KNOWLEDGE BASE Government - Law In the United Kingdom
The information on this page was current at the time it was published. Regulations, trends, statistics, and other information are constantly changing. While we strive to update our Knowledge Base, we strongly suggest you use these pages as a general guide and be sure to verify any regulations, statistics, guidelines, or other information that are important to your efforts.
Brexit Update:
Since the UK officially left the European Union on January 31, 2020, the relationship between the two has evolved and continues to be shaped by the ongoing implementation of the withdrawal agreement.
Key Dates:
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January 31, 2020: UK officially left the EU and entered a transition period that ended on December 31, 2020.
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December 31, 2020: The transition period ended, and the UK fully exited the EU single market and customs union.
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January 1, 2021: The UK-EU Trade and Cooperation Agreement came into effect, outlining the post-Brexit relationship between the two entities.
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2023/2024 Current: The UK and EU are still navigating the ongoing implementation and potential revisions of their post-Brexit relationship.
It's crucial for businesses operating in either the UK or the EU to stay informed about the latest developments and adjust their operations accordingly.
Resources for Further Information:
Government and Legal Structure In the United Kingdom
The political landscape of a country plays a role in how business is conducted, and while the UK boasts a stable and effective political and legal system built over centuries, it's crucial to consider current realities when doing business there. Brexit, with its ongoing negotiations and evolving future relationship with the EU, adds a layer of complexity. Additionally, the domestic political landscape is dynamic, potentially impacting various sectors through policy shifts and regulatory changes. To navigate this environment, thorough research on relevant regulations, seeking expert advice, and staying informed about political developments are key. By understanding and adapting to these dynamics, you can navigate the UK business landscape and make informed decisions for success.
Background
Historically speaking, the UK has played a very significant role in developing parliamentary democracy. At its highest point, the British Empire covered over one-fourth of the world’s surface. While the first half of the 20th century seriously reduced the UK’s strength with its two world wars and the exit of the Irish Republic from the union, it has since rebuilt itself into a modern and prosperous nation. It is one of the five permanent members of the UN Security Council and is a founding member of NATO and the Commonwealth, and takes a very global approach to foreign policy.
To share more about the political landscape in the UK, Globig has gathered information on the following topics in the Governance In The UK section:
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Ease of Doing Business in the UK - Regulatory Environment
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The Effectiveness of the UK’s Governance
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Perceived Public Sector Corruption Levels
Government Structure
The United Kingdom is a parliamentary democracy in which the government is voted into power by the people. Alongside this system is a constitutional monarchy in which the established monarchy remains politically impartial with limited powers. The government, or the executive, runs the country and is responsible for the development and implementation of policy and the drafting of new laws. Parliament, also known as the legislature is the highest legislative authority in the United Kingdom. It is responsible for checking the work of the government and examining, debating, and approving new laws. The devolved Parliaments of Scotland, Wales, and Northern Ireland also hold varying degrees of legislative power over regional matters. People often confuse Parliament with the government. While the two do work closely together and play a part of forming the laws of the United Kingdom, they are separate institutions with separate functions.
The Government
The UK operates under a system of parliamentary democracy, where the Prime Minister leads the government. Currently, Rishi Sunak holds this position. While the Prime Minister's decisions carry significant weight, the ultimate responsibility for policies and decisions is shared with the Cabinet and Parliament.
The Prime Minister leads a team of senior officials known as Cabinet Ministers, which includes Secretaries of State representing various government departments. These Ministers are exclusively chosen from members of the House of Commons, ensuring a close link between the executive and legislative branches. This lack of rigid separation of powers, unlike the US system, allows for more fluid interplay between government and Parliament, though checks and balances exist through parliamentary scrutiny and judicial review.
The Prime Minister oversees the Civil Service and government agencies, appoints Cabinet Ministers, and acts as the primary government figure in the House of Commons. Their role involves navigating the complex interplay between Parliament, Cabinet, and various stakeholders to drive policy, answer questions, and represent the UK on the world stage.
| Ministers | |
| Prime Minister | 1 |
| Cabinet Ministers | 22 |
| Junior Ministers | around 80 |
| Parliamentary Under-Secretaries of State | around 30 |
| Total Ministers | 130 - 140 |
Parliament
Parliament main roles are: to examine and challenge the work of the government, to debate and pass all laws, and to enable the government to raise taxes. Parliament is divided into two houses, the House of Commons and the House of Lords. In general, decisions in one House must to be approved by the other, so in this two-chamber system, each House functions as a check on the other.
The UK public elects Members of Parliament (MPs) to represent their interests and concerns in the House of Commons. Parliament has MPs from areas across England, Scotland, Wales, and Northern Ireland. The party with the largest number of members forms the government. The House of Commons alone is responsible for making the decisions on financial bills, such as proposing new taxes. The House of Lords can consider these bills, but cannot amend or block them.
The House of Lords was created to be independent from but to complement the House of Commons. The Lords are appointed by the Queen on the advice of the Prime Minister, and the House of Lords has undergone reforms to reduce its hereditary membership and increase independent expertise. The two Houses work together to scrutinize the government work and to make and pass new laws.
Through devolution, a national Parliament in Scotland, a national Assembly in Wales, and a national Assembly in Northern Ireland were created in the late 1990s. This means some matters at varying levels were transferred to the UK nations.
Legal Structure
The United Kingdom legal structure is complicated and often confusing because it was created over a 1,000 years of practice, rather than being designed from scratch. The United Kingdom does not have one single unified legal system, instead, there is a system for England and Wales, another for Scotland, and a third for Northern Ireland.
In October 2009, the Supreme Court replaced the Appellate Committee of the House of Lords as the highest court in the United Kingdom. The 12 Justices of the Supreme Court are now explicitly separate from the government and Parliament. The Supreme Court handles civil cases across the UK, but its criminal jurisdiction only covers England, Wales, and Northern Ireland. Scotland has its own separate Court of Appeal for criminal matters. Lower courts include magistrates and judges tasked with various roles. Here is more information about the different types of judges and the cases they hear.
Legal Landscape
The judges of the English High Courts are highly respected for their independence, integrity, knowledge, and experience. Because of that, London’s high courts are used by litigants from around the world. London’s popularity as a litigation hub means it will often take a while for a case to reach the courts, as courts are swamped. Nevertheless, UK courts are efficient and are said to be responsive to requests for urgent hearings.
Mediation is either attempted or at least discussed in the majority of cases in the UK. Mediation has played a particularly important role in commercial disputes for the past 15 years. Arbitration also has an important place in the UK legal system. London is a popular venue for arbitration because of the ease of finding an arbitrator and attorneys with specialized expertise in a variety of different fields.
Court Costs and Legal fees
Most legal fees in the United Kingdom are charged on an hourly basis. However, many firms are moving toward capped fees and more detailed estimates. There has also been a rise in the availability and use of conditional fee arrangements and damages-based agreements, whereby if you don’t win, you don’t pay. This type of fee agreement is very common in the United States and is known as a contingency fee agreement. Hourly rates charged by top firms in London are among the highest in the world. Hourly rates for a decent lawyer in a top firm can run from £1,000 to £2,000.
The UK court system has a “loser pays” legal fees practice. Those costs can be anywhere from 30-60% of the winning party’s legal fees. In addition, foreign litigants are often responsible for the courts’ security costs, but only if there are mitigating circumstances, such as a court deeming someone a flight risk or if they lack sufficient assets in the UK.
Courts and Tribunals Judiciary: Who are the Judiciary
KNOWLEDGE BASE Government - Law In the United Kingdom