Legal expert warns business to plan for a ‘hard Brexit’

Employers have been urged to plan for a ‘hard Brexit’, and focus in particular on existing trade contracts which could contain penalty clauses over delivery dates.

The warning came during a ‘Countdown to Brexit’ debate organised by Wirral Chamber of Commerce.

It featured an expert panel comprising Bill Esterson MP, Shadow Minister for Business and International Trade, Sergei Averin from the Russo-British Chamber of Commerce and Industry of the Russian Federation, Peter Brook, partner at leading law firm DLA Piper, and Sandra Kirkham, Wirral Chamber of Commerce chair and managing director of apprenticeship training provider Progress to Excellence Group.

Peter Brook outlined the complexity of legal work required to untangle the UK from the EU.

With 20,000 EU laws needing to be transferred to the UK statute books, and rewritten appropriately, this would create a huge undertaking, he said.

He stressed the need for every business to make contingency plans for a hard Brexit, highlighting that clients have formed Brexit committees to assess the possible impact of Brexit and put plans in place to mitigate those risks.

He also underlined the wisdom of examining existing trade contracts, especially where penalty clauses exist with regards to delivery dates, which may be affected by border issues.

Mr Brook said: “As we enter the final few months of Brexit negotiations it is imperative that every business begins to assess the impact a hard Brexit may have on their ability to trade.

“DLA Piper is advising our clients on the legal aspects of their contingency plans, but, it is possible that business will be affected in some way or other in a worst case scenario.

“Work done now to identify and mitigate those risks to trade is time well spent.”

Sandra Kirkham emphasised the need for business to continue training, even if the economy slows down in growth due to Brexit.

She called for government to continue its own funding for training programmes, while underwriting any current European grants.

And she called on the UK to think outside the box in relation to recruitment and training, recommending an overhaul of careers advice, training and recruitment procedures to guide people into careers that will improve social mobility.

She said: “It’s essential that we don’t allow Brexit to have a detrimental impact on labour markets, business and government need to continue training and development programmes to ensure the integrity, security and quality of our workforce if we want our economy to grow for future generations.”

Keynote speaker, Sefton Central MP Bill Esterson, stressed the need to maintain a close relationship with the EU to protect existing trade and advocated membership of a customs union as the only way to protect businesses and jobs while also addressing the question of the Irish border.

He urged caution over any proposed trade deal with the US given President Trump’s recent actions on trade tariffs and said: “After two years of negotiation with the EU the Government is no closer to a deal. That has led to uncertainty within the business community and a real fear that we are headed for a ‘no deal’ situation.”

However, Russia is eagerly anticipating a UK outside the EU, said Sergei Averin, who is based at the British Chambers of Commerce offices in London, in which the Russian Chamber has maintained a presence for 35 years.

The Russian Chamber of Commerce boasts more than 180 chambers and 50,000 business members of all sizes, across all industries.

Sergei’s message was a positive one and suggested that the Russian business community is waiting with anticipation for the March 29 Brexit date, so that they can begin to trade freely with the UK.

He highlighted that, in spite of negative press coverage often received, Russia is an outward looking country eager to build mutually beneficial trade networks with the UK.

He said the British brand is valued in Russia and as the Brexit deadline approaches and trade barriers come down, that brand becomes more attractive.

Mr Averin said: “I am very excited about Brexit and the opportunities it brings for Russian and British business to increase trade arrangements.

“Russia’s close proximity, large population and status as an emerging market presents a unique opportunity for UK companies to build networks, develop new trade relationships and ultimately profit from Brexit.”

Wirral Chamber of Commerce chief executive, Paula Basnett, said: “It is important that our membership is given the opportunity to discuss and meet with business colleagues on issues which are likely to affect their businesses in the months ahead.

“I was delighted that the Countdown to Brexit meeting offered this opportunity, and although the leaving terms about Brexit remain unclear at the moment, we will continue to provide the platforms in which our membership voices can be heard.”