Rupert Paines of 11 KBW gives a personal view of the UK Government’s recent consultation on retained EU law, in which the Bar European Group took part.
Lawyers love acronyms, and the UK’s departure from the EU (two down already) gives us the opportunity to expand our vocabulary with a new range of homegrown abbreviations. No doubt this is all part of our birthright as a free and sovereign nation.
Among these new domestic concepts are REL, RECL, and RDCL: retained EU law, retained EU case law, and retained domestic case law. To explain:
- Subject to certain exceptions, on exit day all EU-related legislation will form part of UK law: both direct EU legislation (incorporated into UK law by s. 3 European Union (Withdrawal) Act 2018 as amended (“EUWA”)), and also ‘EU-derived domestic legislation’ as defined in s. 2 EUWA. This includes both secondary legislation made under s. 2(2) European Communities Act 1972, but also substantial areas of primary legislation (eg., large parts of the Equality Act 2010).
- All of this legislation will be REL (s. 6(7) EUWA), and after exit day Parliament will have unfettered power to abolish, amend, or replace it. Ministers and the devolved administrations will also (by s. 8 and Sch 2 EUWA) have powers to make such provision as they consider appropriate to prevent, remedy or mitigate a perceived deficiency in REL arising from the UK’s withdrawal (“modified REL”).
- Pre-exit day judgments on REL from the CJEU are RECL; pre-exit day judgments on REL from the domestic courts are RDCL. Under the original scheme of EUWA, RECL would effectively have the status of judgments of the Supreme Court (s. 6(3)-(4) EUWA), while RDCL would have its normal status under the domestic law of precedent.
- When determining a question relating to REL, a court is to decide the issue in accordance with any retained case law (ie. RECL and RDCL) and any retained general principles of EU law, but having regard to the limits at exit day of EU competences: s. 6(3) EUWA. This applies also to modified REL insofar as that is consistent with the intention of the modifications: s. 6(6) EUWA.
Over the summer, the Government embarked on a short consultation process on questions as to whether courts below the Supreme Court should have the power to depart from RECL or RDCL, and what the test should be if they did so.
The Government’s preliminary view was said to be that additional courts should have that power. This was based upon the “aim of encouraging timely departure from retained EU case law, where appropriate”, and to “reflect the changing circumstances which our departure from the EU brings”. It was said that:
“the Government also considers that it is important that UK courts and tribunals are not bound to retained EU case law for longer than is appropriate and in the interests of the UK and that potential litigants have sufficient ability to seek a change to retained EU case law where it adversely affects them.
…
Divergence from retained EU case law is important to ensure the law remains flexible and appropriate to the UK’s situation following its departure from the EU.”
These rationales are not wholly convincing. The law will undoubtedly be altered to reflect “the changing circumstances which our departure from the EU brings”. EUWA provides extensive mechanisms for that to be done, through legislation. Where legislation alters or replaces REL, the ‘changed circumstances’ of the different legislation will lead to judgments that would not have been reached under the former legislation. Similarly, if unmodified REL led (following Brexit) to unfortunate, absurd or impossible results, existing canons of construction would permit the courts to ameliorate the situation so far as possible. It does not follow that, where REL remains (relevantly) unchanged, ‘changing circumstances’ demand that the courts should have greater freedom to depart from RECL/RDCL. Such a proposition must impliedly be premised on a policy role for the courts, deciding what ‘the circumstances require’ (or what is ‘in the interests of the UK’): but that is not consistent with the UK’s constitutional arrangements.
So one is left with the second rationale: that litigants should be more able to argue that RECL (or possibly RDCL) is ‘just wrong’. This is a perfectly coherent rationale (although it again risks pulling courts into the ‘policy’ arena), but it has little to do with timely departure or changing circumstances. Instead, it smooths the path for relitigation of formerly settled law.[1] That is presumably the underlying policy intention.
BEG submitted a response to the consultation, arguing that the status quo should not be changed in this manner. We pointed out a number of difficulties, including:
- The uncertainty risk: the possibility of a plethora of challenges as litigants (well-resourced commercial entities and institutional litigants) seek to relitigate points of EU law which they regard as controversial or particularly damaging to their interests. We emphasised both the rule of law and the economic importance of legal certainty: “the quality of certainty … is a traditional strength and major selling point of English commercial law.”[2] A legal framework in which the applicable rules are clear, and judicial decisions reasonably predictable, is one which provides the certainty necessary for businesses to enter into agreements and take effective commercial decisions;
- The incoherence/precedent problem: it is essentially a matter of chance whether a particular issue is governed by RECL or RDCL, depending on the fortuity of whether a pre-31/12/20 domestic decision applying a CJEU case exists. If RECL has lower ‘precedent value’ than RDCL, that creates arbitrariness. But if the status of RDCL is reduced with the status of RECL, that upends the domestic law of precedent: a Supreme Court decision on REL would have lower precedent value than a Supreme Court decision on a purely domestic issue. That would be odd.
- The inconsistency problem: the proposed test for departure (essentially, the ‘appears right to do so’ test used by the Supreme Court for departure from its own decisions) differs from that created in other areas (eg. in s. 60A Competition Act 1998). The increased possibility of departure also creates a risk of inconsistency between English law and that in Northern Ireland under the Protocol.
We suggested as possible alternative the creation of a ‘reference’ procedure to the Supreme Court, or the greater use of ‘leapfrog’ appeals.
Similar concerns were raised by other respondents, the great majority of whom (56% to 27%) considered that there should be no change.
Despite this, the Government’s consultation response maintained the position presaged in its consultation paper, announcing that the power to depart from RECL would be extended to the Court of Appeal and equivalent courts, who would apply the Supreme Court’s ‘appears right to do so’ test in deciding whether to depart from RECL. There will be no extension of the power to depart from RDCL, and no set of criteria for the courts to take into account in deciding when to depart from RECL.
Following the consultation response, the catchily-named European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations were laid before Parliament to give effect to the Government’s conclusions. The Explanatory Memorandum thereto essentially restates the same policy intentions as above:
“During our membership of the EU, the body of case law has evolved from judgments of the Court of Justice of the European Union. Following our departure from the EU, and in order to promote legal clarity and certainty in our law, Parliament, through the 2018 Act, has provided that the EU law we have chosen to retain is to be interpreted in line with retained EU case law.
In making this provision, we have considered that the way the law is interpreted by our courts and tribunals does not remain static over time. Our departure from the EU has naturally brought with it a change to the context in which the law is considered; and we would want our courts to be able to reflect that in their decisions where appropriate.
Without the ability to depart from retained EU case law, there is a risk that retained EU law remains tied to an interpretation from the Court of Justice of the European Union that is arguably no longer appropriate in the UK. …”
The consultation response seeks to emphasise the limited nature of this extension (as compared to an extension to the High Court and equivalents as well); and the desirability of mitigating the burden on the Supreme Court and providing it with the views of another judicial body to consider. This is all fine so far as it goes; but it does not follow from the fact that a limited extension is less concerning than a broader extension that an extension is desirable. Nor is it obvious that extending the power to depart from RECL will reduce, rather than increase, the burden on the Supreme Court. The easier it is to challenge RECL, the more such cases are likely to be brought.
The bottom line is that the Government has decided, as a matter of policy, to facilitate challenges to the substance of RECL where litigants consider it in their interests to do so. The risks of uncertainty, incoherence, inconsistency, and drawing the courts into policy questions, are all presumably seen as risks worth taking, to obtain more quickly an indigenous jurisprudence on formerly settled issues of EU law.
More work for the lawyers, then.
[1] Because unsettled law is already capable of challenge on existing principles.
[2] The Golden Victory [2007] 2 AC 353, [1].
the European Advocate 