What’s at Stake in the Brexit Court Ruling: QuickTake Q&A

Darling: U.K. Parliament Should Debate Brexit Position

On Thursday at 10 a.m., three senior judges in London will publish their decision on whether Prime Minister Theresa May can begin Britain’s exit from the European Union without permission from Parliament. Defeat for May would mean her fellow lawmakers, who were overwhelmingly pro-EU before the June 23 referendum, get to vote on her plan before she triggers Article 50 of the Lisbon Treaty by the end of March. With a slim majority in the House of Commons and none in the House of Lords, the process could be delayed by more than a year as lawmakers squabble over the details.

1. What were the key issues during the trial?

At the heart of the challenge is who has the power to execute the will of the people; Parliament or the prime minister. Rarely have British judges been asked to resolve such a politically charged question. David Pannick, the attorney leading the challenge, argued the referendum wasn’t legally binding because it was "advisory," so Parliament must authorize any departure from the EU.

2. What did the government argue?

May’s most senior legal adviser, Attorney General Jeremy Wright, told the panel the lawsuit was merely an attempt by unhappy “Remain” voters to "invalidate" the referendum. Triggering Article 50 would not have any immediate impact on domestic law and wouldn’t require an Act of Parliament, said government lawyer James Eadie. Whatever happens Parliament will likely get a vote on any new treaty, Eadie said. However, once Article 50 is invoked a two-year countdown begins and there is no going back, Wright told the court. The government plans a bill that will enshrine all existing EU law in U.K. law to ensure a smooth transition.

3. What is the ruling likely to say?

During the three-day hearing, judges John Thomas, Terence Etherton and Philip Sales gave very little away beyond their irritation at attorneys taking too long to make their cases. Though the contents of the ruling remains a mystery, it will be "absolutely crystal clear," says Dominic Chambers, a lawyer advising one of the challengers. "It is a binary question. The answer is going to be a simple yes or no."

4. What happens next?

The losing side will appeal to the Supreme Court for a final ruling. Lawyers seeking to block May’s plan are expecting a two-day hearing to take place on or around Dec. 8. Supreme Court judges, known as justices, are the most senior in the hierarchy of the British judiciary. They are appointed by the queen on the advice of the prime minister. Usually five hear each case but, due to the importance of the Brexit question, as many as nine are likely to sit in December. Rulings tend to be given by a majority verdict in about 12 weeks. In this case, the parties are hoping to have a decision before the end of January.

5. Wasn’t there a similar challenge in Belfast?

An activist and a group of politicians brought similar cases in Belfast and both were dismissed. Justice Paul Maguire said on Oct. 28 that it was beyond the power of the court to interfere in how the government triggers Article 50. The Northern Irish claims will likely bundled with any appeal of the London cases to the U.K. Supreme Court.

6. Does defeat mean Brexit won’t happen?

That’s unlikely, but it would hold up May’s plans to trigger Article 50 by the end of March and delay the process indefinitely. In the event of a government defeat, lawmakers would get to vote on May’s plan before she triggers Article 50. That could entail multiple readings of the legislation in both houses of Parliament, possibly taking months. May doesn’t have a majority in the House of Lords, so it might be possible for peers to block her from triggering Article 50 altogether, but it’s extremely unlikely. Unelected Lords blocking the desire of a majority of voters could paralyze the government and trigger a constitutional crisis.

7. What could be the market impact of the ruling?

Expect the pound to climb on a defeat for the government because a greater role for Parliament increases the chance of a "soft" Brexit. The pound has plunged 17 percent since the referendum as investors have grown concerned that May is prioritizing immigration controls over safeguards for trade and banking.

The Reference Shelf

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE