In this panel discussion experts in commercial contracts, employment, data protection, intellectual property, commercial litigation and EU trade and competition compare and contrast the impact Brexit is having on their respective areas and highlight what in-house counsel need to look out for now in in the future.
Joanna Rhodes: Well, good morning everyone and thank you very much for attending our panel discussion this morning with the possibly somewhat thorny title of "Brexit What You Need To Know". My name is Joanna Rhodes, I am a Senior Associate in the firm's Commercial Litigation Team and I am also one of the co-chairs of ThinkHouse Foundations.
ThinkHouse Foundations is the partner programme of our main ThinkHouse series. While that one is aimed at more senior in house lawyers all the way up to GC level, Foundations is aimed at the more junior end from trainee solicitors all the way up to five years PQE and we really try to focus in Foundations on giving more kind of practical assistance with the things that might come across your desk from day to day.
I am told that we started with one talk with about ten people in attendance, so looking at numbers today it has come a long way since then. I have the pleasure of chairing, or perhaps refereeing, this discussion today, which is the second in a series of three ThinkHouse Foundations webinars for the spring/summer season.
On Tuesday just gone Sam Cooper from our Planning and Environment Team kicked off the spring programme on the topic of "A New Era For Environmental Law" and if you were not able to make that one, do not worry because we do record all of these sessions and I would definitely recommend giving it a watch. There are lots of practical tips in there. The final talk for this programme will be a "Contract Law Update" which is going to be on 8 June and will be given by Sarah Townsend, who is one of my colleagues in the Commercial Litigation Team, and that should be a really helpful overview of some of the key developments in the area over the last few months or so.
So, moving on to today's talk then, I am very pleased to be joined today by several of my colleagues from across the firm's specialities. I would like to take a moment to introduce them. First I have with me James Stunt, who is an Associate in our EU, Trade and Competition Team, who specialises in international trade issues and customs compliance. Obviously, very important that he is with us today. I have Khemi Salhan, as Associate from our Intellectual Property Team, who specialises in brands and designs. I have James Hall, who is an Associate from our Employment, Labour and Equalities Team, who specialises in employment law. James is also my co chair for ThinkHouse Foundations so was going to be part of this panel, whether he liked it or not. I have Alex Kim, a Senior Associate from our Commercial, IT and Outsourcing Team, who specialises in data protection and last, but certainly not least, I have James Barr, a Principal Associate in our Commercial IT and Outsourcing Team. James specialises in international outsourcing agreements and contracts for the supply of goods and services with a particular focus on the automation and aviation sectors.
As for the structure for today, we are going to start with our panel discussion and then move onto an open Q&A session and you will see that our panel have put their specialities in their names on Zoom to help you direct any specific queries. We have activated the Q&A function on Zoom so please feel free to ask your questions there and, just to say, that only the panellists and myself will be able to see those.
We will try to answer as many as we can in the time allowed but if we do not get to everyone's, we will follow up after the session and, equally, if there is anything very specific or specific queries you would like advice on, our panel will obviously be very happy to follow that up afterwards. Finally, on the Q&As, if you are asking a specific question for one of three James', if you could specify which one you mean that would be enormously helpful and, equally of course, if you want to ask a question to the panel at large, that is also very welcome.
So, I think that is enough out of me and it is time to hear from our panellists and kicking off the discussion. I suppose a good place to start, might to be to ask you all… so we are kind of four/four and a half months I suppose down the track now… what do you think is, or perhaps are, the most important things for people to be aware of in your practice area, post Brexit? Or perhaps what are you seeing most queries coming across your desk about? And as our resident EU lawyer, I think I will come to you James S, first, if I may.
James Stunt: Yes, thank you very much Jo and good morning everybody. So yes, from our perspective in the EU Trade Team, Brexit has of course significantly altered the UK's trading landscape and it has raised new challenges for many businesses but, in particular, for those businesses which are involved in cross border trade with the EU.
So, as I am sure most of the audience are aware, the UK was previously a member of the EU's Single Market and Customs Union and, as such, it was able to benefit from common customs rules that applied across the EU, and zero tariffs on goods which were traded between EU member states. Now, of course, the UK's relationship with the EU has changed, it is now governed by the Trade and Co operation Agreement which myself and some of the other panellists will be referring to as the TCA throughout this webinar.
What this deal effectively does is provide for a tariff free and quota free trade between the UK and the EU which, in practice, means that goods can move across the border between the UK and the EU without attracting any additional import duties. So, broadly, this is beneficial for UK businesses but it has meant that cross border trade with the EU has become a lot more complicated post Brexit and, in particular, for those UK businesses which have traditionally or typically engaged solely in EU trade. And obviously this is for a number of reasons, but I thought it would be helpful to highlight some of the key areas that are useful to keep in mind.
So the first of this would be the new border controls and customs formalities which now apply for goods moving between the EU and the UK. So following the expiry of the transition period on 31 December 2020, goods which are brought into the UK from the EU or vice versa are now treated as imports and so will be subject to border controls in the same way as imports from countries from the rest of the world.
What this means is that there are now requirements for you to make customs declarations as well as paying any applicable import duties once your products are imported into either the UK or the EU. And, additionally, if you are importing certain types of products so, for example, products of animal origin or animal by products, you might be required to undergo additional processing for these goods such as pre notifying HMRC, or obtaining an export health certificate.
Helpfully for businesses that import into the UK, the UK Government has adopted a phased approach to implementing full controls at the border and this is set out within the UK government Border Operating Model, which is a compendium of information about key deadlines for the transition to full border controls and also gives details about the specific procedures required for certain goods. The key point, I think, out of the Border Operating Model, at the moment, is that it is possible to delay making custom declarations and paying import duty for up to six months from the date on which goods enter the UK. And under the current model that applies until January 2022, although it is possible that it might be pushed out. We have already seen the UK Government pushing the deadlines for full border controls out.
It is also quite important to keep in mind that this phased approach only applies in respect of moving goods from the EU into Great Britain so if you are importing goods into the EU you need to make a full customs declaration in the usual way. The second point, just to flag, is that trade and services has changed significantly so the pre Brexit situation was that service providers could benefit from the EU Single Market and EU principles of freedom of movement. So services could be provided and received freely between the EU member states, which begs the question "where are we now?"
The TCA does include provisions that aim to liberalise the trade and services between the UK and the EU but it is not quite fully liberalised, there are still various restrictions that apply, particularly for individuals who are travelling temporarily to the EU or to the UK for business purposes. And these restrictions include restrictions on the activities that certain types of service providers can undertake. There might also be additional requirements such as establishment requirements for concerns as to the contractual terms of the service contract. And additionally there are member states' specific requirements for where the services are being provided, such as economic needs tests.
So all of this means that it is more important now than ever for businesses operating in… across borders of five services to make sure that they check the requirements that apply for the individual categories of the service in which they operate, as well as the types of activities that their service providers undertake.
And, just a final point, it has been in the news quite a lot that Brexit has raised new challenges for businesses operating in trade involving Northern Ireland. A key aspect of this is governed by the Northern Ireland protocol which provides that Northern Ireland remains part of the UK's customs territory so when the UK enters into a free trade agreement in another country Northern Ireland is counted for in the scope of such an agreement.
But crucially, the customs rules of the EU continue to apply in respect of Northern Ireland and Northern Ireland remains part of the EU's regulatory regime in certain regards. So what this means in practice, in brief summary, is that if you are moving goods through or to Northern Ireland there may be additional considerations that apply. So, for example, if you are moving certain qualifying goods into Great Britain from Northern Ireland you will not need to undertake any additional customs procedures such as export declarations or paying customs duties.
But if your goods start their journey in the EU, then they must comply with customs and export requirements on entering Great Britain. You cannot use Northern Ireland to circumvent the UK tariff and import processes and you might actually be subject to penalties if you do so. So that is a very high level overview of some of the things that we have been seeing in our practice area, so I will just hand back to Jo on that one.
Joanna: Thanks James and I am sure you could probably take up this entire time slot just talking about that question, so thanks for keeping that as brief as you could. I suppose no one will be surprised to hear that there is a fair bit to bear in mind in your practice area and I certainly do not think that anyone is going to be surprised to hear that trade is not quite as straightforward perhaps as it used to be.
James B, could I come to you next? James has touched on the trade there which is obviously fundamental and I can only imagine is front and centre in the thoughts of any business which trades with the EU. I suppose I would be interested to hear, how can you manage that on a commercial level? What is important for those businesses to be aware of post Brexit on a kind of contractual or commercial basis?
James Barr: Yes, that is a good question. So I think that certainly what we have found, from a commercial contracting perspective, not a lot has changed. There is obviously a huge amount of things to consider with cross border contracts but a lot of these are around the trade and how you actually get goods across the border. In terms of how you draft your contracts, as I say, not a huge amount has changed and that is mainly because we have retained EU law into UK domestic legislation. So the law, as it stands, remains broadly the same.
I guess there is probably two key legal issues to think about and that we are getting questions around. One is regulatory, so the regulations in the EU and the UK are starting to diverge, so labelling, packaging requirements, for example, would be an obvious one; registration, licencing arrangements with the relevant local authorities - that has become more complicated as well. But from a purely, what to consider in your contract? The key thing would be law and jurisdiction - that is probably the biggest impact and things to think about.
And that is because the Co operation Agreement really has not dealt with disputes. It is effectively a no deal Brexit and we have lost many of the co operation benefits as a member of the EU. So it is probably worth touching on two or three of the key areas - so the governing law; the choice of forum; and the enforceability of contracts and how pre and post Brexit that has changed.
So just taking the first point, governing law. So, obviously this is about, what is the choice of law that governs your contract? And pre Brexit that was in the EU… that was governed by the Rome instruments and the basic position that member states recognised the parties' express choice of governing law. And there is various rules that then determine, in the absence of next best choice, the law that applies.
The good news is that post Brexit the UK has transposed the Rome rules into domestic legislation so, for now, there is no change. The EU member states will recognise UK law and vice versa and the one thing to watch out for on that therefore is of course that the UK is not bound to mirror changes to the EU Rome legislation or follow the ECJ, so we could find that we start to diverge away from them and then things may change. But for now there is no change and no drafting has changed. There is no change in approach to how you draft your contract.
Where it gets more complicated is the choice of forum, so the jurisdiction, who gets to hear your dispute? And the reason why this is important is because the local legislation, the national law, the rules and procedures just vary and may affect the case, the dispute. So pre Brexit as a member of the EU we benefited from the Brussels, the Lugano regime, and so this again, a little like the government law arrangements, this sets out a set of rules to determine which country has jurisdiction. And the basic position is that the EU respected the parties' choice of court.
Post Brexit it is slightly different, so whilst there are some transitional rules around the disputes that come in pre-1 January 2021, the UK no longer has the benefit of the Brussels Lugano regime so we have applied to join the Lugano regime but that is still being debated, and basically being blocked by the EU at the moment. I think that is partly due to the EU wanting to take contracts away from English law. So they are thinking that the governing law will start to become an EU law, rather than English law. Whether that is the case, I do not know. I am not sure we are seeing a huge amount of that anyway.
But at the moment, as it stands, we do not benefit from the Lugano regime unless we get accepted as a member. So, as it stands, the choice of forum would be governed by a different set of legislation which is the Hague Convention. But there are three main issues. with the Hague Convention.
The first one is that it does not apply to certain disputes so intellectual property; employment; consumer claims, it does not apply to that. The second one, it only applies to exclusive jurisdiction clauses so it does not apply to non exclusive jurisdiction clauses and there is some uncertainty as to whether or not the EU will respect pre Brexit exclusive jurisdiction clauses, because the UK only acceded to the Hague Convention, in its own right, from 2021. So there is this sort of gap between 2015, I think it is, and 2021 where it is not clear whether the Hague Convention would apply either.
And the final point is that the Hague Convention is not tested. So if the Hague Convention applies then, broadly speaking, the EU member states would recognise the choice of law, but there is a lot of uncertainty as to whether it does apply and, if it does not apply, then it falls to national courts applying national laws. So really the practical implications of that are that there is just a lot of uncertainty and there is going to be a lot more increase in local legal advice required and obviously the added costs of that in disputing contracts and enforcing those contracts.
So enforcement wise, again the enforcement of those contracts, even when you get a judgement you have got to go and enforce it in the local jurisdiction and that again is governed by the Brussels Lugano, or was pre Brexit. Post Brexit it is the Hague Convention which has the same issues that we have just talked about. So yes there is a lot of uncertainty and it is likely to be more costly, but I think it is probably worth bearing in mind that we probably have to overstate the risk. It is not that the contracts are not enforceable it is just going to be slightly less certain as to how you do it and, increase the costs in doing it.
In terms of the practical points about how you can mitigate this, then making sure that your contracts have exclusive jurisdiction clauses going forward or you choose arbitration so Brexit has not affected the arbitration process, that is governed by the New York Convention and we are still a member of New York Convention so arbitration will apply in the same way.
Joanna: Thanks James. As a Commercial Litigator, I certainly echo what you have said about jurisdiction and particularly the difficulties in enforcing judgements because it does add that extra layer of complexity. I do not think disputes are anything that anyone really wants to think about when they are entering into their commercial contracts but if you can you know make it as good as you can, at the time, that certainly can make your life a hell of a lot easier if something does go wrong later down the track which unfortunately sometimes it does.
So we have talked about what we need to be aware of in terms of tangible goods and services and how we might need to think about drafting our contracts to get around some of the novel points that Brexit presents. But we also know that we also need to bear in mind the kind of intangible all important IP, Khemi - so what about that? What do businesses need to be aware of? And what are you seeing most of coming across your desk in the kind of IP realm?
Khemi Salhan: Thanks Jo and good morning everyone. I think it is most important for businesses to understand how Brexit has changed their intellectual property rights. So intellectual property is a broad term that covers different intangible assets and there are different legal regimes covering each of the different types of right. For the purposes of this conversation I am going to concentrate on trademarks because I think it applies most broadly to everybody who is listening, because every business has a brand. But there have been changes to the regime around patents, copyrights and design. And designs, in particular, so if anybody has specific queries about that, please do drop me an email.
So looking at trademarks specifically, trademarks are designed to act as an indication of the origin of goods or services by a particular business. They are registered rights that record things like your brand name; logos; slogans; and, occasionally, more unusual things like colours; or shapes; and sounds. So if you take a brand like Nike, they will have a registration for the name Nike, as a wordmark; they will have registration for the Swoosh logo; and they will have a registration for the slogan "just do it". And when you hear or see any of those icons, they indicate to you that the goods have originated from Nike.
This mark is then registered in relation to specific goods and services so they will be registered in respect of apparel and footwear and maybe even in services such as sponsorship or you know in providing stadiums and things like that. So prior to Brexit, a business or an individual could apply for a trademark that covered all of the EU and the benefit of this was that you made one application to a single office, you paid one fee and you had one renewal fee and then you had protection across all of the mandate of the EU.
However, post Brexit, the UK obviously no longer forms part of the EU and therefore is no longer covered by the EU trademark regime. So for those businesses that had EU trademark registrations prior to Brexit, they will now have two trademarks. They will have their existing EU registration, which no longer covers the UK, and they will have a UK clone of that registration. It will cover exactly the same marks; it will cover exactly the same goods and services and it will have exactly the same priority date.
It may be that some businesses already had an existing UK registration, so they may now have two UK registrations covering different goods and services. So for businesses who have two registrations in the UK they need to consider whether it is necessary to maintain both because it can be expensive. And for businesses who are looking to register trademarks in the future, they need to consider where they should be applying for protection, what rights they are using in the territories and what goods and services they need to cover in those territories.
I think it is really important to note that there is not a transition period for trademark registrations, so on 1 January this year the UK clones of those… any existing EU trademarks were automatically created and so if your business already had an EU registration you will now automatically just have this UK right. However if you had filed an application, and the application had not been processed prior to Brexit, you will now need to make a UK application prior to the end of September to make sure you have corresponding UK protection for what will be covered by the EU right.
Taking all of that into consideration I think it is really important for businesses to take stock of all of the different rights that they own and that they are using and just to check that these are all working for the business and that the new rights cover what the activity for the business is undertaking in the relevant territory.
Joanna: Thanks Khemi. It is interesting and a little bit to thinking about there in terms of the kind of IP side of life. James H, can I come to you next? We have talked about goods and services and IP but what about what is arguably a business' most important asset. Has there been a lot of change in the employment sphere since Brexit as well?
James Hall: Morning Jo. Thanks, I am afraid that my answer is a little bit different to everyone else's so far. It is effectively to say what may be similar to a lot of what James B has already said, but there has not really been any impact as such from Brexit immediately to employment law, so there has been no change to what I am sort of advising on day to day as a result of Brexit.
But I would focus on maybe the other part of your question which is, what are the most important things to be aware of now that we are post Brexit? And I think that James B has already touched on this idea of the retained EU law so hopefully it is a familiar concept that we have now effective as of 1 January, we have got this snapshot of EU law in the UK, especially in the employment side of things.
And what that means is that it is as it was before but as things for clients start to change in the future, we could certainly see some diversions and I am sure we will be talking about that later on in a bit more detail. But thinking about what is important to be aware of I thought it might be helpful just to run through some of the sort of parts of our UK employment law that has actually come from the EU.
And some key examples of that would be things like discrimination rights; collective consultation rights in a redundancy scenario; TUPE or the Transfer of Undertaking Regulations, which hopefully is something that we have all come across before; things like family leave; working time limits; things like the 48 hour limit on a working week; and also agency workers' duty. So those are all the things that have come from the EU and who knows you know whether they will continue in the same way. So, as I said, we can talk about that a bit more later maybe.
But I thought that it was also worth flagging that some things that have come from the EU were already here in the UK and that would include equal pay rights; race and disability discrimination laws specifically; and also things like the right to return from maternity leave.
So, yes, as James S has already mentioned it is this TCA agreement that we are really interested in and there is even some specific wording in there that says there is provisions for the development of employment rights in both the UK and the EU going forward and there is this reference to the level playing fields commitments. So that is designed to prevent either side from getting a competitive advantage over the other and that does include labour and social standards.
So yes there are some rights to modify but effectively there is a commitment not to weaken or reduce labour and social standards but crucially that is limited to being in a manner which is affecting trade or investment and right now we do not really know quite how that is going to be sort of dealt with or interpreted going forward. So those are the key things I would say it is good to be aware of post Brexit in employment.
Joanna Thanks James. So it sounds like there is not currently too much for businesses to be too worried about, which I am sure will be welcome news to our audience. Alex, can I come to you on that note. I mean it always seems to me as someone who is not a specialist in the area that data protection is something that we all need to be constantly worried about all the time. But what would you say are the main points for people to be aware of post Brexit in your practice area?
Alex Kim: Yes, thanks Jo. From a data protection perspective we have not seen a drastic change in the law either as a result of Brexit. The data protection laws that now apply in the UK are the Data Protection Act 2018 and the UK GDPR which are pretty much the same as the law pre Brexit. Of course these laws may change in a way that deviates from the EU GDPR going forwards.
The most frequent question that we are coming across is, "what has happened to international transfer of data specifically in relation to the EU?" Or I should say European Economic Area to be more precise. So as a starting point with Brexit that means international transfers of data from the UK to other countries, including to the EEA, are now subject to transfer rules under the UK GDPR. Now these rules are largely the same as they were before Brexit for transfers of data from the UK to the EEA. The UK government has recognised the EEA as being adequate and so no specific documentation, such as standard contractual clauses, is required to transfer data from the UK to the EEA.
For transfers of data from the EEA to the UK the EU GDPR applies and, as things currently stand, the UK government is seeking a European Commission adequacy decision which will allow the free flow of data under the EU GDPR. And to allow time for the EU to consider whether to grant this adequacy decision to the UK, the EU has agreed to delay transfer restrictions for at least four months, known as a bridge, at the beginning of this year and this may be extended to six months.
So far things are looking fairly positive. In February this year the European Commission published its draft decisions on the UK's adequacy where the Commission found the UK to be adequate the draft decisions are now being considered by the European Data Protection Board (the EDPB) and a Committee of the 27 EU member states. If the Committee approve the draft decisions then the European Commission can formally adopt them as legal adequacy decisions.
Now if the UK were not to get the adequacy decision then the UK would be treated as a third country under the EU GDPR meaning that certain appropriate safeguards, such as the use of standard contractual clauses, may need to be put in place. So what we have recommended clients to do in the meantime is identify specific transfers of data between the UK and the EEA so that measures can be carried out promptly if required. And, yes, that is it.
Joanna: Okay. Thanks Alex. So I think that leads me nicely on to my next question then. We have talked about what has been going on or, in some cases not going on, over the last few months in relation to Brexit. But post Brexit and I think some of you have started to touch upon this already, what, if any, kind of retrospective changes might need to be made to existing arrangements which are currently in place? So I think, if I may, I will start with our Commercial lawyers on this one, James B, what would you say about that? I think we have said that people do not need to be rushing to amend their current contracts but, what would you say?
James Barr: Yes, I think that is right. So the short answer is "no", we have not seen a rush of clients and companies wanted to renegotiate and amend, or certainly not wanting to amend their current contracts. I think that is partly because, as we touched on earlier, there has not been a great deal of change in the law that applies to their commercial contracts and, you know, when we take the issues with jurisdiction clauses, the fact that you have got non exclusive jurisdiction clauses in your cross border contract, companies are not going to start amending their contracts just to deal with that.
I guess where we are seeing clients want to renegotiate their existing contracts is where there has been a commercial implication, and James S has touched on this in terms of the trade in cross border transactions. So particularly where the implications of Brexit such as delays in crossing the UK/EU border where that causes a big problem for the contract. So just in time deliveries in the automotive sector, for example - you find many clients wanting to look at those contracts.
And just the costs in crossing the UK/EU border. So the increased logistic costs, because we have got more complicated logistics arrangements in the risks of delay; import/export controls as well; the exchange rate risk as well. So again back to the commercial reality of what is happening with these commercial contracts and to the extent that the volatility in the exchange rate is causing a problem in terms of the pricing that you have agreed in your contracts.
And the other key area where it is causing a problem is the movement of people, so where you are providing services. If you are providing services at another party's site and it is cross border the restrictions on moving the people is going to be a problem as well and how do you deal with that? So really where we are seeing the renegotiation of contracts is due to the upward pressure on costs in performing those contracts.
So what we will find is that clients are looking at higher risk contracts to try and reallocate that risk and the cost of crossing the border. That can be quite difficult so one of the reasons why we are not necessarily seeing many of the contracts being renegotiated is because if you are locked into a long-term agreement and you have no right to amend it or you have no price review clauses then it is quite problematic. You just have to wait until the end of the term, potentially, before you can renegotiate the contract. So, again, that is another reason why we are not necessarily seeing a rush of activity to amend contracts.
What we are finding though is that commercially there are a few things you can do to mitigate those risks. So if delay is a big problem, building up stocks of goods, where possible; investing in IT systems; experts and consultants to assist with import/export requirements and, I suppose, going forward what we are looking at in your contracts is dealing with some of these risks so including price review clauses; having shorter term contracts so long term contracts, where the market is quite uncertain, may not be a particularly good idea, so looking at shorter term contracts.
So really that is the more commercial practical issues that we are finding clients are asking about and looking to try and address in their existing contracts. And I suppose the final point, just to bear in mind, is that these practical commercial implications are not just around cross EU/UK border, it also potentially impacts just the UK contracts where those contracts are reliant on the EU supply chain. And, of course, also Brexit has an impact on UK/non EU cross border contracts because of potential tariff changes and border delays; increase in logistics costs; it is the same issues that arise with those contracts as well.
Joanna: Thanks James, I think there are some really helpful, practical and commercial tips in there. What about from a data protection perspective, Alex? Is there anything that people need to be thinking about, looking over their existing arrangements?
Alex: Yes. From a data protection perspective, nothing immediate really comes to mind. We have had to be mindful of drafting the correct definition of data protection law in our contracts now. But, however, to go back to contracts already signed to just make that specific change, I do not think that is really a critical matter.
I would just like to answer one question from the attendees. An attendee has asked, "what are the requirements for businesses to have an Article 27 post Brexit?" So that is referring to representatives of controllers or processors not established in the EU. I will just be really quick.
If you are a UK organisation selling into the EU market with no presence in the EU market, then you will have to have an EU representative. The same applies for EU organisations, if they are selling into the UK, they are caught by the UK GDPR and if they are not established in the UK, then they will need to have a UK representative.
Joanna: Thanks Alex. What about from your perspective, James S? I am going to hazard a guess that there are some things that perhaps you would recommend are done from a retrospective point of view given there is so much to think about. But what kind of things would you be advising that businesses are thinking about at the moment.
James Stunt: Yes, so James B has quite helpfully gone over a lot of the practical contractual changes that can be implemented to take into account quite a lot of the changes which I touched on earlier in the Webinar. But one area that we are advising clients on, quite a lot recently, is origin management which is potentially involving evaluation of many aspects of a business practice, so their supply chain; their products; the manufacturing processes. And the reason for doing this is ensuring that businesses have been taking advantage of tariff free trading in the past and are able to continue doing so now that we are in the post Brexit environment.
So just to give a quite high level summary of that process, I mentioned earlier that the TCA allows for tariff free trade between the UK and the EU which, in theory, is wonderful but it requires that businesses can only benefit from that tariff free trade if their products satisfy what are called "rules of origin", which are specific rules set out under the various free trade agreements which the UK has entered into with other countries throughout the world. And, obviously, that now includes the EU with the TCA.
Rules of origin themselves are relatively complex and quite specific and, slightly unhelpfully, they differ depending on which free trade agreement you are looking at. But, ordinarily speaking, businesses can undertake origin management exercises into a three stage process, so the first step would be to identify what the correct commodity code is for your individual products and that is the ten digit code that applies to all products that you can conceivably think of.
The next step is that if your products are not wholly obtained, so if they are now grown in the relevant party to the free trade agreement that you are looking at or extracted naturally, you need to look into the provisions of the relevant free trade agreement that you are looking into and check whether your products satisfy the product specific rules of origin and quite often that requires that your products undergo specific changes or processing in order to change their status to originating status And once you have undertaken that exercise you have to then claim preferential tariff treatment on your goods at the point of import.
And, again, the way in which you can do this does differ depending on which trade agreement you are looking at, but, for the purposes of the TCA, you can do this by submitting a supplier statement of origin on your commercial invoices or other national documents when you making your import declaration. If you have also given enough information to the entity that is importing your goods you can rely upon what is called the importer's knowledge for these purposes. But there are certain practical steps, it does not come automatically to you when you move goods across and we are advising clients to do this, both on a current and a retrospective level.
So if you are failing to make use of a preferential tariff treatment under a free trade agreement you could potentially be paying hundreds of thousands of pounds worth of import duties, often unnecessarily, and that is particularly the case if you are operating in an industry that has got particularly high tariffs, so the automotive sector, for example, or the clothing sector, the textile industry.
What it is also quite useful for businesses, and something that we have advised on relatively recently is that, if you have not been using the preferential tariff treatment provisions under previous free trade agreements, you can actually make an application to a customs authority to reclaim certain time limited periods of duties which can be quite a boom to the businesses. So there are a few steps that a business can look into from their products; manufacturing; supply chain perspective, just to make sure they are making the most of what is available to them under the new trading arrangements.
Joanna: Thanks James. And again I do not think anyone is going to be surprised to hear (laughs) that there is quite a bit to be thinking about but we are, of course, always here to help you if you need it. Khemi, you said there is quite a bit to think about from an IP point of view, what about people looking into their existing arrangements in that area, is there anything that you would particularly recommend?
Khemi: Yes. So it is not so much retrospective changes that need to be made as reviewing and considering your existing arrangements and to make sure that they work for you going forward in this new post Brexit landscape. So I think broadly this can be broken down into two things. Firstly, it is reviewing the brand that you are using; where you are using them; and what right you have registered to protect that use. And then, secondly, looking at what rights have been licenced. So who are those rights licenced to? And do the agreements need to be updated to reflect any changes?
So, dealing with the first point about reviewing your brands and making sure that they work for you and what you have registered. I mentioned earlier that trademark owners will now have UK clones of their EU rights and that some brands may already have pre existing UK registration so they have now got the two UK marks and businesses need to consider whether it is necessary to maintain both marks. There may be a very good reason for doing so, so the pre existing mark may have covered a more narrow selection of goods and services and the subsequent clone may be broader in scope.
Similarly, you may want to retain the newer mark if it is within the first five years of its registration as you do not have to prove that you have used it in relation to all of the goods and services and this means that it can then help if your mark is attacked for validity. You do not have to prove that it has been used in relation to all of those goods because after the first five years you do have to prove use and if you cannot, then your mark can be invalidated.
On the flip side of that though if you have got a very old registration, that you have been using for a long time in relation to all of the goods and services, you may want to maintain that mark because you will have accrued lots of goodwill and reputation under that brand and that can be really helpful when it comes to dealing with infringes. So it is just considering whether the registrations that you have now cover all of the goods and services that you are using them for and what is the most cost effective way of maintaining the rights that need to work for you.
And then my other point was about licencing and with licence trademarks you need to make sure that the licensee has the correct right to cover their activity and to cover their use and this is obviously the case regardless of Brexit. But I think it is worth reviewing the agreements you use, which marks in relation to what goods and services. So, for example, if you are licenced to use an EU trademark but you carry out your activities in the UK you may need to consider whether the licence is updated to reflect any changes and we would recommend just seeking some advice on that really.
Joanna Okay thanks. So it sounds like it is actually quite a good time to sort of take stock of what you have and what might need to be given a bit of a refresh, or not got, as the case may be, and to use your IP.
Joanna: James H, you said that not a lot has immediately changed from an employment perspective but is there any need for businesses to be thinking about making any retrospective changes?
James Hall: Yes, you are right Jo. The answer here is hopefully a positive one, which is that "there is not really any need at all". So it is a pretty short answer from me. So yes there is nothing that we recommend changing in employment contracts or anything like that, so yes I will defer to my colleagues on this one.
Joanna: Okay, well I think that is happy news, I am sure that everyone is very pleased to hear that that is at least one thing that they do not need to worry about, at least not immediately. I am going to stick with you though, James, as you have not given me an answer and you are clearly not being kept busy enough with Brexit related work at the moment (incredulous laugh from James). So moving forward then, what would you recommend people look out for in the future in employment law? Or that you think might be coming down the tracks.
James Hall: Okay, well I have certainly got a bit to say about this, you will be pleased to hear.
Joanna: I am pleased to hear it James (laughs).
James Hall: So I touched on this earlier, the TCA has these level playing field provisions that restrict just from making major changes to existing employment law but, they do not completely prevent changes taking place and the non regression commitment is limited to measures affecting trade or investment only. So I think I have also already said that we are not really clear what that might mean, but we are thinking that minor changes are pretty likely and so there is not going to be significant gaps opening up between the UK and the EU anytime soon. And, as James B has already touched on, we are not going to be going to the European Court of Justice for helpful decisions that can then be applied in our low level Employment Tribunals and similar courts.
But having said that, there has been lots of talk in the employment practitioner world about what changes might be coming down the tracks, so I thought it might be interesting to talk through some of those, certainly some of the key ones from my point of view that are likely to be most interesting for in house lawyers.
So the first one will be discrimination law which, as I touched on before, really was established out of EU law primarily and what we might see is a cap being applied to the compensation that can be awarded for discrimination claims. So currently it is uncapped although you know there are rules about how you work out the compensation, but there is currently no cap in the same way as there is for unfair dismissal claims, for example. So we might see something like that or in the near future. There is also the chance that there could be changes to the law regarding positive discrimination, to favour underrepresented groups since society which are not currently permissible under EU law.
There is also a chance of changes to TUPE which is a bit like Marmite, you either love it or you hate it, and some businesses find it useful and some don't and I think James B would agree that it's usually priced into most commercial agreements where it's applicable but we think there could be some sort of entries and business friendly changes such as making it easier to harmonise employee terms following a TUPE transfer, which is currently not permitted, that could be a really big change and make, sort of, or easier to bring different businesses in line with each other.
Another one could be holiday pay which can be a very, very, expensive issue for businesses who have come across that where there has been lots of recent high level EU cases which effectively said that people should be paid their normal pay during holiday which you might imagine can be quite tricky to work out sometimes.
And then this is redundancies, there are a lot of redundancies going on at the moment unfortunately given where we are with the pandemic and the state of the economy so there are rules as you may know about, when you are dismissing more than 100 employees at once about the length of time to consult, things like that, so we may see changes to that in the future.
Then finally, although I am not an immigration specialist, I think it would be silly not to mention that now we've got this new immigration points based system. So that's something to be thinking about in terms of EU and non-EU citizens who have come to the UK and how they will be treated in the same way going forward in terms of, you know, movement and right to work and things like that.
Joanna: So it sounds like the message from your point of view is watch this space.
James Hall: Exactly.
Joanna: Ok, thank you. James B can I come to you next. So from a purely commercial point of view we've heard a lot about the threats or in some cases the reality of some UK companies moving their main operations to the EU. Have you seen anything come up about the restructuring of businesses more generally in a post Brexit world I suppose, or anything that might indicate what's coming down the tracks in that regard?
James Barr: Yes, I am not sure that everybody's rushing to move head offices around the EU but certainly there is a lot of restructuring of businesses and supply chains to deal with Brexit. Essentially, what we are finding is that companies are splitting their supply chain to avoid crossing the border, so setting up warehousing and logistic arrangements in the EU and separate arrangements for the UK and obviously with that comes additional costs. The other thing we are seeing is setting up EU group companies and vice versa in the UK to deal with local registration, licensing arrangements for example, so because the regulated framework might be different and you might need a local entity to register with the local authorities, so that's very much dependent on the goods that are being supplied and crossing the border and obviously with that comes intragroup supply agreements potential distribution arrangements so putting put in place the intragroup contracts that then govern how those relationships work and a lot of that is then driven by tax as well so there are tax implications of it. I guess going forward we are likely to see that continue particularly as EU and UK law start to diverge, that's going to become more and more prominent I think.
I guess the other thing just to touch on in terms of why it is the case that not much has really happened around services, the TCA didn't really deal with it much and so again I think we are going to see a lot more. To date I think COVID-19 has sort of dampened the effect that Brexit has had on services because there isn't the free movement of people around the EU at the moment, but as obviously we come out of COVID-19 I suspect we will see a lot more effect on the services industry as a result.
Now it is very unclear as to how that's going to work or what the effect might be, it is very much service dependent, some services, legal services for example are quite localised anyway because you need to be UK lawyers, English lawyers, you can't go practicing in Germany without requalifying for example, things like that, so will have a huge effect. Other services, financial services, regulated services, it probably will be impacted much more heavily and where there is a need to move people across the border. There is a lot of stuff in the press around the music industry for example at the moment and how difficult it is for them to continue providing services and so really I think going forward that will be the things which we will need to watch out for I think.
Joanna: Thanks James B and I think those are really useful, very practical, helpful points to look out for in terms of the kind of the commercial side of things. I am just going to take it back to the purely legal side of life, if I may, for a moment. Khemi what do you think, or perhaps what do you know might be coming down the tracks in IP?
Khemi: So my main recommendation is to keep an eye out for changes to the law around parallel trade and exhaustion. I appreciate most people may not have heard of either of those things so.
Joanna: I haven't!
Khemi: I am going to explain, so parallel trade occurs where goods are imported and exported outside of an IP right holders normal course of trade when they first put goods on the market and once a business first puts their goods on the market they cannot then use their IP rights to prevent any further resale of those goods, so we say that their IP rights have been exhausted and then this creates a market in second hand goods.
So for example, Nike will sell trainers through their stores or online and I could purchase those trainers and then sell them on e-bay or a car boot sale and Nike cannot prevent the sale of those trainers on the grounds of trademark infringement because their rights have been exhausted.
So moving on to come and look at what that means for Brexit, I think prior to Brexit Europe and the UK shared an exhaustion regime so before Brexit placing goods on the market in Europe including the UK exhausted the owner's rights to prevent resale anywhere else in Europe, also including the UK, and post-Brexit the UK has maintained this position, but the EU has excluded the UK from its exhaustion regime and now treats the UK like any other third party, like the US or Canada.
So if the owner of intellectual property rights in Europe is different to the owner of intellectual property rights in the UK, the owner of the EU right can block the import of genuine goods into Europe based on an intellectual property right. So it's no longer lawful to parallel import goods from the UK into Europe without a consent of the right holder and those seeking to put goods on the market in the UK before exporting them to Europe will need the consent of the right holder before doing that. And practically I think this is going to mean that people need to review any customs procedures that they have in place and to make sure trademarks are registered with border control etc.
The reason I say keep an eye on this is because politically the current position is contrary to the motivation for Brexit, it's affording EU brand owners greater protection then for UK brand owners and so asymmetry of the position can't really be maintained, there is currently an ongoing government consultation about this issue so I do suspect it's going to change but it is obviously very complicated and rolls into a lot of the trade agreements that James S has been talking about as well, so I just think it's something to keep an eye on in coming months really and for us to bear in mind.
Joanna: Thanks Khemi. I think that's really helpful. Alex, data protection seems to me that's always a hot topic and I can't imagine that's going to change any time soon, but is there anything in particular that's Brexit related or perhaps even not Brexit related that you would recommend people look out for in the months and perhaps years to come?
Alex: Yes. The most important thing is definitely the adequacy position. The other development that the data protection world is closely monitoring is the introduction of the new standard contractual clauses for international transfer of data or model clauses as they are sometimes called. We actually have a question from the attendees about the subject. Now these are in the process of being finalised by the European Commission. They produced a draft version back in November last year. Now just to clarify these new clauses are not specifically a Brexit thing, and that they weren't caused by Brexit. They would have been introduced irrespective of Brexit as the plans to update them were already in place but now that the UK is out of the EU, the UK is technically free to publish its own standard contractual clauses for international transfers. Indeed I recently saw on an ICO social media post that the ICO is working on bespoke UK standard contractual clauses and intends to go to consultation on them in the summer. I personally can't imagine that the UK version will be greatly different from the new draft EU standard contractual clauses, but we will all just have to wait and see. The ICO said they will provide more information about their subject as things develop and give organisations plenty of notice and a grace period to adopt the new clauses as and when they become available.
Joanna: Thanks Alex. So finishing where we started then. James S, I am going to come back to you and I am going again hazard a guess that there will be a fair bit that people need to look out for might be coming down the tracks from your perspective as this is such a continually evolving area. What other kind of things that you would recommend people are on the watch for?
James: Stunt: Yes so as you mentioned the widely evolving areas sometimes change and happen very quickly and so it's never been more important for this to keep an eye out for any developments that may affect their sector. With that being said, one area which I thought is useful to keep in mind is that Brexit has resulted in a change to the UK's sanctions and export controls provisions.
So just in brief a summary to those who are not familiar with this area, sanctions broadly speaking are measures which are put in place by government to target foreign countries, companies, organisations as well as individuals to pursue the government's foreign policy objectives and they encompass a wide variety of measures. It can include embargoes or restrictions on certain goods and trade in certain goods and technology and it can also restrict or limit financial actions of sanctioned entities and it's actually we find quite broader than you would think so certain products that wouldn't think would ordinarily come under these regimes can actually end up in court if you are not careful.
So the pre-Brexit situation obviously the UK's implemented that you use sanctions policy and that has now ceased to apply post-Brexit. In its place the UK have adopted what is called the Sanctions and Anti-Money Laundering Act 2018, and essentially that allows the UK to adopt its own sanctions regime through domestic legislation.
For the time being the UK has broadly adopted its regulations that are achieve the same effect as those that are applicable equivalent EU legislation and it is also expressed that an intention to cooperate with the EU in terms of its sanctions policy but what we are advising clients on at the moment is to not assume that the UK has simply copied and pasted the EU's regime. So for example the UK regulations are often consolidated versions of the EU's provisions and there may be changes in certain aspects.
The individuals that are targeted by the UK sanctions regime have already differed from those of under the EU's and also if you are dealing with exports of certain goods then if you had a licence to do so issued by either the EU or the UK pre Brexit that's no longer valid for exporting your goods, so that's a lot of changes that have happened. But also the UK is now putting in its own regime so in July 2020 it put in place the human rights sanctions regulations and just last month it has adopted its anti-corruptions sanctions regulations and these provisions allow the UK to impose asset freezes and travel bans on individuals who have committed human rights violations or engaged in serious corruption.
So the UK is already showing its desire to push forward and develop its own autonomous sanctions regime and seem to be quite a top player on the global stage, and this is particularly relevant to people because the penalties for breaching these regulations and export control provisions are severe. So for example, breaches of an export restriction can mean that you may face imprisonment of up to ten years and/or an unlimited fine, and that can be applied to both individuals and to companies as well and that's also a step up from the previous EU regulations, the penalties and EU regulations as well and while historically the EU has been fairly reluctant to report its own sanctions regime particularly if you compare it to the US for example.
There is certainly scope for the UK to increase its enforcement act with these. So all this means is that even if it is not something that happens in your day to day activities, it is certainly important that businesses bear in mind that these provisions are there and even more so, if you are active in respect of high risk jurisdictions or products or services, so we are really advising clients to familiarise themselves with the new UK regime but not assume compliance on the basis that of the EU's rules and also to take proactive steps to ensure that their activities don't give rise to any risk infringement, so implementing sanction screening policies for example.
Joanna: Thanks James. I think you have sufficiently scared everyone there as a [laughs] a way to leave the main part of the panel. I am conscious that's an awful lot of information, hopefully useful information, but an awful lot of information none the less for our attendees to take in, so I am going to draw the panel discussion to a close in a minute to we can get into the Q&A but before I do that can I put each of you on the spot and ask for one short message that you would like to leave our attendees with today.
Khemi: can I start with you?
Khemi: Sure, I would say review your rights and check that they work for you and if you are not sure if they do come and see us.
Joanna: That's always the moto, come and see us. Alex?
Alex: For data protection I would say your efforts to comply with GDPR when they came into force before Brexit have not gone to waste, they still apply. Brexit alone hasn't brought about an overnight change in the requirements but data protection is a very dynamic area so please keep your eyes open for further changes in this area.
Joanna: Thanks Alex. It's always good to hear that all of your hard work from three to four years hasn't gone completely to waste. James H what would you say?
James: Hall: Thanks Jo. I would probably just say similarly to Alex, just keep an eye out for things that are coming down the track. I think it is interesting, for example that there was no employment bill in the Queen's speech, and one of the other things I'd probably mention is the fact that there was promise of consultation on workers' rights post Brexit which was cancelled pretty soon after it was announced, so don't be surprised if that gets re-announced - I don't think that's the right term - in the near future so yes just keep an eye out basically is the message from me.
Joanna: Thank you. James S what would you say?
James: Stunt: So from an international trade perspective I would just recommend check and double check the current arrangements that apply when clearing your goods through customs, because if you get it wrong it can cause delays, it can disrupt your supply chains and potentially cause issues with your customers and suppliers, and in some circumstances you may end up paying additional duties or incurring further costs when you otherwise wouldn't need to.
Joanna: Nobody wants that do they? And finally James B, what's your one take away message for our audience today?
James: Barr: I think in terms of commercial contracts, whilst not a huge amount has changed in how we are drafting contracts, I guess the key take away is that particularly where you are dealing with international cross-border contracts, just to really think through the provisions that you've got in that contract in a little bit more detail and, you know, does it still work, does it allocate risk and address and mitigate risk that has come about because of Brexit commercially, so whether that's dealing with delays, the movement of people, that's really the key message that I think when dealing with international contracts you just need to give the contract detail a little bit more thought.
Joanna: Ok thank you very much and on that note I'd like to open the floor to Q&A's.
We have had a few questions in already. The first question which our audience member says might be for all the James'.
"What policies or regulations might businesses need to consider particularly post-Brexit for any increased demand or remote cross border employment and also a simpler question will the recording for today be shared?" I am going to take the simpler question and say yes it will and then I'm going to hand over to my colleagues.
James: Hall: Thanks Jo. I can offer some initial high level thoughts on that. I think we might have seen, I think during the pandemic, countries such as Barbados were advertising saying come and work from home in Barbados, something like that, I think I may have seen that so that sounded tempting.
I think the key things to be thinking about here in terms of remote working, it's not really, I don't think there is any kind of Brexit impact to be thinking about but correct me if I am wrong the other James', but it's more about thinking about the tax aspect of somebody who is working in another country and things like that so I would be happy to look and offer some proper more detailed advice on this if helpful. The other thing I would note is if somebody is working and is dominantly effectively domiciled in another jurisdiction and they have employment issues that they want to raise such as, you know, unfair treatment and things like that, they will do that in the place where they are basis, if that makes sense, so we deal with a lot of UK employees who work in, you know, one or two people who might work for a US company and are the only two individuals in the UK so they would bring their claim here, so the same would apply in other countries.
James: Barr: Yes I know, I guess quite a wide question really. It is very dependent on the contract and the industry sector people are working in so yeah regulations would be whatever is relevant to your goods or services, whether that's as said mentioned, or whether that is sort of packaging labelling requirements because they are now different because we are not part of the EU or vice versa then supplying goods with the UK, so it's really just being on top of what is it we are supplying with the goods and services and what's the now current regulatory regime that applies to those goods and services.
James: Stunt: I would just echo those comments I think we are still at a quite early stage and working out exactly how these things work and at the moment things are still very specific and limited to whatever area or type of activity that you are providing so yeah it's a case of narrowing it down to what exactly you are undertaking.
Joanna: Thanks everyone. I am just looking through these questions. Khemi I have one for you.
What practical steps should we take to ensure we have the right rights in the right territory and I'm going to anticipate what Khemi's going to say first and I am going to say "speak to us", but apart from that what else would you say Khemi?
Khemi: Yes of course come and speak to us, but I think it's about if you've got multiple registrations in different territories, of you are using an agent already, work with your agents that are managing those registrations and talk to them about what you are still using. I think there are lots of brands you pre-emptively register or lots of businesses you pre-emptively register brands and then never end up using them or it doesn't quite take off in the way that they'd hoped and it is expensive to maintain trademarks so make sure that you are not paying for something that you are not using.
In terms of making sure that you have somebody who can manage all registrations in the relevant territory. In Europe you now need somebody who is based in Europe to manage and deal with any representation at the EU Intellectual Property Office and similarly in the UK it must be somebody based in the UK to deal with UK IPO as well.
So it's about just making sure you've got the right contacts, the right people to talk to you about it and then sitting down and taking the time to look at what you are using as a brand and what you are not using and what you have registered and then also really analysing the goods and services that you have got it registered for. I know that some businesses pre-emptively register really broad marks covering loads of different goods and services but there have been some rules and some case law around whether doing so when you know there isn't a real possibility of genuine use in relation to those goods and services can actually invalidate your mark. So it's just thinking a bit more cleverly about the registrations that you make and taking the time to work through them really.
Joanna: Thanks Khemi. Alex I've got a question for you.
Are you able to touch on international transfers from the UK to the US in light of the privacy shield invalidation? Do you think the SCCs are enough protection for these transfers to the US and do you think the ICO will approve the new set of SCCs?
Alex: Right, so the latter part of that question I covered in my earlier response when we were covering things to look out for. Rather the subject of privacy shield and Schrems it's a rather complicated one and I think we are still waiting for the definitive position or guidelines from the regulators in terms of what needs to be done on this. Unfortunately it's one of those case by case scenarios where it really depends on the personal data that is intended to be shared. I think on a high level we would say carry out a risk assessment and identify what data is actually being transferred, is there a need to transfer that, is there a way to not to transfer that anonymising it and then what are the chances of, or has there been pertinence of that data being intercepted or being requested by intelligence agencies etc. And then, yes use the SCCs but consider putting in more provisions, more protection for the data that is being transferred because with the SCCs you can't take out stuff but you can certainly add more provisions in.
Joanna: Thanks Alex and I hope that helps to answer that question. So we've got another one.
In terms of forum for contractual disputes is the recommendation to opt for exclusive jurisdiction of the English courts to ensure disputes are heard in the UK rather than non exclusives?
James B, I'm going to give a little bit of my answer on that from a com lit point of view and may be if you want to supplement it.
I would say certainly opt for exclusive jurisdiction if at all possible. It makes life an awful lot easier once you get into the rounds of a dispute that is of course if you want it to be heard in the courts. If you don't want it to be heard in the courts we need to be looking at something like an arbitration or something else, another jurisdiction clause. But generally, yes. I would say, clearly depending on your contract, both or exclusive jurisdiction rather than non-exclusive.
James: Barr: Yes I think I would echo that. So in reality I don't think it's really changed necessarily our advice on how we deal with jurisdiction clauses. The basic position is you would probably want to choose exclusive jurisdiction of the English courts anyway even pre Brexit. I guess what it has done is meant that because we are no longer part of the EU whereas in international contracts outside of the EU we would probably want to think about arbitration rather than jurisdiction, a court hearing dispute. I guess that what it is doing is pushing us towards potentially choosing arbitration for EU contracts not just sort of global contracts but yeah it definitely exclusive over non-exclusive and the question whether you should probably be going for arbitration.
Joanna: That's all sorts of things to consider. There's one for you James S.
"Apart from paying customs duties, are there any other issues my business might face in placing our products on the market in the EU or the UK?"
James: Stunt: Yes so some of the areas that we are seeing an increasing activity is non-tariff regulatory barriers to trade and that's part of navigating the EU regulations and how they diverge from UK regulations. So one of the areas we have seen this coming up is that obviously the UK no longer being part of the EU it's treated as a third country for purposes of the EU regulations and this means that certain EU regulations, I think a machinery directive for example, and various other ones, regulations such as these which have specific activities which manufacturers have to undertake or authorised representatives of manufacturers have to undertake and some of these require that there is a EU presence and some of these activities are carried out in the EU in order to ensure that products meet the specified safety requirements.
So I think practically that may pose a barrier to some UK businesses and gives rise to the need to double-check the regulatory provisions that apply to their products to ensure that they can continue to carry out the functions that are necessary when trading in the EU or otherwise investigate how to modify their supply chain and it's one of the things that James B has talked about earlier on.
There is also a change in terms of the CE marking provisions that require certain products so the UK has replaced the EU CE mark which confirms that a product complies with relevant product and safety requirements and it has replaced it with its own UK mark the UKCA. You are able to put both the CE mark and the UKCA on your products up until, I think it's 1 January 2022 at the moment, but that is currently subject to the standards for product conformity an assessment remaining the same between the UK and the EU and it is something that we touched upon earlier whereby there is a potential for the standards of the EU and the standards of the UK to diverge, so compliance with one standard might mean that a product is not compliant with the UK and of the EU standards, so again, it's something for businesses which require CE marking or product safety labelling for their products to keep an eye out for and keep looking out for in case these things do change.
Joanna: Thanks James. James B. I've got a question for you. That's an interesting one.
Are references to EU legislation in commercial contracts now wrong?
James: Barr: Good question. So I think the answer to that is no, not necessarily. From a commercial contracting perspective you can agree whatever you want to agree in the contract under English law, so, and it's quite common in international contracts for example to have references to local insolvency legislation for example to determine if the entity is insolvent under their own legislation. So to having a reference to EU law in your contract is not necessarily wrong but it just may not make much sense if you are talking, if it's a UK domestic contract, but it may of course be perfectly sensible to have that EU reference if it is cross border so an obvious example would be TUPE for example, where in the UK if it's a UK contract you would probably want to talk about TUPE whereas if it's in the EU cross border, it might be you want to be talking about the acquired rights directive. So I think it very much depends on context and again it's back to that point of really when you are going through your commercial contracts, just giving it a bit more thought as to whether that is actually the appropriate reference that you should be having in your contract.
Joanna: Thanks so not a blanket no which is … or yes as the case may be which is always nice to hear I think.
James: Barr: It depends.
Joanna: It depends, yes sorry we do like to give that answer. So I think we've got time for probably one more, it's probably quite a good one to end on actually as it is quite general I think. So anyone who has got any thoughts please jump in.
What do you think is the most significant legal change that has been or could be made post Brexit?
I'm going to start by saying from my perspective as a litigator the enforcement of judgements in the EU and probably also service of proceedings is not as quite straightforward as it used to be but I am going to throw that over to the panel. Does anyone have any particular thoughts on that?
James: Hall: : Well I'm happy to just jump in and repeat may be a little bit of what I said earlier but I think potential changes to TUPE. James B has just talked about it as well but that could be huge because as things currently stand, you know, after a TUPE transfer if you want to harmonise employees terms and conditions you can have some real issues with that because you might effectively need to be dismissing employees and re-engaging them and that could be void of the result of the transfer and all sorts of issues like that so if that is removed in the future it would certainly be, I think, a really positive change that Brexit, you know, effectively facilitated.
Joanna: Thanks James.
Alex: I would just add to that. I think GDPR was in itself a very legal change for everyone so I don't think anything of that magnitude is in the pipeline any time soon, but as I mentioned earlier data protection is a pretty dynamic area so I think we all need to be on the lookout for certain developments within the framework of GDPR going forward.
Joanna: I think that'll be welcome Alex, I can't imagine anyone fancies going through GDPR mark 2 five years later so I think that'll be welcome news.
James: Barr: I think that is generally the main point here is that but actually it's at the moment we retain a lot of the EU law, so really a lot of this is going to be about waiting and watching and seeing what happens going forward as we start the regulations and the law starts to diverge so it's a little bit of an unknown I think at the moment.
Joanna: Khemi did you want to say something?
Khemi: Yes I was just going to say what James B has just said and say it's all about where we start to move away from EU law so in terms of IP a lot of our case law is very heavily influenced by EU court decisions and that's because the rights have been quite heavily intertwined and they are all very similar so the legislation itself can be similar. I think that IP is designed to adapt to new technologies in as new technologies start to be created and as may be the UK starts to take a lead in certain areas it might need to start developing a different case or different regimes to protect those rights and so it's not necessarily going to be immediate but it certainly something that we could see happening in the future, I think it is just keeping an eye out for it really.
James: Stunt: I think I will just make one extra, one point that sort of bounces off what Khemi says there is that obviously if the UK has retained a lot of the, as we have said, the EU's law and that is workable from an EU context then I think what we are going to see in the future is that certainly a lot of the UK domestic legislation and regulatory provisions apply in respect of products may have actually have to change because in order to reflect the realities of the UK market. So I think we are still in the early days and seeing how all of these provisions are transposed now into a domestic UK legislation but it's a watch this space scenario again.
Joanna: Thanks and we are coming up to 12 on the dot now so I think that's a good place and a good message to leave it on so thank you very much for coming, thank you very much for all of your questions, I am aware that there are a couple of questions that we didn't manage to get to but will pick those up off-line so to speak. Thanks very much.
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