Brexit Uncertainty? Turn it to your advantage
25 Jan 2019 | 5 min read
Starved of clarity, businesses in the UK have largely been forced to fend for themselves to build a coherent strategy on Brexit management and to understand what it will mean for their business. As the UK government continues to oscillate between a “hard” Brexit, a Norway style deal or “soft” Brexit, and “no deal”- it’s important that in-house lawyers avoid the same speculation and ensure that their Brexit plans are pragmatic and address the realities of their businesses. While the type of Brexit the UK will eventually leave with will doubtless impact the kind of safeguards businesses will eventually install, there are several fundamental evaluations that should form the backbone of Brexit preparations to ensure that their business remains buoyant and manages risk whatever the outcome of 29th March.
To aid in-house lawyers in their Brexit planning, LexisNexis has devised confidence building toolkits, designed to aid lawyers build confidence in spite of uncertainty. Although the work will be significant, senior in-house lawyers and GC’s should be cognizant of the potential for growth: although the uncertainty of Brexit may expose weakness, Brexit also offers an opportunity to gain insight into the business, helping lawyers to develop their project management skills and help to shape the growth of their businesses. In the face of such upheaval, we examine how the uncertainty of Brexit can enable growth, provide strategy insight for in house lawyers and advise on which areas of your business require your attention.
Understand the key areas where Brexit may impact your own business
In such turbulent times, it is tempting to look to other businesses for advice, or for a template of best practice. However, in the same way that no two businesses are the same, there are also no identical modes of handling Brexit—what works for one company may not work for another. As a result, it is vital to evaluate your own business to pinpoint specific areas of impact and those which require your most urgent attention. To get to grips with this task, we have identified the headline problems that will impact the majority of all businesses:
• Risk exposure in contracts
• Supply chain disruption
• Restrictions on the transfer of data
• Replacement of existing EU derived laws
• Enforcement of judgments
• Operations outside of the UK including recruitment and placement of employees
Businesses and their boards are increasingly looking to their in-house legal and compliance teams to be closely involved with this Brexit planning, and lawyers are being asked to undertake risk assessments; report and advise on risks and how issues can be managed or mitigated; undertake scenario planning exercises and; devise contingency plans.
It is therefore critical that in-house lawyers gather information about their businesses in order to provide pragmatic direction on Brexit management. In-house lawyers are vital in exposing risk and identifying solutions. By undertaking a deep dive into their businesses, in-house lawyers are in a position to move their businesses forward—not least by asking the right questions; what does efficiency look like? What tech can we apply to that? How can we do this better? By doing so, not only can in-house lawyers mitigate risk but advance their businesses beyond the pitfalls of Brexit.
The LexisNexis Brexit Risk Management Guide has been designed to empower in-house legal teams to seamlessly manage Brexit. To demonstrate how LexisNexis can support your legal team, we’ve rounded up the key advice for in-house lawyers to help manage risk and navigate Brexit turbulence.
1. Contract drafting and review:
• Confirm definitions—where contracts refer to the EU or EEA (and this is intended to incorporate the UK) these contracts may need to be amended to reflect the UK’s position post Brexit
• Watch out for contracts which reference specific laws and regulations. Ensure clauses allow for any amendments or re-enactments to the laws; if they don’t, consider the impact of subsequent changes in UK law on the contract
• Consider whether the contract allows for provisions and variations to be made in the event of a change of law
2. Supply chain disruption:
• If you import goods from/export goods to the EU register for a UK Economic Operator Registration and Identification (EORI) number
• Identify any key contracts containing international commercial terms (Incoterms) that may need amending to reflect a change in your status
• Assess and quantify the impact of potential tariffs on any imports/exports
3. Restriction on the transfer of data:
• Check whether your business currently makes transfers of personal data (as defined by the GDPR) outside of the EU
• If yes, determine whether is necessary to transfer that personal data outside the EU to meet your purposes
4. New legislation replacing existing EU- derived laws:
• Identify whether: your business is currently required by existing UK legislation to take any actions at EU level, and if so; document the legislation in question
• Assess the: impact of any applicable new laws and/or regulations on your business, and; identify any changes, amendments or actions required as a result of the new law and/or regulation
5. Enforcement of judgments:
• Ascertain whether your business has any outstanding judgments with businesses in the EU that have not yet been enforced.
• If there are outstanding judgments, take necessary steps to seek enforcement pre-Brexit.
• Ensure you check proposed jurisdiction clauses in any new contracts with businesses in the EU to assess whether these clauses need to be negotiated in light of Brexit.
Created to assist in-house lawyers identify key risks, LexisNexis Brexit Risk Management Guide helps in-house lawyers ask the right questions and safeguard their business. Undertaking a rigorous review of your business’ potential vulnerabilities will enable a smoother transition to a post Brexit world. To help aid in this process, LexisNexis have developed dedicated Brexit resources that include: a legislation tracker, Brexit timeline, action checklists, dedicated PA updates, Brexit analysis and Q&As with experts. To learn more about how LexisNexis can support your Brexit preparations click here.