What will change with a Brexit from the EU? Legal experts respond

What are the biggest legal challenges in the event of a Leave vote? FT readers share their insight

Some of the most compelling questions on what may change with a British exit from the EU are also the hardest to answer. We turned those questions around to the experts among our FT readership and received responses from partners at international law firms, legal professors, and even a former Labour MP. Here, in edited form, is what they had to say.

What are the biggest legal challenges in the event of a decision to leave the EU?

Judith Aldersey-Williams
Partner, CMS

“From a legislative perspective, there would be [a] limited immediate impact of a Leave vote (although some on the Leave side have suggested taking immediate steps to reduce the influence of the European Court of Justice). Over the longer term, disentangling the UK from the substantial body of EU legislation which applies in the UK would be a massive task which would take many years to complete.”

Becket McGrath
Partner, Cooley LLP

“On the competition law front, the main challenge would be additional complexity and duplication. At the moment, UK competition law and merger control work as part of a pretty well integrated system with the laws of other EU member states and the EU itself. Brexit would break this system, leaving the legal status of agreements less certain and potentially requiring duplication in [the] merger control process.”

Dr Pavlos Eleftheriadis
Barrister at Francis Taylor Building, fellow in law, Mansfield College, University of Oxford

“Britain will have to negotiate two separate deals. First, the terms of the divorce, ie, the process whereby the UK will stop being a member of the EU. Such a deal will, for example, affect UK nationals currently living and working in other member states or indeed companies already present in the City.

“The second deal is the trade or other deal of the UK with the EU after the process of leaving is complete — this is clearly the most difficult and it may take several years to complete. In addition, the UK will have its own constitutional issues to deal with — for example, issues arising with Scotland and Northern Ireland.”

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What would happen to financial services firms if ‘passporting’ from the UK is not authorised by former EU partners in the bloc?

William Bain
Head of financial services and fintech, Inline Policy; former lecturer in EU law and Labour MP for Glasgow North East (2009-15)

“Passporting is authorised under the legal provisions relating to the Single Market in financial services observed by EU institutions, the member states and those EFTA member states who are part of the European Economic Area (Norway, Liechtenstein and Iceland). It forms part of the Single Rulebook, which many in the UK financial services sector have been very keen to retain. If the UK is not part of the Single Market in the event of leaving the EU, passporting will cease.”

Aaron Stocks
Head of listed funds, Travers Smith

“Many large financial services firms have offices in the EU outside the UK and they could register those as the office through which they passport services throughout the EU, but it would require new registrations and undoubtedly a shift of personnel from London to another EU state. Theoretically the UK regime could be granted equivalence status within the EU for certain purposes to allow passporting, but that seems unlikely given the likely political dynamic.”

Stuart Weinstein
Professor, faculty of business and law, Coventry University

“If passporting is not available, a process of finding equivalency between UK and EU regulations will have to be undertaken on a regulation by regulation basis. While this sounds easy to do, it is far more complex than seems at first.”

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How would environmental and food safety regulations be enforced after a departure from the EU?

Olivia Jamison
Partner, CMS

“Environment law in the UK consists of a number of layers including international treaties and conventions, EU directives and regulations, UK legislation and laws established by the devolved administrations. Brexit in itself would not mean automatic, immediate repeal of all of the EU and international layers. EU directives are directly applicable in member states but require domestic legislation to implement, whereas EU regulations apply once in force.

“The domestic legislation implementing EU law is mainly made under specific legislation, which can be repealed. There would need to be an evaluation exercise by the UK government (and separately devolved administrations, which have increasing powers on environment matters) as to whether some EU laws should be replaced by similar laws or simply repealed.”

Richard Burnett-Hall
Solicitor and chartered patent attorney

“In some areas, the EU requirements are only giving effect to international treaties, and here the UK would continue to be bound, but most of the current controls are derived from the EU alone. It would be an immense task to replicate the EU legislation in new UK legislation, all the more so as Scotland, Wales and Northern Ireland all have had devolved to them their own competences in environmental law matters.

“The biggest loss in this area from Brexit would be the resulting inability to take the UK government to court to force it to comply with applicable EU requirements that it was failing to observe.”

Other issues and questions our expert readers raised

“What is the proper legal basis for negotiations on the UK’s relationship with the EU to be conducted between the UK and the EU, if the UK does not immediately invoke Article 50 of the EU Treaty?” William Bain

“The big question is when we press the button to finalise a timetable for exit. Despite the political pressures, if there is a vote to leave it does not make sense to bind ourselves to a timetable where time is not our friend.” Aaron Stocks

“In the event of Brexit, the obvious questions is whether the UK will wish to enter the European Economic Area. This was not a matter for the referendum and in my view the government is free to take a view. Of course, entering the EEA will require a new act of parliament, which will ultimately will have to make a decision.” Dr Pavlos Eleftheriadis

“The biggest practical challenge for foreign companies doing business with UK companies will be how to protect themselves against the unknown. For example, who bears the risk of changes in law such as the reintroduction of customs duties and tariffs?” Iain Jacobs, managing partner, The Contract Centre, Zurich, former head of contracts, ABB

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