The Challenges of Administering Brexit: International, Continental, Regional and Domestic

I have been in the United Kingdom for almost a month now. Brexit, unsurprisingly, dominates the political landscape and I expect I will be returning to it more than once in the coming months and years. This is just a brief post to highlight the scale of the challenges for the United Kingdom of implementing Brexit, thereby disentangling itself from the European Union, and some of the legal issues that are likely to arise.

Brexit is a challenge on multiple levels: the international, the continental, the regional and the domestic. Whilst the Article 50 process for leaving the EU sets a two-year deadline for the conclusion of an exit deal (unless the deadline is extended), it is extremely unlikely that these challenges can be successfully met within that timeframe.

Internationally, the UK must negotiate new trade arrangements with countries around the world. Trade is an exclusive competence of the EU, which means — critically — that the UK cannot lawfully send its diplomats out to negotiate substantive agreements until the UK has left the EU. Although there may be some room for creative interpretation of “negotiate” and “substantive”, the UK will more likely err on the side of caution, so as not to incur reputational damage at an inopportune time. These agreements are difficult to negotiate. They no longer focus on tariffs but on non-tariff barriers that typically take the form of complex regulatory requirements that have to be harmonized as between the two parties to the agreement. The EU-Canada trade agreement, to take an example, took many years to negotiate, runs to more than a thousand pages, and has still not been brought into force. One positive point in the UK’s favour is that it probably will be able to retain more or less its current status in the World Trade Organisation (though there are likely to be negotiations and, possibly, litigation on this point).

Continentally, the UK must negotiate an arrangement for future trade in goods and services with the EU, a common security relationship (Europol, European Arrest Warrants and so on) and, presumably, a strategy for dealing with cross-border migration. It is difficult to overstate how complex these negotiations could become, in the area of trade alone. To take just one example, “financial services” turns out (based on an instructive series of posts by Ciaran McGonagle) to be a fragmented area of many different services that are regulated in diverse ways. Suffice it to say that many sectors of the European and British economies — from agriculture and fisheries to manufacturing to financial services — will want to continue to trade with each other but that national interests may diverge quite sharply, such that painstaking sector-by-sector negotiations seem likely. Although it is true to say that, at present, British companies must comply with standards set out in EU law, post-Brexit there would be no such guarantee, which would require in turn the development of systems for ensuring the equivalence of British and European regulations.

Regionally, the UK must square Scottish and Northern Irish appetite for EU membership with English (and Welsh!) desire for Brexit. Interesting legal issues arise here: the courts in Northern Ireland have been asked to determine whether a departure from the EU would be consistent with the obligations created by the Good Friday Agreement. No legal action has been initiated yet in Scotland and, indeed, any formal legal objection seems doomed to fail. But Scotland can certainly register its disapproval of any plan for Brexit as a political matter, which may ultimately require a fundamental reappraisal of the UK-Scotland relationship. Indeed, the Prime Minister has indicated that Article 50 will not be triggered until the development of a negotiating position shared by Scotland and Northern Ireland. Quite how such a position can be arrived at, given the sharp divergence of views between England and the rest of the UK, is unclear.

Domestically, the UK must disentangle domestic law from the thicket of EU law in which it is now bound up. Leaving the EU will mean that the UK is no longer a party to the Treaties. Obligations directly derived from the Treaties will no longer form part of domestic law; EU regulations and decisions will cease to have direct effect in the UK; those parts of EU directives that now have direct effect by virtue of their clarity will no longer have direct effect; but EU directives that have been transposed into domestic law by statute or delegated legislation will continue to have full force and effect until repealed (directly or impliedly); and administrative agencies that have integrated EU and domestic law commitments into their decisions and processes will have to reflect on how best to move forward.

It would be possible to provide by legislation, on an interim basis, for EU law to continue to have full force and effect, subject to Parliament providing to derogate from a particular EU-law provision (see sections 9 & 10 of Allen & Overy’s “Brexit Act”). In theory, this would allow the UK to gradually disentangle domestic and EU law (though remaining subject, presumably temporarily, to the jurisdiction of EU regulatory bodies and the European Court of Justice albeit without any influence on how that jurisdiction would be exercised). But it is unclear how the UK courts would interpret such legislation: the European Communities Act 1972 is a fundamental feature of the contemporary UK constitution and was treated as such, permitting courts to disapply domestic legislation that was in conflict with EU law and making it difficult (or, on some views, impossible) to impliedly repeal legislation designed to implement obligations derived from EU law. Moreover, undoing one piece of EU law might have knock-on effects on others, creating administrative difficulties and, eventually, tricky questions of interpretation for the courts. Furthermore, removing or qualifying the fundamental economic freedoms that are guaranteed by the Treaties (and latterly by the Charter of Fundamental Rights) will change the way the UK courts interpret EU law and domestic law in a way that is difficult to predict with any degree of certainty. Short of going line by line through the statute book (and the various pieces of soft law that have gathered around it) — a process that would take many, many years — it will be impossible to avoid raising questions that the UK courts will have to resolve, at considerable expense.

With these international, continental, regional and domestic challenges to face, it is extremely surprising that many seem keen to rule out the “Flexcit” option of joining the European Economic Area. This would be a safe halfway house in which the UK would have the time needed to carefully address the challenges created by Brexit.

This content has been updated on September 23, 2016 at 10:15.