Single market legal challenge
29th November, 2016
The Government is facing a fresh legal battle regarding whether the UK will remain as part of the European Economic Area (EEA) and single market following its departure from the EU.
The legal issue in question is expected to focus on whether the UK is a member of the single market in its own right or instead whether its inclusion is due solely to its EU membership.
Accordingly, the case will determine whether the UK’s membership of the single market will cease to exist upon its departure from Brexit, or whether this would not be an automatic occurrence and would only take place following the triggering of Article 127 of the European Economic Area Agreement.
With regard to its position, the Government has stated that: “the UK is only party to EEA Agreement in its capacity as an EU Member State and once we leave the EU we will automatically cease to be a member of the EEA.”
However, contrary to this, the claimants will argue that there is no provision in the EEA Agreement for the UK’s membership to lapse upon it withdrawal from the EU.
For this reason, the only exit mechanism is that specified under Article 127 and in order to leave the single market a parliamentary vote invoking Article 127 would be required.
The case is of particular significance given that the Government has not, as of yet, clarified whether it is looking to negotiate a “soft Brexit” under which single market membership is retained, or a “hard Brexit” whereby the UK relinquishes its membership.
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Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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