At 11pm on Friday 31 January the UK left the EU. Whilst attention is now on the negotiations around our future relationship, what changes need to be made to legal documents now?
Implementation period
Although the UK has left the EU, we are now in an 11 month 'implementation period', from 31 January (exit day) until 31 December 2020 (IP completion day).Â
During the implementation period, EU law will continue to apply in the UK, and the EU and the UK will treat the UK as if it was still a member state.
Previous legislative measures taken by the Government in anticipation of a 'no deal' Brexit, including hundreds of Brexit-related statutory instruments and arrangements to on-shore EU legislation into UK domestic law, have been delayed. Subject to the future relationship negotiations, these measures will now come into force on IP completion day (not exit day).
Reference to EU legislation in a document
Whether or not a reference to a piece of EU legislation in a document (for example, the General Data Protection Regulation or GDPR) needs to be updated depends on when that reference will apply.
- If the reference will only ever fall to be interpreted at a date during the implementation period, no change is required. For example, the reference may only appear in warranties given at a fixed date. If that date is during the implementation period, when EU law continues to apply in the UK, the reference will continue to be correct.Â
- If the reference may need to be interpreted after the end of the implementation period, the reference should be updated. For example, if the reference appears in a compliance obligation which will continue to apply after IP completion day, when EU law will no longer directly apply in the UK and the on-shored UK version could diverge from the continuing EU version of the same legislation, the reference should be updated so that it refers, for example, to the relevant legislation 'as it applies in England and Wales from time to time'. This will help to ensure the reference continues to be fit for purpose after 31 December.
Reference to Member State, EU or EEA in a document
On exit day the UK left the EU. Although relevant arrangements between the EU and the UK provide that references to Member State, the EU or EEA in EU or UK legislation will be treated as including a reference to the UK, those provisions will not apply to references to those terms in private contracts.
If an agreement contains a reference to Member State, EU or EEA that reference should be updated to include the UK, for example, by referring to 'the combined area of the UK and the EEA' if the parties intend the relevant reference to continue to include the UK.
Governing law and jurisdiction clauses
The existing regulations on the law governing contractual and non-contractual obligations will apply to contracts concluded before IP completion day and in respect of events which occurred during the implementation period which give rise to damages.Â
Similarly the relevant instruments relating to jurisdiction and the enforcement of judgments across the EU will apply to legal proceedings instituted before the end of the implementation period, and to the recognition and enforcement of judgments given in legal proceedings instituted before the end of the implementation period.
So no changes need to be made to governing law and jurisdiction clauses during the implementation period.
What happens on IP completion day?
The exact detail of what will happen at the end of the implementation period on IP completion day is not yet known. This will depend on the details of the future relationship to be negotiated between the EU and the UK. In most cases, the various Brexit-related statutory instruments previously passed in anticipation of a 'no deal' Brexit will come into force. But this may change depending on what is agreed between the EU and the UK for each relevant matter.
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