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Brexit

Background

How does Brexit affect your business?

Start of Brexit process

Who decides to implement Brexit

Brexit Date on 29 March 2019

Exit Date changed

Prorogation controversy

Brexit delayed again to 31 January 2020

Will EU law cease to apply on Exit Day

Other Brexit legislation

Devolved legislatures

Background

This article describes the Brexit process from a mainly legal perspective. Readers should look elsewhere for the political element. The content is derived mainly from the EU Treaties and UK legislation and judicial decisions. Other information has been derived from non-statutory Explanatory Notes attached to legislation, and the usually reliable and impartial source in Parliamentary publications although it should be noted that the House of Commons is itself a protagonist in the arguments between it and the Government over Brexit.

On 1 January 1973, the UK joined the then European Economic Community, which has since evolved to become today’s European Union (EU). A condition of EU membership is that community law, which is now EU law, be given effect in domestic law. The European Communities Act 1972 is the principal piece of domestic legislation passed by the UK Parliament which gives effect to EU law in the UK, and gives EU law supremacy over UK domestic law.

How does Brexit affect your business?

The vast majority of EU based law will continue to apply in the UK for an indefinite period due to the transposition of the law into UK law by the Brexit legislation.

Nevertheless, after 11 pm on 31 January 2020 there will be immediate practical changes for some sectors, especially for import and export of goods and international transport. For more information, see Department for Exiting the European Union and search for Brexit guidance.

The start of the Brexit process

On 23 January 2013 Prime Minister Cameron announced his intention to negotiate a new settlement on the terms of the UK’s membership of the EU, followed by a pledge to subsequently hold an in-out referendum on the UK’s membership of the EU.

The European Union Referendum Act 2015 paved the way for the referendum to be held in the UK and Gibraltar on whether the UK should remain a member of the EU. The Government committed to honouring the result. The referendum was held on 23 June 2016 and the result was a decision to leave the EU by 52% to 48%.

 

Under Article 50 of the Treaty on European Union (TEU), any Member State may decide to withdraw from the Union by giving notice to the European Council of its intention. The European Council is then required to negotiate and conclude an agreement with the leaving State setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. The EU Treaties cease to apply to the leaving State from the date on which the withdrawal agreement comes into force or, failing that, two years after the notice to leave. The date may be extended if the European Council, voting unanimously, and the leaving State agree to do so.

Who decides to implement Brexit?

The Government wanted to implement the result without further legislation by invoking Prerogative power to trigger the UK’s withdrawal from the EU under Article 50 of the Treaty on European Union. However, in R (on the application of Miller and another) v Secretary of State for Exiting the European Union [2016] EWHC 2768 (Admin), the Supreme Court judgment made it clear that, notwithstanding the result of the European Referendum, the Government had no power to initiate the process of withdrawal from the EU without the authority of primary legislation. The Supreme Court also considered arguments relating to the devolution acts and whether consent of the devolved administrations was required before notice to withdraw could be served. The unanimous decision of the court was that EU and other foreign affairs matters were reserved to the UK Government and Parliament and that the devolved legislatures did not have a veto on the UK’s decision to withdraw from the EU.

The Government was therefore obliged to initiate primary legislation, leading to the enactment of the European Union (Notification of Withdrawal) Act 2017. The UK gave formal notification of its intention to withdraw to the European Council of its intention on 29 March 2017.

Brexit Date on 29 March 2019

The European Union (Withdrawal) Act 2018 received Royal Assent on 28June 2018. The Act provides for the European Communities Act 1972 to be repealed on “Exit Day”, defined as 29 March 2019 at 11.00 pm (but see below).

The Act provides for the repeal of the European Communities Act 1972, thereby ending the supremacy of European Union (EU) law in UK law, and the conversion of EU law as it stands at the moment of exit into domestic law. It also empowers the Government to make secondary legislation to enable corrections to be made to the laws that would otherwise no longer operate appropriately once the UK has left, so that the UK domestic legal system continues to function correctly outside the EU.

The Act also enables domestic law to reflect the content of a withdrawal agreement under Article 50 of the Treaty on European Union once the UK leaves the EU, subject to the prior enactment of a statute by Parliament approving the final terms of withdrawal.

 

Article 50 does not provide for any withdrawal of a notice to leave. However on 10 December 2018, in the case of Wightman and Others v Secretary of State for Exiting the European Union Case C-621/18, the EU Court of Justice ruled that, when a Member State has notified the European Council of its intention to withdraw from the European Union, as the UK has done, that Member State is free to revoke unilaterally that notification, provided that no withdrawal agreement between that Member State and the EU has entered into force or, if no such agreement has been concluded, as long as the two-year period laid down in Article 50(3) TEU, possibly extended in accordance with that paragraph, has not expired.

On 29th March 2017, the Prime Minister gave notice of the intention of the United Kingdom to withdraw from the European Union in accordance with Article 50 of the Treaty on European Union and the European Union (Notification of Withdrawal) Act 2017. Where a Member State has given such notice, paragraph 3 of that Article provides that the Treaties of the European Union cease to apply to the Member State concerned from the date of entry into force of a withdrawal agreement or, failing that, two years after the notification, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period. In consequence, the Treaties were due to cease to apply to the United Kingdom at 11.00 pm on 29th March 2019.

Exit Day changed from 29 March 2019 to 31 October 2019

In view of the continued delay in negotiating the terms of the Withdrawal Agreement and the Government’s difficulties in securing its ratification by Parliament, the definition of Exit Day in the Withdrawal Act was amended twice since enactment.

Prime Minister Theresa May wrote to the President of the European Council on 20 March 2019 requesting an extension to the Article 50 period in order to delay Brexit. The Council agreed an extension on 22 March(i). As a result, the EU Treaties were instead cease to apply to the UK at 11.00 pm on 22nd May 2019 if the House of Commons approved the Withdrawal Agreement by 11.00 pm on 29th March. If the House of Commons did not give such approval by that time, the Treaties were to cease to apply at the earlier date of 11.00 pm on 12th April 2019(ii).

(i) European Council Decision (EU) 2019/476, OJ No L 80 I, p 1

(ii) European Union (Withdrawal) Act 2018 (Exit Day) (Amendment) Regulations 2019, SI 2019/718

On 2 April, the Prime Minister proposed talks with the Leader of the Opposition to agree a deal enabling the UK to leave the EU by 22 May. After votes in the House of Commons enabling non-government MPs to control the agenda of the House of Commons on specific days, the so-called “Cooper Bill” obliging the Government to seek another Article 50 extension passed its various Commons stages in one day on 3 April. The legislation took longer to get through the House of Lords, but eventually received Royal Assent on 8 April(i). This measure also changed the Parliamentary procedure for approving any future changes to Exit Day from an affirmative resolution in each House to a negative resolution (see below).

(i) European Union (Withdrawal) Act 2019

On 5 April, the Prime Minister wrote to the President of the European Council Donald Tusk seeking a further extension of the Exit Date to 29 June. The European Council agreed on an extension until 31 October, with the possibility of the UK leaving earlier if the Withdrawal Agreement were ratified(i). Exit Date was accordingly changed again to 31 October 2019 at 11.00 pm(ii).

(i) European Council Decision (EU) 2019/584, OJ No L 101, p1).

(ii) European Union (Withdrawal) Act 2018 (Exit Day) (Amendment) (No 2) Regulations 2019 (SI 2019/859)

In his first speech as Prime Minister on 24 July 2019, Boris Johnson stated that the UK would “come out of the EU on October 31 no ifs or buts” while nevertheless expecting that the Withdrawal Agreement would be concluded by then. However, most MPs in the House of Commons were opposed to the possibility of Brexit without the Withdrawal Agreement (”no deal Brexit”).

Prorogation controversy

On 28 August, the Privy Council with the Queen’s consent made an Order in Council to prorogue Parliament from the week beginning 9 September until the State Opening of Parliament on 14 October. Many MPs and others viewed such a long prorogation as unprecedented. Upon Parliament's return from the summer recess on 3 September, a Bill was introduced in the Commons with the aim of forcing the Government to seek a further extension of the Exit Date from the European Council. The Bill after amendment in its passage through Parliament was enacted on 9 September as the European Union (Withdrawal) (No. 2) Act 2019. This Act requires the Prime Minister to write to the European Council by 19 October in order to request an extension of the Exit Date to 11.00pm on 31 January 2020, unless Parliament approves before the Withdrawal Agreement or a withdrawal from the EU without an agreement.

In R (on the application of Miller) (Appellant) v The Prime Minister (Respondent) [2019] EWHC 2381 (QB)11/09/2019, Gina Miller applied to the English High Court for a judicial review on the questions:

(i) whether the decision of the Prime Minister to advise Her Majesty the Queen to prorogue Parliament is justiciable in the courts; and

(ii) if the decision is justiciable and the appeal is not academic, whether that advice was lawful.

The court ruled that to prorogue Parliament is not justiciable in Her Majesty's courts.

A similar result was reached in the action for judicial review made by Raymond McCord in the High Court of Northern Ireland in Belfast which alleged breaches of the Good Friday Agreement. The court held that was non-justiciable under Northern Irish law.

However, in the Scottish case Joanna Cherry QC MP and others v The Advocate General11/09/2019 the Court of Session found that the real purpose of the prorogation order was to restrict the time available for Parliamentary scrutiny of Government action and, in particular, the ongoing Brexit procedure. The prorogation was therefore unlawful and of no effect.

Appeals in both the Miller and Cherry cases were heard in the Supreme Court as

R (on the application of Miller) (Appellant) v The Prime Minister (Respondent)
Cherry and others (Respondents) v Advocate General for Scotland (Appellant) (Scotland).

Because of the importance of the case, a panel of 11 Justices was convened, the maximum number of serving Justices who are permitted to sit. In the unanimous judgment of all 11 Justices. The cases were heard from 17 to 19h September 2019. The court held that:

(i) the first question was whether the lawfulness of the Prime Minister’s advice to Her Majesty [to prorogue Parliament] was justiciable. The court held that it was. The courts have exercised a supervisory jurisdiction over the lawfulness of acts of the Government for centuries. As long ago as 1611, the court held that “the King [who was then the government] hath no prerogative but that which the law of the land allows him”.

(ii) the second question was what are the limits to that power [to advice the Queen to prorogue Parliament]? Two fundamental principles of the British Constitution were relevant to deciding that question. The first was Parliamentary sovereignty - that Parliament can make laws which everyone must obey: this would be undermined if the executive could, through the use of the prerogative, prevent Parliament from exercising its power to make laws for as long as it pleased. The second fundamental principle was Parliamentary
accountability. The power to prorogue is limited by the constitutional principles with which it would otherwise conflict. The relevant limit on the power to prorogue was: that a decision to prorogue (or advise the monarch to prorogue) will be unlawful if the prorogation has the effect of frustrating or preventing, without reasonable justification, the ability of Parliament to carry out its constitutional functions as a legislature and as the body responsible for the supervision of the executive. In judging any justification which might be put forward, the court must of course be sensitive to the responsibilities and experience of the Prime Minister and proceed with appropriate caution. If the prorogation did have that effect, without reasonable justification, there wasno need for the court to consider whether the Prime Minister’s motive or purpose was unlawful.

(iii) The third question was whether the prorogation did have the effect of frustrating or
preventing the ability of Parliament to carry out its constitutional functions without reasonable justification. The prolonged suspension of Parliamentary democracy took place in quite exceptional circumstances: the fundamental change which was due to take place in the Constitution of the United Kingdom on 31st October. Parliament, and in particular the House of Commons as the elected representatives of the people, has a right to a voice in how that change comes about. The effect upon the fundamentals of our democracy was extreme. No justification for taking action with such an extreme effect had been put before the court.

The only evidence of why it was taken is the memorandum from Nikki da Costa of 15 August. It explained why holding the Queen’s Speech to open a new session of Parliament on 14 October would be desirable. It did not explain why it was necessary to bring Parliamentary business to a halt for five weeks before that, when the normal period necessary to prepare for the Queen’s Speech is four to six days. It did not discuss the difference between prorogation and recess. It did does not discuss the impact of prorogation on the special procedures for scrutinising the delegated legislation necessary to achieve an orderly withdrawal from the European Union, with or without
a withdrawal agreement, on 31st October. It did not discuss what Parliamentary time would be needed to secure Parliamentary approval for any new withdrawal agreement, as required by section 13 of the European Union (Withdrawal) Act 2018.


The Court was bound to conclude, therefore, that the decision to advise Her Majesty to prorogue Parliament was unlawful because it had the effect of frustrating or preventing the ability of Parliament to carry out its constitutional functions without reasonable justification.


(iv) The final question, therefore, was what the legal effect of that finding was and therefore what remedies the Court should grant. The court had already concluded that the Prime Minister’s advice to Her Majesty was unlawful, void and of no effect. This meant that the Order in Council to which it led was also unlawful, void and of no effect and should be quashed. This meant that when the Royal Commissioners walked into the House of Lords it was as if they walked in with a blank sheet of paper. The prorogation was also void and of no effect. Parliament has not been prorogued.

Comment

The Withdrawal Act specifically provided that “Exit Day” (i.e. the date of Brexit) meant 29 March 2019 at 11.00 pm. The Act seems to have envisaged that the Withdrawal Agreement would be negotiated in time to come into effect on Exit Day but it did not state that specifically.

While the Supreme Court judgment in the Miller and Cherry cases was momentous and unprecedented in British modern constitutional history, it has no effect, at least directly, on the legal date for Brexit. The Supremem Court emphasised that the two cases were not about when and on what terms the United Kingdom is to leave the European Union

In our opinion, much of the political and legal turmoil and delay over Brexit stems from the failure of the Government and indeed Parliament to envisage and think through the consequences and plan for the possibility that a satisfactory withdrawal agreement might not be negotiated within the two year timetable provided by Article 50 of the EU Treaty. This failure began with the framing of the Referendum question in 2016 which offered voters the binary choice:

* “Remain a member of the European Union”;

* “Leave the European Union”.

The framers of the Referendum failed to include any question around the possibility that a withdrawal agreement acceptable to Parliament might not be concluded within the two year deadline.

For commentary on this topic, see e.g. “The tale of the Brexit referendum question” David Allen Green 3 August 2017 ft.com. See also: Referendums.

Brexit delayed again to 31 January 2020

Following the withdrawal notice, a Withdrawal Agreement was negotiated by the Government with the European Council . The Withdrawal Agreement provided only for the terms of the 'divorce' of the UK from the EU, including a transition period at the end of which the UK would cease to be subject to EU law and provisions for payment by the UK to settle its financial liabilitie on quitting the Union. However the Withdrawal Agreement did not and could not provide for the future trading relationship between the EU and the UK which would require a long period of negotiation due to the huge range of economic and social activities concerned. For that reason, a Political Declaration was also negotiated with a view to setting out the principles upon which the future relationship would be based.

Throughout 2019 the Government was not in a position to ensure the passing of the legislation and the House of Commons repeatedly refused to ratify the Withdrawal Agreement. On 5 April 2019, Prime Minister Theresa May wrote to the President of the European Council Donald Tusk seeking a further extension of the Exit Date to 29 June. The European Council agreed on an extension until 31 October, with the possibility of the UK leaving earlier if the Withdrawal Agreement were ratified. Exit Date was accordingly changed again to 31 October 2019 at 11.00 pm.

Following the failure of Parliament to approve the version of the agreement negotiated by Prime Minister Theresa May's government, the government under her successor, Boris Johnson, re-opened negotiations with the EU for a revised Withdrawal Agreement and Political Declaration. In his first speech as Prime Minister on 24 July 2019, Boris Johnson stated that the UK would 'come out of the EU on October 31 no ifs or buts' while nevertheless expecting that the Withdrawal Agreement would be concluded by then. However, most MPs in the House of Commons were opposed to the possibility of Brexit without the Withdrawal Agreement (”no deal Brexit”).

With no prospect in sight of Parliament being able to approve the Withdrawal Agreement by 31 October, legislation was proposed whereby the PM would be forced to seek yet another extension of the Exit Day. On 9 September 2019 the European Union (Withdrawal) (No. 2) Act 2019 was enacted and imposed an obligation upon the PM to seek an extension of the Exit Day to 11 pm on 31 January 2020.

The revised Withdrawal Agreement and Political Declaration were considered and agreed at the EU's European Council on 17 October 2019. The Government however was again unable to persuade the Commons to approve the revised withdrawal agreement by the end of October. To resolve the deadlock, the PM called for a general election to be held as soon as possible.

The Fixed-term Parliaments Act 2011 (FTPA) was a barrier to an early election as it provides for a general election to take place every five years, unless an early election is triggered by the House of Commons by either a resolution supported by at least two thirds of the total membership of the House or by a vote of no confidence in the government, There was insufficient support in the Commons for either possibility. On 29 October, the PM introduced a bill to the House of Commons to circumvent the FTPA and to legislate for a special election day. A mere simple majority of MPs was required to approve the Bill which was duly passed both in the Commons and the House of Lords. The date of the general election was set for Thursday, 12 December 2019.

Following the return of a Conservative Government with a substantiual majority in the Commons, the PM was enabled to introduce revised legislation, the European Union (Withdrawal Agreement) Bill 2019-20 which is likely to be duly enacted..

 

Will EU law cease to apply on Brexit day?

The short answer to this question is yes. But in practice UK law will replicate much of the existing EU law for a long time to come.

The extrication of the UK from the EU legal system is immensely complicated. The scale of the task is uprecedented. The reason fro this is the extent to which EU law has become embedded in UK law over the period of some 45 years since the accession of the UK to the (then) EEC.

'Our sovereignty has been taken away by the European Court of Justice...Our courts must no longer enforce our national laws. They must enforce Community law...No longer is European law an incoming tide flowing up the estuaries of England. It is now like a tidal wave bringing down our sea walls and flowing inland over our fields and houses—to the dismay of all.'
Lord Denning: Introduction to The European Court of Justice: Judges or Policy Makers? (London: Bruges Group, 1990).

The first step in exiting the EU legal system will in effect be the replication of almost the entire EU legal system into UK law. This will inevitably mean that all the law of EU origin affecting business and commerce will continue in effect in the UK for years to come.

The UK remains a full member of the EU and all the rights and obligations of EU membership remain in force until exit. EU law will continue to apply during this period and the Government stated in the White Paper ‘Legislating for the United Kingdom’s withdrawal from the European Union’that it will continue to negotiate, implement and apply EU law during this period.

The Government explained in the White Paper its view that in order to achieve a stable and smooth transition, it intended to initiate the European Union (Withdrawal) Bill - the so-called ‘Great Repeal Bill’ - which will convert the body of existing EU law into domestic UK law. Parliament and, where appropriate, the devolved legislatures, will then be able to decide which elements of that law to keep, amend or repeal after the UK has left the EU. In that way, in general the same rules and laws will continue apply after the UK’s departure from the EU as they did before. If there were no legislation to preserve or convert existing EU law into domestic law at the same time as repealing the European Communities Act 1972, there would be significant gaps in UK law.

The House of Commons Library has estimated that 13.2% of UK primary and secondary legislation enacted between 1993 and 2004 was EU related. The review of all EU-related legislation, as well as that which will be transposed by the Great Repeal Bill, makes this potentially one of the largest legislative projects ever undertaken in the UK. The White Paper indicated that the corrections will require between 800 to 1000 statutory instruments.

In order to give legal effect to the UK withdrawal, the Government has introduced to Parliament the 'Great Repeal Bill' or formally the 'European Union (Withdrawal) Bill'. AThe Bill is now proceeding through the usual parliamentary stages. At the time of writing, the ''exit day' for the UK's departure means 29 March 2019 at 11.00 pm.

The Repeal Bill includes so-called “Henry VIII clauses” which would give the Government powers to change primary legislation already been passed by Parliament. Government Ministers have claimed that the powers are required to “correct” European laws, for example those which refer to EU bodies soon to be defunct after Brexit. Critics have objected that the Government would thereby avoid legislative scrutiny notably in the House of Lords.

The existing statutory basis for the application of EU law in the UK - the European Communities Act 1972 - will be repealed.


Other withdrawal legislation


Other exit-related legislation introduced in Parliament in the last session include the Nuclear Safeguards Act 2018, Sanctions and Anti-Money Laundering Act 2018 and Taxation (Cross Border Trade) Act 2018. The Trade Bill failed to complete its passage through Parliament. See further: Parliament Bills and Legislation.

See further: Department for Exiting the European Union

Devolved legislatures in the UK

Under the well-established ‘Sewel Convention’, the UK Government will not normally legislate on devolved matters except with the agreement of the devolved legislature. Some politicians and commentators have claimed that Brexit might be “blocked” if the Scottish Parliament were to refuse consent. However, as a constitutional convention, it is not legally enforceable as recently confirmed in the Miller case.

The Withdrawal Billl will replicate the common frameworks created by EU law in the UK, and
maintain the scope of devolved decision making powers immediately after exit. The Government has stated that this will be a transitional arrangement to provide certainty after exit and allow intensive discussion and consultation with devolved administrations on where lasting common frameworks are needed.

 

[Legaleze gratefully acknowledges the following sources: BBC News; McGill & Co; GOV.UK]

[Page updated: 09/01/2020]

 

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