The Brexit process has reached an interesting phase, according to a new blog post from Thomson Reuters Legal UK & Ireland. Since the fifth round of negotiations between the UK government and the European Union’s chief Brexit negotiator Michel Barnier concluded last week, it quickly emerged that little progress has been made, the post reported.
The European Council is unlikely to agree to extend negotiations beyond the current remit — indicating that subsequent negotiations will focus on the withdrawal process rather than trade talks.
While the Brexit process creeps along, it has inevitably led to lots of debate as to whether the inherent uncertainty about the future legal and regulatory landscape might lead to changes in market practice.
To that end, Thomson Reuters’ held a webinar earlier last week, entitled, Brexit & the Choice of Law & Jurisdiction Clauses: Views from Germany, Ireland and Italy, which tackled the key issues surrounding Brexit and its implications for the legal market.
The webinar’s expert panel included Cecilia Carrara, a Partner at the Italian law firm, Legance; Dr. Christoph Wolf, a Partner with Baker & McKenzie in Germany; and John Cronin, a Partner with McCann FitzGerald in Ireland. The webinar was hosted by Joanna Morris, Director of Commissioning Content and Laura Marianello, International Know-How Editor at Thomson Reuters Legal.
A New Approach to Governing Law
The webinar hosts opened the discussion on a big issue: Could parties to a cross-border transaction change their attitude to governing law in contracts as a result of Brexit?
English laws and UK courts have traditionally been a very popular choice for cross-border transactions. The reasoning for this stems from the benefits attributed to English law and the judiciary system, in particular its transparency, certainty, flexibility, and predictability, webinar co-host Marianello said.
However, the panel explained that given the current uncertainty swirling around Brexit, it is consequently impacting the decision-making of parties.
Dr. Wolf alluded to a common scenario which is currently of ‘most interest’ in Germany — where, for example, a Scandinavian and Italian counter-party historically prefer to use English law for the transaction. But he added that parties will now question whether this is the best option, “and even more so whether English courts could or would be a good choice,” as a result of Brexit uncertainty.
The rest of the panel concurred, adding that potentially in the short to medium term other legal systems like Germany, France and Switzerland, may appear as a better neutral choice to non-English parties.
You can read the entire blog post and listen to full webinar here.