Brexit and the justice system

Brexit is causing a loss of confidence in the use of English law in contracts, the Justice Committee has heard.

Giving evidence this week, Clifford Chance partner Kate Gibbons said English law has always been the ‘lingua franca’ for contracts but ‘now people are taking a breath and asking if it remains appropriate’.

‘There is no torrent of concern but a slight loosening of the tooth in the mouth. It’s a question that’s being asked, but the longer we go without a clear resolution, the more there is a tendency to wiggle that tooth.’

She said financial clients need more certainty, for example, there is a risk that clients dealing in derivatives may have ongoing contractual obligations that they can’t comply with after Brexit.

Bar Chair Andrew Walker QC said: ‘The Netherlands, France, Germany and Belgium are all setting up commercial courts in the English language because of the opportunity that they see in Brexit, while the Irish are saying “come to Dublin”.’ He said some barristers have already taken steps to become members of the Irish Bar because they understand they risk losing their EU law practices if they do not.

Gibbons added: ‘If we could say straight away there is mutual enforcement of judgments and recognition of jurisdiction then we would get rid of most of [the concerns].’

Simon Davis, Law Society vice-president, said: ‘The choice of law was already fiercely competitive, and this has given the competition an extra stick to beat us with’. Davis said about 1,000 solicitors have requalified in Ireland, while Freshfields Bruckhaus Deringer and Eversheds Sutherland are now the biggest firms in Dublin.

For family law, the panel agreed there are fallbacks if there is no deal but said these were not as good as the existing system and would cost more, take longer and add to the burden on families. They agreed with Justice Committee Chair Bob Neill that there could be a return to parallel proceedings in divorce cases.

Also giving evidence this week, Justice Minister Lucy Frazer QC said she recognised there is a gap on provision for divorce, adding: ‘The plan is to get a deal as close as possible to what we’ve got.’