Brexit Briefing - August 2017: Some Progress but probably not enough

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Jane Lambert

It is worth reminding ourselves what the art 50 negotiations in Brussels are intended to achieve. Much of our economic, industrial, international trade and social policies of the post war period have been founded on agreements and legislation made under the Treaty on European Union and the Treaty on the Functioning of the European Union ("the Treaties"). Art 50 (3) of the Treaty on European provides that those Treaties and everything that has been built up on top of them will cease to apply to the United Kingdom on the 29 March 2019 or sooner if we negotiate a withdrawal agreement "unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period."

The purpose of the negotiations in Brussels between the Rt Hon David Davis MP and Monsieur Michel Barnier and their respective negotiating teams is to hammer out a withdrawal agreement that will allow British pensioners on the Costa to keep their homes, doctors and nurses from Ireland and the Continent to continue working for the NHS, commuters in Dundalk to go to work in Newry without showing a passport and for the United Kingdom to honour funding commitments it made before last June's referendum. What those talks are not about (and indeed cannot be about unless and until Monsieur Barnier receives a mandate from the Council under art 218 (2) of the Treaty on the Functioning of the European Union) is trade.

At the start of the negotiations, it seemed that the British government recognized that reality but the spate of position and future partnership papers on such matters as data protection and future customers arrangements suggest that it does not.  Those papers are all very worthy and I have reviewed some of them in New Position Papers from DxEU 26 Aug 2017 and HMG's Exchange and Protection of Personal Data Position Paper 26 Aug 2017 NIPC Data Protection). They may be useful for future negotiations but they are completely irrelevant to any of the negotiations that are in hand right now or indeed for the foreseeable future.

So where do those negotiations stand?  In his speech at the press conference of 31 Aug 2017 following the third round of Article 50 negotiations with the United Kingdom, Monsieur Barnier was careful to avoid saying that nothing had been achieved:

"This week, we made some useful clarifications on a lot of points, for example, the status of frontier workers, the aggregation of social security rights, and pending legal proceedings before the Court of Justice, to name but three.
But we made no decisive progress on the main subjects, even though – and I want to say so – the discussion on Ireland was fruitful.
On this subject – which I continue to follow personally, as all other areas – we made real progress on the question of the Common Travel Area, on the basis of guarantees by the United Kingdom, and we clarified, in a constructive manner, what remains to be done, particularly with regards to North-South cooperation in the Good Friday Agreement.
But, I repeat again, time is passing quickly for us to reach a global agreement.
At the current speed, we are far from being able to recommend to the European Council that there has been sufficient progress in order to start discussions on the future relationship, while we are finalising the withdrawal agreement throughout 2018."

In his speech at the same press conference, Mr Davis  seemed to agree:

"This week we have had long and detailed discussions across multiple areas and I think it is fair to say, that we have seen some concrete progress. I mean, Michel referred to one, but I think there’s been more than that.
However, as I said at the very start of this week, it is only through flexibility and imagination that we’ll achieve a deal that truly works for both sides.
In some areas we have found this from the Commission’s side, which I welcome, but there remains some way to go.
Talks this week have once again focussed on citizens’ rights, on financial matters, on Northern Ireland and Ireland, and on issues relating to our separation. I’m pleased to say we have engaged in detail on all of those areas."

Looking on the bright side, there is slightly more green ink on the Scott schedule on citizens' rights as of 31 Aug 2017 than there was on 19 July 2017 mainly in relation to frontier workers and healthcare but there still remains an awful lot of red. My view is that the sticking point will not be over financial contributions but over enforcement of any withdrawal agreement by individuals and companies once the rule in Francovich goes (see Dispute Resolution - A Potential Deal Breaker 4 Aug 2017 and HMG's Enforcement and Dispute Resolution Position Paper 23 Aug 2017). If we can't get agreement on that we won't get any kind of withdrawal agreement let alone a favourable trade agreement.

Regrettably, I have no progress to report on the unitary patent and Unified Patent Court. German ratification appears to have stalled over a constitutional objection that has prevented the President from signing into law legislation that has already cleared both houses of the German federal legislature, I asked Markus Grampp what the objection was all about at the Cambridge IP Law Summer School which we both addressed, but neither he nor any of the other German lawyers at the event seemed to know.

One reasonably certain consequence of Brexit is that we lose not only the European institutions in London which I mentioned in my last Brexit briefing of 5 Aug 2017 but also jobs in the financial serviced industry to Frankfurt and other financial centres. They, on the other hand, will do very well out of Brexit (see How Frankfurt could benefit from Brexit: WHU-Otto Beisheim School of Management Study 29 Aug 2017).

A lot will be happening in September. Parliament will begin discussion on the European Union (Withdrawal) Bill when it returns for a few days before the party conferences. There could be all sorts of upsets at those conferences except perhaps for the LibDems, especially as Labour appears to have changed its tack on the single market and customs union. There will also be another round of negotiations between Mr Davis and Monsieur Barnier which will be particularly important for it will be the last chance for the Council to decide whether there has been sufficient progress on the Brexit terms to justify talks on the future relations.

On a more positive note, Helen Tse's Doing Business After Brexit for which I wrote the chapter on intellectual property and data protection is now on sale. It will be launched at a meeting of the Pro-Manchester SME Club on 20 Sept 2017.

Should anybody wish to discuss this article or Brexit generally, call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

New Position Papers from DxEU

Jane Lambert

Mr David Davis and his civil servants have been busy. While everyone else in England and Wales has been looking forward to the late summer bank holiday they have been preparing for the third round of talks with the Commission's Art 50 Task Force on 28 Aug 2017 (the programme for which is here). They have also produced a number of position papers and future partnership papers on data protection, enforcement and dispute resolution, cross-border civil judicial cooperation and future customs arrangements even though none of those "future partnership issues" is yet on the table.

The most interesting of the "future partnership" position papers is the enforcement and dispute resolution position paper which I discussed in HMG's Enforcement and Dispute Resolution Position Paper 23 Aug 2017 and the data protection paper which I discussed in HMG's Exchange and Protection of Personal Data Position Paper in my Data Protection blog today.

The enforcement and dispute resolution position paper has given rise to a lot of comment much of it uninformed because of the inclusion of the adjective direct in the first line of the paper.  The sentence reads:

"In leaving the European Union, we will bring about an end to the direct jurisdiction of the Court of Justice of the European Union (CJEU)."

The Court of Justice determines disputes that arise under the EU treaties which cease to apply to automatically under art 50 (3) of the Treaty of European Union or the coming into force of a withdrawal agreement whichever happens first. In that sense, the jurisdiction of the Court of Justice will end. It will no longer be possible for the Commission to take infringement proceedings against our government for failing to implement a directive or for an English court to refer an issue of Union law that arises in English litigation to the Court under art 267 of the Treaty on the Functioning of the European Union.  But the Court will continue to influence our law for many years to come and perhaps indefinitely by virtue of the incorporation of EU legislation and case law into our national law under the provisions of the European Union (Withdrawal) Bill. Moreover, as clause 6 (2)  of the Bill permits courts in the UK to have regard to decisions of the Court of Justice after we leave the Union its decisions will continue to have considerable persuasive authority indefinitely.

I criticized the position paper but on the grounds that it guarantees no rights for citizens including those of our own country to take proceedings against our government if they suffer loss or damage by reason of its failure to implement an obligation under any withdrawal agreement that we may make with the remaining member states or of any derogation that it may make from such agreement. To my mind, that is much more fundamental.

The data protection paper is much more sensible. We need to ensure the unrestricted flow of personal data between Britain and the UK if our service industries are to continue to do business in Europe. The same is, of course, true of the service industries of the remaining member states. The difference is that they could survive disruption much better than us because they could still do business freely with each other.  The financial services industries in say Frankfurt, Paris, Amsterdam, Dublin and Madrid might even do well if it became more difficult to exchange data with London. The European negotiators almost certainly know that and will be no hurry to do any favours for us unless and until they see some concessions on the issues that matter to them.

Should anyone wish to discuss this article or Brexit in general, call my chambers on +44 (0)20 7404 5252 during normal office hours or send me a message on my contact form.