Wine as an investment – the wine merchant’s risk
As part of our commentary and sharing of insights on Brexit, we are introducing a series of guest blogs with views and perspectives from other jurisdictions. We are always very keen to know how other countries view the UK's decision to leave the EU and what issues and challenges they believe the UK or indeed their nationals and country may face along the way, with particular reference to their jurisdictions. In this blog of the series, we are welcoming a view from the Netherlands with a blog by Sandra Verburgt, Partner at Delissen Martens and an international family lawyer and mediator.
“UK-EU relations hit new low as Theresa May viciously attacks European politicians” were the headlines of the Independent on 3 May 2017. Theresa May had accused European politicians of meddling in the UK’s general elections and trying to wreck Brexit. On the other side, Mr Juncker had said that “Ms May lives in another galaxy” and “is deluding herself over Brexit”.
Later on EU-negotiator Michel Barnier had explained that “there is no punishment, there is no Brexit bill” but the UK would have to commit to settling its liabilities to start any negotiations on a trade deal, along with agreeing a deal on citizens’ rights and external borders.
The whole process looks like that of a divorce between angry spouses, the wife accusing her soon-to-be ex-husband of being very unfair to her, leaving her in misery and distress, while the husband explains that his wife has no sense of reality as to what a divorce really means, whilst choosing it for herself. He never wanted this divorce, but now it has reached this stage, “the maths” have to be done.
As a family lawyer and mediator I am frequently consulted when marriages hit troubled waters, either by one of the spouses as his or her lawyer or as a mediator by both of them. The chance of success in settling the dispute depends on whether each of them is able to step out of their own trench and to get in the mind of the other. It requires the parties to make clear choices in what they want to achieve, but also to accept that you cannot get everything you want, and that concessions need to be made.
Contrary to Mrs May’s suggestion, the 27 European Countries negotiating with the United Kingdom do have an interest in a good result for her in the general elections of 8 June 2017. The stronger her support, the greater the chance that her negotiating efforts with the other 27 countries will be accepted.
On the other hand the UK’s firm position that it will not make any payment to the EU seems to show that Mrs May has not much ability to identify with the position of the other 27 countries. If 28 friends organise a dine-around in a fancy restaurant and agree upfront to share the bill 1/28 each, it is not polite to leave the restaurant after the fourth course, just before the dessert is being served, without paying your fair share. Do you expect that the others will pay for your 5-course dinner?
Another example. If spouses buy a matrimonial home and enter into a long term mortgage agreement for say 20 years and with a fixed interest term of 10 years, then the mortgagee will expect that they will at least comply with the mortgage agreement for the coming 10 years. That is why the bank and spouses agreed to the fixed interest term. Suppose that after 6 years have elapsed the spouses can get a better deal with another bank, i.e. they are offered a much lower interest rate, the spouses may be able to exit their current deal, but most probably on the payment of a substantial penalty which may not make it worth their while. Not an overly attractive option. The terms of the contract can be renegotiated, but only after a penalty has been paid to the original mortgagee for missing out the interest terms of the remaining 4 years.
The same applies in the relationship between the EU - Member States for long-term projects. If you have made commitments to investments for a longer term, than you shall adhere to the agreements with your soon to be ex-partners. Taking the position that one can walk away without making any payment is also not in favour of the United Kingdom. If you think you can leave the project earlier without complying with your financial duties, it will harm your trustworthiness in future relationships. At least you could offer to share the pain.
And then what would happen to the “children” - the citizens of the United Kingdom residing in the EU and the EU-citizens living in the United Kingdom? As family lawyers would say, “after divorce spouses will be ex-partners, but they will remain parents of their children”. In the Netherlands the Family Court would not even pronounce the divorce without a parenting plan or arrangements for the children being made first. The fact that divorcing spouses will remain parents after divorce imposes responsibilities and obligations towards each other and towards their children. The same applies in the EU. The citizens of all 28 countries involved deserve clarity on their future status, rights and obligations after Brexit. Therefore it is not unfair to require a “parenting plan” for the children first, before future relationships will be negotiated.
In the short term, as long as the divorce is not final yet, there will be no major changes to the rights of EU citizens and businesses in the UK. The United Kingdom is still a member of the EU and will remain so for at least until 29 March 2019 (2 years after the British government gave formal notice of its departure from the EU) or until the UK and the EU have reached an agreement on the conditions of the UK’s departure from the EU (the so-called Article 50 procedure).
As Kingsley Napley senior partner Jane Keir recently pointed out in her blog of 3 April 2017 the following three Regulations play an important role in facilitating the daily operation of the European legal system, while protecting the rights of EU citizens and the ability of businesses to engage with the Single Market’:
The 27 EU member States will continue to benefit from these regulations. These rules provide, to a certain extent, certainty and clarity to individuals and businesses, knowing that all EU Member States will apply the same rules in the same situations. We will see what will be agreed in the “parenting plan” between the EU and the United Kingdom and how the United Kingdom will fill the vacuum of legislation – adopting Hague Conventions or sister treaties with the EU like the Lugano Convention 2007 - when the United Kingdom leaves the EU and cannot benefit from the EU legislation anymore. In any case this has to be sorted out before 29 March 2019.
So the answer to the question whether it will be a messy divorce or an amicable settlement very much depends on how the United Kingdom and the 27 EU-Member States will interact over the coming 2 years. The choices made in recent elections in Austria, the Netherlands and France seems to be an indication that the children will demand that the parent takes full responsibility for its actions. It is to be hoped that this sense of responsibility will also take root in Mrs May’s mind…
Britain sailing away into the Atlantic Ocean on its own could be a moving caption at the end of a dramatic motion picture, but the spectator knows already there will be a part II coming up soon and just wonders how that one will commence?
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