Next week we’ll have a flood of articles…..
Here’s what’s already turned up in our inbox
Brexit Vote Clouds Big-Firm Lawyers’ M&A Crystal Balls
Julie Triedman, The Am Law Daily
As top transactional lawyers sought to calm nervous clients Friday after Britain’s vote to leave the EU, several said that they were bracing for the possibility of a two-year drought in their most highly leveraged, profitable business: advising on cross-border M&A deals.
Legal Implications of Brexit Are Vast and Uncertain
http://blogs.wsj.com/law/2016/06/24/legal-implications-of-brexit-are-vast-and-uncertain/
Jun 24, 2016 1:04 pm ET
The legal implications of Britain’s vote to leave the European Union are sprawling as they are uncertain. What an exit would mean for various legal regimes — from tax law to data privacy and IP — depends a lot on arrangements worked out between U.K. and EU, but lawyers across the industries are preparing their clients on what to expect.
Here’s a snapshot of the potential legal impact of Brexit:
• Merger and competition law: Legal experts don’t expect Brexit to fundamentally change U.K. competition law, but it could mean an end to the the simpler “one-stop-shop” review for large-scale mergers falling under EU regulation, says U.K. firm Osborne Clarke.
That could mean more a complex and expensive compliance regime, according to DLA Piper. “Any company doing business in the EU will still be caught by the EU rules and so this could increase the regulatory burden as compliance with both the EU and UK regimes would be necessary,” the firm said.
A lot could depend on the UK’s post-Brexit trading arrangements with the EU, but it’s possible the U.K. “could obtain greater freedom to block or impose conditions on mergers on grounds that are unrelated to competition, such as the impact on employment, or a desire to limit foreign ownership of UK businesses,” says a Clifford Chance LLP analysis.
• Data privacy and security law: A U.K. exit would cast some uncertainty over the EU’s recent overhaul of its data-privacy laws, which are supposed to come into force in 2018. “There remains a question as to what the UK will do as regards the [Global Data Privacy Regulation],” says an analysis by Taylor Wessing LLP. The U.K. may not be required to adopt the new rule package, but “there will be a desire to ensure that data can still flow freely between the UK and the EU,” the firm said.
The U.K. Information Commissioner’s Office, which is charged with protecting personal information in the country, said in a statement that it would want the U.K. to adopt “equivalent” data-protection standards “With so many businesses and services operating across borders,”the ICO said, “international consistency around data protection laws and rights is crucial.”
• Tax law: “In the corporate world, Brexit could impinge upon VAT, customs duties and the taxation of payments between EU group companies in particular,” says Reed Smith LLP. For example, “a post-Brexit world could mean that customs duties are applied on all goods that the UK exports to EU member states,” the firm said.
As for individuals, “British citizens living abroad would be likely to feel changes to the tax regime quite keenly post-Brexit,” the firm says. As an example, the firm notes that capital gains taxes for non-EU citizens living in France “are levied at much higher rates.”
• Intellectual property rights: The biggest IP impact could be on trademarks. The U.K. would no longer be part of the EU’s “community” trademark regime that offers rights protection across the continent. “[I]t is likely that the UK system would begin to diverge from that of the EU,” says an Osborne Clarke analysis.
• Aviation law: “New air traffic rights will need to be agreed between the UK and EU member states,” says DLA Piper. “Airlines owned and controlled by nationals of EU states can operate freely within the EU without restrictions on capacity, frequency or pricing. Following the vote to leave the EU, UK airlines’ ability to exercise air traffic rights within Europe will change — as may EU airlines’ ability to exercise air traffic rights within the UK.”
• Insurance law: U.K. insurers could face a more complicated regulatory regime. “It is possible that UK insurers may need to relocate or open new branches inside the EU to underwrite business in EU member states,” writes DLA Piper.
• Clinical research regulation: “Clinical research is already reducing in the UK, and many view Brexit as ‘the straw that would break the camel’s back,” states an Arnold & Porter analysis. “If the UK leaves the EU… it is likely to make the environment very difficult for companies wanting to undertake trials in a number of countries that includes the UK.”
Brexit has happened, now law firms need to adjust to survive
http://www.legalweek.com/legal-week/blog-post/2462761/brexit-the-implications-for-law-firms
Brexit has triumphed. The Prime Minister has resigned. Markets are in turmoil. As a consequence, a sustained period of uncertainty, volatility and confusion is guaranteed – not least for English law firms, which have benefited so much from the UK’s membership of the European Union (EU) since January 1973, when we first became a member of what was then called the European Economic Community (EEC).
After joining the EEC, the development of legal practice by London law firms in Europe grew tentatively as small offices were opened in Paris and Brussels by the magic circle (and their predecessors), and a handful of other firms. Their numbers grew in the 1980s, in part because of financial deregulation that came with Big Bang in 1986, which fuelled the increasing dominance of the City of London. This was supplemented by access to a reunited Germany and eastern European markets that came in the wake of the fall of the Berlin Wall in 1989.
The Maastricht treaty in 1993 created the EU, led to the single currency and the eurozone in 1999, and helped to deliver access to what became a much enlarged single market. Until now, that has provided British and international companies with direct access to 28 member states comprising more than 500 million consumers.
Many of them, together with the banks that finance their cross-border activities, became clients of UK law firms. Today, London-based firms are preeminent local players in France and Germany, they have significant operations in Spain and Italy, and they are the foremost advisers on EU law in Brussels. Meanwhile, the EU economies accounted for €18.9trn in GDP last year – more than the US.
But all that is set to change. Very dramatically. As conservative businesses, law firms will be looking to minimise risk while cautiously maximising opportunity. How they do that in such a febrile atmosphere of uncertainty remains to be seen.
Short term, law firms will need to adjust, recalibrate and respond to fast-moving events that affect their clients. Medium term, those with a network of European offices will need to carefully evaluate their viability according to changing circumstances as Britain’s relationship with Europe is completely redefined. Long term, more UK firms may seek US suitors or vice versa for defensive mergers.
While there may be a short term boom in Brexit-related legal work during the next few years, long-term questions will prevail about the future of the City of London, the continued importance of English law in international contracts and disputes, and the future viability of EU legal advice.
