Supreme Court rules that the Government cannot invoke Article 50 without an Act of Parliament

Article 50: what next for international contracts?

On 24 January 2017, the Supreme Court ruled that the government cannot invoke Article 50, thereby commencing the process of the UK’s withdrawal from the European Union (“EU”), without an Act of Parliament.

For the first time in the Supreme Court’s history, all 11 permanent judges heard the case, which highlights its fundamental constitutional significance. The Supreme Court panel upheld the High Court judgment of 3 November 2016, by a majority of 8-3.

The two issues for the Supreme Court to determine were as follows:

  • the extent of ministers’ powers to effect changes in domestic law through exercise of their prerogative powers at the international level; and
  • the relationship between the UK government and Parliament on the one hand, and the devolved legislatures and administrations of Scotland, Wales and Northern Ireland on the other.

The Supreme Court dismissed the government’s appeal, finding that ministers cannot invoke Article 50 without the authority of an Act of Parliament. However, the Supreme Court ruled in favour of the government in relation to the devolution issues, meaning that approval of the devolved nations will not be required.

In relation to the first issue, the Supreme Court ruled that the terms of the European Communities Act 1972 (the “ECA”), which gave effect to the UK’s membership of the EU, are inconsistent with the exercise by ministers of any power to withdraw from the treaties which govern the EU (the “EU Treaties”) without authorisation by a prior Act of Parliament, for the following reasons:   

  • Pursuant to section 2 of the ECA, EU law is established as an independent source of UK law and takes precedence over it. This remains the case until and unless Parliament decides otherwise.
  • Invoking Article 50 would inevitably lead to the UK’s withdrawal from the EU Treaties, which would fundamentally change the UK’s constitution by cutting of EU law as a source of UK law. The UK’s constitution requires such a change to be effected by way of an Act of Parliament. 
  • As a result of the UK’s withdrawal from the EU, UK law will change and the rights of UK residents granted through EU law will be affected. This also requires a prior Act of Parliament.
  • When enacting the ECA, it was open to Parliament to authorise ministers to withdraw from the EU Treaties. The provisions of the ECA provide that ministers do not have such power.
  • Pursuant to the UK’s constitution, it is not sufficient that ministers are accountable to Parliament for their actions. The Supreme Court stated that it had been asked to assume that invoking Article 50 is irrevocable. Therefore, if ministers invoke Article 50 without prior authorisation from Parliament, this would pre-empt any action by Parliament.
  • The legal significance of the EU referendum was limited to what was included by Parliament in the European Union Referendum Act 2016, which did not set out the consequences of the EU referendum. Therefore, the change of law required to implement the outcome of the EU referendum must be made in accordance with the UK’s constitution, through legislation enacted by Parliament.

In relation to the devolution issues, in summary the Supreme Court held that:

  • The devolution legislation assumes that the UK would remain a member of the EU but does not require the UK to remain a member.
  • Relations with the EU, like other matters of foreign affairs, are reserved or excepted in the cases of Scotland and Northern Ireland and are not devolved in the case of Wales. Withdrawal from the EU is therefore a matter for the UK Parliament and not for the devolved legislatures.
  • Withdrawal from the EU will alter the competence of the devolved institutions and remove the requirement to comply with EU law. 
  • The devolved legislatures do not have a veto on the UK’s decision to withdraw from the EU.

It is evident that this is the most important constitutional judgment in recent history. Perhaps having regard to the potential for a wider than usual readership, the judgment is admirably clear and astonishingly refers to a concept of law as being ‘dry and technical’. The judgment emphasises that “this case has nothing to do with issues such as the wisdom of the decision to withdraw from the European Union, the terms of withdrawal, the timetable or arrangements for withdrawal, or the details of any further relationship with the European Union.”  Such issues are stated to be political in nature, and are not therefore appropriate for resolution by judges.

Although the ruling requires the government to seek authority from Parliament before triggering Article 50, there is likely to be considerable relief on the part of government that the devolved nations do not have a veto over the UK’s decision to leave the EU. It is certain that the judgment will have a considerable impact on what happens next. Our thoughts on this are as follows:

  • The Supreme Court’s judgment may not ultimately prevent the UK’s withdrawal from the EU, however it may impact the process of the UK withdrawing from the EU.
  • The government cannot use prerogative power to invoke Article 50 without authority from Parliament, otherwise “the bullet would have left the gun before Parliament has accorded the necessary leave for the trigger to be pulled.” 
  • The Supreme Court panel distanced itself from prescribing what the bill might look like. It has stated that a resolution of the House of Commons will not suffice, however it is a matter for Parliament as to what form the legislation should take. The judgment does not dismiss the possibility of the bill being very short. The essential point made by the Supreme Court on this matter is that there must be primary legislation enacted by the Queen in Parliament.
  • Parliament will now play a fundamental role in this process. The government has published a very short bill, the European Union (Notification of Withdrawal) Bill and it has also agreed to publish a white paper.
  • Current expectations are that the bill will pass by a considerable margin. However, it is clear that there will be attempts to amend the bill, inevitably resulting in delay, and therefore we consider the government’s self-imposed deadline of invoking Article 50 before the end of March to be very ambitious.

Contact our experts for further advice

Gustaf Duhs, Maliha Carey

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