 Felly, mae'n gwybod a'r cymdeithasol o'i ddweud y Chyfbryd, ein gwybod i'r cadw'r gweithlach, yw Sarah Worthington, ac rwy'n ddod i'n gwybod i'n gwybod i'n ddiweddiol i'r Ffwrdd Llywodraeth Cymru gyda'r Llywodraeth Cymru. Ychydig, mae'n ddwy'r llwydd yn ei ddim yn gyflwyddol ac mae'r Cyfryd Llywodraeth Cymru gyda'r Llywodraeth Cymru. One of the Centre's ambitions has been to facilitate informed and challenging public debate about some of the fundamental and significant legal issues we face. So tonight's lecture, given by Anthony Parry, really fits the bill. I'm not doing formal introduction, that will be done by Nigel Rodding, a partner at Freshfields, and a keen supporter of the faculty's various endeavours. But it is my place to welcome both Anthony and Nigel to the faculty, back to the faculty for both of them tonight. Before I hand over to the main event, there are a few housekeeping matters, but very few. Anthony will speak for about 40 minutes, maybe slightly longer, so there will be time for questions at the end, and then even more time for questions over drinks after the lecture, and you are all invited to drinks. So without more ado, I'll hand over to Nigel Rodding, but welcome. Thank you very much indeed, Sarah, and welcome from me too to everybody to this fourth annual private law centre lecture, which we have sponsored. I've got the great privilege and pleasure of introducing this year's speaker, and I'm delighted to say at the outset that after three false starts, where the apologies to Lord Newburger Wood Hoffman and the Honourable Michael Kirby, Sarah and I have now been able to find a speaker who studied law at Cambridge. So we're off to a good start already, I'm sure. Anthony is not only a Cambridge graduate, in fact, he also grew up in Cambridge. His father, Clive Parry, was a professor of international law here. Anthony tells me that Clive was something of a Eurosceptic, and father and son would often engage in fierce debates about the merits or otherwise of membership of what was then called the common market or the EEC, and from the sound of it there was a bit of thrust as well as parry in the household on those occasions. Now that was a ffensing joke, by the way, and you don't hear many of those, and there's probably a good reason for that. Thus, those early encounters didn't dissuade or deter Anthony from writing with Stephen Hardy, one of the first textbooks on EEC law. Then, after taking a master's degree in that subject at Brussels University, Anthony joined the legal advisers team at the Foreign Office where he worked for a number of years on European law issues. Anthony subsequently joined British Aerospace, as it was then called now BAE Systems, as its European director working on BAE's programme of mergers and acquisitions as well as on trade law issues for the Airbus partnership, of which BAE was then the UK member. Until the summer of last year, Anthony was the focal point for legal advice on how much this treasury on European law and trade law issues. He also led for HM Treasury on judicial review cases and European court cases. He undoubtedly has a unique combination of government and private sector experience when it comes to European law issues. At this point, I should declare an interest. As the event sponsor, you may think it comes a little late for the business of declaring interest, but I should say that Anthony is now also a colleague having joined Freshfields immediately after he left the treasury in the summer of last year. He works with us as a consultant on Brexit and trade issues amongst other things. As I hope you are about to discover for yourselves, we are very fortunate indeed to have him. What could be more fitting than a discourse on Brexit taking place on Pancake Day or Shroff Tuesday, as it used to be called and by some still is? This, of course, is an important day in the Christian calendar. An opportunity to feast on ingredients thought to represent the virtues of creation, purity, nourishment and wholesomeness, I have informed myself, before giving up such things and many others for Lent. Those of other faiths and those of no faith at all may also welcome the opportunity to give up talking about Brexit for the next 40 days. Just imagine that for a moment. What on earth would we talk about? Either way, I have no doubt Anthony will send us on our way looking for new subjects of conversation over dinner in the pub, elsewhere no alcohol or chocolate either during the period of Lent with plenty to digest in the meantime. Anthony's chosen title is Under Threat, which has a question mark. I know you can't see that, but it has a question mark under threat. Safeguarding the future of English law and the English courts after Brexit. Please join me in welcoming Anthony. Thank you. Thank you very much, Nigel Sir. Thank you very much for these kind introductions. Just before we came in here, I was speaking to Professor Tensman and that really made me realise that what I'm going to talk about is about the future fundamentally of this law faculty and young people who come out of this law faculty, many of whom 75% I believe go into the legal profession once they graduate. Most of them go into become solicitors although about 10% I believe go to the bar. Not to say there aren't other career opportunities using your law degree. That includes government service like myself going to the foreign office or the home office. There are opportunities also in international organisations, maybe the EU not so much anymore after Brexit. And the third sector as well seems to be popular, charities and voluntary organisations. But of course you don't have to use a law degree directly. You can go on to be, I think we all used to laugh about this but you can go on to be an accountant or a banker or a journalist or a teacher. It says on your website that you would be following in the footsteps of many other Cambridge law graduates and following that sort of career path. So I wanted to colour these options a bit by telling you a bit about my own career path which Nigel has sketched in a little bit already. It wasn't so much that these options I've just referred to were alternatives, it was more the case that they were cumulative and I think that fits in very well with our understanding these days that you have to think about changing a career every five years in this modern world. A bit like software really. My career really has spanned the whole arc of the European community membership of the UK. I wasn't perhaps exactly there present at the curation but near enough to that. When I read law at Cambridge I didn't think anybody knew what the common market was and most people confused it with the Council of Europe in Strasbourg. I suspect that confusion still continues for some people. On graduating I was fortunate enough to be offered a Wiener and Sparks scholarship. Highly recommended, very valuable to study at Brussels University studying European law and that was to some extent my ticket to the foreign office where I worked with a bill team that was working on what became the European Communities Act 1972. Then, as Nigel says, I spent some time at British Aerospace, some time at the Treasury and then press fields were kind enough to invite me to join them to work on the future of I suppose nothing less than the UK legal profession in a post Brexit environment. I really want to talk about the future of English law, the future of the legal profession and also about English courts after Brexit and to some extent these things interweave with each other. So you'll forgive me if there's an element of coming back to some of the same issues there. I want to start though by talking about the issue of sovereignty because I think that says a great deal about the role of our courts and our future relations with other nations. I want to start though with an anecdote. Recently, I watched the television series The Tudors, I don't know whether any of you saw that. I thought it was a fantastic mixture of costume drama and potted history. There was also a fair bit of sex in it but then that's not very surprising because basically what it was about was the story of England's King Henry VIII and as everybody knows he had six wives, divorced, beheaded, died, divorced, beheaded, survived as the rhyme goes. But the underlying theme throughout Great Harry's reign on television and in reality was the shifting alliances between England, France, the Empire and other European powers always with the Pope, the vicar of Rome in the background. So one year there was a dynastic alliance with France as being the objective. The next year it was well let's challenge Spain and rely ourselves with France and then back again. Now it's this iterative pattern of relations between states which remains central today. I don't think that has really changed. Actually you should be forgiven for thinking that perhaps there are parallels between Henry's experiences with the papacy, with the reformation and Britain's uneasy post-war relationship with Europe and with the European Union. After Brexit we are told by the Prime Minister that the UK will have an equal partnership between an independent self-governing global Britain and our friends and allies in the EU. So what is the basis for the new relationship? Well I suppose it will be some kind of agreement. What the Prime Minister has said is that she wants a bold and ambitious free trade agreement. So this is another in the series of international alliances. I thought a bit about what the International Court and before it the permanent Court of International Justice had said about the sources of law and international relations. First and foremost the statute of the court says you apply international conventions provided they're expressly recognised by the contesting states. There are other sources of international law but they probably pale into insignificance when you set it against the tidal wave of what Manly Hudson referred to as international legislation. I.e. all these treaties which have poured out of international organisations as part of what you could almost describe as the post-World War II settlement. Now what was it that underpinned this system of international relations? I'm fairly persuaded that what it is is an understanding about principles of justice as fairness. There are philosophers who subscribe to what I believe is referred to as the Rawlsian principles of justice as fairness and that seemed to need to be a fairly good description. But this compact really, the post-war understanding here seems to be breaking down in much the same way as it broke down it has to be said in the run-up to the First World War and we seem to be shifting back away from globalisation and towards de-globalisation. This is really led by the new United States President who is widely described as taking a transactional approach to international relations. He says he intends a certain realignment at the geo-strategic level. He's ordered the United States to withdraw from the Trans-Pacific Partnership and he's questioned the United States commitment to NATO, the WTO and other multilateral institutions which the United States has underwritten for the past 70 years. On the other hand, you can see how Britain's decision to withdraw from the EU really has echoes in other member states of the European Union referring only to those who have got elections in 2017, the Netherlands, Italy, France, Germany and others that I could prefer to the visa-grad group as well. So you have to ask yourself whether there isn't a bit of a shift in the meaning and practice of international law. From a general code, we now seem to be looking at it not so much as a framework for fair contact as an arena in which the great actors stake their contending claims. Whatever the case, much of the Brexit debate was about taking back the UK's parliamentary sovereignty. Theresa May in her Lancashire House speech referred to the principle of parliamentary sovereignty as the basis of our constitutional settlement and says that supranational institutions, as long as those created by the EU sit very uneasily with this. Now I have to say that the doctrine of supremacy of European law long predates the UK's accession to the common market. In your EU law 101 class you must remember the Van Gent and Loos case which said that member states had limited their sovereign rights in favour of the EU. So you'll also remember that that case dates not from 1983 or 73 but from 1963. All of this was very well understood by the Labour government which started accession negotiations in 1967 and by the Conservative government which took the UK into the common market in 1973. In fact I suppose I must have made these very points to the government when I was a junior member of the Bill team back in 1972. Whatever the case, there's been a tendency laterally in the Brexit argument to say oh yeah but we never, we didn't sign up for supranational organisation as it has emerged on the back of the Siegel European Act which was in 1986 and the Maastricht Treaty 1992 and this is where the UK is now drawing a line in the sand. Well I think you can argue about that and also I think it's interesting to look here at the judgments in the Miller case, the Supreme Court, a recent Supreme Court decision. I've said something about this in the paper which I imagine may appear after this evening on your website. So I won't go into that beyond saying that the majority of the court took the view that the 1972 act was unprecedented and unique in its effects and this could only be dealt with by action of parliament which in fact is taking the form of I think one of the shortest bills on record to give Parliament's consent to the issuance of the article 50 notice. Of course Lord Reed dissented from the view taken by the majority and I think that really it's beyond my remit to debate with you which is the better view there but probably you'll come back to that in later courses here. Certainly the proper construction of the 72 act remain interesting questions for debate. Let me go on then to look at the consequences of leaving the EU for our domestic legal system and specifically the consequences for the provision of legal services, choice of law and the choice of English courts to resolve disputes. Of course there's a huge internal market for legal services in the UK but this is driven by people going about their everyday business of living, working, buying property, renting houses and dying as well. There's also a huge commercial component with a purely domestic content, sales of goods and services, commercial leases and so forth as well as a big component of government regulation of one kind or another. None of this activity has to do with Europe in any direct sense but equally across very wide ranges of activity both private and commercial and regulatory the relevant law will be European law or based on European law or influenced by European law and that European law as you know has effect in the UK by virtue of the European Communities Act 1972 or by instruments adopted under it or in some cases by certain discrete statutes all of which provides the conduit pipe in the words of the Supreme Court in the Miller case through which EU law became part of our UK domestic system. Not to suggest though that the influence of European law on domestic law began in 1972 as Lord Newberger pointed out when he delivered his lecture on the British and Europe to this very audience in 2014 there's been a long and fruitful history of cross-fertilisation between common law and the continental legal systems which predates our membership of the European community by several hundred years. As Lord Newberger said, our legal history should be viewed not as one of splendid isolation from the continent but rather one of splendid synthesis. The full extent of the EU's contribution to that synthesis in recent years is shown by a House of Commons study which shows that there was something like 19,000 legislative acts currently in force including some 5,000 regulations. Now I think this figure is actually somewhat exaggerated because it includes quite a lot of amending legislation but you're still left with around a thousand pieces of substantive legislation which apply in the UK. The government has announced that it will introduce a great repeal bill this summer to repeal the 1972 act and to make provision for the EU ache that is the body of existing EU law and obligations to be converted into UK law wherever practical and appropriate I believe they're referring to this as on-shoring in a nice bit of modern jargon. So European law will become UK law not just in its effect but in fact as well. There's going to be a whole question about how our courts will view this law in the light of the jurisprudence of the European court. The government has been very clear that post Brexit the UK would no longer be subject to the jurisdiction of the court but beyond that we don't know exactly how the courts in the UK will take account of existing or future European jurisprudence but in short all of existing European legislation will either be domesticated or repealed so far so good. My immediate concern is with the use of English law internationally I said something about how English law had its separate existence from European law and how European law overlays it and how the new act will in effect assimilate all that European law into UK law. What happens to international parties choosing English law to govern their contracts and using the English courts to resolve their disputes? There's been a huge expansion of this activity I've experienced this personally since Big Bang in 1986 this was when the financial institutions were liberated from hitherto very restrictive legislation. The reasons for the choice of English law have little to do with the membership of the EU so one could expect that the choice of English law and English courts by international parties should not be affected by Brexit. Nevertheless there has been an attempt in sub quarters to suggest that Brexit may undermine the future attractiveness of English law and of this jurisdiction as a forum for resolving disputes. There are a number of steps that can and should be taken to mitigate that perception and it's those that I want to try and explore further today. One obvious measure of the popularity of English law and the English courts system in general is the success of the UK legal services industry. Lot of statistics here. Three billion trade surplus in 2015 1.6% of GDP is provided by legal services in the UK that compares with a mere 7% accounted for by the national health. I'm not sure how I correlate those two figures almost as many lawyers as doctors does that mean? I'm not quite sure. Nevertheless all of this potentially is put at risk by Brexit. What could this mean for lawyers and for provision of legal services? At the moment the EU single market gives UK qualified lawyers who are also EU nationals near complete freedom to provide legal services in other member states. Without this framework UK lawyers and that means you as future graduates I expect seeking to work in the EU would need to comply with local rules governing access to the legal professions. These differ from member state to member state. This access is crucial to the UK legal services sector's future success. Let me say something about the basis for the single market and legal services. It's founded on three key lawyer specific rights derived from the treaties and from directives. First of all the free movement of legal services laid down in certain inner directive. The right of establishment for lawyers and the mutual recognition of professional qualifications. In a scenario where the EU rules cease to apply we'd be thrown back on the WTO rules. Well but what are they? The WTO rules are something called the general agreement on trade in services and that says almost nothing about freedom to provide legal services. And it is essentially a matter of concession by individual parties to the WTO what restrictions they are prepared to waive. Concentrating on the loss of the rights which are provided under those three headings by EU law in a worst case scenario we would see UK lawyers as being able to provide advice only on UK law and public international law via telephone and teleconference and not by way of visits to clients on the continent. They would no longer be able to give advice on EU law to clients based in mainland Europe. They would lose their rights of establishment in some jurisdictions in mainland Europe. They would not be able to practice EU or local law unless established in mainland Europe and UK and continental firms would find it significantly more difficult and less attractive to con lawyers in and out of the UK. In consequence we would see London as losing its position as the EU legal services capital which it is today. It would be a less attractive location for non-EU firms to establish their European operations and the quality and experience of UK-qualified lawyers could decline in consequence. At the moment what I think is referred to is the Republic of Ireland get out of jail card at the moment that there is some question as to whether Irish might be moved to close that particular loophole. Possibly the simplest way to retain access to the directives would be by way of amending them as to refer to the UK in addition to the member states of the European Union. If that weren't an option then possibly a separate bilateral agreement of some thought covering similar principles but for example limiting registration requirements in EU member states. Generally countries take a protectionist approach towards their local legal services sectors as opposed to that sort of negotiation would be easy. I don't think one can put much faith in the possibility that a standard form free trade agreement with the EU would provide freedom, provide legal services. Certainly the recent agreement concluded with Canada is not much of a precedent there. So I've painted rather a gloomy picture of what could happen to the provision of legal services without an agreement with the EU on continued access to the European market. I want to say now something about choice of English law to govern business relationships between parties from outside the UK. This has been going on for a very long time. A recent Singapore Academy of Law survey said that 48% of their respondents identified English law as their preferred choice of governing law in contracts. Well that sounds very good. Certainly this is consistent with a survey that fresh fields themselves conducted on trying to identify in effect why it was that clients were using English law, particularly where there was little or no nexus to England in the mandate. I will leave you to read the very long list of examples given in the printed text of this paper, but the examples that I particularly liked were private placings by Russian companies and debt restructurings of non-English companies, property deals outside the United States, and lastly disputes between oligarchs. So actually what's motivating all these commercial parties to select English law? Now again another survey this time by the British Institute of International and Comparative Law. The main reason they found that commercial parties choose English law is due to the perceived quality, certainty, clarity, and predictability of our law, as well as its efficiency in commercial disputes. The Bickel survey also identified some of the substantive features of English law which make it attractive, and these included unequivocal recognition of freedom to contract, availability of commercially oriented remedies, and I liked the last bit, reluctance of courts to rewrite commercial contracts. Another important theme to emerge was the possibility of combining a choice of English law clause with an English litigation clause. Perhaps I should turn now to the impact of Brexit on the private international law rules governing choice of law. Again back to your EU law 101 class you'll remember that the Rome 1 regulation governs choice of law in respect of contractual obligations and wait for it Rome 2 governs non contractual obligations. Most significantly for present purposes both of these regulations recognise the principle of universal application. That is to say that if you choose the law of a particular jurisdiction then the courts will recognise that and if you choose New York law rather than law, the law of a member state of the European Union then they will still recognise it. In other words an express choice of English law to govern contractual or non contractual obligations ought to be effective throughout the EU when the UK ceases to be a member of the EU. I've mentioned also that the body of European law will be turned into UK law when the 1972 act is repealed. That suggests that Rome 1 and Rome 2 should continue to apply since they will be part of that body of law. There may be some controversy about that but all will be revealed I expect when the government gets round to publishing its bill. Now some questions about the courts in relation to Rome 1 and Rome 2. At the moment it's not the UK courts but it is the European court in Luxembourg which is the final article of how Rome 1 and Rome 2 are applied. Going forward it could be that British courts need only to take due account of rulings by the European courts relating to the regulations. That means to be clarified. The objective of the regulations is to ensure that courts across the different EU jurisdictions take a consistent approach and surely this objective of harmonisation will remain desirable following Brexit but we will be in a situation where courts are not required to apply European jurisprudence directly so there's a risk that over time a consistent approach to conflict of law rules between the UK and member states could be on the mind. Let me turn now to the reasons parties have turned to UK courts for the resolution of their disputes. According to a report by the commercial bar association something like 80% of all cases for the English commercial court involve at least one foreign party. My Bickel survey again this comes down to parties identifying the reputation and experiences of English judges and the ability to combine choice of clauses with choice of law clauses all favouring English law. This latter point underscores the symbiotic relationship between choice of law and choice of jurisdiction. There is a message here that businesses are sending out which is that British courts are an excellent forum for resolving disputes. The reasons which made them attractive options before the referendum vote ought not to disappear with Brexit. But there is a potential issue around the future and forcibility of UK court judgments that needs to be resolved. I could make this very long or I could make this very short. To know I think that this next part I shall make quite short. At the moment the EU wide system of allocating jurisdiction among EU member state courts and for the recognition and enforcement of judgments is based on something called the Brussels Recast Regulation. The difficulty here is again well if we are outside the EU can we rely on the recast regulation for recognition and enforcement of judgments. Well no probably not simply incorporating the Brussels Regulation into English law will not have the effect of ensuring that other member states give effect to judgments delivered by the UK courts. So what is to be done we think that there are tiered options here the most obvious one would be to say ok well why don't we have a convention with the EU which says the Brussels Regulation will recast regulation will apply between the UK and the EU are you will say but doesn't this terrible problem of the jurisdiction of the European Court come up yet again will you accept the jurisdiction of the European Court or what will your courts do about this to which the answer is aha you say well the Danes thought about this when they opted out of this area of European law some years ago and they agreed that while they would track the reverse version of the recast regulation in effect the Brussels one regulation they would also undertake to accept future amendments and while they wouldn't accept the jurisdiction of the European Court directly they would have regard to the jurisprudence of the court and this in all areas where other member states refer cases to the European Court so with adaptations perhaps that seems a rather attractive solution to the problem of the continuous in effect of the Brussels Regulation for the UK that's a big ask in a negotiation with the other member states and until recently people were saying that perhaps there was a middle solution which would consist in adopting the well really horning in on the convention which the EU has agreed with the after countries for a similar purpose of giving effect to the earlier iterations of the Brussels Recast Regulation I won't go into the merits of the substance of the Lugano Convention as against the Brussels Recast Regulation however there is the rather obvious problem that in order to participate in the Lugano Convention it would be necessary not only to secure the agreement of all of the member states of the European Union same problem as with the Recast Regulation but it would also be necessary to obtain the agreement of all of the after members so while I'm not suggesting that's an insuperable hurdle there is a major practical problem there in order to get to what is fundamentally a less attractive solution than finding a way of incorporating the Brussels Recast Regulation third option is for the UK to seek to exceed to the Hague Convention on Recognition of Judgments now the UK is already a party to this convention by virtue of its membership with the EU and the EU has acceded to that convention so in principle there is no difficulty about the substance however the Hague Convention is by way of being a bit of a backstop the remedies which it provides and the the streamlining that the Brussels Regulation has introduced are not really present in the Hague Convention and our recommendation to government really would be yes yes yes go ahead ratify the Hague Convention obviously you should do that but that shouldn't deter you from working towards incorporation of the Brussels Recast Regulation as best you can that kind of brings me to an end of what I have to say about the law briefly I wanted to say something about what the justice system can do to help itself Lord Thomas, the Chief Justice has recognised he recognised in quite an important speech he gave last year than his Bailey lecture that English courts are facing competition from international arbitral tribunals and also from courts in other countries and he said in a recent presentation that he gave at Freshfield's actually on 19 January that work was in progress to develop proposals that maintain the preeminence of our legal system we have in place he said a reform programme for the courts and tribunals which is the most ambitious in terms of modernisation in the world I thought that was a pretty big claim actually nevertheless this is all dependent I think on having the appropriate judiciary in place Lord Newberger referred to earlier was reported only last week as saying that lack of judges was a risk in the post-Brexit world apparently because there's not enough money in the justice department's kitty lastly what about arbitration what about London's seated arbitration isn't this a solution to any potential uncertainty around the future of enforceability of UK court judgments well yes we think that it is to some extent and another survey London is currently the most widely used and preferred seat for international arbitration ahead of all rivals and Brexit should not impact significantly on any of the factors which make it attractive and more importantly we don't think that there are any enforcement issues that arrive with London arbitral awards and this is because enforcement depends on the 1968 New York Convention which is independent of membership of the European Union so from a practical viewpoint certainly an interim solution for international parties particularly concerned about enforceability of UK judgments could be to agree to London arbitration as an alternative to the solicitation before English courts but of course not every transaction is suitable for arbitration or is not always a natural choice there and where preference remains for litigation an alternative option would be parties to agree to refer disputes to the exclusive jurisdiction of English courts subject to a carve out to the effect that if there is no treaty or other instrument enforced by which a judgment of a UK court could automatically be enforced as at the date of legal proceedings the dispute should be referred instead to arbitration so although Brexit bought them to have too much of an effect on London led arbitrations it remains possible that any potential concerns could have a future impact on its uses and underpinning governing law and the choice of London as a seat of arbitration and this could have a knock on effect on UK based lawyers and law firms and on the courts before I stop some conclusions I think we are entering on some troubled waters I'm conscious in speaking overly long this evening that there are an awful lot of issues here which are raised by Brexit and I think that although government has looked at some of these issues in isolation I don't think that it has that good an overall picture of it and I'm certainly not conscious that the government has said oh yeah we've taken all that on board we've stuck it all above our red line and we'll ensure we'll be absolutely certain that it's included in any agreement that we reach with the EU regarding exit or our future relationship I don't think that's happening at the moment and we are leading the safety of an international order guaranteed by the post war settlement based on fairness and reciprocity into something I'm not quite sure what really certainly a more transactional approach to international relations in Brexit negotiations we clearly need to look for mutual advantage but at the moment the signs are not very promising there is a risk that there will be no agreement and that we will default to the WTO option which is no option at all nevertheless on the assumption that there will be a mutually beneficial negotiation I suggest that the legal profession is pretty united in calling on government to include in its red lines continuance of the principles of Rome 1 and 2 regulations and an agreement with the EU on continuance of Brussels's recast along the lines of the Danish model and I hope this doesn't fail over quibbles about jurisdiction of the European Court but that won't be enough on its own in a legally competitive environment the UK needs to work hard at modernising and streamlining the machinery of justice and I'm glad that there are signs that this is in hand I'm told I might answer questions if I can