Uncertainty around the enforceability of contracts is the “elephant in the room” in Brexit discussions, the chair of the justice select committee said today.
Speaking to City A.M., Conservative MP Bob Neill cited insurance contracts and derivatives as examples of areas where there was still a great deal of uncertainty about post-Brexit contract enforceability.
EU-based firms have derivative contracts worth a notional £69 trillion with UK clearing houses the Bank of England’s financial policy committee said in October.
Neill also questioned the work the government was doing to prepare for the enforceability of contracts, in the event of a no-deal Brexit.
“What on earth do we do in the event of a crash out?” he said.
In the event of the UK leaving the EU without a deal, Neill said the government would have to do a lot of bilateral deals very quickly to ensure that contracts remained enforceable.
“What work is being done to prepare for that?” he asked.
Neill also asked what the position would be if contracts between UK and overseas companies were not enforceable post-Brexit because of “the actions of the UK government”?
“Shall we leave British businesses to pick up the tab?” he said.