Brexit – The New Uncertainty



The UK High Court of Justice has delivered its highly anticipated decision on the legal challenge brought against the UK Government to the effect that the Executive does not have the right to trigger Brexit without the prior approval of the UK Legislature. In a development that will take many by surprise, the claim has succeeded.

In Depth

The High Court has determined that the fundamental principle of parliamentary sovereignty requires the Government to seek the approval of the UK Parliament before triggering Article 50 of the Treaty on European Union. The government has indicated that it will appeal the decision to the Supreme Court, which is likely to hear the case in December this year. Judgment is expected to be delivered in January 2017.

This is a landmark constitutional judgment, with parliamentary sovereignty being opposed by the government on the basis that it is looking to implement the public will, as expressed through the referendum. The economic impact is, however, the more significant issue in the short term. The UK Supreme Court has clearly recognised that the ongoing uncertainty caused by the decision justifies an expedited hearing. Unfortunately this is unlikely to give significant comfort to the international markets, which do not appear to have anticipated this outcome.

The current received wisdom in the United Kingdom is that, irrespective of the ultimate decision, Parliament will feel bound by the result of the referendum to support the decision to trigger Article 50, even though the poll was only advisory. Given that reality has already upset Brexit expectations in a number of ways, it may be imprudent to make assumptions based on received political expectations. Interested parties should be making contingency plans for all of the possible outcomes.