The High Court Ruling on Article 50 Explained

Background

After a three day Judicial Review, the High Court has ruled in favour of a campaign group known as ‘the People’s Challenge’, led by Gina Miller, who challenged the government’s plans to trigger Article 50 of the Lisbon Treaty without first consulting Parliament.

Following the result of the EU referendum in June 2016, it has been well documented that Article 50 needs to be triggered to formally begin the Brexit process. Theresa May recently confirmed that she intends to do so by the end of March 2017.

This would lead to at least two years of negotiations with the EU, following which the UK would formally leave the EU. The Prime Minister has previously indicated that, prior to the expiration of the two year deadline, Parliament would have the right to vote on the final Brexit deal.

The Arguments

The challenge was complex, but centred on the idea that Article 50 would result in the removal of a number of citizenship rights, granted by the European Communities Act 1972, and that the government does not have the power to remove any rights granted by an Act of Parliament. This, argued the challengers, is something only Parliament can do.

After the ruling was announced, Ms Miller said ‘you can’t talk about getting back a sovereign Parliament and being in control but at the same time then bypass it’.

The government’s argument was that it had the authority to act under an age-old doctrine known as ‘Royal Prerogative’, which contains powers relating to foreign affairs and is used when the government deems the decision a questionable use of Parliamentary time.

As a referendum had been held, and the result was a clear majority, it was argued that the government could use this doctrine to give effect to the result of the referendum. In addition, it was argued that Parliamentary input was not being bypassed because it would be likely that legislation would be needed to give effect to the exit negotiations and any corresponding exiting treaty. The Secretary of State for Leaving the EU, David Davis, has insisted that ‘the people are sovereign’.

What Does This Mean?

Ultimately, the ruling means that Parliament will have to be consulted before Article 50 is triggered. However, there is much uncertainty as to what question should be put to Parliament. It may be that it is a decision as to when to trigger Article 50, or the government may decide to ask Parliament whether Article 50 can be invoked at all.

There is then the question of how Parliament will be consulted. It could, for example, be a simple debate and subsequent vote in the House of Commons, or it could be that formal legislation is to be passed by Parliament, which would require the consent of both the House of Commons and House of Lords.

What Happens Next?

The Government has already indicated its intention to appeal to the Supreme Court, with suggestions that such an appeal could be heard as early as December. If the High Court’s decision is not overturned, the government will need time to consult Parliament before Article 50 is triggered.

However, a spokeswoman for Theresa May has stated “we have no intention of letting this decision derail our timetable for triggering Article 50”. If the PM’s timetable is to avoid disruption, the appeal will need to be made and heard quickly.

Based on the High Court’s decision, MPs may, pending appeal, be able to vote on whether or not the UK should invoke Article 50. Many of the MPs in the House of Commons campaigned on the remain side prior to the referendum and, in light of the very public outcry at the result of the referendum, thoughts are now shifting as to whether they will adhere to that result in any Parliamentary vote. However, it seems unlikely that more than a handful of MPs would attempt to block Brexit altogether.

What Does This Mean For Businesses?

There has already been a positive market reaction, with the value of Sterling reaching the highest peak against the US Dollar in a number of weeks. It is important to consider that, on the day of the High Court’s ruling, the Bank of England almost doubled its economic forecast for 2017, which may also have affected confidence.

Whatever the cause, the increased value of Sterling could be good for businesses based on imports, but may adversely affect those who sell goods and services abroad. In the context of the dip in the value of the pound after the referendum, however, this change is not likely to be noticeable. The Bank of England is warning businesses against being too over enthusiastic at this increase, as there is still much uncertainty surrounding the UK’s position in the EU.

If you require any legal advice, our solicitors can help. You can contact our head office in Preston on 01772 864365. We also have lawyers in Lancaster, Kendal, Garstang and Clitheroe.