This new Article 50 period will now extend until 31 October 2019, but the so-called 'flextension' that has been granted may be extended thereafter or shortened if Parliament votes to approve the Withdrawal Agreement negotiated with the European Union.
What this means in practice is that "no deal" scenario plans for end of March 2019 (or 12 April 2019) need not fully enter into force at this time, but the threat of this happening is far from over and depending on political developments may simply re-emerge again later this year. Many businesses may welcome the immediate threat of "no deal" having been avoided, but will not welcome the continued uncertainty and the knowledge that the same contingency planning for a "no deal" scenario may need to be repeated. For example, stockpiles of goods that many businesses have built up may be maintained but to the extent such goods are at all perishable then adjustments will be required to avoid waste, and the exercise may simply end up being repeated later this year if "no deal" would start to become a potential end point at that stage.
In terms of the legal mechanics to delay Brexit, a Minister of the Crown will now use s.20(4) of the European Union (Withdrawal) Act 2018 to "amend the definition of “exit day” … to ensure that the day and time specified in the definition are the day and time that the Treaties are to cease to apply to the United Kingdom". This follows the precedent set when the original Brexit date of 29 March 2019 was moved to 12 April 2019 following a request from the UK. This date could be moved forward if the Withdrawal Agreement is ratified. This means that the plethora of legal changes that were destined to happen as at the moment of Brexit will now be delayed, albeit not removed.
The delay in Brexit will be welcomed by those seeking to revoke Article 50 (as discussed in our article on the Wightman case) or another referendum, but will further frustrate those eager to push ahead with Brexit. For the Prime Minister, the result avoids a no deal Brexit and will give her more time to attempt to negotiate a way for the Withdrawal Agreement through Parliament. However, she will be keenly aware that the Conservative Party Conference is scheduled just weeks before the end date of 31 October 2019 and that the UK holding European Parliament elections will be criticised by Brexit supporters.
The 'flextension' is conditional, with the EU agreeing to review progress at the end of June 2019 and stating that it will not reopen negotiations in respect of the Withdrawal Agreement (but is willing to further discussions about the contents of the Framework for the Future Relationship). The UK has also agreed to behave with "sincere cooperation" as a Member of the European Union (a move intended to address claims by Conservative Eurosceptics that the UK could use EU Membership to frustrate the running of the European Union as a means to negotiate a more favourable Brexit deal). If the Withdrawal Agreement does not have UK Parliamentary support by 22nd May then the UK will be required to hold European Parliament elections.
A longer delay to the Brexit timetable has been agreed by the European Union, which Theresa May hopes to use to find a way to get the House of Commons to support the Withdrawal Agreement. It remains to be seen whether this strategy will succeed but if it does then the UK's legal system will change as the European Communities Act 1972 is revoked and an estimated 12,000 regulations are transposed into domestic law (with modifications to address deficiencies). The timetable for this remains uncertain while the UK Parliament remains deadlocked on the best way forward.
If the Withdrawal Agreement continues not to be ratified, then various alternative options will continue to be considered by Parliament, each of which has different consequences for the legal system within the United Kingdom. "No deal" remains a possibility as it was before and in the meantime the uncertainty continues. Businesses will need to maintain contingency plans for different scenarios for a bit longer yet.
by Jonathan Branton and Alexander Rose
11 April 2019
DWF Law LLP has a breadth of expertise in Brexit related matters. We are able to draw upon a team of leading experts, in our UK, Brussels and other international offices, who have extensive experience in this area, including working within the UK Government on Brexit matters, within the European Commission and helping business leaders quickly adapt to new laws and regulators.