Why the World chose English law over EU law

The English legal system enables, the EU’s system restricts

Montage © Facts4EU.Org 2023

Brexit Facts4EU presents a ‘one-pager’ on the benefits of English law, by a world expert

Brexit Facts4EU and CIBUK are pleased to present a powerful statement on the supremacy of the English legal system over the EU’s equivalent, written by the top EU and global law expert, the highly-respected Barnabas Reynolds.

The law matters and has always been appreciated by the British people. For centuries it has been developed and nurtured and the British legal system has been adopted by countless countries around the world. It enables rather than restricts and people know where they stand.

In contrast, the EU27 countries operate on “the Napoleonic code”. The principle in the EU is that you can only do something safely if the law says you can. If there’s no law then you have no legal cover. In effect the EU legal system means you could be committing an offence even if there is no law prohibiting it.

In this excellent summary written by Barney Reynolds, Partner at Shearman and Sterling, he explains for readers why businesses would far rather do business in the UK than in the EU.

Why businesses should choose English law

By Barnabas Reynolds, Partner, Shearman and Sterling

Law, its extent and method are critical to doing business; and English law provides a highly desirable system. It is predictable yet innovative; and also apolitical.

Key benefits of English law

1. The law supports business ambitions, powering global business rather than slowing it down. It brings:

Contractual certainty and predictability
Commercial freedom
Recognition of the trust and equitable ownership
Confidence in the system through the doctrine of precedent
A sophisticated body of common law
Robust commercial law which is suited to international trade
Damages for contractual and tortious breach which are awarded to compensate not punish
No juries in commercial cases
Robust conflicts of law rules

2. The English law system is visionary and progressive, constantly evolving and looking to the future.

It has proved flexible for adapting to societal changes and events over the centuries. There is a large body of practitioners with a great depth of international experience and specialist industry knowledge.

3. The system has the support of a robust court, arbitration and disputes infrastructure.

The U.K. is a leading place for the resolution of disputes involving international contracts. There is a deep bench of legal and commercial experts.
The U.K. has strong, relatively fast and efficient judicial and arbitration systems, with high quality judges and arbitrators.
State of the art technology is available for dispute resolution. There is a wide, progressive, dispute resolution sector, constantly innovating.

How to choose English law

In contract, it is possible expressly to choose English law; a further step is to submit to the jurisdiction of the U.K. courts.
Taking advantage of U.K. regulation, and U.K. corporate and insolvency laws, generally requires a business to be located here.
Property rights are usually governed by the place in which property is located. For financial and certain other assets, English law can be chosen by locating the relevant holder of the asset in the U.K.
The advantages of English property law have resulted in the U.K. being a key global jurisdiction for the custody and holding of financial assets.

Why establish business vehicles in the U.K.?

U.K. corporate law is flexible and the U.K’s restructuring and insolvency laws are seen as efficient and fair.
The U.K. is often seen as a hub for international restructuring and insolvency matters.
English law encompasses the highly developed recognition of trusts, security interests, netting, set-off and other means of reducing exposures, with no surprises.

U.K. regulation

The U.K.’s regulatory system is flexible, well managed, and can be changed quickly, by professional regulators.

The regulators:

are respectful of the free market;
seek to focus on matters of untoward risk to customers, market integrity and systemic risk;
do not impose penal fines, nor fines levied to fund their own activities

- Barnabas Reynolds, Partner, Shearman and Sterling

- For the full analysis, see the LegalUK paper linked here

Note: Nothing in the above should be construed as legal advice. Please refer to Shearman and Sterling should this be required.

About the author : Barnabas (Barney) Reynolds is one of the world’s leading financial institution practitioners. He specializes in banking and financial markets law and regulation, clearing, settlement, derivatives, asset management and insurance regulation. He advises banks and investment banks, fund managers, financial infrastructure providers (exchanges, clearing houses, settlement systems), payment agencies, FinTechs, crypto companies, insurers and reinsurers on their proprietary business in the U.K., EU and U.K.-style systems elsewhere, including Abu Dhabi Global Market (ADGM, which he set up) and Dubai International Financial Centre (DIFC).

Barney specializes in U.K. regulation and advises on and coordinates rest-of-world advice for institutions. He provides strategic advice on the implications of legal and regulatory change and opportunities for their businesses. He also advises Boards on strategic issues.

Barney is a leading thinker on legal and regulatory matters, engaging in individual and roundtable discussions with c-suites and boards of financial firms. He has played a central role in evaluating the legal and regulatory implications and opportunities arising from Brexit. He plays a key role on European structuring for numerous financial services firms.

He is Global Head of the Financial Services Industry Group at international law firm Shearman & Sterling LLP and leads the global Financial Regulatory practice.

Observations

The Facts4EU team is grateful to Barney Reynolds. He is a strong advocate for the English legal system, and rightly so. He also understands the importance for business in the possibilities for investment, innovation and creativity which this affords.

For readers who have the time, we recommend reading the full analysis contained in the LegalUK paper linked here.

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[ Sources: Barney Reynolds, Shearman and Sterling ] Politicians and journalists can contact us for details, as ever.

Brexit Facts4EU.Org, Wed 25 Oct 2023

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Reader Comments 11

1. Sparky , Wednesday, October 25, 2023, 06:12:

This is just trying to invent new justifications for having left the EU. Clear sign of regret and realization that it was a bad decision.
.
Interesting interview with Steve Baker where he says the Brexit Ref should have been a supermajority (60%) threshold.

2. Ashley Great Britain , Wednesday, October 25, 2023, 06:53:

1 sparky.
Talking about Steve Baker and a supermajority is just trying to justify rejoining the EU.
Interesting interview with Belinda de Lucy who says Reform UK is experiencing high levels of new membership.

3. Gazzablack , Wednesday, October 25, 2023, 08:41:

1, sparkless
.
Interesting interview with Dustin Moscovitz, Facebook co-founder and CEO of the multi million dollar firm 'Asana', who says the UK is better off outside the EU.
.

4. There is no 'g' in Brexit , Wednesday, October 25, 2023, 10:03:

Contrary to other opinions expressed here, this is not a invention of a new justification for having left the EU, merely a re-statement of the main justification for me, and I believe others, for voting to leave. Namely, regaining sovereignty. That implies retaining our own, long-established, legal framework of common law rather than being increasingly subject to continental, Napoleonic law.

5. terence patrick hewett , Wednesday, October 25, 2023, 10:31:

Comparing the tenets of Common Law, with those of the Napoleonic Code and the Code's presumption of guilt, amply demonstrate the fundamental incompatibility of the EU and the UK. Common Law is the foundation upon which our freedom is built: which is why EU collaborators in the UK despise it so much, and try so hard to corrupt it.

6. NH , Wednesday, October 25, 2023, 10:56:

1. Sparky, "Brexit Ref should have been a supermajority (60%) threshold"
.
I think you make a very good point and it may surprise you but I agree with you. As you have suggested any future referendum on EU membership should require a 60% majority. The UK had an EU referendum in 1975 and another one in 2016. We should maintain this tradition and have another one in 2057 and it should require a 60% majority.
.
UK "English Common Law" is respected and used throughout the world by international businesses, all major financial centres and all major capital markets. USA Law is derived from "English Common Law". The problem is membership of the EU resulted in the UK having to accept a vast amount of EU law. This should be removed as soon as possible. This would make investment in the UK more attractive and improve our services exports. As UK service exports now exceed good exports, and they are booming, this would be a major advantage to the UK. Unfortunately we have a government who's default position is to do absolutely nothing and I don't think the next one will be any better.

7. Robert Mcdonald , Wednesday, October 25, 2023, 12:26:

So we have it in writing, sparky does not believe in democracy.

8. Gazzablack , Wednesday, October 25, 2023, 18:15:

13 of the largest European car manufacturers have written to EU President Von Der Leyen, urging her to postpone the increase in tariffs that would hit EV car exports to the UK -- their "number one EV export market"
.
BTW 1
The Eurozone economy has suffered it's worst month for three years amid warnings recession in Germany is "well under way"
.
.BTW 2
Reported in Le Figaro
The French public have the least trust in the EU of any of the 27 member states, with only 34% saying they trust the EU versus 55% who don't.
13 of the 27 member states, and the EU average, distrust more than trust the EU.
.
And as regards a supermajority
A year of polling from Omnisis has now consistently shown week after week after week, that the obligation to adopt the Euro - mandatory for joining the EU - would see any vote to rejoin fail by a massive majority.
.
Every week, same answer.
For a whole year.

9. Captain Thunderbolt , Wednesday, October 25, 2023, 19:22:

1. Sparky , Wednesday, October 25, 2023, 07:12:
This is just trying to invent new justifications for having left the EU. Clear sign of regret and realization that it was a bad decision.
.
I do not see any signs of regret in that article, but I do see sign that it shows of the different complexities of different types of standards when it comes to the law common law against civil law.
.-.-
.
Interesting interview with Steve Baker where he says the Brexit Ref should have been a supermajority (60%) threshold.
.
Everyone has a different opinion
David Cameron in his infinite wisdom could have put anything he liked with the approval of Parliament.
But I do have to disagree on there being a super majority, I believe it’s high time that the UK have a codified constitution where matter are indissoluble unless it is put to the people for constitutional change.
.
One not only has to look at the Australian model that requires a double majority and gives states a equal footing in that the largest states cannot impose its will on the smaller states.
.
It still requires a majority of 50+1 but it also requires 4 out of the 6 states to have a majority
.
If the UK had a codified constitution back when Heath commit treason for entering true UK into the EEC when he relinquished sovereignty from the Crown without it’s consent

10. Gazzablack , Wednesday, October 25, 2023, 20:06:

9, Captain
It's a popular misconception that the UK doesn't have a codified constitution.
.
The UK does indeed have a codified constitution dating back to 1689 and the Glorious Revolution.
.
Membership of the EU was incompatible with our constitution.

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