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Ill-defined legal terms likely to cause post-Brexit problems, advisory group cautions


Words and phrases introduced in EU legislation could cause confusion and disruption for UK judges if the terms' meanings aren't agreed on before Brexit, according to a letter sent this week to the Ministry of Justice by an advisory group of legal experts.

The letter details the concerns and advice of the Financial Markets Law Committee (FMLC)’s Advisory Group on Brexit, whose Working Group has worked for the last three months to discuss problems related to a lack of precision in EU legal terminology – all of which, come Brexit, is set to be incorporated into domestic law as a result of the European Union (Withdrawal) Bill.

The role of the FMLC is to identify such issues of uncertainty or misunderstanding which might give rise to material risks, and to consider how such issues should be addressed.

"Where the meaning of terms is not fixed by exit day – or their interpretation is discussed and adjudicated upon by the European Court of Justice post-Brexit – there remains ambiguity as to how UK courts should proceed," according to the letter signed by FMLC Chief Executive Joanna Perkins, on behalf of the Working Group, which includes the expertise of Professor Arad Reisberg, Brunel University London's Head of Law.

Such ambiguity has been caused in the past by the financial terms 'derivative', 'spot' and 'insider' not being defined well enough in EU legislation.

"If terms such as these are open to interpretation, the knock-on effects are likely to be worse than you would imagine," remarked Professor Reisberg. "There will be an increased likelihood of inconsistent first-instance judgments, and lengthier-than-usual waiting times for hearings at the Court of Appeal and Supreme Court.

"The Withdrawal Bill further complicates the situation by saying that a court need not have regard to anything done on or after exit day by the European Court, but may do so if it considers it appropriate to do so. And it offers no guidance about how these terms should be interpreted." There are concrete examples from the corporate law area, some of which are from Professor Reisberg’s research in this area, which are included in the letter.

The FMLC's letter therefore recommends that HM Government:

  • applies careful thought to the practical use of the 'appropriateness' test
  • provides the judiciary with principles to help with consistent evaluation or with interpretation of terms
  • makes independent provisions which can guide judicial deliberation.
Read the full letter here.

Reported by:

Joe Buchanunn, Media Relations
+44 (0)1895 268821