Brexit Briefing - July 2018

Plage de la Coutarde

Author Baptiste Rossi
Copyright waived by the author 
Source Wikipedia

Jane Lambert

A lot happened in July. First, the resignations of the Rt Hon David Davis MP, the Rt Hon Boris Johnson MP and a number of other ministers. Secondly, the publication of white papers on The Future Relationship between the United Kingdom and the European Union and Legislating for the Withdrawal Agreement between the United Kingdom and the European Union.   Thirdly, the Prime Minister and her ministers have visited the capitals of other EU member states to canvass support for the future relationship white paper's proposals. Finally, active preparations have begun here and in the rest of the EU for the UK's withdrawal from the EU without a withdrawal agreement.

The procedure by which a member state withdraws from the European Union is set out in art 50 (2) of the Treaty of European Union:

"A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament."

The procedure was initiated by  a letter from the Prime Minister to the President of the Council dated  29 March 2017 giving notice of the UK's intention to withdraw from the EU. The Council provided the guidelines on 29 April 2017 supplemented by others on 15 Dec 2017 and 23 March 2018.  Negotiations on the terms of a withdrawal agreement began after the British general election a draft of which was published in February.  About 80% of the text is now agreed but there are a number of sticking points one of which is the border between Northern Ireland and the Irish Republic.

The withdrawal agreement has to take account of the future relationship between the UK and EU.  The Chequers statement which I reviewed in The Chequers Statement Explained 8 July 2018 was an attempt to get agreement within the government on what that relationship should be.   It did not survive the weekend as David Davis resigned on Sunday night and was followed by several other ministers including Johnson. The white paper on the future relationship was attacked by Brexiteers and remainers in the UK and given a lukewarm reception in Brussels.  I discussed it in The White Paper on the Future Relationship between the UK and the EU on 21 July 2018.  The EU's negotiator, Michel Barnier, set out his vision for the future relationship between the EU and UK in his op-ed  An ambitious partnership with the UK after Brexit on 2 Aug 2018.

If a withdrawal agreement is concluded it will have to be incorporated into English and Welsh, Scots and Northern Irish law by statute. The government's proposals for legislation are set out in the white paper on Legislating for the Withdrawal Agreement between the United Kingdom and the European Union which I discussed in Today's White Paper on the Withdrawal Agreement - What's happened to Ireland? on 24 July 2018.

In Brexit - Why do I follow the Art 50 (2) Negotiations when I am an IP Lawyer? 26 July 2018 NIPC Law I explained why the art 50 (2) negotiations are important and the likely outcomes if they are successful and also if they are not.   I also described the negotiations as "finely balanced".  There is an evens chance of their going either way.

Anyone wishing to discuss this article or Brexit generally should call me on +44 (0)20 7404 5252 or send me a message through my contact form.

Today's White Paper on the Withdrawal Agreement - What's happened to Ireland?

Satellite Image of Ireland

Author NASA
Licence Copyright waived by the owner

Jane Lambert

Today our government published yet another white paper on Brexit.  This one is entitled Legislating for the Withdrawal Agreement between the United Kingdom and the European Union Cm 9674 and it proposes legislation for the implementation of the withdrawal agreement contemplated by art 50 (2) of the Treaty of European Union,

A draft of that agreement was published at the end of February and about 80% of it has been agreed according to Monsieur Barnier  (see Press statement by Michel Barnier following the July 2018 General Affairs Council (Article 50) 20 July 2018). But there remains one stumbling block and that is how to avoid the need for border posts with customs officers and immigration inspectors along the border between the Irish Republic and Northern Ireland when the UK leaves the Customs Union and Single Market that allows freedom of movement between member states.  One obvious solution would be for Northern Ireland to remain in the Customs Union and Single Market so that the border between the EU and UK is the Irish Sea but that would be anathema to Ulster Unionists as well as many in the Conservative Party and perhaps other British politicians.

It is no doubt for that reason that the 44 page white paper is almost silent on Ireland.   I counted only 13 references to the island in the text, mainly in the Introduction.  There is a lot more detail on Citizen's Rights (Chapter 2 - paragraph 16 to 51), the Implementation Period (Chapter 3 - paragraph 52 to 104), The financial settlement (Chapter 4 - paragraph 105 to 136) and Procedures for approval and implementation of the Withdrawal Agreement and framework for our future relationship (Chapter 5 - paragraph 137 - 157).  A lot of Mrs May's problems would disappear if more of her backbenchers and local Conservative Association members bothered to read those last 20 paragraphs.

In that it shows how far the negotiations have progressed on everything except Ireland and it betokens an intention to seeing the job through I am mildly comforted by  this document. Should anyone wish to discuss it or Brexit in general, call me on 020 7404 5252 or send me a message through my contact form. 

The White Paper on the Future Relationship between the UK and the EU

Jane Lambert

Art 50 (2) of the Treaty of European Union requires the European Union to "negotiate and conclude an agreement with [a departing] State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union." The white paper on The Future Relationship between the United Kingdom and the European Union Cm 6593 is intended to satisfy the need for a framework for the future relationship with the EU to be taken into account.  Its defects and deficiencies are obvious but they probably do not matter because nobody expects its proposals to be accepted lock, stock and barrel by the remaining member states of the EU.  The purpose of the white paper is short term.  It is simply to address the requirements of art 50 (2).

According to Michel Barnier, some 80% of the provisions of the withdrawal agreement required by art 50 (2) have already been agreed (see Press statement by Michel Barnier following the July 2018 General Affairs Council (Article 50)  20 July 2018).  The draft agreement provides for an implementation period between 30 March 2019 and 31 Dec 2020 during which time EU law will continue to apply to the UK even though it will cease to be a member state.  At the end of that period it is hoped that a new agreement will be in place to govern relations between the UK and the 27 remaining states.

The white paper is a political expedient contrived to calm the nerves of employers in the aerospace, automotive and other industries while satisfying the demands of those seeking an end to British contributions to the EU budget and the jurisdiction of the Court of Justice of the European Union, the restoration of control of immigration from the EU 27 at ports and airports and so on.  Monsieur Barnier recognized the white paper for what it was when he described it as "le fruit d'un débat très intense au Royaume-Uni qui était nécessaire" ("the fruit of a very intense debate in the UK which had been necessary") adding that everyone is well aware that that debate is not over yet.  Although the white paper is not all bad - I found its commitments on continued judicial cooperation on civil and commercial matters and its commitment to the Unified Patent Court and the unitary patent very much to my liking (see Jane Lambert Like the Curate's Egg - The White Paper on the Future Relationship between the UK and EU 18 July 2018 NIPC News) - it is unlikely to form the basis of a permanent relationship for all the reasons that Monsieur Barnier gave in yesterday's press statement.

However, that does not mean that it is without value.  As Monsieur Barnier also said:

"De notre point de vue, il y a plusieurs éléments qui ouvrent la voie à une discussion constructive pour la déclaration politique sur notre future relation, par exemple :

• la proposition d'un accord de libre-échange, qui devrait constituer le cœur de notre future relation économique. On rejoint là une proposition clef des guidelines du Conseil européen : un ambitieux free trade agreement;

• des engagements en matière de level playing field, notamment en ce qui concerne les aides d'Etat et les règles sur l'environnement et l'emploi;

• et une large convergence de vues sur de possibles et nécessaires coopérations en matière de sécurité intérieure et extérieure.

Le Royaume-Uni apporte des garanties en matière de protection des droits fondamentaux et reconnaît la Cour de justice de l'UE comme seul arbitre du droit européen.
Cela facilitera les échanges de données entre le Royaume-Uni et nous, et cela ouvre donc la possibilité d'élargir notre offre en matière de coopération sur la sécurité interne en particulier."

A political declaration on the future relationship is how the Commission and remaining member states interpret the requirement in art 50 (2) to take account of the departing state's future relationship with the EU.

Getting a withdrawal agreement that will lead to a transitional period between 29 March 2019 and the 31 Dec 2020 in which the UK will be formally outside the EU but the EU treaties. legislation and case law of the Court of Justice will continue to apply is probably the best for which those who wish to see as little disruption as possible to the UK's relationship with the EU can realistically hope.  A second referendum on the withdrawal terms is attractive to some but it would require legislation and time to campaign and the 2 year notice period provided by art 50 (3) runs out in less than 9 months.

Even though 80% of the text of the withdrawal agreement is agreed, it is by no means certain that we will get it.  The question of what should be done about Ireland (and to a lesser extent Gibraltar) remains as intractable as ever.  There are many MPs in the Conservative Party and even one or two in Labour who would relish an abrupt end to the UK's relationship with the remaining EU member states regardless of any inconvenience, discomfort and hardship that it would cause in the short term in the hope that it would lead to a complete reordering not only of our trade and foreign relations but also of our economy and society. I doubt that many of my clients or readers would want that to happen but such an outcome is very much on the cards and they are advised strongly to prepare for it.

Anyone wishing to discuss this article or Brexit in general in relation to IP and their legal affairs generally should call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

Dispute Resolution: A Potential Deal Breaker?

Author Cédric Puisney 

Licence Creative Commons Attribution 2.0 Generic  

Jane Lambert

On 20 July 2017 negotiators for the British government and the Commission published a joint technical note on the comparison between the British and EU positions on citizens' rights.  It is drawn up rather like a Scott schedule with 5 columns:

• Topic
• Detail
• EU Position
• UK Position
• Issue.

The "Issue" column is colour coded, green indicating convergence, red divergence and yellow where further discussion is required to deepen understanding.

There is an encouraging amount of green in the right-hand column but the red reveals fundamental differences of approach between the two sides.  Take "Individual enforcement of rights" on page 4, for example.  The EU position is that the provisions of any agreement for the withdrawal of the UK from the EU ("the withdrawal agreement") that give rights to citizens of the remaining EU member states shall be directly enforceable by those citizens without regard to any statute that may implement the withdrawal agreement. The British position, on the other hand, is that any rights that may be granted to those citizens will depend on a British statute though a court in the UK may have regard to the withdrawal agreement to determine legislative intent.  

The problem for the 27 remaining member states is that governments do not always perform their treaty obligations. That may be because of a genuine difference of view on the interpretation of the treaty or it may be because domestic political pressures make it impossible for a government to honour its international obligations. Her Majesty's Government may be no worse in that regard than the governments of most other countries.  Indeed, we like to think that ours is somewhat better but we have been called "Perfidious Albion" in the past and possibly for a reason.

The difficulty can best be appreciated by an example. Suppose a Polish worker in Lincolnshire is denied a benefit to which he or she believes he or she is entitled.  Right now, he or she can appeal to an administrative tribunal which has to apply the law as set out in the EU legislation in accordance with the judgments of the Court of Justice of the European Union ("the CJEU"). Should a point of law arise upon which there is no guidance from the CJEU the tribunal of last resort has a duty to refer the issue to the CJEU for a preliminary ruling under art 267 of the Treaty on the Functioning of the European Union. The EU negotiators want something like that to continue after Brexit but the British contend that the worker's rights have to depend entirely on the wording of the statute possibly as interpreted by previous judgments of the English courts. If the worker believes that the Act fails to implement the terms of the withdrawal agreement, the most he or she could do would be to ask his or her government to intercede with the British government diplomatically. The Polish foreign ministry might or might not accept its citizen's request but, even if it did, it could take years to persuade the British government to change the law, Moreover, any such change would be of no immediate, practical use to the unfortunate Polish worker.

As the Commission's negotiators will have anticipated that sort of difficulty, they are unlikely to recommend a withdrawal agreement that leaves EU citizens in the UK without an effective remedy. It follows that unless the two sides can agree what that remedy should be before 29 March 2019, there can be no withdrawal agreement when the treaties cease to apply to us pursuant to art 50 (3) of the Treaty of European Union. That is no doubt why the Bar Council's Working Group on Brexit described dispute resolution as a "potential deal breaker" at para 4 of Paper 10 of the 3rd edition of The Brexit Papers. When the treaties fall away all sorts of commercial and administrative arrangements that we have made with our largest and closest trading partner over most of the last half century fall away with them with alarming consequences for us, the rest of Europe and, indeed, the rest of the world. 

The problem arises because our government announced at para 2 of its white paper, The United Kingdom’s exit from, and new partnership with, the European Union:

"We will take control of our own affairs, as those who voted in their millions to leave the EU demanded we must, and bring an end to the jurisdiction in the UK of the Court of Justice of the European Union (CJEU)."

It added at 2.3:

"The Court of Justice of the European Union (CJEU) is the EU’s ultimate arbiter on matters of EU law. As a supranational court, it aims to provide both consistent interpretation and enforcement of EU law across all 28 Member States and a clear process for dispute resolution when disagreements arise. The CJEU is amongst the most powerful of supranational courts due to the principles of primacy and direct effect in EU law. We will bring an end to the jurisdiction of the CJEU in the UK. We will of course continue to honour our international commitments and follow international law"

To its credit, the government did acknowledge at 2.4 that "ensuring a fair and equitable implementation of our future relationship with the EU requires provision for dispute resolution" and suggested several dispute resolution models between paras 2.5 and 2.8 and Annex A.  The Bar Council Working Group has considered and commented on those models between paras 20 and 27 of Paper 10. Those models were also discussed at the Institute for Government seminar, Brexit, dispute resolution and the European Court of Justice on 24 July 2017. I would urge all my readers to watch Raphael Hogarth's presentation and the video of the discussion, both of which are available on YouTube.

At paragraph 2.9 of its white paper, our government says "the UK will seek to agree a new approach to interpretation and dispute resolution with the EU" and adds at 2.10:

"The actual form of dispute resolution in a future relationship with the EU will be a matter for negotiations between the UK and the EU, and we should not be constrained by precedent. Different dispute resolution mechanisms could apply to different agreements, depending on how the new relationship with the EU is structured. Any arrangements must be ones that respect UK sovereignty, protect the role of our courts and maximise legal certainty, including for businesses, consumers, workers and other citizens."

The problem with that from the European point of view is that treaties are part of the remaining states' legal order.  Any withdrawal agreement that the remaining member states make with us will be just as much part of EU law as any other.  As the white paper, acknowledges, the CJEU is "the EU’s ultimate arbiter on matters of EU law." Prof. Catherine Barnard says in Issues concerning the Court of Justice that workarounds such as hybrid courts consisting of judges from the CJEU and other states have been considered before and have had to be abandoned as incompatible with EU law.

Looking at the other matters being discussed by the negotiating teams, the sort of problems that I have envisaged for the Polish worker could apply to a resident of Dundalk who wants to keep his or her job in Newry or the computation of the amounts that the British government may agree to pay under any withdrawal agreement. Similar problems will occur if we want to continue to participate in Euratom, the European Medicines Agency or indeed the Unified Patent Agreement as art 20 obliges the Unified Patent Court to apply EU law in its entirety and to respect its primacy.

It seems to me that the positions of the British and EU negotiators are incompatible and irreconcilable. If I understand their arguments correctly it would seem that the Bar Council's Brexit Working Party and Prof. Barnard would agree with me. It is very depressing - rather like watching two crowded passenger trains steaming towards each other at full speed on the same stretch of track. A crash can be averted only if one side or the other gives way.  Since it would be impossible for the EU to give way without dismantling a legal order that has subsisted in one form or another since the establishment of the European Coal and Steel Community in 1952 I can't see how any concessions can possibly come from them.

Should any of my readers wish to discuss this article or the legal consequences of Brexit generally, they should call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.