Legal views and news

Transition Period: Part 1: Avoiding the Negotiating Noose

By Martin Howe QC:

In this first part of his analysis of the legal and treaty ramifications of the Florence speech “implementation period” proposal, Martin Howe QC explains that:

  • The EU only has the legal power under Article 50 of the Treaty on European Union to agree transitional or interim arrangements once the destination to which the transition leads has been agreed, at least as a framework. There is no power under Article 50 for the EU to agree an open ended transitional period of the kind which many business leaders seem to expect in order to allow time for negotiation about the future relationship.
  • Because the EU cannot agree to a transitional period until the framework of the future relationship has been agreed, it is impossible for the EU to agree to a transitional period until late 2018 at the earliest. Hopes that such a transition can be agreed “by the end of this year” are naive and totally unrealistic.
  • The EU27’s negotiating strategy dictates that they will not agree to a transition period until the UK has succumbed to their demands about the EU’s legally meritless financial claim, citizens rights, ECJ jurisdiction, and other matters. From the EU27’s perspective, granting an interim period would let the UK off the hook, contrary to the EU27’s strategy to force the UK up against the wall of the hard deadline for exit in March 2019.
  • Continue reading “Transition Period: Part 1: Avoiding the Negotiating Noose”

We don’t owe the EU any money

We do not owe the EU any money as a Brexit divorce bill. That is the conclusion that Martin Howe QC, Chairman of Lawyers for Britain, and Charlie Elphicke MP have come to after an exhaustive analysis (click to download report) of the claims the EU Commission sent to the British Government in June. The Government would, therefore, be right to stand firm and not be blackmailed into a multi-billion pound divorce bill. Particularly as it transpires that the legal position is that the EU owes us €10 billion. Continue reading “We don’t owe the EU any money”

Brexit choices: the EU Customs Union and the Single Market?

by Martin Howe QC, 25th July 2017

Brexit is happening, but the big question now is: “What kind of Brexit?” Should we seek to stay in the EU’s Customs Union and/or its Single Market, as the Liberal Democrats, some Labour MPs and Scottish and Welsh Nationalists propose, or instead seek a wide and deep Free Trade Agreement as the Government and the Labour front bench propose? Continue reading “Brexit choices: the EU Customs Union and the Single Market?”

Rights of EU Citizens in the UK after Brexit

A fair settlement – or a privileged caste with superior rights enforced by a foreign court?

By Martin Howe QC, Francis Hoar and Dr Gunnar Beckfull paper.

An early and fair settlement of the rights of EU citizens resident in the UK, and of UK citizens resident in the EU27, has been a priority for the British government. When the European Council published its Brexit negotiating guidelines on 29 April 2017, it appeared that the EU27 shared that objective as well and that any discussions would be limited to matters of detail.

Unfortunately, the picture radically changed on 24 May 2017 when the EU Commission published a more detailed Working Paper. This introduced two major demands, absent from the European Council’s guidelines. First, it demanded that EU citizens should, in perpetuity, have “the same level of protection as that set out in Union law at the date of withdrawal”; and, secondly, that their rights in the UK should be overseen, interpreted and enforced after Brexit by the EU Commission and by the European Court of Justice at Luxembourg (ECJ).

We have published a detailed paper which explains why each of these demands is unacceptable. Continue reading “Rights of EU Citizens in the UK after Brexit”

Withdrawal – UK potential financial liabilities

The European Union’s ever expanding Brexit financial claims against the UK, now apparently northward of €100bn, have raised their head in the campaign. On 21 March 2017, the Prime Minister gave an interview to The Sunday Telegraph in which she insisted that the UK’s rights must be respected — including its claim to a share of the European Investment Bank —  as well as any obligations. David Davis gave an interview to The Sunday Times in which he was dismissive of the EU’s financial demands for €100bn or more and commented:  “I’m sufficiently poor to think that €1bn is a lot of money.” He also raised the possibility that the EU’s stance on this and other issues might lead to “no deal”.

We have scrutinised the EU’s Brexit financial claims as they are now being advanced under the European Council’s approved negotiating guidelines. Our new and updated Analysis of the UK’s potential financial liabilities looks at the legal arguments in depth. We have failed to find a credible legal argument either for a liability on the UK to contribute to the EU’s unfunded pension fund deficit, or for any liability to contribute to the EU’s ongoing programmes after Brexit day on 29 March 2019, with the possible exception of an obligation to carry on contributing overseas aid of €1.3bn up to the end of 2020 via the European Development Fund (EDF). But the EDF example is actually helpful to the wider argument that the UK has no ongoing liability at all to contribute to the EU budget, since the funding for the EDF is agreed via a quite different mechanism in which the individual Member States assume direct obligations to fund the programme outside the framework of the EU treaties. Continue reading “Withdrawal – UK potential financial liabilities”

The European Court of Justice is not an impartial court and has no role to play in post-Brexit EU-UK relations

Leading authority on EU Law, Dr Gunnar Beck (SOAS), explains why, as a matter of law, Britain can leave the EU without any liability for any allegedly outstanding sums under the EU budget. Dr Beck dismantles Helena Kennedy QC’s suggestion in the Guardian on 3 May 2017 that the EU Court of Justice should have a role in post-Brexit Britain. The Court of Justice has been “a motor of EU integration”, Dr Beck explains, and cannot be trusted as an impartial adjudicator of any post-Brexit disputes involving the UK. Continue reading “The European Court of Justice is not an impartial court and has no role to play in post-Brexit EU-UK relations”

Brexit – doing a deal with the EU

During the general election campaign, the divide between the political parties was over what kind of deal should replace the current relationship which exists under the EU Treaties between the UK and the rest of the EU. That current arrangement involves the UK being inside the EU Customs Union and participating in the EU Single Market. What then should replace that current relationship and how would it compare with the present arrangement?

The first point to make is that participation within the Single Market is a very mixed blessing.  In our article Brexit and the Single Market, we explain that the rules of the European Single Market are made up of a number of different elements, some of which are helpful to trade, some of which (such as harmonised regulations) have benefits and disadvantages which counterbalance each other and may have different positive and negative impacts depending upon the sector concerned, and others of which are positively harmful and negative for the UK.  In that latter category are the ‘Fortress Europe’ rules of the Single Market which positively require us to impose restrictions on trade between ourselves and non-Member States, so driving up costs to our consumers and industry.

Therefore the aim should not be to preserve participation in the European single market with its negative features. Instead, the aim should be access to the single market.

The EU trade tail should not wag the global dog

Before turning to what kind of deal with the remaining EU we should aim for, we should first ask what is the dog and what is the tail?  Over the past 10 to 15 years, there has been a dramatic decline in the proportion of our trade which goes to the EU as compared with our trade which goes to the wider world. Continue reading “Brexit – doing a deal with the EU”

Germany and the EU cannot afford to drive a hard bargain over Brexit

by Gunnar Beck, Barrister and Reader in EU law & Legal Theory, University of London

This article first appeared in the Wall Street Journal Europe

Germany seems to be softening her stance on Brexit. On 17 August Michael Roth, Germany’s Minister of European Affairs, said, “Given Britain’s size, significance, and its long membership of the European Union, there will probably be a special status which only bears limited comparison to that of countries that have never belonged to the European Union.” Roth’s comments mark a departure from Chancellor Merkel’s comments shortly after the Brexit referendum that Britain would receive no special treatment, nor would she be allowed to “cherry-pick” in trying to retain full access to the single market.

Roth’s comments have not gone unnoticed in the British press. The initial response was a negotiating tactic which has been exposed when Theresa May refused to trigger Art. 50. Since Merkel has come out publicly in support of the EU’s and France’s position against any cherry-picking, Germany’s emerging position is being communicated on a more junior level. It allows the German government to begin the process of shifting the ground while not appearing to change its mind (yet).

Few, however, realise how weak Germany’s and the EU’s negotiating position actually is. Continue reading “Germany and the EU cannot afford to drive a hard bargain over Brexit”

Continuity for the City after Brexit

Brexit: Continuity of current arrangements for banks and investment banks

One area where continuity is very important is the field of financial services. We are delighted to reproduce with permission an article (first published by Thomson Reuters Accelus on www.complinet.com) by a real expert in this field, Barnabas Reynolds, who is partner and head of financial institutions advisory and financial regulation at Shearman & Sterling LLP:

Much of the analysis offered in the media and other publications to date on the implications of Brexit for the bulk of business carried on in the City has been misleading and has overlooked or omitted key points.

The vast majority of banking and investment banking activity should be largely unaffected even in the worst case scenario, and the ultimate situation is likely to be considerably better than that.

In other words, by default, institutions conducting wholesale investment services — that is, broadly, principal and agency broking/dealing, custody services, fund management outside the scope of the Alternative Investment Fund Managers Directive (AIFMD), and investment advice with professional and sophisticated investors — into EU Member States will be able to do so without the need for regulation other than in the UK.

Any negotiated exit is likely to contain additional facilities for and recognition of Europe-wide business. Continue reading “Continuity for the City after Brexit”

Why My American Students Used to Gasp in Horror When they Learnt About the EU

By Jeremy Brier,  barrister and former Adjunct Professor of EU Law at Pepperdine University.

When I used to lecture American graduates in European Union Law, there were many occasions when I reduced them to gasps of disbelief.  Like the time I told them they couldn’t text each other during class. Total outrage. Once, I even had the temerity to ask a boy kindly to refrain from eating a Chinese takeaway (I don’t mind surreptitious snacking but full mid-class meals with chopsticks and napkins are really pushing it).

But there was always a particular moment, midway through our first lecture on the EU, when my American students would look particularly dumbstruck.  It was when they learnt that the common market, entered into in a spirit of amity to heal war-torn Europe, had by the reasoning of its appointed Judges, determined that EU laws must reign supreme over those of the EU’s member states. Continue reading “Why My American Students Used to Gasp in Horror When they Learnt About the EU”

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