Brexit - the legal implications

Article 50 of the Treaty on European Union (the TEU) provides the legal basis and procedure for an EU Member State to withdraw from the Union. This route to withdrawal is the only one that complies with international law. Under Article 50, the Member State must provide notice of its intention to withdraw, which triggers the start of a two year period in which the Member State and the EU negotiate the terms of withdrawal, taking account of the framework for (rather than settling the terms of) their future relationship.

The UK gave notice of its intention to withdraw from the EU on 29 March 2017 (Article 50 notice), which has started a two year period in which the UK and the EU will negotiate the terms of withdrawal. The UK remains a Member State during this process. Read the letter to President Tusk here.

If no agreement on the arrangements for its withdrawal is reached, Brexit will occur automatically two years later on 29 March 2019.The UK Prime Minister has said that the default position, in the event no agreement is reached, would be that the UK would leave the EU on World Trade Organisation terms. The two year period can however be extended if negotiations are incomplete, but only with the unanimous consent of the Council of the EU (and thus all remaining 27 Member States). The two year period includes time at the end when the Council and Parliament consider the terms of the agreement, so the available period for negotiation is well under two years.

The Article 50 procedure has never before been used and the provision is somewhat opaque. This puts both the UK and the EU into unchartered waters. However, the EU has said that it will not consider negotiation of a post-exit arrangement, without finalizing negotiations on the terms of the UK’s withdrawal first.

The Council of the EU is ultimately responsible for concluding the withdrawal agreement with the UK on the basis of a qualified (weighted) majority, having sought the consent of the European Parliament.

It is not clear whether the UK could revoke the Article 50 notice, once given. Its irrevocability was assumed by both parties in the Miller litigation, but this interpretation is yet to be confirmed by the Court of Justice of the European Union (CJEU) or any other EU institution. An action before the Irish High Court to establish if Article 50 notice is or is not revocable once given has been discontinued.

EU law is deeply embedded in the legal landscape in the UK at the moment. More generally, the UK and its laws must comply with the Treaty obligations of the UK under the EU treaties and acknowledge the principle of the supremacy of EU law.

Two main types of EU legislation currently shape UK law:

1. EU Regulations

   EU Regulations lay down general rules that are binding at EU and at national level. They are “directly applicable”, which means that they do not need to be separately enacted through UK legislation to have effect. Regulations will fall away with once the UK formally exits unless substituted.

2. EU Directives

   EU Directives are binding in terms of the results to be achieved - but the Member States have flexibility as to how to achieve those results. In the UK, EU legislation is implemented either as standalone legislation or integrated into a broader piece of legislation, and as either primary legislation (Acts of Parliament) or secondary legislation, under the European Communities Act 1972 (the ECA).

   The vast majority of EU Directives are implemented through secondary legislation. Following the UK’s exit, each piece of primary legislation implementing an EU Directive remains in force unless or until separately repealed by Parliament, but there will be no obligations to follow any subsequent amendments to the EU directives. Whilst other (secondary) legislation will only remain in force until the repeal of the ECA, unless expressly retained by the UK Parliament or substituted.

European Union (Withdrawal Bill) (formerly The Great Repeal Bill)

On 13 July 2017 the European Union (Withdrawal) Bill was introduced into the House of Commons. This bill will (i) repeal the European Communities Act 1972 on the day the UK formally leaves the EU; (ii) convert EU law as it stands at the moment of exit into UK law before the UK leaves the EU, so that the first day following exit does not place the UK in a legal vacuum; (iii) create powers to make secondary legislation, including temporary powers to allow corrections to be made to laws that would otherwise no longer operate appropriately once the UK has left the EU and to implement a withdrawal agreement and (iv) maintains the current scope of devolved decision-making powers in areas currently governed by EU law.

See "Brexit: UK legislation: recent developments "for more information on the European Union (Withdrawal Bill )and other UK Bills which have been introduced as a result of Brexit.

The extent to which the UK’s legal landscape will change as a result of Brexit depends on the outcome of the negotiations between the UK and the EU. The UK Prime Minister, Theresa May, has made it clear that the UK will not seek membership of the EEA or Single Market. The UK Government instead seeks to negotiate a bespoke Free Trade Agreement between the UK and the EU. See "Brexit negotiations: recent developments" for more information.

It is not possible to predict what the precise consequences of the withdrawal might be in practice for the UK, until negotiations are complete.

For our views on the key issues that will arise for businesses when the UK leaves the EU, see our series of Brexit articles on the left.