able to sign foreign players over the age of 18 as, outside the EU/ EEA, they would no longer be able to benefit from the exception under the current FIFA regulations given for transfers involving 16 and 17 year old footballers within the EU/EEA. Secondly, if EU law ceases to apply in the UK, the organisers of sports competitions may be able more effectively to restrict the number of foreign players that feature in match day squads as they could potentially include EU nationals and Kolpak players within any foreign player quota. Some governing bodies may see this as advantageous in that it would allow them to discriminate in favour of the development of English qualified players to the potential advantage of the national team whereas it could be damaging to leagues/clubs who would be less competitive in their ability to attract the best players from across the Continent.

Retail & Leisure

With the vote for Brexit, the UK now undergoes the prescribed two year exit process from its membership of the EU. The legal implications of Brexit will stretch far beyond the mechanics of EU membership. Brexit will also trigger a review of EU derived legislation some of which may now face the prospect of repeal. Further, the issue of trade uncertainty will go beyond the ‘high level’ issue of tariffs and quotas (all to be negotiated) and will inevitably bring into focus and review the individual agreements in place between UK businesses and their EU counterparts.

With the prospect of the repeal of certain legislation and the separation between the UK and the EU created by Brexit, parties on both sides of cross border agreements will be forced to reflect upon their trading terms to ensure that they continue to offer the protection they require.

Remain calm

Whichever way you voted yesterday, we expect most of us are feeling some sense of trepidation following the outcome of the referendum. There will now undoubtedly be turbulence and change, especially in the immediate aftermath but we mustn’t lose sight of the great opportunities that will be presented. We advise you to stay calm, positive and embrace this change in a measured way.