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Brexit for Software Consultants

Q. In the event of Brexit happening (both May’s deal and no-deal), what will the impact be on supplying software consultancy/dev services to clients in the EU compared to now?

A. Brexit has created uncertainty for contractors in the United Kingdom particularly in relation to contractual arrangements with their clients who will continue to remain in the European Union.

Contractors are advised to review their current contracts in the event of a no deal Brexit as it may affect the enforcement of contracts where sections of the contract have clauses which are not subject to the law of the United Kingdom.

The British Government has indicated that should there be a no deal Brexit the British Courts will continue to implement the standards set out in Treaty of Rome I and II. These regulations cover the choice of law for contractual and none contractual obligations. The status quo is likely to continue for the time being.

The British Government has stipulated in the event of a no deal Brexit the Government will intend to repeal the Recast Brussels Regulation. The Government will instead attempt to ratify the Hague Convention on Choice of Court Agreements, which provides a charter of rules in relation to exclusive jurisdiction clauses and the acknowledgement and enforcement of judgments of such clauses.

It should be noted that any ratification would only apply to contracts entered after Brexit happens. The Government has not made clear what rules will apply to contracts signed before that date, nor to contracts which do not contain an exclusive jurisdiction clause. One option is for the British Government to re-ratify the Lugano Convention. This is because it comparable to the Recast Brussels Regulations in relation to the treatment of jurisdiction and enforcement of court judgements.

Readers are advised to keep an eye on the UK Government’s guidance on a “no-deal” Brexit which is available on the GOV.UK website. The guidance will change as Brexit evolves.

This answer was provided by Quest.

By Contractor Doctor

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