Brexit: What's next for Britain?

In late January, the Supreme Court decreed that MPs and peers must be able to take Brexit plans into their own hands and that Parliament must give its consent before the Government can trigger Article 50 of the EU's Lisbon Treaty and correctly initiate Brexit (R (on the application of Miller and another) v Secretary of State for Exiting the European Union 2017] UKSC 5[22]). After a taxing court battle described as “…a judgement that sets a far-reaching constitutional precedent and upholds parliamentary sovereignty”, Justices ruled by a majority of eight to three.

This eagerly awaited ruling, conducted by the largest panel of Judges in history, assembled in Britain’s highest court. Lord Neuberger stated that “the referendum is of great political significance, but the Act of Parliament authorising it did not say what would happen afterwards". In other words, any action taken now must be in keeping with the UK’s constitution. He further went on to say ‘any change in the law to give effect to the referendum must be made in the only way permitted by the UK constitution, namely by an Act of Parliament”, and concluded with the statement that “to proceed otherwise would be a breach of settled constitutional principles stretching back many centuries."

By handing MPs the authority to sanction the UK’s withdrawal, it shows that there is no need for Parliament to wait for consent from the devolved assemblies that lie in our neighbouring countries, Scotland, Northern Ireland or Wales. This decision therefore sets a limit on the extent of the Government’s powers with regard to Brexit, which have been embedded in the law through the enactment of the 1972 European Communities Act (ECA).

Although this ruling could be seen as a blow to Theresa May’s Brexit timetable, this has not stopped her in her tracks quite yet. As of January, Theresa May has been able to ‘fast-track’ legislation to be on par with her plans for Brexit, after suffering a defeat from the Supreme Court. Additionally, the Prime Minister has been expected to have coincided a Bill that gives her a “full authority to invoke Article 50, the EU treaty’s divorce clause, at her discretion”, as reported by the Financial Times.

It has been said that Minsters hope to rush to get the legislation published ‘within days’ to facilitate May’s drive to trigger Article 50, possibly before the end of March. Brexit Secretary David Davis also told the House of Commons that the legislation can be classed as the “most straightforward bill possible”, suggesting that it will be made harder for the opposing MPs to amend.

The impact of Brexit on the legal sphere

Ever since the results of this referendum were announced last year, there is no doubt that the future of Britain has been quite uncertain. Brexit has also resulted in a loss of 43 years of interconnection between UK and EU Law.

The biggest question now is how Brexit will impact the legal sphere. Below are five main ways the prospect of Brexit could enhance or inhibit the legal sector.

1. Treaties

Some of the immediate challenges for businesses will arise from the impact of Brexit on the EU Treaties. The treaties of the EU are the highest level of EU legislation, creating what is known as the Single Market and based on the four fundamental freedoms of the EU:

• Freedom of movement of people

• Freedom of movement of services

• Freedom of movement of goods

• Freedom of movement of capital

Moreover, these Treaties are incorporated into UK law by the European Communities Act 1972, as mentioned previously, and they also provide the legislative basis for transposing EU law into domestic law.

2. Regulations and Directives

Regulations are directly applicable under the Treaty on the Functioning of the European Union, meaning that they apply in Member States without the need for implementing legislation. Conversely, Directives require Member States to draft regulations to transpose them into the law of respective Member States.

3. Decisions and Recommendations

Placed at the lowest end of the legislative spectrum are Commission Decisions, which are binding on the subject, and Recommendations, which do not have any legally binding effect.

4. Case Law

New laws are also made by the judiciary in the form of judgments handed down by the Court of Justice of the European Union (CJEU). The CJEU hears references from MS courts, regarding points of EU law. For example, if one is asking how to interpret an aspect of EU law in a local case, the case may be stayed pending a reference to the CJEU. National courts are required to follow the CJEU decisions which can radically alter the interpretation of EU legislation. In the UK, the ECA gives primacy to the CJEU in matters of EU law.

5. Human Rights

It is important to recognise that the European Court of Human Rights is not an EU institution and its membership goes beyond the EU. Its jurisdiction depends on countries being signatories to the European Convention on Human Rights (incorporated into the UK law by the Human Rights Act 1998) and not on being an EU Member State.

Financial Markets

In terms of financial markets, the Pound Sterling fell just as the Government lost the Brexit Supreme Court Appeal. The pound was trading at $1.246 and fell down by around 0.6 per cent on the day after the ruling. Prior to this judgement, the sterling was just above $1.25, and had remained at a five-week high.

It is evident that the sterling has endured quite a bumpy ride during recent months, but according to May, it had largely edged higher as she stated in her speech last month. It has also been said that the strength coincided with a fall in the dollar, which was triggered by concerns over US President Donald Trump's policies, just days after his inauguration.

To conclude, there is no doubt that the Article 50 provisions are untested and raise a considerable degree of uncertainty. However, to be clear, nobody knows how long it will take to exit the EU and put in place a replacement framework, as opinions differ wildly.