LONDON (REUTERS) - British Prime Minister Theresa May will learn on Thursday (Nov 3) whether she must seek parliamentary approval before triggering the formal process of leaving the European Union (EU), a step some investors hope will lessen the chances of an economically disruptive "hard Brexit".
London's High Court will hand down its judgment on whether Mrs May and her ministers have the authority to invoke Article 50 of the EU Lisbon Treaty, the mechanism by which a country can leave the bloc, without the explicit backing of Parliament.
Mrs May says she is determined to honour voters' decision in a referendum last June to leave the EU, and has the authority to do so.
But if the legal challenge succeeds, members of parliament (MPs) might have to vote on whether and when Article 50 should be triggered, which could lead to delays or even, in theory, block Brexit altogether.
Mrs May has said she will invoke Article 50 by the end of March, kicking off two years of divorce negotiations. In the wake of that announcement, the sterling pound, which had already weakened dramatically since June, shed about 5 per cent against the US dollar to plumb its lowest levels in over three decades.
If the legal challenge is successful, Mrs May might not be able to meet her own March deadline. Some investors also believe the more lawmakers are involved, the less chance there will be of a "hard Brexit", where Britain prioritises curbing immigration over remaining in the EU single market.
During a three-day hearing last month, the attorney-general, the government's top lawyer, accused the challengers of trying to invalidate the result of the referendum, which backed Brexit by 52 per cent to 48.
However, the challengers argued that only Parliament, as Britain's sovereign body, could make a decision that would strip citizens of statutory rights.
The losing side is expected to appeal to the Supreme Court, Britain's highest judicial body, which will probably hear the case in December.
Around three-quarters of the 650 members of the lower house had backed remaining in the EU before the referendum. However, a Reuters survey last month suggested many of those were likely to endorse Brexit now.
If the High Court rules against the government, Mrs May might therefore choose to bring in legislation promptly rather than appeal and risk a delay to her timetable.