‘Good faith, cooperation and pragmatism from both sides of the English Channel’ is needed to avoid significant ‘no deal’ disruption, a leading Brexit specialist lawyer has warned.
Meanwhile, the Law Society has published research showing ‘no deal’ could lose legal services £3bn by 2025.
The predictions came as the government, which is spending £3bn preparing for a ‘no deal’ Brexit, published 25 technical notices on its preparations this week. The notices cover a range of topics including financial services, pharmaceutical batch testing and support for businesses at the UK-EU border. A further 50 notices are due to be published by the end of September.
Charles Brasted, partner in the Hogan Lovells Brexit Taskforce said: ‘These notices re-emphasise that a no-deal exit next March is a real possibility for which contingency plans need to be made, and in some cases put into action now or very soon.
‘This is consistent with what we are hearing from many businesses in recent weeks. The notices purport to provide 'pragmatic and practical' guidance on how the government and businesses should seek to mitigate the potential impact of the UK withdrawing from the EU without a deal. The Brexit Secretary, Dominic Raab MP, in his speech announcing the notices, sought to dispel wilder claims in the press about the government's plans, for example in relation to the military being used to ensure the security of food supplies.
‘However, the detail of the technical notices makes clear that avoiding much of the potentially significant disruption of a no deal outcome will require good faith, cooperation and pragmatism from both sides of the English Channel. It is imperative that businesses continue to engage with the government's no-deal preparations, as well as to monitor the on-going negotiations, in order to ensure that they are well prepared for any eventuality.’
Meanwhile, the Law Society published economic forecasts using alternative Brexit scenarios developed in collaboration with Thomson Reuters, showing a £3bn loss for the legal sector by 2025 in the event of ‘no deal’.
‘Brexit is likely to have a significant negative effect on the legal sector in the medium and longer term,’ said Law Society President Christina Blacklaws.
‘This is largely due to the knock-on impact of Brexit on the wider economy as demand for legal services relies on the success of other sectors of the UK economy. Our econometric model predicts 2.2% average annual growth from 2019-2025 with a soft Brexit. This drops to just 1.5% with ‘harder’ Brexit options such as a Canada-style free trade agreement (FTA).
‘If the UK had to fall back on Word Trade Organisation (WTO) rules—a ‘no deal’ scenario—growth would only be 1.1% per year on average over this period.’
Blacklaws said there could be 4,000-5,000 fewer people employed in UK legal services by 2025, under a Canada-style agreement than under a soft Brexit scenario. Some 8,000-10,000 jobs could be lost under a WTO rules scenario. She emphasised, however, that shifts in employment were harder to predict than other figures in the Law Society’s forecast.
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