Eversheds: start planning for hard Brexit

By Gwen Ridler

- Last updated on GMT

Without a deal, businesses will need to prepare for a hard Brexit
Without a deal, businesses will need to prepare for a hard Brexit
Food and drink manufacturers need to start implementing their no-deal Brexit contingency plans, legal firm Eversheds has warned, as the threat of a hard exit from the EU draws closer.

The comments followed Prime Minister Theresa May’s defeat in the House of Commons last night, with her Brexit deal rejected by 230 votes.

With no deal in place, the UK will default to crashing out of the EU on 29 March said Eversheds partner Ros Kellaway. As such, businesses needed to prepare for the possibility of a hard border in Ireland, increased tariffs and delays at customs.

‘Fill the vacuum’

“It’s tempting to feel, with the withdrawal agreement having been voted down, that something else will definitely arrive to fill the vacuum,”​ said Kellaway.

“As a matter of law, the default position is we will leave without a deal under the legally binding EU Withdrawal Act 2018, which stipulates what the exit date is. Therefore the key message is that the prudent course for all businesses is to be prepared for a hard exit.”

The rejection of the Prime Minister’s Brexit agreement has now created huge uncertainty among businesses and industry. This included the loss of a transitional period and the ability to extend it.

Impact on supply chains

Kellaway advised businesses to overview their supply chains and the possible impact a hard Brexit might have on them. Aside from challenges arising from borders and customs, she urged companies to review their corporate structures to make sure they could still trade post-Brexit

“That includes things like: will your corporate structure be recognised by law, especially on issues of liability?”​ she added.  

“Unless the withdrawal act is amended to change the exit date, which would require an agreed extension of the notice or unilateral revocation of the notice, it is really essential that everybody is implementing their hard Brexit contingency plans.”

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