6 Apr 16 | 13:14 GMT Lewis Crofts
The MLex Brexit Service
This article was originally published on the MLex Brexit news service. MLex’s Brexit coverage provides daily reporting and analysis focused on the regulatory risks and opportunities of Britain leaving the European Union, and what this means for business.
The watchword of campaigners for the UK to leave the EU is “sovereignty.” They argue that UK judges and lawmakers shouldn’t find themselves in hock to the rulings of the EU Court of Justice.
If the UK left the union to join the looser bloc — the European Free Trade Association — it would still come under the jurisdiction of foreign laws and judges, but the arrangements are more flexible.
And yet, they might not be pliant enough to placate the out-campaigners.
Pro-“Brexit” voices say there should be an end to EU laws that cuff the hands of UK lawmakers. They also abhor the “diktats” that come from EU judges — interpreting those same laws — that then apply across the entire bloc.
For them, the UK should exist outside of this framework and judges in London shouldn’t be overruled by colleagues at the Court of Justice in Luxembourg.
The biggest question for the out-campaigners is what form the post-Brexit UK-EU relationship will take. One option is to join Norway, Liechtenstein and Iceland in EFTA, a bloc that implements EU law via a trading relationship with the neighboring bloc creating the European Economic Area.
Their main benefit: The EEA Agreement is narrower than the EU treaties, focusing on market-access arrangements. EFTA countries retain national powers over industries such as fisheries and agriculture, as well as international trade deals.
The UK was the driving force behind the creation of EFTA in 1960 before leaving — alongside Denmark — in 1972 to join the precursor to today’s EU. While UK premier David Cameron has rejected the Norwegian model as an option for Britain, the arrangement gives some breathing space when it comes to court oversight.
“There is no written obligation on the courts of last resort of our [EFTA] member states to make a reference to the EFTA Court,” Carl Baudenbacher, president of the court, told MLex in an interview.
Furthermore, the “preliminary rulings of the EFTA Court are not in the same way binding as those of the ECJ. They are called ‘advisory opinions.’”
Norwegian judges have been famously reluctant to send cases to the EFTA Court for adjudication, but it is starting to happen more.
— No exact science —
Out-campaigners may see the looser arrangement of the EFTA Court as intruding less on sovereignty while accepting the judicial oversight needed as a price for a trading relationship.
Baudenbacher emphasized that interpreting the law is no exact science.
“The EEA single market requires a homogeneous legal framework, but homogeneity is rather a process than a snapshot in time. The EFTA Court has to tackle novel legal questions in the majority of its cases.”
“In certain cases, the EFTA Court’s case law has reflected EFTA values such as the belief in free trade, competition, human rights, the principle of liability, or a liberal image of man,” Baudenbacher said.
But Norway might not think there’s more freedom under the EFTA Court’s jurisdiction compared to countries within the EU.
“It is worth noting that Norway’s review of the EEA Agreement found that the EFTA Court is stricter than its EU equivalent, the European Court of Justice,” the Confederation of British Industry said in a study this year, referencing a 2012 report by the Norwegian government.
— Laws —
As regards legislation: Out-campaigners will still argue that EFTA countries have little say in the laws approved in Brussels. They must simply implement them with very little ability to shape them.
All EFTA governments can participate in Brussels’ negotiations on legislation but, it seems, they don’t make full use of the option.
“EEA/EFTA states are on equal footing with the EU states on the expert level,” Baudenbacher said.
“I have heard over the years that the EFTA states have not always made use of this right to the full extent and sometimes complained afterwards that the final outcome did not fulfill their expectations.”
A post-Brexit London government would still have plenty of resources to deploy in those talks, if it desired.
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