On 24 February UK Prime Minister Theresa May confirmed that there would be no "meaningful vote" on the Withdrawal Agreement and Political Declaration ("WA") during the week commencing 25 February, and that the vote might be held as late as 12 March – 17 days before the "exit day" locked into the EU (Withdrawal) Act 2018. Unless the Parliamentary schedule is altered to displace the private members' Bills that usually occupy Fridays, and to require MPs to sit through weekends, a vote on 12 March would leave only 12 days for Parliament (Lords as well as Commons) to pass the raft of complicated legislation required to implement the WA. Failure to address key provisions in existing legislation, or errors in Acts passed in haste with inadequate scrutiny, might result in legal challenges concerning the UK's status as well as crucial business issues such as customs and regulatory compliance.

The latest government delay has been met with dismay from business organisations. Adam Marshall, Director General of the British Chambers of Commerce, said: “Another day, another delay. The government’s choices mean extending business uncertainty to the last possible minute, giving firms little chance to plan with confidence for any changes that lie ahead. It is unbelievable to businesses that political tactics are still being put before economic considerations, especially given the fact that the consequences of a messy and disorderly Brexit on March 29 are so stark".

While media attention has focused on high profile announcements, such as Honda's decision to discontinue automobile manufacturing in Swindon, court proceedings offer a quieter but perhaps more accurate insight into business responses to Brexit. Businesses operating in regulated sectors, particularly financial services, require court approval for schemes that involve the transfer of business or assets to other jurisdictions. Applications for court approval have become a regular feature of daily legal updates since autumn 2018. Recent court rulings include approvals affecting:

  • Aviva (transfer to Ireland)
  • AIG (transfer to Netherlands)
  • Triodos Bank (transfer to Netherlands)
  • Royal London Insurance (transfer to Ireland)
  • UBS (transfer to Germany)
  • Santander (ring-fencing UK subsidiary and emptying it of assets)
  • Prudential (transfer to Ireland)
  • Society of Lloyds (transfer to Lloyds SA
  • Euroclear PLC (transfer to Belgium)
  • Marine Kiln Insurance (transfer to Luxembourg)
  • Barclays (transfer to Ireland)
  • Liberty Mutual Insurance (merger to create a Societas Europa as part of Brexit planning – Luxembourg).
  • In other sectors, businesses have also been taking increasingly urgent steps to prepare for, or mitigate the effects of, Brexit. Contractual amendments providing for price adjustments to reflect tariffs and other costs on import or export have become more detailed, looking beyond tariffs to allocate responsibility for associated costs, such as fees for customs brokers and other professionals. Force majeure clauses have also been amended to list Brexit (and in some clauses a "no deal" Brexit) as an event suspending or releasing contractual obligations. Drafting on that point has gathered additional urgency following the High Court ruling in EMA v Canary Wharf [2019] EWHC 335 (Ch), which concluded that the doctrine of frustration would not provide an escape route from contractual obligations affected by Brexit.

From a business perspective, each day of delay in the Parliamentary process increases the level of unmanageable risk. Shipments are currently en route between the UK, South-East Asia and other parts of the world with delivery dates falling after 29 March 2019. Contracts for the supply of goods and services now commonly have lead times that extend beyond that "exit day". Further, each day of delay in the Parliamentary process compresses the time available to ensure that legislation is error-free and covers all necessary points. Government regularly professes to understand that confidence and political stability are key to business and investment decisions. Comments such as Adam Marshall's underline the extent to which Brexit-related uncertainty is now driving those decisions.