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  • brexit banner your disputes

      Your sales and tender processes


      Current state of play

      • EU firms are guaranteed access to the EU’s public procurement market without discrimination under the EU Treaty and procurement directives.
      • The general EU procurement directive dealing with contracts awarded by state entities neither specifically allows member states to exclude bidders from third countries from public procurements in EU member states nor prevents authorities from imposing such measures themselves.
      • But, under certain circumstances, specific EU procurement directives explicitly allow the market to be closed to foreign bidders from third countries, namely in the utilities (telecoms, post, water, energy) and defence sectors.
      • What will happen in future is unclear. The Commission put forward a Procurement Initiative in 2012 that aims to restrict access to the EU public procurement market for third countries that are reluctant to offer reciprocal access to their markets. But a new directive is unlikely to restrict access to the EU procurement market for countries (including the UK) that are parties to the Agreement on Government Procurement.
      • EU companies can access procurement markets in countries across the world through numerous international treaties.


      What should I be thinking about now?

      • Is there an existing treaty between the EU and a third country that allows me full access to procurement procedures? If so, would I have equivalent rights after a Brexit?
      • As a UK business that tenders for significant contracts in the utilities (or defence) sector in Europe, would I still have access to the EU’s public procurement market without discrimination following a Brexit? Or would I stand to lose important opportunities for EU business?


      What could the position be following a Brexit?

      The answers to many of the above questions would depend on the nature of a post-Brexit UK/EU relationship.

      To give an idea of the range of possible outcomes, we have considered what the position would be under the ‘Norwegian option’ and the ‘World Trade Organisation (WTO) option’ – on the basis that these are at opposite ends of the spectrum of existing models for an alternative relationship with the EU.

      What if the UK leaves the EU, joins the European Free Trade Association and remained a member of the European Economic Area (EEA)? (the Norwegian option)

      There would be no impact on current applicable public procurement law. Under the EEA Agreement, non-EU states that join the EEA still participate in the EU’s internal market by adopting all the relevant EU legislation, apart from that on fisheries and agriculture. This means that the EU’s public procurement law will continue to apply.

      What if the UK leaves the EU without any form of free trade agreement? (the WTO option)

      • The General Agreement on Tariffs and Trade (GATT) does not cover public procurement. Moreover, neither the GATT principle of national treatment nor the ‘most favoured nation’ clause apply to laws, regulations or requirements governing the procurement by governmental agencies of products purchased for governmental purposes, ie products not purchased for either commercial resale or for use in the production of goods for commercial sale.
      • In this context, several WTO members, including the EU, are parties to the plurilateral government procurement agreement (GPA), which guarantees access to the procurement markets of the contracting states.
      • However, the UK is not party to the GPA so with a Brexit the UK would no longer be bound by or entitled to rely on it. Consequently, UK businesses may not have the right to access procurement markets of GPA signatories unless the UK becomes a contracting party itself. However, some GPA signatories, such as the EU, allow companies to participate in procurement procedures even if they are not based in a GPA contracting state.