European Union: Cadwalader Partners Examine Legal Implications Of "Brexit"

Last Updated: July 4 2016
Article by Patrick T. Quinn

Most Read Contributor in United States, September 2017

Cadwalader partners Alec J. Burnside and Adam Blakemore addressed some of the immediate legal questions arising from the June 23, 2016, "Brexit" vote. In a webinar titled "The Day after Brexit? How the World Might Look," the London-based attorneys reviewed the following topics:

  • Does the vote trigger break clauses or termination rights in attorneys' contracts?
  • Will attorneys' seconded staff have to return to base?
  • Will firm's passport to do cross-border business be cancelled?
  • Where will attorneys have to notify my latest company acquisition?
  • Will attorneys' exports and imports face tariffs?
  • How might the UK's tax system be affected?
  • Will the new Data Protection regulation apply in the UK?

The attorneys asserted that these factors "concern . . .businesses in Asia, the US and worldwide for whom the UK is an entry point to the EU market. To say nothing of trade between the UK and its former EU partners."

In addition, Cadwalader Managing Partner Alec J. Burnside previously outlined the implications of a British exit in a September 2013 comment. Among other topics, he emphasized that the "Brexit" could: (i) weaken EU competition policy; (ii) impose instant additional costs on businesses and the UK future Competition and Markets Authority; and (iii) harm the dialogue between competition authorities. Mr. Burnside emphasized that:

Competition policy in Europe has always been about more than just free competition: it also serves the goal of breaking down barriers between countries. Single market legislation removes legislative barriers, and competition policy ensures that firms do not erect private barriers in their place. Believers in the single market should pause to reflect whether the UK is better on the inside of EU competition policy, or on the outside looking in.


By now you certainly know that the UK voted to exit the European Union in Thursday's historic referendum. This is, of course, a major event for many of our clients. Although at this early stage there are many more questions than answers, we at Cadwalader are committed to helping our clients understand and react to unfolding events in the wake of Brexit.

A key point to understand is that the exit is not effective immediately. Rather, all existing laws remain in effect. Exit is likely to be a slow and intricate process, involving lengthy negotiations in a complicated political environment.

We anticipate that Brexit could present opportunities as well as challenges. While it is possible that volatility in financial markets could have an impact on some transactions, there may also be opportunities for our clients arising from the uncertainty and possible dislocation. We are committed to helping our clients understand the implications of potential regulatory outcomes and to help them in contingency planning, including restructuring of businesses and transactions, as well as analysis and restructuring of legal documentation. We are also prepared to help clients protect their rights, as it is reasonable to expect Brexit to result in an increase in litigation activity.

It is still very soon after the vote and the coming weeks and months will provide more clarity on the impact of the UK's exit. As of now, most U.S. clients have indicated to us that they expect continued normal activity in the US debt capital markets (perhaps after a period of market volatility). In London, some clients have asked that we continue our work on European deals in anticipation of closing on schedule. At this early stage, we have not had any current transactions or other matters in any of our offices put on hold or otherwise disrupted.

We are taking the following steps to ensure that Cadwalader is best positioned to help clients face challenges and capitalize on opportunities arising from Brexit:

  • We have re-launched our recent webinar conducted by Cadwalader partners Alec Burnside and Adam Blakemore entitled "The Day after Brexit," which explains issues arising from the UK vote to leave the European Union. We will continue to follow this with advice and analysis for our client base in the coming days and weeks.
  • We are creating a Brexit Task Force composed of lawyers in our London, Brussels and US offices to meet with our clients to help them in planning for the UK exit.
  • We are creating a Brexit Regulatory Committee to follow and help shape developments in the post-Brexit regulatory environment that impact our clients. This team will help all Cadwalader lawyers in advising clients on these matters with real-time knowledge and expertise.

We are committed to ensuring that Cadwalader is a best-in-class resource for our clients and friends to help in responding to these historic events. We welcome the opportunity to discuss issues and questions with you.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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