Brexit: what legal impact can we expect?

May 15, 2019

Written By Becky Kells, Editor, AllAboutLaw

As Brexit continues to plough ahead, we examine some of the key legal changes that will stem from it.

The EU has allowed the UK to delay its exit from the bloc until the end of October 2019—so no matter how exhausted you are from hearing about Brexit, there’s still some way to go. If you’ve been following the negotiations so far, you’ll be fully aware that nothing is set in stone.

That said, legal professionals, politicians, finance professionals and other experts have gone into some detail about what we can expect once Brexit finally happens. Here, we examine what’s happened so far—and summarise some of the legal developments that we can expect to happen post-Brexit.

Brexit: a legal timeline so far

December 17, 2015: European Union Referendum Act 2015

The prospect of a referendum first hits Parliament in 2015, with this piece of legislation making it a requirement for the secretary of state to appoint the date for the referendum. It was announced by former prime minister David Cameron in January 2013 that a referendum should be held, but this is the moment at which it becomes legally binding. The European Union Referendum Act comes into play on December 17, 2015 after passing in the House of Commons and the House of Lords. It reaches full legal force on February 1, 2016.

February 20, 2016: a date is set

Following the European Union Referendum Act becoming legislation, David Cameron sets the date for the referendum: June 23, 2016.

June 23, 2016: the referendum is held

On June 23, 2016, Britain wakes to find that it has voted to leave the EU with a majority of 51.89% votes for leave, to 48.11% votes for remain. The financial markets are thrown into disarray and David Cameron resigns as prime minister.

January 24, 2017: the legal challenge

In early January 2017, the Supreme Court rules that the UK Government must have an Act of UK Parliament before initiating the withdrawal process from the EU. Prominent business owner and activist Gina Miller puts her name to the legal case, arguing that the government can’t formally start the leave proceedings without a vote or deliberative debate in Parliament. The Supreme Court rules unanimously that an Act of Parliament must be obtained.

March 16, 2017: the Notification of Withdrawal

On March 16, the first major legislation since the referendum is passed by Parliament. Just two days after the outcome of the Miller case, on January 26, the Notification of Withdrawal is debated in parliament for the first time, and comes into effect on March 16.

March 28, 2017: Article 50

Prime minister Theresa May signs and issues a letter to the president of the European Council, Donald Tusk. The letter triggers Article 50, setting out a two-year negotiation period ending on March 29, 2019.

June 26, 2018: the European Union (Withdrawal) Act 2018

The European Union Withdrawal Act commences on June 26, 2018. In terms of legislation, it’s the big one: its implementation will facilitate the end of EU laws being applicable to the UK. Any EU laws that are directly applicable will be transposed into UK law. Crucially, any laws that are no longer relevant can be removed by the government, as the supremacy of the EU law in the UK will have ended. However, this Act also sets out that another parliamentary Act must be passed before a withdrawal agreement can be ratified.

April 11, 2019: a new deadline

After extending the original deadline of March 29, 2019 to April 12, 2019, Theresa May enters into frantic talks with the EU to extend the deadline further. On April 11, a new deadline of October 31, 2019 is announced. Donald Tusk said of the six-month extension, “Please do not waste this time.”

Possible law changes

Human rights

One of the largest gaps left by Britain’s departure from the EU will be in human rights law. This was picked up as early as January 2018, when a letter published in The Observer detailed the human-rights groups that would be affected by Brexit. The Withdrawal Agreement will remove the EU charter of fundamental rights from UK law, and many leading human-rights activists were concerned that a vacuum will be left behind, putting many at risk.

Over a year later, there’s still a lack of clarity about what will happen on the human-rights front when Britain leaves the EU. The UK Parliament Human Rights Committee has expressed concern that the current Brexit negotiations are not giving enough weight to human-rights issues. All current international agreements, regardless of whether they are human-rights-specific or not, currently undergo scrutiny by the European Parliament and UK Parliaments Committees. After Brexit, the European Parliament will no longer do this for the UK.

The UK Parliament Human Rights Committee has called for standard human-rights protection in all agreements, as well as a strengthened role for Parliament in scrutinising all international agreements from a human-rights perspective. It’s as yet unclear what legislation will replace the existing EU human-rights legislation.

Human-rights law would also be thrown into a different kind of uncertainty should the UK crash out of the EU without a deal. Theresa May said that the residency of EU citizens currently living in the UK would be protected, and the same was said of UK citizens living in the EU by Donald Tusk. A specific registration system was set up by the government where EU citizens could register their “settled status” in the UK ahead of Brexit.

However, if there isn’t a deal in place when Britain leaves the EU, there’s no legal reassurance that EU citizens could be secure in their residencies.

Even without a deal, the EU laws covering workers’ rights and discrimination, for example, will become integrated into UK law. The UK will still be protected under the European Convention on Human Rights, which exists separately from the EU, covering the Council of Europe members.

But issues such as employment, equality and privacy—covered by the scrapped EU charter of fundamental rights—currently remain unaccounted for in UK law.

Trade

From 1950 onwards, the original founders of what we now call the European Union were establishing the first bloc—and the bedrock of their unity was trade. Originally called the European Coal and Steel Community, and comprising France and Germany, key principles of this early union were to pool resources and create a common market for trade and goods. Between 1960 and 1969, EU countries decided to stop charging custom duties among themselves. This eventually evolved into the “single market” model adopted by the EU today.

The UK’s departure from the EU will mean a departure from this single market—which means that our trade agreements are set to look very different post-Brexit. There are a number of different outcomes depending on the way in which the UK leaves the EU.

If there’s a no-deal, the UK would automatically rely on the World Trade Organisation (WTO) rules for trade. Like all other members of the WTO without a free-trade agreement, the UK would be subject to the list of tariffs and quotas issued by the EU. The UK can’t lower tariffs for the EU—and vice versa—without a trade agreement; they have to treat each other exactly the same as every other WTO member. So trade would continue with the EU under WTO rules—but it would be different, with new tariffs. Another point of confusion in the event of a no-deal Brexit would be product standards, safety regulations and sanitary checks.

At present, the UK is part of 40 trade agreements with more than 70 countries due to its EU membership. To make Brexit as seamless as possible, it’s essential that the government replicates these agreements. It has done so with a few countries, but it’s unlikely that all deals with all countries will be concluded ahead of Brexit.

Aviation

Any sector that operates across multiple countries is likely to be affected by Brexit—but aviation has its own unique issues. At present, airlines owned and controlled by EU member states can operate within the EU and aren’t subject to capacity, frequency or pricing restrictions. They are also privy to traffic rights as negotiated by the EU with non-member states. Not only will the UK need to renegotiate its own traffic rights with non-member states, it will also need to establish agreements with how its airlines can operate in relation to the EU.

In terms of keeping things moving, Herbert Smith Freehills’ Brexit Legal Guide has more: “As part of its Contingency Action Plan, the EU has responded by proposing a unilateral legislative measure to ensure temporarily (for 12 months) basic air connectivity between the EU and UK.”

Competition law

At present, the UK is subject to EU competition law, which prevents the creation of monopolies and promotes competition within the European Single Market. Policies look to address mergers, state aid, abuse of market dominance, and cartels. The exact position of the UK in relation to this law will depend on the circumstances under which we leave the EU.

However, any UK businesses that affect the EU in any way will be subject to the same laws as before; the same is true of businesses based in companies currently outside the bloc. But the European Commission will lose the power to carry out on-site investigations in the UK, or to ask the Competition and Markets Authority in the UK to do so.

“The impact will mainly be felt in relation to the enforcement of competition law by the UK authorities,” write Peter Willis and Richard Eccles in Bird & Bird’s competition law implications article. “The substance of UK competition law is very similar to that of EU competition law, and there’s a statutory requirement (section 60 of the Competition Act 1998) to interpret the UK competition rules in a manner consistent with competition case-law of the European Court of Justice. There is a strong prospect that this link would be cut as a result of the vote to exit the EU.”

This article originally appeared in our Areas of Law edition of the Principle. Find out more about EU law here.

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