Scottish Independence Insta-Symposium: The Legal Terrain Following a Yes Vote for Scottish Independence

[David Scheffer is the Mayer Brown/Robert A. Helman Professor of Law and Director of the Center for International Human Rights at Northwestern University School of Law.]

If the Scottish people vote in the majority on September 18^th to become an independent nation, then a host of legal issues will descend immediately upon Holyrood, where the Scottish Parliament sits in Edinburgh, and Westminster, the legislative center of the United Kingdom Government in London.  Some of these issues can be overcome if there is a willingness to negotiate in good faith.  Otherwise, obstructionist and stubborn negotiating tactics can result in a bitter fight to the end, which will be 24 March 2016 if Holyrood’s schedule stands for Scotland to break away as a newly-minted sovereign state.

The Edinburgh Agreement of 15 October 2012, signed by First Minister Alex Salmond for the Scottish Government and Prime Minister David Cameron for the United Kingdom, provides the legal platform for the September 18^th referendum.  Whatever is decided on that day has the legitimacy required under British law to move forward either with the United Kingdom as a unified country (if there is a majority no vote) or with the emergence of an independent Scotland following separation negotiations between Holyrood and Westminster and the necessary parliamentary acts (if there is a majority yes vote).

Section 30 of the Edinburgh Agreement is critical as to the aftermath, stating that the two governments “look forward to a referendum that is legal and fair producing a decisive and respected outcome.  The two governments are committed to continue to work together constructively in the light of the outcome, whatever it is, in the best interests of the people of Scotland and of the rest of the United Kingdom.”  That has long been understood to mean that negotiations between Holyrood and Westminster would commence in the event of a “yes” vote for independence.

Yet for months Westminster and the three main UK political parties (Conservative, Labour, Liberal) have waged their “no” campaign with scare tactics premised, it seems, on there being no meaningful negotiations at all.   Their message is that if there is a “yes” vote, then the protectionist shields will rise at Hadrian’s Wall and the remainder of the United Kingdom (rUK) will simply go its own way as the “continuator state,” leaving Scotland to survive or sink on its own.  Nothing could be further from reality, and Westminster knows that.

It will be in the interests of Westminster and the citizens of rUK to work out how to continue prosperous commercial and social relations with the Scottish people and sustain bonds with Scotland as a close ally.  Alienating Scotland with arrogant posturing now—a raw campaign tactic—as well as later during the inevitable negotiations is an irrational game plan for Westminster.  In fact, the tightening polls in Scotland seem to confirm that the bluff is backfiring.

The first legal issue upon which so much else depends centers on the law of state succession—what will be the legal outcome regarding statehood if Scotland and rUK split?  Westminster and many international lawyers insist that the rUK will be the continuator state, thus continuing the status quo in almost all treaty and international organization relations, while Scotland would be cast off as a new state to initiate its own treaty relations, currency, and membership in international organizations—the “clean slate” approach.  Such a punitive view of Scottish self-determination would force Holyrood onto the most arduous pathway towards statehood and presupposes either unnecessarily complex negotiations with no end in sight or no credible negotiations at all.  Westminster’s tactic is built upon a pyramid of presumptions arising from the initial premise of the continuator theory and yet little of which relates to the sui generis character of the Scottish situation, as I have examined elsewhere.

The unique history of the Scottish and English union of 1707 and the fact that since the 1970s we have seen unfold in Scotland a distinctly modern form of self-determination colors this entire exercise.  Nowhere else are the facts even similar regarding this remarkably peaceful and progressively building process of devolution leading to the renewed independence of a once sovereign nation, including the consent of the UK Government to hold such a referendum.  Legal theories on state succession based upon irrelevant practices of decolonization and stale notions of what constitutes customary international law simply do not work here.

Indeed, the modern formulation of state succession framed in the 1978 Vienna Convention on Succession of States in Respect of Treaties for a situation of this character points towards negotiated co-equal successor state status for both Scotland and the rUK during post-referendum negotiations.  If Holyrood and Westminster cooperate in good faith during the negotiations as co-equal successor states, they can create a pathway of mutually agreed and beneficial continuation of various treaty obligations for both states, Scottish membership in the European Union, continued UK membership as a permanent member of the UN Security Council, and a smooth transition for Scotland to join NATO and other international organizations.

Regarding the European Union, if one theoretically were to design the most judicious and EU-compliant path towards internal enlargement, the Scottish experience would set the gold standard.  Scotland is already part of the European Union because it is part of the United Kingdom.  The Scottish people are EU citizens with important rights under EU law.  Given those realities, transitioning to Scotland and the rUK following a “yes” vote on the referendum should be negotiable with Brussels in order to sustain the membership of both nations in the EU.  Surely that would be to the advantage of the European Union.  Caustic and unsubstantiated statements by EU officials and Westminster politicians in the past that relegate Scotland to new applicant status shorn of any existing rights under EU law have been narrow-minded expressions of insecurity.  I recently argued in Brussels, “[Scotland] is truly a sui generis phenomenon within the European Union and efforts to create false symmetries with other sub-state aspirations on the European continent are misleading.”

Of course, much is complicated by Prime Minister Cameron’s intention, expressed on 23 January 2013, to renegotiate parts of the UK’s relations with the European Union and hold a referendum by 2017 to determine continued membership of the UK in the Union. The anti-EU fervor arising from both Conservative and Labour party ranks and manifested in the United Kingdom Independence Party stands in contrast to the Scottish Government’s strong allegiance to the European Union and for sustained EU membership for an independent Scotland.  For rUK negotiators to threaten their Scottish counterparts with outcast status in the European Union while London plots its own withdrawal would be supremely ironic and not easily overlooked.

Each side has a different take on how to proceed with EU membership for Scotland.  The Scottish Government favors amending the Treaty of the European Union (TEU) under Article 48 to create procedures for continued Scottish membership.  This “continuity of effect” assumes transitioning Scotland’s current status as part of the United Kingdom into a newly sovereign status in a fully integrated way within the European Union’s legal, economic, institutional, political and social frameworks.  But this approach requires Westminster to seek such amendments as a willing partner following a yes vote on the referendum.

Westminster and some European Commission officials insist that Scotland would have to apply for membership in the European Union under Article 49 of the TEU just like other new applicants that have never been part of the European Union, like Croatia recently.  There doubtless would result a significant gap in EU membership for Scotland, which might be forced to delay the process until it achieves sovereign statehood status. A legal nightmare may well ensue. If Westminster intends to punish Holyrood following a yes vote, rather than negotiate in good faith, this would do it.

A negotiated formula, however, that essentially melds together procedures of Articles 48 and 49 of the TEU with the support of Westminster in discussions with EU leaders in Brussels and EU member states could provide a reasonable framework for keeping Scotland in the European Union with the least degree of disruption.  This formula would open the way for Holyrood to negotiate what normally would be required under Article 49 for membership, but to do so during the period prior to Scottish statehood with an Article 48 amendment process.  Westminster can facilitate this by joining with Holyrood in such negotiations and thus be the EU member state at the table.  That would reflect the true spirit of Section 30 of the Edinburgh Agreement already agreed to by the two parties.  Westminster’s role is critical, for under the procedures of either Article 48 or Article 49 of the TEU, the unanimous consent of all 28 EU member states would be required to facilitate Scotland’s membership in the European Union.

Perhaps the most divisive issue in recent months has been over the Scottish Government proposal that a currency union be formed between Scotland and rUK to sustain use of the pound sterling by an independent Scotland. There are considerable complexities to any currency option for an independent Scotland, but Westminster has slammed the door on a currency union prior to any negotiations and taunted First Minister Salmond to state his Plan B.

For Salmond to have put forward any Plan B before the referendum would cave into Westminster’s cynical tactic prior to any serious negotiations on currency that could work to the benefit of both nations.  Such bullying by unionists may have chalked up a  few debate points, but it has stirred anti-UK sentiment in Scotland while ignoring the fact that during post-referendum negotiations the Scots have some trump cards of their own.

One of those cards is that if Westminster insists that UK will be the continuator state of the United Kingdom and refuse a currency deal, Scotland can beg off sharing the UK debt and let Westminster shoulder the entire estimated burden of £1.6 trillion by 2016/17. That would comply with the logic of rUK being a continuator state.  Holyrood has offered to accept partial liability on the UK debt but obviously only after negotiations that settle all issues, including division of assets. The markets likely would respect Scotland’s willingness to pay, but also calculate the punitive character of a refusal by Westminster to negotiate currency issues with the result that Scotland’s economy would be unshackled of UK liabilities.  In an effort to reassure the markets, the UK Treasury agreed earlier this year to cover all UK gilts in the event of Scottish independence, but did so assuming that Holyrood still would shoulder a portion of the UK debt.  Not so fast, as Holyrood will have its own demands in such negotiations.

Whatever the outcome on September 18^th, the people of Scotland will have acted democratically and peacefully to determine the fate of their nation.  That itself will be a significant achievement under the rule of law.