Brexit could lead to a legal quagmire, warns top lawyer
Firms are seeing a bounce but pain lies ahead, writes Fearghal O'Connor
A no-deal Brexit will only be the start of the pain from Brexit, as a major legal quagmire lies ahead for the EU and the UK, the head of one of Ireland's law firms has said.
Declan Black, the managing partner of Mason Hayes Curran, said that although legal firms and other professional services firms have experienced a bounce due to Brexit-related relocations to Ireland, he expects there will be "a price to pay" when Britain actually leaves the EU.
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"I am nervous about the fallout from a no-deal Brexit," he said, adding that clarity is urgently needed about how Ireland will manage a land border with a non-EU member state.
"That is going to be painful but we need to face up to our responsibilities as a member of the EU and we can't have it every way. It's going to be difficult and obviously will have to be handled very sensitively but it will have to be done."
A major international legal mess could unfold in the years following a no-deal Brexit, he warned.
"If, for example, you had a judgment of the European Court of Justice in favour of the EU, finding that the UK owed it X billion euro, and the UK did not accept that, well then you would move to enforcement. So would the EU be looking to sequester UK assets throughout the EU while at the same time trying to repair a political relationship?"
That, he said, would risk a situation whereby "political capital is to be made by adopting a hardline position, not an accommodating or compromising position".
"And the people who suffer in hardline scenarios tend to be the general populace," said Black.
Black said that although law firms tend to mirror the economy and do well when things are on the up, a crisis can lead to a lot of restructuring work and insolvency-related work.
"Where law firms and professional services firms generally tend not to do well is in a slow decline, where there is just a reduction in overall activity. I would be concerned that Brexit may lead to this type of situation and that will be bad for professional services," he said, adding that so far, law firms are seeing a Brexit bounce.
"We are seeing a very steady stream of relocations from the UK to Ireland, increased footprints, and FDI wins that are coming to Ireland, rather than going to the UK. It's not done dramatically, because organisations are more savvy than that. Nor are people closing down in the UK.
"But if they need to scale up by, let's say, 100 jobs, and they have a choice as to where to put them, well they are choosing to switch them away from the UK." This allows firms to say that they are maintaining their presence in the UK, he said.
"But what the UK is missing out on is the aggregate increase. Ever since the referendum, you've seen an increasing comprehension and uptake of that in business terms and that's been very good for Ireland."
Sunday Indo Business