NCA’s Annual Report 2019-20: a focus on recovering the proceeds of crime and asset denial
On Tuesday 24 January 2017, UK constitutional law was thrown into the spotlight in what can only be described as one of the most hotly anticipated judgments in recent years. The fact that all eleven Justices of the Supreme Court sat to hear the Government’s appeal (an unprecedented event in the Court’s history) signifies the importance of the decision, which marks another important step in the road to Brexit.
The Court was at pains to emphasise that it was in no way passing an opinion on the merits or otherwise of leaving the EU. The key questions before the Court were twofold: (i) whether, as a matter of UK domestic law, a formal notice of withdrawal under Article 50 (“Notice”) can lawfully be given by the UK Government without the prior authority of an Act of Parliament, and (ii) whether the terms by which powers were devolved to Scotland, Wales and Northern Ireland dictate that consultation and/or the agreement of the devolved legislatures is required before the UK can withdraw from the EU.
The Government’s case was predicated on the accepted constitutional principle that the Crown is able to enter into and/or terminate treaties without recourse to Parliament by virtue of its prerogative powers. This, it contended, extends to the right to withdraw from the treaties governing the UK’s membership of the EU. The appellants challenged the Government on the basis of another fundamental principle of UK constitutional law. Namely, that the prerogative powers cannot be used by Government Ministers to change UK domestic law, unless Parliament expressly permits it.
On the first question, the Divisional Court had found against the Government on the basis that the European Communities Act 1972 (“the 1972 Act”) fundamentally changed UK law by granting EU rights to UK citizens that are enforceable in domestic law. As withdrawal from the EU would effectively change (in most cases remove) those domestically enforceable rights such a decision could not be taken by the Government exercising its prerogative powers.
By a majority of eight to three (Lords Reed, Carnwath and Hughes dissenting) the Supreme Court upheld the decision of the Divisional Court and ruled that the Government cannot serve Notice under Article 50 without prior authorisation by an Act of Parliament. Giving the judgment of the majority Lord Neuberger expressed the decision in the following way:
“We cannot accept that a major change to UK constitutional arrangements can be achieved by a ministers [sic] alone; it must be effected in the only way that the UK constitution recognises, namely by Parliamentary legislation.”
On the devolution issue, the Court unanimously concluded that consultation and/or the agreement of the devolved legislatures was not required as a matter of law before the UK can withdraw from the EU.
The Court accepted the general rule that, subject to any restrictions imposed by Parliament, Government Ministers, in exercising their prerogative powers, have untrammelled authority to enter into and withdraw from international treaties without the interference of Parliament or the courts. However, citing Lord Hoffmann in Higgs v Minister of National Security, Lord Neuberger pointed out that this constitutional rule was dependent on two related propositions. Firstly, that treaties between sovereign states have effect in international law and are not governed by the domestic law of any state. Secondly, although binding on the UK in international law, treaties do not form part of UK law and give rise to no legal rights or obligations in domestic law.
The UK’s relationship with the EU is different in-so-far as the 1972 Act effected an unprecedented change to the UK constitution by “authorising a dynamic process by which, without further primary legislation […] EU law not only becomes a source of UK law, but actually takes precedence over all domestic sources of UK law, including statutes”. In other words, the 1972 Act partially transferred law-making powers to the EU institutions and resulted in EU law becoming a source of domestic law enforceable in the UK courts. Both sides accepted that withdrawal from the EU would change this fact. The Supreme Court held that that being the case it would be impermissible for the Government to give Notice of withdrawal without prior Parliamentary authority.
The Court did not accept the Government’s contention that such authority can be derived from section 2(1) of the 1972 Act itself. Mr Eddie QC contended on behalf of the Government that section 2 accommodates the possibility that Ministers could use their prerogative powers to withdraw from the EU treaties. The Court squarely rejected that proposition holding that, whilst section 2 clearly does envisage domestic law and therefore the rights of UK citizens changing as EU law varies, it does not envisage those rights changing as a result of the Government unilaterally deciding that the UK should withdraw from the EU treaties. Parliament could have given the Government that power, but it chose not to do so. Lord Neuberger pointed out that it would be surprising indeed if, having effecting such an unprecedented change to the UK constitution in enacting the 1972 Act, Parliament left it open to the Government to alter this arrangement unchecked.
In relation to the devolution issues, the Court accepted that the devolution Acts were passed by Parliament on the assumption that the UK would be a member of the EU. However, it rules that it does not follow that those Acts require the UK to remain a member.
The Supreme Court’s ruling that the Government is not required to consult and/or obtain the consent of the devolved legislatures prior to withdrawing from the EU has helped the Prime Minister by removing a potential obstacle in her path.
Events continue to unfold rapidly. Two days after the judgment, the Government has published details of the Bill that will, once enacted, give the Government the necessary authority to give Notice pursuant to Article 50. The European Union (Notification of Withdrawal) Bill (see here) is the subject of an expedited programme motion, meaning that the Bill is timetabled to pass through its Commons stages relatively quickly. Given the Labour leader’s comments that he will tell his party not to obstruct the vote in Parliament it seems likely that Brexit is still coming. However, the next stage for the Government are the negotiations with the EU itself, which are likely to prove more divisive. There will no doubt be continued debate in all spheres regarding the form that the UK’s exit should take.
You may be interested in reading our other blogs below about the Brexit ruling - or visit our Brexit blog for wider commentary and guidance.
Kingsley Napley will continue to comment on the developments and what these may mean for our clients as events unfold. Should you have any questions in the meantime, please feel free to contact a member of our public law team.
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