Uncertainty and Legal Disintegration: Evidence From Brexit

Abstract

When does uncertainty about continued membership in a highly integrated polity like the European Union (EU) start impacting the behavior of judges and litigants? The Brexit referendum has created uncertainty over the terms of the UK's future relationship with the EU and, in so doing, over the application of EU law and the authority of the European Court of Justice (ECJ) in the UK legal system. While the UK is still formally part of the EU, we argue that this uncertainty is already discouraging British litigants and judges to invoke EU law and to refer cases to the ECJ. Using data on referral activity from the UK's accession in 1973 up to mid-2018, we apply a difference-in-difference design to evaluate the effect of the Brexit vote on the referral propensity of British courts. We find strong evidence that the Brexit vote is adversely affecting the use of EU law. UK judges are referring 22 per cent fewer references after the vote than did prior to it. With the future relationship between the EU and the UK still in limbo, our analysis suggests that the uncertainty arising from the political process has already begun to unravel the fabric of legal integration.