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High Court Decision Demands Act of Parliament for Brexit

Case Could Go to the ECJ

Article published in Börsen-Zeitung No. 224 in German language | 19 November 2016

Authors: Chris Bryant, Partner at Berwin Leighton Paisner LLP, London and Dr. Mathias Hanten, Partner at Deloitte Legal, Frankfurt am Main

The United Kingdom’s relationship to the European Union has always been uncomfortable, with neither of the UK’s major political parties able to resolve internal tensions over the UK’s European identity. In an attempt to confront and resolve these disagreements, the UK Parliament enacted the European Referendum Act 2015, with the objective of holding an advisory (i.e. non-binding) referendum on the UK’s continuing membership of the European Union. On 23 June 2016, the British people decided by a narrow majority of 51.9 % to 48.1 % that the United Kingdom should leave the European Union.

This result was hugely unexpected. By its own admission the Government had not made any meaningful preparations for how to implement a withdrawal. In the weeks that followed, constitutional lawyers began to scrutinize EU and UK law to determine the precise mechanics of departure.

Article 50 of the Treaty of European Union (TEU) regulates the basic procedure of withdrawal. It stipulates that a Member State “may decide to withdraw from the Union in accordance with its own constitutional requirements” and that “a Member State which decides to withdraw shall notify the European Council of its intention”. From a UK perspective, the immediate question is this: what are the UK’s constitutional requirements for making such a decision? The answer is less straightforward to ascertain than one might imagine, in large part due to the lack of a formal written UK constitution, and has now been the subject of a high-profile court judgment.

The UK Government accepted that it did not have statutory authority to trigger Article 50, since the referendum was expressly stated to be non-binding. Nevertheless, the Government asserted that it had authority to initiate the Article 50 procedure pursuant to its so-called “Royal Prerogative powers”. These powers originate from the delegated authority of the crown, which date back to medieval times, and are traditionally understood to encompass matters of international relations, and treaty negotiations. Accordingly, the UK Government stated its intention to trigger Article 50 before the end of March 2017, thus initiating the two-year process for withdrawal from the European Union.

A competing view developed as to the proper constitutional requirements for withdrawal. In essence, it was argued that the Royal Prerogative is a narrow, vestigial power, confined by domestic law and Parliament, and could not be exercised in a manner that would compromise or remove citizens’ fundamental rights. According to this view, authority to trigger Article 50 had to lie with Parliament alone.

This competing view was expressed in a judicial review challenge brought before the English High Court by a number of British citizens, including lead claimants Gina Miller and Deir Dos Santos. Judicial review proceedings are a procedure of English law whereby the court supervises the exercise of power by public bodies, including the Government. By this mechanism, citizens can ensure that their rights are not unlawfully impinged by the state.

It is important to note that the claimants did not contend that the referendum result should be rejected or ignored; that is a matter of politics and policy. Their legal challenge focused solely on the narrow, legal question of process: does the authority to instigate withdrawal by invoking Article 50 lie with the Government alone, or does the Government first need the consent of Parliament?

The case was heard in October 2016. The Government argued during the proceedings that the Royal Prerogative empowered it to trigger Article 50, but asserted that Parliament would be consulted throughout the withdrawal negotiations, and be asked to approve any deal agreed with the EU at the conclusion of that negotiation.

The hearing before the English High Court, however, took a different tack. Very early in the proceedings, the Government was pressed to commit to a position on whether the Article 50 procedure for withdrawal was a revocable process. It had been implicit in the earlier proceedings that it was revocable, since a clear distinction was drawn between triggering Article 50 and actually withdrawing from membership.

However, in the English High Court proceedings, the Government agreed with the claimants that the Article 50 process is not in fact revocable. The Government took this position as a matter of political expediency, but it was ultimately fatal to its defence. The claimants argued convincingly that the very act of serving notice would cause certain legal rights, which exist only by virtue of the UK’s EU membership, to fall away. This inexorable consequence of serving an irrevocable notice would be an affront to the sovereignty of Parliament.

The court’s judgment, handed down on 3 November 2016, thereby held that only Parliament, not the Government, has the requisite constitutional authority to invoke Article 50 and thus the UK’s withdrawal from the EU. What the court did not say is precisely what steps Parliament must take. It is broadly accepted that approval following debate in the House of Commons will not suffice; an Act of Parliament is required. This is significant since it necessitates approval by both the House of Commons and the House of Lords (barring the improbable deployment of “emergency legislation” procedures). This will slow the passage of the bill through Parliament, and increases the likelihood of obstacles or qualifications to securing approval of the bill.

It should be noted that the critical question of whether Article 50 is revocable is unlikely to go away. The Government has appealed to the UK Supreme Court, who will hear the case in early December. It seems likely that the Supreme Court will consider the revocability of Article 50 notwithstanding that both sides are in agreement that it is irrevocable. Since this comes down to interpretation of EU law, there is a very real possibility that this point will be referred up to the Court of Justice of the European Union (ECJ) pursuant to Art. 267 TFEU. The irony of this potential scenario is lost on no one, as the Brexiters were always adamantly opposed to any national questions being referred to the ECJ.

The UK position is very different from the position under German law. Under German law, Art. 23 par. 1 of the German Constitution (“Grundgesetz – GG”) establishes a specific obligation to integrate the Federal Republic into the European Union. This obligation limits the right to leave the European Union. A German decision to leave the European Union under Art. 50 TEU would require the European Union’s infringements of the nubs of the German constitution as well as a majority of two thirds in the German Parliament (“Bundestag”) and the same majority in the German Federal Council (“Bundesrat”). So, unlike the situation in the UK, the German law makers would face severe obstacles to trigger Art. 50 TEU.

As regards the next steps, the UK Supreme Court has stated that it anticipates providing judgment in early 2017. In the meantime, the Government is presumably in the process of preparing draft legislation to secure Parliamentary approval for the triggering of Article 50 in time for the Government’s self-imposed deadline in March 2017. They say that a week is a long time in politics; the next months are certainly going to seem like a long time for this particular Government…

Börsen-Zeitung Article

Article published in Börsen-Zeitung No. 224 in German language | 19. November 2016 | Geduldsprobe für die britische Regierung 

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