Many Irish firms, and companies from other EU states, have extensive investments and trading interests in the UK.
For the past 40 years, these investments have been protected by UK membership of the EU, which allowed firms that might feel they were being discriminated against in favour of British-owned competitors, to appeal not only to the UK Courts but also to the European Court of Justice(ECJ)
Yesterday the UK Prime Minister announced that, once the UK leaves the EU, the jurisdiction of the ECJ in the UK would be ended. Thus there will no longer be any, non UK-controlled, arbiter to protect Irish or other UK investors in the UK against discriminatory laws by a future UK government. The UK has no written constitution.
Therefore it will be important that there be a robust independent investor protection disputes mechanism, capable of overturning discriminatory decisions that might be taken by the UK courts against the interests of EU-owned firms.
This must take immediate effect the day the UK leaves the EU. It cannot wait for the longer term trade agreement the EU negotiates with the UK, which may take years to finalise. Investor protection clauses can be controversial, as we have seen with the TTIP negotiation, and are a reduction of “sovereignty” in the abstract sense.
- the highly nationalistic tenor of UK politics at the moment,
- the dramatic ideological trends in the Labour party, and
- the likelihood of trade tensions between the UK and the EU,
Irish and other EU firms doing, or intending to do, business in the UK will need a very robust independent investor protection regime.
Otherwise they may have to commence disinvestment in the UK to protect their shareholders’ legitimate interests.
(Based on remarks uttered at a “Brexit Financial Services evening” sponsored by Deloitte in the Marker Hotel, Dublin 3rd October)