If Brexit Means Brexit, Little-Known Court Offers Non-ECJ Option

Updated on
  • Departing EFTA court chief says it’s good option for U.K.
  • Baudenbacher raises notion of Britain ‘docking’ at EFTA court
Photographer: Luke MacGregor/Bloomberg

Even as U.K. Prime Minister Theresa May goes full steam away from the European Union’s single market, a senior judge is touting a compromise to give Britain some of the EU’s benefits without losing national sovereignty.

Carl Baudenbacher, the departing president of the European Free Trade Association’s court, said the U.K. could do this by “docking” at his own institution after turning its back on the EU’s Court of Justice. In essence, this would mean using the EFTA tribunal as an arbiter for disputes under whatever trade pact the U.K. and EU agree upon.

Baudenbacher said it would allow the U.K. to free itself from the powers of the EU’s top court and instead send a judge to the smaller Luxembourg-based EFTA tribunal, used by Iceland, Liechtenstein and Norway, which operate their own trade bloc with access to the EU market. How it would work in reality would need to be hashed out in the Brexit negotiations, he said.

While the U.K. has rejected being part of EFTA as a way to maintain access to the single market and prefers to negotiate a bespoke deal, the country would need a place to thrash out legal issues. The idea of docking would mean Britain would join EFTA’s court and its supervisory authority, which could have the power to rule on any trade disputes between the U.K. and the EU after Brexit.

“I was always convinced there was room for two structures in Europe,” Baudenbacher, 70, said at an event organized by University College London in Britain’s capital on Wednesday. There are “those who want to go for political integration and those who want to stick to economic integration and leave the rest to international treaties.”

Swiss-Tested

“Most of the models being discussed in the U.K. now have been tested by the Swiss” and choosing EFTA’s institutions “would in my view be an option,” said Baudenbacher, a Swiss national. Docking is a real possibility for the U.K. and one that the Brussels-based European Commission is aware of too, he said.

As Brexit talks resumed last week in Brussels, Michel Barnier, the EU’s chief negotiator, raised the prospect of the U.K. crashing out of the bloc next year without the transition period that is the top priority for business. The pound fell.

“Being out of the EU but remaining a member of the single market would mean accepting a role for European courts and still not having control over immigration,” the U.K.’s Brexit department said in an emailed statement. “We​ ​will​ ​not​ ​be pursuing​ ​an off-the-shelf arrangement and will​ ​instead be​ ​seeking​ ​a​ ​bespoke arrangement​ ​that​ ​works​ for​ ​both​ ​the United​ ​Kingdom​ ​and​ ​the​ ​EU.”

The commission, the EU’s executive arm, declined to comment.

‘Mature Court’

The EFTA court was created in 1994 and its role in many ways mirrors that of the EU’s Court of Justice even though both are independent. Baudenbacher, who will leave at the end of March, strongly rejects any suggestion that the institution he headed since 2003 is some kind of vassal of the ECJ.

“After 24 years, it’s safe to say this is not the case,” said Baudenbacher, whose Icelandic replacement Pall Hreinsson formally took over last month. “There has been a certain development over time” and the EFTA court is now seen as “quite a mature court” which doesn’t always follow the ECJ.

The EU’s Court of Justice has the final say over disputes concerning the 28 member nations, while the EFTA court has the last word on any challenges concerning Norway, Iceland and Liechtenstein. This includes referrals from national courts in those member countries, or direct actions against those governments accused of violating European rules. Switzerland is a member of EFTA but isn’t subject to the rulings of the EFTA court.

Working in English

Rulings from the ECJ are binding, while national courts in the EFTA states aren’t formally bound by the EFTA court’s rulings although often accept them. The EFTA court has three judges and, unlike the ECJ, its working language is English.

For Baudenbacher, his court remains the best option for the U.K. also because EFTA rulings better reflect British legal traditions than French ones.

“ECJ rulings are written in the French style,” he said. “We are giving real reasons” in our judgments. “We disclose what’s going on in our brains.”

— With assistance by Jonathan Stearns, and Chris Elser

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