Brexit: UK govt faces new legal challenge over single market

British Prime Minister Theresa May is set to face a new legal battle over whether the 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).

Its lawyers claim the UK will not leave the European single market automatically when it leaves the EU and that the UK Parliament should decide on it.

"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.

The legal question is focused on whether the UK is a member of the EEA in its own right or because it is an EU member.

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."