By Huw Beverley-Smith, Robert K. Campbell, Scarlett Diamond, James Ellis-Rees, Hans-Christian Mehrens | Faegre Baker Daniels
The exit of the United Kingdom from the European Union is heading towards another periodic climax with the exit date currently set for 31 October 2019. The U.K. Supreme Court today held that the Prime Minister’s decision to shut down, or in legal terms “prorogue,” Parliament during the critical stages of negotiations with the EU was unlawful.
This alert provides a brief summary of an extremely complex and fast-changing legal, political and economic landscape. Our previous briefing can be found here.
The exit terms negotiated with the EU were rejected by the U.K. Parliament three times earlier this year. This resulted in the resignation of Prime Minister Theresa May and the appointment of Boris Johnson as Conservative Party leader, and by default, as Prime Minister, in July. Boris Johnson has pledged to leave the EU by 31 October whatever the circumstances and has ruled out any further extensions.
Deal or No Deal Brexit – Practical Implications
If exit terms are agreed in time, the U.K. will leave the EU in a relatively orderly manner over a transition period that is intended to last two years from the exit date. However, if there is no deal on the exit date, the U.K. would immediately cease to be a part of the EU single market and customs union, both of which are arrangements designed to facilitate trade between EU members by eliminating checks and tariffs. The U.K. would also leave EU institutions such as the European Court of Justice and Europol, its law enforcement body, overnight on Halloween in the wake of a no-deal Brexit.
The most immediate impact would be the (1) reintroduction of customs checks at U.K. ports (which is likely, in the U.K. government’s own assessment, to result in significant disruption to supply chains and supplies of medicines and fresh foods) and (2) the imposition of tariffs on exports to the EU. Currently, U.K. businesses can trade with other EU member states with no tariffs. In a no-deal Brexit, World Trade Organisation (WTO) rules, including WTO tariffs, would apply as the default option. Under WTO rules, the U.K. would face tariffs on 90% of exports by value to the EU, at an average tariff of 4%. Some sectors, such as the automotive sector, would face much higher tariffs of 10%. In certain agricultural sectors, tariffs on exports to the EU would be in excess of 30%. This would make exports to the U.K. uncompetitive and the opportunities of finding substitute markets for U.K. products beyond the EU (e.g. in the U.S. or Japan) in the short-term following a no-deal Brexit would be limited, as trade deals are yet to be negotiated and it is likely to take months if not years to put these into place.
One of the obvious problems in the negotiations has been the need for workable border arrangements to protect the integrity of the EU single market and to prevent goods and agricultural produce from entering the EU from third countries. This has led to the “Irish Backstop” becoming one of the most divisive issues in the negotiations. The Irish Backstop as contained in the current draft Withdrawal Agreement is intended to prevent the reintroduction of a hard border between Northern Ireland and the Irish Republic. It effectively is an insurance policy that would kick in if the EU and U.K. are unable to agree on a trade deal by the end of the transition period. The U.K. would join a single customs territory with the EU. In addition, Northern Ireland would remain aligned to some extra EU legislation to ensure the border remains open until such time as alternative arrangements, e.g. technological solutions, can be delivered that will permit the border to be effectively invisible.
This is contentious with Brexit proponents who worry that it could result in Brexit being delayed indefinitely while arrangements for the border are worked out.
Upon becoming Prime Minister, Boris Johnson made the complete removal of the Irish Backstop a fundamental “deal breaker” issue for the U.K., but he has not made proposals for any alternative arrangements. Political opponents viewed this negotiation tactic as a cynical move to request the impossible and thereby prolong negotiations and run down the negotiation clock to the 31 October deadline when the U.K. would, by default, leave the EU. Johnson has said that maintaining the current timeframe offers the greatest prospect of renegotiating a more favourable deal with the EU.
Political opponents from across all parties therefore passed an Act of Parliament requiring the U.K. Prime Minister to request an extension from the EU if an agreement with the EU has not been reached by the EU Summit of all Member States on 17 – 18 October. This was passed in only a few days shortly before Parliament was prorogued on 10 September.
Any decision by the U.K. Parliament to extend the deadline would also require the unanimous agreement of the remaining EU members to have effect.
The Royal Prerogative and the Role of the Queen
Proroguing Parliament, the issue of the Supreme Court case, is a Royal Prerogative power exercised by the Queen who, by convention, does so on the advice of the Prime Minister. Unlike the U.S., the U.K. is a constitutional monarchy with an unwritten constitution. The Queen’s role as head of state is essentially formal and ceremonial. She does not have discretion to act in accordance with her own political views and performs her functions largely guided by convention, those conventions being the underlying principles of the constitution without themselves being codified.
The Royal Prerogative is one of the most significant elements of the U.K. constitution. It is a power held by the Monarch personally and not conferred by Parliament. The government provides advice to the Queen on the exercise of the prerogative, which by convention, she is expected to follow. It enables the government, among other things, to deploy the armed forces, make and unmake treaties and confer honours.
The separation of legislative, judicial and executive powers is a fundamental principle of the U.K. constitution. Although the government of the day has considerable power within this framework, crucially, its actions are generally subject to scrutiny by Parliament and by the courts.
Issues in the Supreme Court – Prorogation
Prorogation signals the end of a parliamentary session and brings nearly all parliamentary business, including most bills that are in process, to a close. Critically, it also ends parliamentary scrutiny (by select committees and questions to ministers) of the government’s actions. On this occasion the Prime Minister ostensibly advised the Queen to prorogue Parliament in order to allow time to prepare the Queen’s Speech setting out the government’s legislative agenda for the new session. Parliament was prorogued until 14 October when a new session was intended to open with a new legislative agenda. This prorogation has been controversial because the five-week gap until the start of the new session was unusually long and took place during an extremely sensitive political period.
The legal challenges in the Supreme Court concerned whether this was the real reason and whether the Prime Minister’s advice was capable of being reviewed by the courts. There was a suspicion that Johnson’s real motivation was to stifle Parliament’s ability to scrutinize the government’s Brexit activities in the run up to 31 October, and in particular before a crucial meeting of the EU Council on 17 – 18 October.
Extent to Which Prime Minister’s Advice Can Be Reviewed
It is possible to challenge the use of the Royal Prerogative by judicial review. Its scope is difficult to determine due to the nature of the U.K.’s unwritten constitution, making its existence and extent a matter of common law. The extent of such review was one of the issues before the Supreme Court.
The courts generally regard matters of “high policy” or matters which are “political” as “non-justiciable” issues which are beyond the scope of their review. This marks the separation of powers between the judicial and the executive branches of government. The Prime Minister has contended that his advice to the Queen to prorogue Parliament was political.
The English and Scottish Court Decisions
Proceedings were started in the English High Court on the same day prorogation was announced, by Gina Miller, who previously had successfully challenged the government, which led to Parliament having to be consulted before the government could trigger Article 50, i.e. the notification now more than two years ago that the U.K. intends to leave the EU. The key issue was whether the Prime Minister’s decision to prorogue Parliament was capable of challenge in court, or whether it is an exclusively political matter. The English High Court decided that the issue was purely political and could not be challenged.
Parallel proceedings were brought in Scotland (a separate jurisdiction to the courts of England and Wales). The Court of Session ruled that the prorogation of Parliament was unlawful on the basis that the reason for prorogation was to “prevent or impede Parliament holding the executive to account and legislating with regard to Brexit, and to allow the executive to pursue a policy of a no-deal Brexit without further parliamentary interference.”
The Supreme Court Decision
The U.K. Supreme Court has today ruled that the decision by Boris Johnson to advise the Queen to prorogue Parliament was unlawful, void and of no effect. Therefore, Parliament was not prorogued. The ruling was the unanimous judgment of the maximum panel of 11 serving Supreme Court Justices who were convened for the appeal.
In the summary of the judgment given by Lady Hale, the President of Court, the Court firstly held that the advice given by the Prime Minister to the Queen was justiciable. The prorogation of Parliament was a prerogative power of the Monarch. While some prerogative powers were not amenable to judicial review, this one was.
The Court then held that the limit on the power to prorogue Parliament was that it would be unlawful if the prorogation had the effect of frustrating or preventing, without reasonable justification, the ability of Parliament to carry out its functions as a legislature and as the supervisory body of the executive. It concluded that this prorogation did have that frustrating effect. It was not a normal prorogation in the run-up to a new session of Parliament but was a prolonged suspension of Parliamentary democracy in the exceptional circumstances of the fundamental change to the constitution of the United Kingdom due to take place on 31 October.
The Court held that the effect of its judgment was that the prorogation of Parliament was void and of no effect and therefore that it had not been prorogued. It was for Parliament itself to decide what to do next to enable each House to meet as soon as possible. No further action was required from the Prime Minister.
The judgment reinforces three fundamental principles: (1) parliamentary sovereignty – Parliament makes laws that everyone, including the executive, must obey, (2) parliamentary accountability – the executive is accountable to Parliament for its actions, and (3) Royal Prerogative powers are limited to those powers afforded to the Monarch by Parliament.
Events are likely to move fast in the coming days. The Speaker of the House of Commons has already announced that the House will reconvene tomorrow. With Parliament back in session the government will face increased scrutiny of its handling of the Brexit process over the next few weeks, including further coordinated action by opposition parties to ensure Johnson complies with the obligation to seek an extension from the EU. This make a no-deal Brexit less likely but developments will need to be monitored closely.
Compliments of Faegre Baker Daniels, a member of the EACCNY