We've just written about the latest political developments in the Brexit saga and what may happen over the next few months, on our tech and media microsite, Download (read it quickly before it goes out of date!). Over the last year though, Radar has focused on some of the concrete legal and commercial developments, rather than on the political ones.
The EU Withdrawal Act 2018
A major development was the passing of the European Union Withdrawal Act 2018, (Act) which received Royal Assent on 26 June 2018. Some provisions have come into force, others will be brought in by statutory instrument. The Act:
- Repeals the European Communities Act 1972 from date of exit.
- Preserves the rights in EU treaties that can be relied on directly in court by individuals.
- Converts existing EU law (as it applies to the UK) into national law.
- Preserves all laws made in the UK to implement EU obligations.
- Gives pre-Brexit CJEU law the same binding precedent status as Supreme Court decisions.
- Creates powers to make secondary legislation in order to enable corrections to be made to laws which would no longer work appropriately.
- Sets out the order of precedence after exit, from which point:
- new UK legislation will trump EU-derived law.
- EU-derived law which applies at the time of exit will trump non-EU derived law in force at the time of exit.
- Covers repatriation of powers from the EU to the devolved nations. And
- Gives Parliament a vote on the final Brexit deal before it is voted on by the European Parliament.
The Withdrawal Act is not to be confused with the Withdrawal Agreement (the agreement with the EU under which the UK would exit the EU). It deals with purely internal matters. It also commits the UK to an exit date which means that any change to that (for example, due to an extension of Article 50), would require another Act of Parliament.
Technical 'no deal' notices
While a transition period has been provisionally agreed, it is dependent on the UK and the EU reaching agreement on withdrawal and Parliament approving the deal. If we crash out of the EU on 29 March without a deal on either exit or our future trading relationship, many UK businesses will be in uncharted and turbulent waters. Opinions differ as to how serious the ramifications may be, but there are very few who think this is a desirable outcome.
In an attempt to help prepare for the eventuality of a 'no deal' Brexit, the government has published a series of technical notices, together with an overarching framework notice. The notices set out the government's views of what will happen in specific areas and provide some advice. We covered the notices most relevant to commercial tech and data in September and October, but our overall view is that they are not particularly helpful to businesses struggling to understand what to do in the event of no deal. Most of them do little more than restate the law as it will stand, although there are a few nuggets of useful information here and there. The majority are only a couple of pages long and half of that space is taken up by the government's assurances that it will get a deal. If a notice touches on an area which impacts you then it is worth reading but is unlikely to prove enlightening.
CJEU decision on withdrawal of Article 50 notification
The CJEU ruled this month that the UK may withdraw Article 50 notification unilaterally at any time before a withdrawal agreement has entered into force, or before the two year notification period (including any extension period) has expired. If notification is withdrawn, the UK will remain in the EU under unchanged terms and conditions.
The reasoning is as follows:
- Article 50 TEU enshrines the sovereign right to withdraw from the EU in an orderly fashion.
- The TEU is silent on the question of withdrawal of notification but the sovereign right to provide notification supports the conclusion that there should be a sovereign right to withdraw the notification, provided local Member State democratic process is followed. In other words, the fact that the decision to leave is sovereign, supports a sovereign decision to remain in the EU – a status which is neither suspended nor altered by Article 50 notification.
- The CJEU considers that it would be inconsistent with the EU Treaties (which support an ever closer union) to force the withdrawal of a Member State from the EU by not allowing it to withdraw Article 50 notification.
- Were withdrawal of notification dependent on approval of the European Council, it would transform a unilateral sovereign right into a conditional right and would be incompatible with the principle that a Member State cannot be forced to withdraw from the EU against its will.
The decision follows the reasoning of the Advocate General who argued that the requirement that a Member State would need to follow constitutional process in order to withdraw notification was a sufficiently high deterrent against tactical revocations by Member States to try and improve their terms of membership. In the UK, as submission of Article 50 required an Act of Parliament (in accordance with the ruling in Miller v Santos), an Act of Parliament would be needed to withdraw notification – not necessarily a terribly difficult hurdle to meet.
This decision does significantly change the balance of power under Article 50. The position under Article 50 is that there needs to be unanimous agreement among the Member States to extend an Article 50 notification. Previously, this meant that once Article 50 notification had been submitted, any other Member State could ensure that the submitting State fell out of the EU on expiry of the initial two year period by vetoing an extension of Article 50, thereby putting the balance of power completely in the hands of the European Council. Ironically, this decision protects the sovereignty of a withdrawing Member States.
