Brexit - UK and EU legal framework

Publication | April 2017

After

 

What will be the legal route to achieving Brexit?
What UK legislation will need to be repealed or amended in order for Brexit to take effect?
What will be the impact on existing European Union Directives?
What will be the impact on existing European Union Regulations?
Will UK courts still be bound by decisions of the CJEU?

What will be the legal route to achieving Brexit?

On March 29, 2017, the UK gave notice to the European Council under Article 50 of the Treaty on European Union (the TEU) of the UK's intention to leave the EU.

Article 50 provides for a two year period for the withdrawal to take effect. Accordingly, there will now be negotiations between the UK and the European Commission1, as EU negotiator, and these will continue based on guidelines issued by the European Council and in accordance with article 218(3) of the Treaty on the Functioning of the European Union (TFEU). The negotiating period can be extended by agreement of all EU member states. If no extension is agreed, the UK would automatically cease to be a member of the EU at the end of two years. A link to our Brexit timeline tracker can be found here. It is possible that even if there is a formal exit after 2 years, much of the detail of the negotiation will need to be dealt with over a longer period. Article 50 has never been used before so the UK would be setting a new precedent and this is likely to bring its own challenges for all parties involved in so far as there is “no clear legal framework for how it would work”2.

What UK legislation will need to be repealed or amended in order for Brexit to take effect?

The most important piece of UK legislation that would need to be repealed is the European Communities Act 1972 (ECA), which provides for the supremacy of EU law. Repealing the ECA will bring an end to the constitutional relationship that exists between EU and UK law. Moreover, the vast amounts of secondary legislation that have been passed with the objective and justification of implementing EU law would have to be considered by the Government.

It has been announced that the Government intends to repeal the ECA with a ‘Great Repeal Bill’, which will convert all existing EU-derived law into domestic law allowing the UK to decide over time what laws it wishes to retain. This approach is intended to avoid the significant gaps and consequent uncertainty if all EU-derived law was repealed without replacement.  

Commercially, even if the UK decided not to retain any EU law, companies looking to trade in the EU would nevertheless still be required to comply with EU laws such as EU competition rules, regulations and standards.

The Great Repeal Bill will separately need to address EU provisions which regulate the relationship between EU Member States themselves or are based on reciprocity. Thought will also need to be given to the issues surrounding:

  1. legislation which relies on an EU Regulator or give jurisdiction to the CJEU;
  2. the numerous treaties which have been signed by the EU and are currently directly applicable in the UK by virtue of s2(1) of the European Communities Act; and
  3. the fact that references in EU laws to actions being taken within the EU will not cover actions taken within the UK.

The Government’s Great Repeal Bill White Paper proposes wide-ranging powers to amend EU-derived law by secondary legislation. In the Government’s view, these powers will give sufficient scope to correct or remove laws that would otherwise not function properly after Brexit, although the White Paper makes clear that the powers will not be able to be used to create ‘new policy’. For further details, please see our blog post.

What will be the impact on existing European Union Directives?

EU Directives require implementation into UK law in order to have effect. This creates the task for any UK government overseeing Brexit of deciding whether to embark on a process of reviewing Acts of Parliament and statutory instruments with a view to ascertaining whether or not to maintain, replace or repeal each piece of legislation. As set out above, the Great Repeal Bill is intended to affirm the status of UK legislation passed pursuant to EU Directives, but much of this legislation will need to be amended to take into account the new relationship with the EU, such as the appointment and oversight of new UK regulators in place of the EU institutions.

What will be the impact on existing European Union Regulations?

EU Regulations rely on the principle of direct applicability, which means that unlike EU Directives, they are directly implemented into UK law without the need for legislation from the UK Parliament. In this light, Regulations are more powerful legislative tools for the EU because of their immediate applicability. The status of existing Regulations will be addressed in the Great Repeal Bill, although as noted above, in many cases amendments will likely be needed to take into account the UK’s new relationship with the EU.

Will UK courts still be bound by decisions of the CJEU?

The Court of Justice of the European Union (CJEU) situated in Luxembourg is the final arbiter on questions of the interpretation of EU law. In her first speech setting out the UK Government’s priorities for Brexit on 17 January 2017, the Prime Minister restated her position that the UK is not prepared to continue to be subject to the jurisdiction of the CJEU.

The Government’s Great Repeal Bill White Paper proposes that CJEU decisions before Brexit will have the status of Supreme Court decisions. This is an attempt to preserve continuity given that previous CJEU decisions have influenced many areas of English case law and similarly, the English courts have looked at the wording of EU Directives for the purposes of construing UK legislation which was passed to give them effect. It is possible that the UK courts may start to move away from such decisions once the UK is no longer bound by EU law and/or such decisions may be superseded by post-Brexit legislation, but in the interim we envisage that the interpretation of EU law will likely continue to play some role in English jurisprudence.

Footnotes

  1. EU Referendum, the process of leaving the EU, House of Commons briefing paper, April 2016.
  2. EU referendum: the process of leaving the EU, House of Commons briefing paper April 2016.

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