Why Brexit ‘will be a very, very nasty divorce’ which could go on for a decade — legal perspectives

Among British voters who supported Brexit, there were probably quite a number who upon seeing the news on Friday morning concluded: That’s it! Britain is out of the EU.

To understand why the withdrawal process will in fact be “a complex and daunting task,” it’s necessary to dig into some of the legal details of the process.

On March 8, The Select Committee on the European Union in the House of Lords, sought evidence from two experts in the field of EU law: Sir David Edward KCMG, QC, PC, FRSE, a former Judge of the Court of Justice of the European Union and Professor Emeritus at the School of Law, University of Edinburgh; and Professor Derrick Wyatt QC, Emeritus Professor of Law, Oxford University, and also of Brick Court Chambers.

What follows are some excerpts from their public testimony. Questions came from members of the Committee.

Professor Derrick Wyatt: … with respect to the fate of EU legislation, we tend to look at it as legislation that is imposed upon us. That is not accurate. Part of the way that British Governments have successively exercised their policies has been through the machinery of the European Union. If we look at legislation on equality in the workplace or on the environment, or we look at our company law, these are not all alien mechanisms to our detriment that have been forced upon us. Many of them are pieces of legislation that are regarded as currently important and still receive strong support. It would take years for Government and Parliament properly to review the corpus of European law, jettison what was not wanted and keep what would be wanted — in my view, the majority.

Professor Derrick Wyatt: Greenland shows that even mildly complicated issues can take quite a long time. The population of Greenland is 55,000. Its issues are mainly around fishing, and transitional rules took two years to negotiate. [A referendum in 1982 led Greenland to withdraw from the EEC, a process completed in 1985.]

Professor Derrick Wyatt: The Open Europe think tank recently published some comparative information on how long it takes to negotiate various types of agreement. Agreements negotiated by the EU were taking between four and seven years. If one looks at agreements negotiated by countries between themselves outside the EU, they seem to take between four and nine years. All that shows one is that these things can take a long time.

Baroness Scott of Needham Market: I am not clear on the position of the UK with regard to the day-to-day business of the EU going forward. While all this negotiation is going on, it will be getting on with other things. What is the status of the UK during that period, which could be up to a decade?

Sir David Edward: The UK remains a member state. Strictly speaking, we become chairman of the Council. We have the presidency of the Council in 2017. Strictly speaking, it just continues.

Professor Derrick Wyatt: Under the trio system, every presidency acts in conjunction with the next two in line. A few days after the Brexit referendum the UK would join the trio, with Slovakia and Malta. What does the trio do? Forward planning and continuity. We would be in that trio, we would be in the next trio and then we would have the presidency. Forward planning and continuity would be weaknesses for the UK. On the other hand, there would be some issues we would want to stay in on: for example, common foreign and security policy and sanctions against rogue states. The UK has an enormous influence, and our interests are served by that. We would not want to disengage politically from decisions such as that. Suppose there were a meeting on duties on imports of dumped Chinese steel. The UK would want to be involved with that.

Lord Whitty: But is it up to the UK?

Professor Derrick Wyatt: Yes, it would be up to the UK, but the UK would have to work hard to maintain political credibility. The other side of that would be some selective disengagement, because where it was not working the UK would have to say, “We can understand why this bit won’t work and we are not trying to undermine this organisation”.

Lord Borwick: What are the legal implications if, as you say, the withdrawal negotiations take more than two years, as we all expect they would, and no extension is given? It has to be given unanimously [by all 27 member states], as I understand it. I am not sure what the incentive is for all the other states to agree to that extension?

Professor Derrick Wyatt: It is £8 billion a year in net contributions, and access to the UK market for workers and for motor cars. All the member states in the EU believe they benefit from the internal market. They will continue to believe that and there will be a minor budgetary crisis the day that the UK financial net contribution ceases. I am not saying that people always act according to their best interests if their blood is up. This would be one of the huge risks. If, for example, the UK were to jump the gun and insist on imposing unilateral restrictions on immigration while negotiations were going on, the climate would disintegrate. We would not be able to carry on in the spirit of considered mutual self-interest.

Lord Borwick: I entirely agree with you, but as far as a lot of voters are concerned, after a decision on Brexit has been made, they will believe that is the point at which Brexit takes place. They will not understand the details of Article 50 or the two years, let alone the other implications that you have brought forward. Will they not demand some instant withdrawal politically?

Professor Derrick Wyatt: I do not think it is feasible for politicians now to have a plan B, but it is essential that our Civil Service has a procedural plan B. I put my cards on the table. I shall vote to remain. I am not wishing for this to happen. If it does happen, we shall all be in the same boat and there will be huge national self-interest in moving forward in a very considered way without jumping the gun in directions that could torpedo the negotiations before they start. There will be a major learning curve for some politicians, obviously — present company excepted — and the electorate as to what needs to be done to achieve British self-interest. This is not a question of concessions to others; it is how we achieve what we would want to achieve. I agree that the man or woman in the street might expect, on the day we vote out, that with one bound we are free.

Lord Borwick: Yes, together with the newspapers, the television and others. The first time that a directive comes through with which we disagree and on which we have had no comment but which we will be bound with, there will be a really big row, one presumes.

Professor Derrick Wyatt: That is where the trick will be such a hard one — forging political consensus across the parties to move forward in a way that serves our best interests.

Lord Borwick: As you said, there has to be political consensus across the parties, including presumably the SNP [Scottish National Party], which has a different interest in this matter.

Professor Derrick Wyatt: Yes, but there will be the same interest in what the SNP might say is the short to medium term, because it has aspirations to leave the UK in the longer term.

Sir David Edward: I go back to about a month ago when I was giving a lecture in Germany organised jointly by a university and the German-British Friendship Society of that particular province or Land. The chairman of the German-British Friendship Society said, “Make no mistake about it: if there is a vote to leave, it will be a very, very nasty divorce”.

The Chairman [Lord Boswell]: There is a follow-up point — forgive us — which is the question of acquired rights under EU law. In a sense, trade might be simple because there is a machinery. I am not aware of any machinery for safeguarding acquired rights. Do either of you have a comment on that?

Sir David Edward: Could I give you some examples of what would need to be negotiated? A businessman in two different member states has a contract for the supply of components at a fixed price over a period of years that extends beyond the two-year period. What happens if there is an immediate exit? Is customs duty then payable and does that disrupt the contract? What are the consequences? A university has an EU research funding package with provision for cross-frontier movement of research scientists, and that has a life beyond two years. What happens to that? What happens to Erasmus students? When does participation in Erasmus end? A divorced couple live in the UK and another member state with special arrangements for access to children, and particularly cross-border payment of family maintenance. What happens to that? There are cross-border investments and tax treatment of capital and revenue. There are agricultural support payments and fishing quotas. Those are just examples.

Lord Mawson: Has anyone considered practically, given the process you are describing, how many zeros there will be on the legal bill for all of this?

Sir David Edward: I echo the feeling of one of my contemporaries, an EU lawyer, who said, “I thank God for my mortality”. The long-term ghastliness of the legal complications is almost unimaginable. Certainly, there will be people who will make a great deal of money out of it.

Lord Davies of Stamford: Do you think that the Government’s assessment of the risks, uncertainties and potential costs of withdrawal are overstated, understated or reasonably stated?

Sir David Edward: I think potentially they are understated. You should be apprehensive.

Professor Derrick Wyatt: I prefer not to comment on the Government’s proposals. In the Government’s White Paper, they say a number of things, but I would rather confine myself to specific issues. On the specific issues, it seems to me that there is a considerable level of uncertainty and the immediate effect of Brexit would be that the pound would go down, the Stock Exchange would go down and the cost of public sector borrowing would go up, which is why the Bank of England at the moment is making contingency plans to bail out the banks. I find those things worrying.

Lord Davies of Stamford: You do not think that the Government have overstated the hazards of withdrawal.

Professor Derrick Wyatt: I do not want to take a position on what the Government say. I would rather indicate precisely what my concerns are and give a reason as to why I am concerned. Those are my concerns, but if there is Brexit we are all in the same boat and we would have to make the very best of it that we could. That would mean coming together in a strong cross-party consensus to show the EU that we could negotiate a long-term agreement that would stick, and that we would not be running backwards and forwards trying to renegotiate things. We would have to do that or business would lose confidence in the future. If that is scaremongering, I am guilty of scaremongering. I think that is a sober assessment, but it is mine and not the Government’s.

Baroness Suttie: What legislative measures would be necessary to extinguish the application of EU law in the devolved nations [Scotland, Northern Ireland, and Wales]? I have a specific question to Sir David, if I may. Do you think that the Scottish Parliament would be likely to grant legislative consent? If they did not, what would be the consequences?

Sir David Edward: The formal consequence is this. Under Section 29 of the Scotland Act 1998 the Scottish Parliament is bound by EU law, and, ditto, under Section 57(2) the Scottish Government are bound by EU law. Under the Scotland Bill that is going through Parliament at the moment, the Sewel convention will be recognised in Section 2 if it becomes an Act. Therefore, as I see it, you would have to amend the Scotland Act and, therefore, you would have to have legislative consent from the Scottish Parliament. I can envisage certain political advantages being drawn from not acceding to the legislative consent — creating difficulties about it.

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