Brexit—What We Know

Background

On 23 June 2016, the electorate of the United Kingdom voted to secede from the European Union in an "in - out" referendum. Assuming that the UK government follows this direction, the UK would become the first major Member State to leave the EU (or one of its predecessor forms).[1] The situation can rightly, therefore, be categorised as without precedent and much that has been and will be said and written about the legal implications of "Brexit" in the near future will be mere speculation and conjecture. This note attempts to outline, in the memorable words of Donald Rumsfeld, the "known knowns" and the "known unknowns," leaving the complete speculation of the "unknown unknowns" to others.

Executive Summary

It is the plan of the current government not to commence formal exit negotiations until at least October 2016. The UK will then have two years to negotiate a settlement with the EU, at the end of which if no agreement is made the UK will lose access to the single market and EU laws will have no effect in the UK. Until that point, as things stand, the UK will have access to the single market and the law will remain unchanged. The fast-moving political and constitutional situation of the UK and EU make predictions extremely difficult, but some significant underlying factors are clear. Known Knowns

Will There Actually Be a Brexit?

What we do know is that 51.89 percent of the UK electorate (or to be more precise, 51.89 percent of the 72 percent of eligible voters which turned out to vote) voted to leave the EU. However, it is important to note that this was only an advisory referendum and is therefore not binding on the UK government. Immediately after the outcome of the referendum became known, the general consensus was that secession was virtually inevitable. However, although secession is still, on balance, the more likely outcome, it is not a foregone conclusion. The UK Prime Minister David Cameron, one of the leading voices behind the "remain" campaign, resigned from office the day after the referendum. In an arguably politically shrewd move, he declined to serve the formal notice himself saying that this should be a task for his successor. In the intervening days, there has also been much press coverage of whether the majority of "leave" voters really thought that a "leave" vote was genuinely a decision to leave the EU or whether it was more a protest vote. Supporters of the view that the narrow margin of victory justifies ignoring the outcome of the referendum assert that (i) the dire economic consequences (sterling at its lowest level in 30 years, £120 billion wiped off the FTSE and the UK downgraded to AA by S&P and Fitch) were not fully understood before the referendum; (ii) there is a threat to the continued union within the United Kingdom arising from the divergence between voting patterns in England and Scotland; (iii) the lack of a clear majority would make such a fundamental, and potentially irreversible, decision inappropriate; and (iv) if the votes are weighted on a basis which gives preference to the younger voter (whose lives will be more affected by the decision), then the outcome would have been very different.

In addition, there is an "e-petition" regime in the UK, introduced in August 2011, which provides that any electronic petition which receives more than 100,000 signatures must be given time in the UK parliament for debate. An e-petition campaign (interestingly, launched by a "leave" supporter weeks ahead of the referendum and demanding that "if the remain or leave vote is less than 60% based on a turnout less than 75% there should be another referendum") has currently attracted over four million signatories, the highest of any e-petition currently running.

Accordingly, although a Brexit is still the more likely result, there is likely to be some time still before it becomes reality, and there is some continued doubt as to whether it will, in fact, ever happen.

How Will Brexit Be Effected?

The next "fact" is that Article 50 of the Treaty of Lisbon (Treaty) provides the framework for withdrawing from the EU. This would be the first time Article 50 has been invoked (with both Algeria and Greenland leaving before the Treaty was signed). There is an academic argument that the UK could simply repeal the European Communities Act (1972) (the act of parliament providing for the incorporation of European Union law into the domestic law of the UK) as parliament is free to do. However, walking away from all of the UK's rights and obligations under the Treaty would be interpreted as an inflammatory gesture and jeopardise future negotiations with the EU whilst ending its access to the free market. Additionally, it would mean the UK, a country...