Brexit in the City

City lawyers’ initial reactions to the draft Brexit treaty have been broadly positive.

The 585-page document, published last week, outlines the terms of the UK’s withdrawal from the EU but must first make its perilous journey through Parliament, amid growing clamour for second referendum and acrimonious divisions within the political parties.

However, Hogan Lovells finance partner Rachel Kent said the deal was ‘probably as much as we could hope for at this stage’.

She said she hopes ‘that equivalence decisions will be made before the end of the transition period to provide further certainty for businesses’. Under regulatory equivalence, the European Commission can designate a third country’s rules and regulatory systems ‘equivalent’ to its own and allow certain business activities to take place.  

‘The door is still open to conversations about increases in scope where there are economic benefits to both parties,’ Kent said. ‘The industry’s concerns about processes have also been heard and these will be considered. I don’t see that any doors have been closed.’

On competition law, her colleague at the firm, partner Angus Coulter, said: ‘The draft treaty provides welcome points for practitioners, regulators and business—both clarity and the substance of what is proposed.

‘The provisions make clear that the Commission will not have to drop the UK element of existing merger reviews and antitrust investigations, meaning that the UK's Competition and Markets Authority will not have to launch duplicative inquiries. They also give guidance on which investigations will be saved by these provisions. UK lawyers will remain able during the transition period to represent clients in the EU courts.

‘Otherwise, the level playing field provisions of the draft treaty reintroduce the core elements which the EU competition law currently provide for EU-UK trade, on anticompetitive agreements, abuses of dominance and mergers. Probably most importantly, the UK (and the EU) are required to give effect to these rules taking into account the EU rules and case law as these evolve—not a snapshot of EU jurisprudence at the date of leaving (which is what the UK no-deal backstop in this area takes as its starting point).’