Brexit: No Deal? No Plan?

Brexit: No Deal? No Plan?

There may be some truth in the maxim “fail to prepare, prepare to fail” but for many organisations planning for a no-deal Brexit is easier said than done. We look at a few of the key issues to consider.

We are told that many large multi-national organisations have been planning for months if not years while at the other end of the scale there are numerous reports of small businesses not having sufficient plans in place.

Investing time and money on something which might never happen isn’t appealing, but we recommend that organisations familiarise themselves with the main ways in which a no-deal Brexit would impact on their activities. There is lots of guidance available and many websites have published Brexit checklists. We summarise below some of the key legal issues for businesses and other organisations to consider:

How might Brexit affect your contracts?

We suggest you identify your key contracts and check when they will come to an end. If Brexit will have an adverse impact on a key contract, could you exit it if necessary and how? If a key contract is due to end before Brexit date, can it be extended and should you do so?

Before deciding whether to terminate or extend an existing contract (or indeed before entering into new contracts), you should think about how Brexit might affect it:

  • Could Brexit impact on your ability to source materials and/or labour?
  • Which party pays any tariffs and is responsible for getting customs clearance?
  • Could border delays mean the contract might not be completed on time and what would the consequences of this be?
  • What currency are payments to be made in?
  • Does the contract involve the transfer of personal data from the EU to the UK?
  • Will other updates need to be made to the contract, e.g. to change references to EU legislation and terminology?

How might Brexit affect your data flows?

If your activities involve the regular transfer of personal data between the EU and the UK, it is likely that in a no-deal Brexit situation you will need to amend your contracts (whether or not they are close to renewal) to make sure that personal data can be lawfully transferred from the EU to the UK. This issue needs to be considered in relation to all contracts, not just key ones as any failure to comply with data protection law could have serious ramifications.

In many cases, the issue may be addressed by incorporating the EU’s standard contractual clauses but making sure that data flows and controller/processor relationships are identified properly and documented appropriately is not always straight forward and professional advice may be needed.

How might Brexit affect your workforce?

The risks here could include:

  • Key staff from the EU might decide to leave the UK and resign from their posts in your organisation.
  • How easy will it be to hire EU staff in future and will there be changes to the process for doing so?
  • Will business travel to mainland Europe become more difficult as a result of Brexit and how could you work around this?

Other sources of information

There are many sources of guidance, including the following websites:

UK Government: https://www.gov.uk/brexit

British Chamber of Commerce: https://www.britishchambers.org.uk/page/business-brexit-checklist

Information Commissioner’s Office: https://ico.org.uk/for-organisations/data-protection-and-brexit/

These are useful starting points, but general guidance cannot help but be generic so once you have got an overview of the general themes for your organisation, you may want specialist advice to drill down into the specifics of your situation.

Tempting though it might be to adopt a policy of “wait and see” it may be prudent to take action sooner rather than later.

If you would like to discuss how Brexit might impact on your business, please contact Cathrine Ripley or one of the other members of our Commercial & Technology team.