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Some insights from a conference in Brussels on Brexit’s legal consequences

Amidst daily reports about warring factions in the British government and stalling negotiations between the UK and EU, a conference in Brussels that took place last week took a sober view on the legal consequences of Brexit. In short: They are mind-boggling and perhaps even more complex as previously assumed.
Arbeidsliv og offentlig sektor Brexit Konkurranse-, EØS- og statsstøtterett

On 28 and 29 September, ERA, the Academy of European Law, organised a conference on the legal consequences of Brexit. It brought together experts from across Europe and distinguished speakers from academia, (EU) courts and (British) legal practice. The conference focused predominately on the withdrawal of the UK from the EU (and the EEA). Less attention was given to the future relationship between the EU and the UK, though the conference proved that these issues are inevitably intertwined.

This short report will highlight some of the most interesting points that were made in the course of the conference.

Why are the divorce and a potential transitional agreement so complex to negotiate?

At the start of the conference, Professor Catherine Barnard provided a lucid overview of the structure and challenges of the divorce talks.

She recalled that the EU at this stage insists on a phased approach to the negotiation, in which first the terms of the divorce (e.g. financial settlement, citizen rights and the question of the Irish border) have to be agreed upon before any talks on the future relationship can commence. Two key reasons for this approach were identified by Prof Barnard. First, while Article 50 of the Treaty (the exit provision) provides a legal basis for the withdrawal agreement (and requires only a qualified majority in the EU Council), it only refers to the need to "take account of the future relationship". Second, a deal on the future relationship would be a so-called mixed agreement, which means that it has to be ratified by all EU national parliaments and a number of regional parliaments, guaranteeing a very complex negotiation process (cf. CETA, the trade deal between Canada and the EU). However, without knowing the nature of the future relationship, complex questions pertaining for instance to the Irish border would be difficult to solve in the withdrawal agreement. All this would suggest that it is at the same time necessary but also nigh on impossible to agree on the future relationship in order to come to a divorce deal.

She also pointed out that, at the very least for reasons of legal certainty, the UK should separately notify the withdrawal from the EEA agreement, as suggested for example by Professor Christophe Hillion.

Finally, Prof Barnard attempted to answer the question whether a transitional period, as now proposed by the UK government, could be a solution to the complexities stemming from Brexit. In this respect, she pointed out that the UK so far had not decided whether this would be a true transition (which would entail that the UK would be akin to an EFTA EEA member during a time-limited transition period – meaning access to the single market against payment, but no role in the institutions), or an extension (essentially prolonging for a limited time the membership with all associated rights and obligations). One participant remarked that such a transitional agreement might be as hard to negotiate as the future relationship agreement itself.

The continued application of EU/EEA law after Brexit in Britain

While the negotiations are ongoing, the UK has begun to prepare its domestic legal system for the "exit day". QC Alexander Layton presented a very clear analysis of the challenges relating to importing a vast amount of EU law into the British legal system.

As a dualist legal system, Britain needed a domestic legal provision to give effect to EU law. This is the UK's 1972 European Communities Act, which will be repealed. Thus, a new legal act is needed to preserve those parts of EU law that the UK considers necessary. The tool to achieve this import of hundreds if not thousand different laws is the highly controversial European Union Withdrawal Bill, formerly known as the Great Repeal Bill, and labelled by some (Tories) as an "astonishing monstrosity".

The reasons for the controversies surrounding the Withdrawal Bill are two-fold: One the one hand, the bill in its current form gives the government extremely wide-ranging powers to decide which parts of EU Law are to be kept or modified. This is seen by many as depriving the UK Parliament of its legislative powers. On the other hand, it is a very complex piece of legislation, described by Mr Layton as byzantine, including because of a structure that is based on exceptions to exceptions to exceptions to exceptions. In short, it will most likely remain unclear on "exit day" (the date of which is determined by the UK government) which parts of EU law (in particular also case-law) remain applicable after the UK exits the EU, and to what extent UK courts should take account of (future) EU law in applying those parts of EU law that were incorporated in UK law through this bill.

A deal on dispute resolution could be particularly hard to attain

Nial Fennely, a former Advocate General to the EU Court of Justice (CJEU), analysed the much debated question as to how disputes between the UK and the EU could be settled going forward. He paid particular attention to disputes arising from the interpretation of a future withdrawal agreement.

In essence, he concluded that the two negotiating parties are at loggerheads because the UK has insisted that Brexit will mean the end of the CJEU's jurisdiction over the UK (including the withdrawal agreement), whereas under EU law, the jurisdiction of the CJEU over that agreement is a given. As a result, in the absence of an innovative solution, he predicts the existence of parallel (and possibly inconsistent) interpretations of the withdrawal agreement by the CJEU and UK Courts, with no clear dispute resolution mechanism. Coincidentally, the British "Institute for Government" published a detailed report on precisely this question on 6 October. This report concludes that the UK Government should either opt for the European Free Trade Association (EFTA) Court model or bring forward proposals for an untested new dispute resolution system for the withdrawal agreement. The report cautions against giving the CJEU the final say over the withdrawal agreement.

Why should Norway care?

This brief report and the even this two day conference could only touch upon a fraction of the myriad of complex legal questions raised by Brexit. Brexit is and remains a journey into unchartered waters, fraught with economic, legal and importantly also political uncertainty. It remains impossible to say how the negotiations between the EU and UK will develop, and what this will eventually mean for Norwegian-British trade and relations. With increasingly little time left to reach a deal, an answer to the question how the EEA, EFTA and Norway fit into this complex picture becomes ever more urgent.

Detailed updates and insights on Brexit and in particular its consequences for Norway will be published regularly on this site in the next months.