In the latest twist in the Brexit saga, three senior judges in the Royal Courts of Justice yesterday decided that the Government needs the approval of Parliament before it can give notice to withdraw from the European Union pursuant to Article 50 of the Lisbon Treaty. The judgment (the full text of which can be found here) has profound political, constitutional and commercial ramifications.
What is the immediate impact?
Until yesterday, the Prime Minister had been proceeding on the basis that she has personal authority to initiate the process of leaving the European Union, with or without Parliamentary approval. This rationale lent support to the Government's decision not to share its negotiating strategy with Parliament, or to enter into any substantive debate with Parliament about what Brexit will entail in practice.
The assumption is no longer safe. As matters now stand, the Government must obtain Parliamentary approval before it can trigger Article 50. Consequently, there will be calls for much greater transparency in order to ensure that the Commons and the House of Lords have an understanding of the form and implications of the Brexit they are being asked to approve.
There has been a shift from the relative certainty of a Prime Minister announcing that Article 50 will be triggered in March 2017 (and thus Brexit potentially two years later - by March 2019) to significant uncertainty over whether and/or in what form Parliamentary approval will be secured.
What was the legal basis for the decision?
The Government's central argument was that, when Parliament passed the European Communities Act 1972 (1972 Act), it intended that the Government would retain prerogative powers to withdraw from the EU and to choose whether or not EU law should continue to have an effect in the UK.
The Court found that there was nothing in the text of the 1972 Act to support this contention. It also held that the Government's position was contrary to the fundamental constitutional principle that Parliament is sovereign, and that the Government of the day cannot exercise its prerogative powers to override legislation enacted by Parliament.
As the triggering of Article 50 would inevitably unravel rights under EU law which have been incorporated into domestic law, the Court considered that the Government proposed actions would exceed its powers.
The Government also contended that not triggering Article 50 would be contrary to the will of the public (as expressed through the referendum) and, that serving notice to withdraw should be distinguished from the act of withdrawal itself. The Court was dismissive, finding that the referendum was merely advisory in nature, and that service of notice should not be treated as merely procedural because it was irrevocable and in substance would inevitably cause Brexit two years later.
What will the Government do next?
The Government has already announced its intention to appeal. This appeal should take place in early December 2016 – the most likely dates are 7 and 8 December 2016. It will be heard by the Supreme Court (the highest Court in the UK), bypassing the Court of Appeal in an attempt to produce a definitive result as soon as possible.
The Government may also hedge its bets by starting the process of introducing a bill into Parliament specifically to give it the power to serve notice pursuant to Article 50.
What will happen if the Government's appeal succeeds?
If the Supreme Court overturns yesterday's decision, the Government should be able to proceed with its original plan to trigger Article 50 by the end of March 2017.
What if the Government is defeated again?
Its only option at that stage will be to obtain Parliamentary approval. There are serious doubts about whether this will be achievable by March 2017; the need for legislation is likely to slow the process significantly.
The Government will in the first instance seek the approval of the House of Commons, and then the House of Lords.
If the House of Commons ultimately rejects the Government's Article 50 legislation (which is currently viewed by most commentators as unlikely), the Government may call a second referendum specifying exactly what would happen in the event of a further vote to leave, giving greater political and constitutional certainty than there is at the moment. An alternative (raised immediately following yesterday's judgment) is that the Government could call an early general election, and a new Government will be voted in on the basis of manifestos which deal explicitly with Brexit and thus with a clearer mandate.
If you require further information on anything covered in this briefing please contact Kate Allass (firstname.lastname@example.org , 020 3375 7220), David Fletcher (email@example.com , 020 3375 7117) or your usual contact at the firm on 020 3375 7000. Further information can also be found on the Focus on Brexit page on our website
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, November 2016