Brexit Law – Article 50 litigation

Article 50 notification – Parliamentary
approval is required
3 November 2016

Issue in focus
In a hugely important constitutional and political
decision, the English High Court has today ruled against
the UK Government, declaring that the Government
cannot trigger the process of leaving the European Union
without the consent of Parliament.
The UK Government has indicated that it intends to
appeal directly to the Supreme Court, and an expedited
appeal is likely to be heard in early December.
The decision is also of great practical significance as it
has the potential to delay the timetable for the UK’s exit
from the EU. This in turn may have a material impact on
the approach that commercial parties take to their Brexit
contingency planning.
If the High Court’s decision is upheld by the Supreme
Court, Parliament may in practice have an opportunity to
influence the UK Government’s approach to the Brexit
process, for example by requiring the Government to set
out its goals in the negotiations with the other Member
States before any approval is granted. Given the
significant concerns arising from the on-going
uncertainty as to exactly what Brexit will involve,
businesses operating in the UK and the EU may
welcome greater clarity as to what the UK Government
will seek to achieve in the negotiations. However, one
less desirable consequence is that a delay in the service
of an Article 50 notice may prolong the uncertainty as to
the form that the UK’s post-Brexit relationship with the
EU will ultimately take.

© Allen & Overy LLP 2016

There has been an enormous amount written about the
High Court’s judgment today. In this bulletin, we
provide a legal analysis of the decision, consider the
wider commercial impact of the proceedings and discuss
what might happen next.

Article 50 proceedings
Background
Article 50 of the Treaty of the European Union (TEU)
sets out the process by which an EU Member State may
withdraw from the European Union. It provides that a
Member State may decide to withdraw “in accordance
with its own constitutional requirements” and that it
must then notify the European Council of its intention
(an Article 50 notice). Unless agreed otherwise, service
of an Article 50 notice triggers a two year negotiating
period, at the end of which the relevant Member State
leaves the EU, whether or not a withdrawal agreement is
in place.
These proceedings, comprising a number of separate
claims which were heard together by three senior judges
over three days last month, were commenced shortly
after the UK referendum on 23 June 2016.
The sole question before the Court was whether, as a
matter of the constitutional law of the UK, the Crown –
acting through the Government of the day – is entitled to
use its prerogative powers to give notice under Article
50 for the UK to cease to be a member of the EU.

1

Brexit Law | Article 50 notification – Parliamentary approval is required | 3 November 2016

authority to the Crown (expressly in, or by
necessary implication from, the terms of an Act of
Parliament) to diminish or abrogate such rights.

Article 50 TEU
1.

2.

3.

4.

5.

Any Member State may decide to withdraw from
the Union in accordance with its own
constitutional requirements.
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 Treaties shall cease to apply to the State in
question from the date of entry into force of the
withdrawal agreement or, failing that, two years
after the notification referred to in paragraph 2,
unless the European Council, in agreement with
the Member State concerned, unanimously
decides to extend this period.
For the purposes of paragraphs 2 and 3, the
member of the European Council or of the
Council representing the withdrawing Member
State shall not participate in the discussions of the
European Council or Council or in decisions
concerning it. A qualified majority shall be
defined in accordance with Article 238(3)(b) of
the Treaty on the Functioning of the European
Union.
If a State which has withdrawn from the Union
asks to rejoin, its request shall be subject to the
procedure referred to in Article 49.

The claimants’ arguments

b.

No words can be found under which Parliament has
given such authority either expressly or by
necessary implication in the European Communities
Act 1972 (the ECA 1972, the Act by which EU law
is made applicable or given effect in the UK) or
subsequent legislation relating to the EU.

c.

The giving of an Article 50 notice would pre-empt
any ability of Parliament to decide on whether
statutory rights should be changed. The notice
would automatically abrogate in due course certain
rights conferred by the ECA 1972 and European law
and would remove from Parliament the decision to
maintain certain rights.

d.

Ratification by Parliament of a withdrawal treaty (if
any such treaty was agreed between the UK and the
EU) would not cure the pre-emption, as the effect of
giving the Article 50 notice would in effect
inevitably remove the real decision from Parliament.

e.

Parliament did not give authority by the 2015
Referendum Act for the Crown to give notice of
withdrawal under Article 50.

f.

Alternatively, any power under the Crown’s
prerogative was removed by the ECA 1972 or by
subsequent legislation in relation to the European
Union.

The Government’s arguments
The Court’s summary of the Government’s case was
broadly as follows:
a.

Parliament could choose to leave (or not to
abrogate) prerogative power in the hands of the
Crown, even if its use would result in a change to
common law and statutory rights.

b.

Unless express words could be found in a statute (or
possibly by necessary implication), Parliament
could not be taken to have abrogated the Crown’s
prerogative powers in relation to the EU Treaties.
Therefore an Article 50 notice could be given with
the consequences that followed in the form of either
a withdrawal treaty or automatic departure.

c.

No words could be found in the ECA 1972 or any
other statute which abrogated that power expressly
or by necessary implication.

The Court summarised the claimants’ primary
submissions broadly as follows:
a.

2

The question in this case is to be approached on the
basis that it is a fundamental principle of the UK
constitution that the Crown’s prerogative powers
cannot be used by the executive Government to
diminish or abrogate the rights under the law of the
United Kingdom (whether conferred by common
law or statute), unless Parliament has given

© Allen & Overy LLP 2016

Brexit Law | Article 50 notification – Parliamentary approval is required | 3 November 2016

d.

In particular, it is notable that statutes that had been
enacted since Article 50 came into existence did not
restrict the Crown’s prerogative power to give an
Article 50 notice. On the contrary, the statutes in
question implicitly recognised that such prerogative
power existed as no restriction was placed on the
power of the Crown to invoke that right exercisable
under the TEU, as amended by the Lisbon Treaty.

e.

Nor were there any express words in any UK
legislation that abrogated the Crown’s prerogative
power to withdraw from the Treaties as distinct
from amending them.

f.

As it is likely that any withdrawal treaty would
contain a provision requiring ratification, the
withdrawal treaty would in any event have to be
approved by Parliament by way of the negative
resolution procedure in the Constitutional Reform
and Governance Act 2010 before that occurred; if it
contained provisions requiring application in
domestic law, primary legislation would also need
to be introduced to allow that. This would be
consistent with the proper sequencing of the
respective functions of the Crown and of
Parliament, as had invariably happened in the past:
once an EU treaty had been made, domestic law was
brought into line by Parliament through legislation
and then the treaty was ratified.

g.

Although the 2015 Referendum Act does not itself
confer statutory power on the Secretary of State to
give the Article 50 notice, the implication from the
fact that the 2015 Referendum Act is silent on the
issue of whether legislation is required before notice
could be given supports the contention that
Parliament accepted the continued existence of the
prerogative powers of the Crown to give such
notice; it certainly contains no restriction on such
prerogative power as may still exist.

The judgment
The High Court held that statutory interpretation,
particularly of the ECA 1972 (which is a constitutional
statute), must proceed having regard to the relevant
background constitutional principles. These principles
inform the inferences to be drawn as to what Parliament
intended by legislating in the terms it did.
Where background constitutional principles are strong,
there is a presumption that Parliament intended to

© Allen & Overy LLP 2016

legislate in conformity with them and not to undermine
them. The Court found that the Government’s
submissions “gave no value to the usual constitutional
principle that, unless Parliament legislates to the
contrary, the Crown should not have power to vary the
law of the land by the exercise of its prerogative
powers”.
The Court further stated that this view is reinforced by
reference to two constitutional principles. The first is
that the Crown cannot use its prerogative powers to alter
domestic law which, it said, was “the product of an
especially strong constitutional tradition” in the UK,
which evolved through the long struggle which “had its
roots well before the war between the Crown and
Parliament in the seventeenth century but was decisively
confirmed in the settlement arrived at with the Glorious
Revolution in 1688 and has been recognised ever since.”
The second was the principle that the Crown’s
prerogative power operates only on the international
plane. The Court said that the justification for noninterference with the Crown’s prerogative in
international affairs is substantially undermined in a case
such as this, where the Government was asserting that it
could use the prerogative to bring about major changes
in domestic law.
The Court concluded that: “Interpreting the ECA 1972 in
the light of the constitutional background referred to
above, we consider that it is clear that Parliament
intended to legislate by that Act so as to introduce EU
law into domestic law…in such a way that this could not
be undone by exercise of Crown prerogative
power…The Crown therefore has no prerogative power
to effect a withdrawal from the relevant Treaties by
giving notice under Article 50 of the TEU.”

Revocability of an Article 50 notice
Both the claimants and the Government had asserted
during the course of the proceedings that an Article 50
notice, once served, is irrevocable. The question of
whether an Article 50 notice is revocable is a question of
European law and therefore one that is potentially
referable to the Court of Justice of the EU (CJEU). On
the first day of the hearing, the Court appeared to
recognise that the assertion that an Article 50
notification is irrevocable was “central” to the
claimants’ case. The Court did not appear minded to
accept the invitation to assume that such a notice is a
“one-way trigger” that “can’t be stopped” and indicated

3

Brexit Law | Article 50 notification – Parliamentary approval is required | 3 November 2016

that it would be “absolutely essential” for it to decide the
matter rather than to proceed on an assumption.
The Court did not, however, grapple with this issue in its
judgment, noting simply that “Important matters in
respect of Article 50 were common ground between the
parties: (1) a notice under Article 50(2) cannot be
withdrawn, once it is given; and (2) Article 50 does not
allow for a conditional notice to be given…”. The Court
did not therefore feel compelled to refer the matter to the
CJEU.

What does this mean for the
Government?
The Government has today indicated that it intends to
appeal the UK Supreme Court and counsel for the
Government made an application after the judgment was
handed down for a certificate that would permit the
Government to ‘leapfrog’ the Court of Appeal and
appeal directly to the Supreme Court. The application
for a certificate was granted by the Court.
To pursue an appeal, the Government must now make an
application for permission to appeal to the Supreme
Court. Given the immense importance of this case,
however, it is almost inconceivable that permission will
be refused.
As noted above, the substantive appeal is likely to be
heard next month. It is likely that the Supreme Court's
judgment will be handed down in January at the latest.

Why does all of this
matter?
If the High Court’s decision is upheld on appeal, the
process of obtaining Parliamentary approval via an Act
will necessarily involve readings, debates and votes in
both Houses of Parliament (the House of Commons and
the House of Lords). Whilst in theory this process can be
expedited if there is sufficient political will to do so,
such that it is achievable by the end of March 2017, in
practice it may well be difficult to legislate within that
timescale. As such, it is by no means clear that it will be
completed in sufficient time to allow the Government to

4

serve the Article 50 notice by the end of March. It is
likely to be particularly difficult to pass legislation
quickly if MPs or members of the House of Lords seek
to require assurances as to the Government’s proposed
stance in negotiations with the other Member States
before any approval is given.
Another scenario that may have an impact on timing is
that the Supreme Court may decide that it needs to refer
the question of whether the Article 50 notice is
revocable to the CJEU, notwithstanding the fact that this
was not in issue between the parties before the High
Court. This would almost certainly delay the date of
service of an Article 50 notice beyond March 2017.
There is also another possible – though perhaps unlikely
– consequence of any decision by the Supreme Court to
uphold the High Court’s decision (whether before or
after a reference to the CJEU). Parliament, with a
majority (on paper) of pro-remain MPs, a slim
Government majority and an independent minded House
of Lords may conceivably decide not to approve service
of the Article 50 notice at all. Whether this is a likely
scenario is largely a political assessment, but is another
uncertain factor in this analysis.
If, on the other hand, the Supreme Court overturns the
High Court’s judgment (and assuming it does so before
the end of March 2017), this would allow the
Government to serve the Article 50 notice in accordance
with the timetable set out by the Prime Minister.
All of this is of profound significance constitutionally
and politically but also practically for those doing
business in the EU and the UK. The EU has indicated
that it will not begin negotiations until the Article 50
notice has been served, which means that if service is
delayed, it is likely to extend the period of uncertainty
for commercial parties as to the form that the UK’s
future trading relationship with the EU will take and,
ultimately, the date of Brexit itself. On the upside,
however, it will allow the UK Government, and those
doing cross-border business in the UK and the EU, more
time to plan for that future relationship and to execute
whatever restructuring might be necessary.

© Allen & Overy LLP 2016

Brexit Law | Article 50 notification – Parliamentary approval is required | 3 November 2016

Your Allen & Overy contacts

Karen Birch

Sarah Garvey

Thomas Cusworth

Counsel
Litigation – London
Tel +44 20 3088 3737
karen.birch@allenovery.com

Counsel
Litigation – London
Tel +44 20 3088 3710
sarah.garvey@allenovery.com

Associate
Litigation – London
Tel +44 20 3088 2453
thomas.cusworth@allenovery.com

Andrew Denny
Partner
Litigation – London
Tel +44 20 3088 1489
andrew.denny@allenovery.com

If you would like to discuss the issues raised in this paper in more detail, please contact Karen Birch, Sarah Garvey,
Andrew Denny, Thomas Cusworth or your usual Allen & Overy contact.

This article is one of a series of specialist Allen & Overy papers on Brexit. To read these
papers as they become available, please visit: www.allenovery.com/brexit.

Allen & Overy means Allen & Overy LLP and/or its affiliated undertakings. The term partner is used to refer to a member of Allen & Overy or an
employee or consultant with equivalent standing and qualifications or an individual with equivalent status in one of Allen & Overy LLP’s affiliated
undertakings. | Allen & Overy maintains a database of business contact details in order to develop and improve its services to its clients. The
information is not traded with any external bodies or organisations. If any of your details are incorrect or you no longer wish to receive publications
from Allen & Overy, please contact corporatepublications@allenovery.com. | This note is for general guidance only and does not constitute definitive
advice. | LT:16600125.2
5

© Allen & Overy LLP 2016