The EU has brought into force around 19,000 legislative acts which have directly set out much of the legal framework and regulations in the UK. Some of the most important are around competition, intellectual property, employment rules and environmental standards.
Key challenges for business
How will the key EU rules and regulations change for UK businesses?
In the first months and even years of no deal, there won’t be many substantial changes businesses will have to make when it comes to rules that are not related to trade – so-called level playing field regulations like employment rules, competition policy and environmental standards. That is because these laws have been copied from EU law into UK law, so these rules and procedures will be the same before and in the months after no deal.
One of the changes that businesses will have to consider are in the long-term – as there may be a desire from politicians to reform some of these areas of legislation. The other is that the public authorities that would usually adjudicate businesses following these rules are only UK authorities. For example, legal action related to employment regulations in the UK will not be referable to the European courts, only the UK ones. Similarly, the CMA, Ofwat and Ofcom will be responsible for competition cases that would normally be handled by their EU counterparts.
Are there any risks that this plan will go wrong?
There are some concerns that the UK’s public authorities, such as the CMA, will struggle initially adapting to a much greater burden of responsibility.
The legislation that copies over EU law into UK law is also not yet entirely complete, with a range of statutory instruments that are required to edit EU law not yet having been submitted to parliament or voted through. This creates the risk of legal uncertainty due to an incomplete legal framework.
What will happen to protections that the EU provides UK products and designs?
Though it varies protection by protection, most designs and products protected under EU mechanisms will continue to be protected in the event of no deal. For example, EU Trade Marks will continue to be valid in the EU and the UK will create a comparable UK trade mark. However, they will be fully independent trade marks which can be challenged, assigned, licensed or renewed separately from the original EU Trade Mark. The same is true for Registered Community Designs, and unregistered protection for designs will continue to exist through the UK unregistered design right.
The UK’s involvement in most international protection systems will also be maintained in the event of no deal, meaning trade marks protected under the Madrid system will be maintained, as will many UK copyrighted works such as music, films, books and photographs protected through international treaties. The government has also stated that no deal will not affect the UK’s involvement in the European Patent Convention and the Unified Patent Court.
However, many of these frameworks will not be entirely complete, and businesses should anticipate changes in the long-term. IP cooperation with the EU will need to be negotiated, for example, and the UK will need to establish new schemes to protect certain types of rights for unregistered community designs.
Key questions for business to consider
Continuity plans for no deal will be unique to every organisation. However, there are some key questions your plan should answer, to ensure the major issues are covered.
- Have you considered communicating to your employees that the current standard of protections for them as workers will not be reduced in the immediate aftermath of no deal?
- Have you considered whether to communicate to your customers that the environmental standards that you are producing to will not be reduced in the immediate aftermath of no deal?
- Have you considered taking legal advice on the status of any protections your products have derived from the EU, such as trademarks?
- If you are planning a transaction that may require oversight from the CMA or other public authority, have you considered early engagement to understand any risks they see in advance of no deal – or thought about the costs and benefits of delaying proceedings until after the Brexit date to avoid uncertainty?
- If you are planning a transaction that may require oversight from the CMA, have you considered seeking legal advice as to whether to include additional Brexit conditions, and whether it may need reviewing by both the UK and the EU?
Other resources to help you plan
Explore how the CMA is preparing for no deal here.
Read more about energy and climate considerations in the event of a no deal.
Look into how civil legal cases will be handed in a no deal scenario here.