Brexit Lawsuits Have London Courts Racing Against the Clock

LONDON (Capital Markets in Africa) – Britain’s judges have gotten used to lawsuits from remain supporters trying to frustrate Brexit, with varying degrees of success. Now, with Brexit potentially just weeks away, they’re grappling with a new breed of cases, from companies that need urgent decisions on the consequences of the split.

Lawsuits that need to be heard before the U.K. leaves the European Union have been hurtling through the courts. The latest is a trial starting Fridayover three government contracts to provide back-up ferry services in a no-deal Brexit, one of which went to a startup that didn’t own any ships.

That suit brought by Eurotunnel — which operates the undersea link between the U.K. and mainland Europe — was only filed Jan. 25, but it’s already reached trial after the court agreed to expedite it.

A case like that would normally take about 18 months from filing to judgment, according to Gideon Cohen, a London barrister who co-founded Solomonic, which analyzes litigation data. It’s even getting started on a Friday — unusual in Britain — because of its “somewhat obvious” urgency, judge Peter Fraser said at hearing in February.

Brexit cases are reaching trial faster than other lawsuits that don’t have the same urgency, as the courts grapple with the need for quick answers to corporate disputes and reorganizations triggered by the prospect of departure, before the split has even taken place. It’s a marked difference from an earlier wave of more political lawsuits — ranging from a successful bid to force a vote in Parliament on triggering the departure process to a failed bid by campaigners to challenge the referendum result.

Working Fast
“What it comes down to is that the legal landscape reflects the turmoil in the political landscape,” said Jonathan Kelly, a lawyer at Cleary Gottlieb in London. “It’s holding up a mirror to some of these issues.”

If the courts are hurrying to deal with Brexit, progress through Parliament remains slow. Prime Minister Theresa May this week conceded that exit day on March 29 may need to be postponed as she tries to get her withdrawal deal through Parliament. Another series of votes by lawmakers is scheduled starting March 12.

“The English courts are used to prioritizing things that are urgent,” said Mona Vaswani, a lawyer at Allen & Overy in London. “They can work very fast when they need to,” whether that’s because of Brexit or the need to freeze assets when fraud is suspected.

Cohen says that after the U.K. actually leaves the EU, the courts may have to deal with more lawsuits than were filed in the wake of the 2008 financial crisis.

Judges are now “having to set aside time to deal with emergency issues that come up,” Cohen said. “You’d only see a true mass of Brexit claims after it happens.”

‘Secretive, Flawed’
The Eurotunnel suit centers on allegations that the U.K. government used a “secretive and flawed” process when it awarded three freight shipment contracts, one of which has since fallen apart. The startup company that had the contract didn’t own any ships. Eurotunnel argues it should’ve been given a chance to bid.

It comes after a dispute between the European Medicines Agency and its London landlord, the Canary Wharf Group, over the agency’s Brexit-related relocation to Amsterdam, was tried in January, just six weeks before the scheduled March 29 departure date. Judge Marcus Smith ruled in the landlord’s favor on Feb. 20. A case like that would normally take more than twice as long to get from first filing to judgment, Cohen said.

In addition, banks and insurers — such as UBS Group AG, Aviva Plc and Barclays Plc — have lined up in recent weeks for permission to transfer parts of their business out of the U.K. because of Brexit. Under U.K. law, those institutions have to get the plans approved by a judge, under a process known as a Part 7 transfer. Judges have become all too familiar with that process.

“I’m becoming quite used to them, having done quite a lot of them,” judge Richard Snowden said while scheduling an unrelated trial in February.

Source: Bloomberg Business News