Brexit, May, Trump and Opportunities in ‘Interesting Times’

Brexit, May, Trump and Opportunities in ‘Interesting Times’

The familiar curse, ‘may you live in interesting times’ (often ascribed to Confucius but a typically English phrase) may be something which the world can now truly understand.

Change is difficult – the decisions of voters have affected policy changes in the UK and the USA throughout 2016, resulting from shifts following the combined effect of the Arab Spring and Credit Crunch. This has led to realignment and reconfiguration of the political and economic maps of the world.

In addition, 24 hour news and the instant delivery of updates online drive continued uncertainty. There is barely a moment to consider one news development before another one takes its place.

Theresa May gave a speech on 17 January, ahead of the inauguration of Donald Trump. On Friday 20 January, there were mass protests against his policies all over the world and over the weekend the “tweet-happy” President added to the storm by hitting back at the Media. Next Friday, 27 January, May will meet Trump for the first time; a week after one of her backbenchers interviewed him for the Times – that was certainly interesting.

10 years ago, 2016 would have seemed like a plot from The West Wing.

The PM’s Brexit 12 Step Program

While many commentators focused on May’s indication that there will be a withdrawal from the Single Market, if you review the words she used, she  at least attempted to provide certainty, clarity and focus on the future for Britain, albeit in terms of aspirations.

Her 12 step program includes headings of: Certainty, Control of our own laws, Strengthening the Union, Maintaining a common travel area with Ireland, Control of immigration, Rights for EU Nationals in Britain and British Nationals in the EU, Protection of workers’ rights, Free Trade with Europe, New Trade Agreements with the world, The UK as the best place for Science and Innovation and Cooperation in the fight against crime and terrorism – all in order to achieve “a smooth, orderly Brexit“.

May’s speech was hopeful and optimistic in tone, more open to the world, rather than aligned with Europe; somewhat in contrast with Trump’s inaugural speech promoting protectionism and ‘America First’.

Whether or not the Prime-Minister’s hopeful approach is more successful, only the uncertain future will provide us with the answer as it unfolds.

What are the opportunities?

The Prime Minister has singled out innovation and technology as one of the UK’s biggest selling points. This could be a real opportunity for our home grown industry to expand on the global stage. However, if this is to be our most ‘invested in’ sector, it is worth bearing in mind that successful companies will always be susceptible to takeovers from one of the UK’s global rivals. It was only last year, just after the Brexit decision, that the UK’s former largest tech firm, ARM Holdings, was sold to Japan’s Softbank.

If the UK is to succeed, we should also consider our other strengths; such asfinancial services  and the broader services sector. 

From a lawyer’s perspective, codifying the body of existing EU law after repealing the European Communities Act 1972 (which incorporates EU law into domestic law) should provide certainty and hold the status quo pending new legislation and policies being debated and changed by parliament.

This is undoubtedly good for the legal services market, which relies, in part, on the certainty provided by our legal system. Only three of the 100 most successful law firms in the world (based on revenue) are based outside the USA or the UK (and one of those three is part owed by a US firm)*. 

The successes of the UK and USA in the world legal services market are  driven by many factors which include  respect for our judiciary (in terms of certainty of outcome),  the rule of law, the efficiency of our legal system as well as the range and quality of expertise which the legal profession in the UK attracts. Many businesses trading internationally will opt for their contracts to be governed by English law.

Risks to the Legal Services Sector

However, other countries around the world also have highly developed legal systems which increasingly compete with the UK. If there is rising uncertainty generally in the UK and the USA, the UK legal sector cannot afford to be complacent.

While the UK’s court system is highly respected, the infrastructure must be renewed, there needs to be better use of technology and Judges should be afforded more time to deal with each case. The way in which the Supreme Court dealt with the case in R (on the application of Miller and another) (Respondents) v Secretary of State for Exiting the European Union (Appellant)), demonstrates that on issues of critical national importance, the system, at its highest level, does have the capacity to deal with cases swiftly and using technology in an innovative way (such as live streaming from the court room). The challenge for the Ministry of Justice is to ensure that all cases, including those lower down in the Court system, are dealt with efficiently.

The risk for the legal sector in the future, then, is that the UK Government continues to  cut budgets within the Ministry of Justice, following austerity measures put in place before the EU referendum. By continuing its program of closing courts, potentially increasing court fees further and failing to invest in critical infrastructure, the UK risks undermining one of its best exported industries.

The decision in R (on the application of Miller and another) (Respondents) v Secretary of State for Exiting the European Union (Appellant) regarding the government’s power to give notice under Article 50 without an Act of Parliament, was handed down on 24 January 2016, in which the government lost its appeal by a majority of eight to three.

While this gives some certainty about the procedure involved, it provides an opportunity for opposition parties in the House of Commons to slow (and potentially complicate) the government’s Brexit negotiations. This could mean that Prime Minister’s plans for a ‘smooth brexit’ are more uncertain that she hoped.

Whatever next Friday or the future holds, it will certainly be interesting.

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