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Introduction

The sector - both within the UK and globally - stands on the edge of a period of considerable change. 

At a strategic level, countries are still grappling with a new world of asymmetric conflict with minor state and non-state actors and with the risk of terrorist activity also playing a big part.  But counter-insurgency and counter-terrorist activities are not the sole focus - the risk of conflict with similarly equipped and similarly sized states cannot be ruled out.

Many countries are also having to juggle the challenges of multi-year (sometimes multi-decade) procurement programmes with the needs of urgent operational requirements.  We see the entry into service of equipment originally designed for Cold War challenges (such as Eurofighter Typhoon) at the same time as demands for equipment to counter roadside explosive devices of ever-increasing sophistication and the need for swift procurement of cheap and flexible unmanned aerial vehicles.

The battlefield can no longer be viewed in the traditional sense - C4ISTAR (or C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, Reconnaissance) in the US) and domestic security and surveillance are increasingly critical elements of a state’s need to retain an edge on the battlefield and protect essential infrastructure at home:  recent events have shown that domestic internet service providers or transport infrastructure are just as likely targets as platoons of men in a foreign country.

All these demands need to be met in a new world of constrained investment and a keen focus on value for money.  This requires radical new approaches to both procurement and support of equipment.  In his report, special adviser to the MoD Bernard Gray revealed with clarity the challenges facing the UK’s defence procurement function and suggested a package of necessary changes to begin to address those issues - and the Defence Support Review has done the same for service and support.  Many major UK procurement projects remain subject to review, for example Trident (and Vanguard) replacement, the CVF fleet and the A400M.  Robert Gates has shown a similar willingness to revert to first principles and think the unthinkable in the US: cancelling or severely curtailing major and established programmes.

The UK’s Green Paper on defence considers and proposes new directions in procurement and support to address these issues, and both main UK political parties are committed to instituting an immediate and regular strategic defence review to better define the mission our forces must respond to and the resources that will be made available to them. Click here for our e-briefing on the matter.

These commercial challenges must also be set in the context of the legal framework in which both national and global AD&S companies operate.  Export control regulations (often with extra-territorial effect), treaty obligations (including those relating to embargoed end-users), and domestic and EU rules on procurement (including the recent Defence Procurement Directive) and on the manufacture of and trade in defence articles must all be understood and navigated.

AD&S companies must also treat seriously their legal and wider obligations to manufacture and trade ethically.  Certain companies have led the way, but recent actions and statements both by the Serious Fraud Office (SFO) and its counterparts elsewhere have shown that all companies - big or small - must treat this issue as key or risk legal and other consequences (such as reputation damage, loss of investor confidence and exclusion from tendering processes).

The Eversheds’ AD&S team advise many major national and international clients from both the public and private sectors; including leading suppliers of defence products, government departments and agencies.  This means that we have built a wealth of knowledge and expertise in this sector across our international network, with legal advisers widely-recognised as leaders in all practice areas. We pride ourselves on being forward thinking and innovative in our approach and on our drive and passion.  Our focus on developing long-standing relationships with our clients means we better appreciate the issues facing them and the particular sensitivities that apply to them.  We understand the intricacies of this sector and will deliver clear, straightforward advice - wherever our clients are based.