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Banks operating in Britain may be able to sue the European Union if the bloc does not grant them a transitional deal as part of Brexit negotiations, Reuters reported Monday.
A document, drawn up by three of the U.K.’s largest law firms — Linklaters, Freshfields and Clifford Chance — suggests banks based in the U.K. have a legitimate legal right to retaining so-called passporting rights and continuing to operate across the EU after Britain leaves the bloc.
Banks could appeal to the European Court of Justice on the basis that they have a right to “legal certainty” and “legitimate expectations” of a stable regulatory environment, according to the document, citing the Vienna Convention on the Law of Treaties, which states that rights given under a treaty continue even after the treaty has been withdrawn.
“EU firms utilizing their passport rights do have ‘legitimate expectations’ within the meaning of EU law that their rights will not simply disappear on Brexit,” the document said. “They will have structured their businesses, and invested into them, in light of those rights.” [...]