Treasury spends £3m on year-long contract for external Brexit lawyers

Treasury officials and lawyers are so overstretched they have splashed out £3 million hiring law firm Hogan Lovells to help with Brexit preparations, new documents show.

The firm will spend a year working with the Treasury, to help navigate the “marked and continuing” increase in its legal work over Brexit and help in “establishing an effective and efficient customs regime”.

The one-year contract was quietly signed in April with Chancellor Philip Hammond’s department and was uncovered by UK government contracts data provider Tussell.

Gus Tugendhat, founder of Tussell, explained: “Untangling the legal complexity of the UK’s trading relationship with the EU has created an unprecedented workload for the Government.

“This is yet another example we’ve seen of the civil service drawing on expert advice from the private sector to navigate the challenges of exiting the EU.”

Drawn up by the Crown Commercial Service, it states that more lawyers are needed due to the “marked and continuing increase in the volume of legal advice and assistance required from Treasury Legal Advisers (TLA) by the Authority; this increase in demand cannot be fully met from TLA’s resources”.

It also reveals some of the Government’s thinking over what issues they foresee in the financial services sector – which is under strain due to the uncertainty around Brexit.

The document says: “It is anticipated that there will be at least one financial services bill during the period of the contract.

“In addition, the Authority will have an interest in a number of cross-Whitehall bills concerning the implementation of, or impact of the UK’s exit from the EU.

“In addition to this primary legislation, the Authority will continue to have a very significant programme of statutory instruments across various subject matters – including further instruments amending and updating instruments made under the EU (Withdrawal) Act 2018.

“[The] Authority’s interests lie particularly in establishing an effective and efficient customs regime, and in respect of the trade in services.”

The Government is particularly keen to find a solution for the financial services sector, due to the high tax revenues generated.

However, ongoing negotiations between the Financial Conduct Authority, which regulates UK-based financial services, and EU counterparts have been slow.

Rules for companies that have dual listings in the UK and Europe remain under review, but, a no-deal Brexit could lead to those businesses trading less in the UK.

Hogan Lovells is a well-established London law firm, most recently representing victims of the London Bridge terror attacks pro bono.