ALSO READBritish PM Theresa May dismisses Brexit veto threat British banks preparing to leave UK over Brexit: Media UK's May ready for tough talks, but will fight over EU market Theresa May says Brexit timetable important for businesses UK PM's visit: Industry wants clarity on EU market access, labour mobility
British Prime Minister Theresa May is set to face a new legal battle over whether the United Kingdom (UK) stays or leaves the European single market, the second legal challenge faced by the government over the Brexit process.
British Influence, a pro-EU think-tank, is demanding a judicial review into the UK government's assumption that membership of the European Economic Area (EEA) automatically ends, when the country leaves the European Union (EU).
"There is a strong chance that the UK will be acting unlawfully by taking us out of the EEA with Brexit. We consider that they have an obligation to seek urgent clarification in the courts. So we are going to be petitioning for a judicial review," said Jonathan Lis, deputy director for British Influence.
British Influence said today it is writing to Brexit Secretary David Davis to inform him that it will seek a formal judicial review of the government's position. But the UK government's stand is that the country's EEA membership ends when the UK officially leaves the EU following a referendum in favour of an exit from the economic bloc in June.
The European single market is a trade agreement that allows different countries within the EU to trade across borders as easily as they can within their own country, with no extra tariffs or negotiations.
There is a view which claims that Article 50, which deals with a country's exit from the EU, does not provide for leaving the EEA, which extends the single market's tariff-free trade in goods to countries like Norway, Iceland and Liechtenstein — which are not full members of the EU.
If the courts back the legal challenge and give Parliament the final say over EEA membership, then MPs could vote to ensure that Britain stays in the single market until a long-term trading relationship with the EU has been agreed.
Professor George Yarrow, chairman of the Regulatory Policy Institute and emeritus professor at Hertford College, Oxford, told BBC, "There is no provision in the EEA Agreement for UK membership to lapse if the UK withdraws from the EU. The only exit mechanism specified is Article 127, which would need to be triggered."
This latest challenge could mean a lengthy legal process, which could delay Brexit negotiations. If the courts say Article 127 does need to be triggered, there is the question of whether an act of Parliament would be needed for it to be authorised.
A UK government spokesperson said, "As the UK is party to the EEA agreement only in its capacity as an EU member state, once we leave the European Union we will automatically cease to be a member of the EEA."
At the start of the month, another challenge saw the high court rule that only Parliament has the power to formally trigger Brexit. That case will be decided by the Supreme Court in an appeal to be heard next week.