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UK Supreme Court Hears UK Government’s Article 50 Brexit Case Appeal

Between December 5 and 8, the UK Supreme Court heard an appeal (Appeal) from the UK government (Government) with respect to R (on the application of Miller & Dos Santos) v Secretary of State for Exiting the European Union.

The Appeal relates to the UK High Court’s decision on November 3, that the Government does not have requisite prerogative powers necessary to give notice under Article 50 for the United Kingdom to withdraw from the European Union, and instead an Act of Parliament is required (see the Corporate & Financial Weekly Digest edition from November 3). Following that ruling, the UK Supreme Court granted permission for the Government to appeal the High Court’s decision and subsequently granted rights to intervene to certain applicants, including the Scottish Government and Welsh Government, among others. On November 25, the Government’s case (Case) was made available online.

The Case maintains that: (1) the exercise of the Government’s prerogative powers is sufficient to give notice pursuant to Article 50; (2) the Government’s prerogative powers, including powers to make, amend and or withdraw from treaties, is constitutionally “normal” and consistent with the UK’s dualist approach to international law; (3) the UK Parliament, through the European Communities Act 1972 (ECA), the EU Referendum Act 2015 and other EU-related legal instruments in UK domestic law, has not expressly or impliedly removed the Government’s prerogative powers in the fields of foreign affairs and treaties; and (4) a “surprising” consequence of the High Court’s decision is that the UK Parliament will be asked the same question put by the UK Parliament to the electorate (i.e., whether the UK should remain a member of the EU), and will be obliged to give the same answer as the electorate in legislative form.

Transcripts published of the Appeal indicate that on the first day of the hearing, several members of the UK Supreme Court questioned the Government’s argument that it has unfettered powers to affect rights of British persons at the EU level through the unilateral exercise of prerogative powers by ministers. The Lord Justices noted that entering into the EU was a joint effort between the UK Parliament and Government, and that the Government would need to address whether departing the EU should also be a joint effort. On the second day of the hearing, the Government confirmed that, should it lose the Appeal, its proposed solution will be a “one-line” Act of Parliament authorizing submission of the Article 50 notice, with no further details on the withdrawal agreement or how the Government might negotiate with the EU. The Government further argued that devolved legislation does not qualify the foreign affairs prerogative.

On the third day of the hearing, respondents to the Appeal (including Gina Miller, Dos Santos and others), argued that the UK referendum did not have binding legal effect, or at least not to the extent of limiting parliamentary sovereignty. The respondents further argued that the prerogative power to make and/or withdraw from treaties does not allow ministers to quash statutory rights and duties, and that the ECA has a “constitutional status” that cannot be set aside by ministers acting without parliamentary assent. Submissions also were heard from the intervening Scottish Government, and Northern Ireland, who argued that formal consultation with, and consent from, the devolved assemblies would be required for the UK to withdraw from the EU. The Welsh Government made submissions on the fourth day of the hearing, which concluded with the Government’s rebuttal.

On the third day of the Appeal, the UK House of Commons passed a motion in support of the Government’s plan to invoke Article 50 by March 31, 2017. The legal effect of the motion, including any impacts on the Appeal, is unclear, although the Government’s counsel appeared to concede it was non-binding.

The UK Supreme Court expects to publish its decision in early 2017, and plans to issue an alert in advance of publication.

For more information on the Appeal, see the Corporate and Financial Weekly Digest edition of December 2.

Transcripts of the Appeal, an agenda of proceedings and copies of the written arguments of the parties (including the Case) are available here.

The motion can be found here.

 

©2017 Katten Muchin Rosenman LLP

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David A. Brennand, Financial Services Lawyer, Katten Muchin Law Firm
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David Brennand is a partner in the Financial Services practice in Katten Muchin Rosenman UK LLP. David provides advice to a wide range of clients active in asset management on a broad spectrum of matters pertinent to their operations, with a particular focus on advising asset managers on the structuring and ongoing operation of hedge and other alternative fund structures investing in a diverse range of asset classes.

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Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

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