The UK votes to leave the EU: initial legal observations

UntitledThe potential legal issues raised by the departure of the UK from the European Union (EU) are unprecedented. However, one thing is clear – until the exit, in terms of the content and stability of UK law, nothing will change. The UK remains bound by its EU Treaty obligations and directly applicable EU law will continue to apply; where EU law does not apply, the UK remains competent to legislate as it sees fit.

Three aspects of the UK’s exit are worth particular comment from a legal perspective.

The legal framework under which the UK will withdraw from the EU

As a matter of EU law, Article 50 of the Lisbon Treaty provides the only mechanism for withdrawal. Under Article 50:

  • It is up to the UK to notify the European Council of its decision to withdraw – the EU cannot start withdrawal proceedings itself.
  • The European Council must negotiate an agreement with the UK “setting out arrangements for its withdrawal, taking account of the framework for its future relationship with the [EU].”
  • The agreement must be approved by a qualified majority of the Council (excluding the UK) after receiving the consent of the European Parliament.
  • If no agreement has been reached within two years of the UK’s formal notification under Article 50, the UK will exit the EU without any framework for their future relations. That two-year period can only be extended by a unanimous decision of the European Council (acting without the UK) and separately agreed by the UK.

The legal framework that will govern the UK’s relationship with the EU after exit

A number of existing models (e.g., accession to the European Economic Area, a form of free trade agreement or simply relying on rights under the World Trade Organization) have been suggested, but nothing is yet clear on this question, and there is no legal reason why it has to be any of these models. If there is an appetite for it (and the time), there is an opportunity to be creative in structuring the future UK-EU relationship.

The task of identifying the impact on UK law once EU law ceases to apply

In simple terms, without EU law applying, what are the gaps in UK law and how should they be filled? Evidently, the nature and content of the negotiated exit agreement with the EU will answer some of those questions.

Read more about what will change, what won’t change, exit negotiations and UK law post exit.

EY Legal Services contacts:

Phil McDonnell +44 (0) 161 333 2676

Sarah Holmes +44 (0) 20 7197 9312