UK to propose new post-Brexit court to oversee relations with EU

Britain will this week propose a “new and unique” court to oversee post-Brexit relations between the UK and the EU, as Theresa May’s government tries to force the pace of exit talks.

Brexit secretary David Davis will float the creation of a beefed-up version of the European Free Trade Association court, which deals with Iceland, Liechtenstein and Norway in their relations with the EU single market.

His Brexit paper on “enforcement and dispute resolution” is a key moment as Britain sets out options for the first time on the judicial regime it wants for its proposed “deep” future UK-EU relationship, including trade, security and citizens’ rights.

Mr Davis hopes that by setting out more details of his Brexit goals he can persuade the EU to move on to the second phase of exit negotiations — discussions on the future relationship — in the autumn.

His options paper will examine the precedent set by the Efta court, which is independent of the EU but has been accused by critics of acting as a rubber stamp for decisions by the Luxembourg-based European Court of Justice.

Writing in the Sunday Times, Mr Davis hinted that the Efta model could be a starting point for building a new post-Brexit judicial regime. “While we believe this will require a new and unique solution, our paper will examine a number of precedents,” he said.

The idea was last month endorsed by Bill Cash, the veteran Tory Eurosceptic MP, who said: “The great advantage of the Efta model is that it is completely independent of the EU yet follows the decisions of the ECJ for the most part, but not always.”

Charles Grant, director of the Centre for European Reform, said that from his conversations in Berlin, Paris and Brussels the EU would be “quite prepared to live with a dispute settlement mechanism modelled on the Efta court”.

Mrs May has so far taken a tough stance on EU legal issues. “We will take back control of our laws and bring an end to the jurisdiction of the European Court of Justice in Britain,” she said in her Brexit speech at Lancaster House in January.

But Mr Davis has signalled that he accepts that if Britain wants a deep partnership with the EU there will have to be some legal bridging mechanism that takes account of ECJ rulings on the single market and other issues.

He spoke only of ending the “direct jurisdiction” of the ECJ in Britain, suggesting that he was open to creating a new UK-EU legal body that took account of the Luxembourg court’s rulings.

Another option considered by Mr Davis’s paper would be a less ambitious dispute resolution panel like the one set up to arbitrate in the new EU-Canada trade deal, but Britain is likely to want a more comprehensive legal framework.

Mr Grant said the Canada deal did not cover complex areas such as financial services, aviation and security co-operation, and he argued that the key was to set up a new court in which Britain could claim to be “an equal” to the EU.

Mats Persson, who was Europe adviser to former prime minister David Cameron and is now head of international trade at EY, agreed that the Efta court model was worth pursuing but said that the body was easily “outgunned” by the ECJ.

He added that the EU could shut Iceland, Liechtenstein and Norway out of parts of the single market in the event of a protracted legal dispute.

Later this week Mr Davis will also produce Brexit position papers on future civil judicial co-operation and data protection, following last week’s documents on customs arrangements and Northern Ireland.

Britain will on Monday urge Brussels to widen the scope of divorce talks to cover goods already sold because there may be lucrative after-sales services relating to maintenance and repairs.

Meanwhile, a group of free market economists, including Patrick Minford and Roger Bootle, have produced a report claiming that Brexit could boost the UK economy by £135bn a year as the country leaves “the protectionist EU”.

Mr Minford said that a “hard Brexit” was economically superior to a softer version, with one option being for the UK to unilaterally eliminate trade barriers, including tariffs, turning the country into “a driver of global free trade”.

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