Introduction

The EU Withdrawal Bill is probably one of the most controversial and important constitutional UK Parliamentary Bills of modern times.

This is the Bill that will pave the way for the UK to leave the European Union and ensures that the UK retains in its wake a functioning statutory framework after Brexit. The aim is to provide legal certainty when converting existing EU law on the day the UK leaves the EU (“Exit Day”) into UK law. However, muddled political thinking could result in a lack of clarity with consequences for UK’s constitutional law as well as legal certainty and effective judicial interpretation.

This week the Bill is to be debated by the House of Lords for the first time and is likely to be subject to heavy amendment with critics alleging that the current Bill “risks undermining the legal certainty it seeks to provide”. The House of Lords Constitution Committee, part of the UK’s upper revising chamber has already labelled it “constitutionally unacceptable” and called for significant amendments to the Bill.

In light of this we review the Bill’s provisions and the amendments accepted by the Government to date and ask how well they are likely to work in practice.

Summary

The central function of the Bill is to repeal the European Communities Act 1972 (“ECA”) thereby ending the supremacy of EU law after Exit Day which is currently prescribed as 29th March 2019.

It converts the provisions of EU law as they stand at the moment of exit into UK law. This is done by way of a series of savings provisions to ensure there is a functioning statutory framework after Brexit. The Bill also provides for the role of the UK courts and the status of pre- and post-Brexit European Court decisions.

Henry VIII Powers

Particularly contentious is the power the Bill creates to make secondary legislation. This power is given where the Government considers it necessary to correct existing UK legislation to take account of Brexit. Among other things, these powers could be used to remove the names of EU institutions no longer relevant after Brexit. These so-called Henry VIII‘s powers have been widely criticized due to their wide ranging scope and the fear that the Government will use them not just for corrective amendments but to push through policy provisions without adequate Parliamentary scrutiny.

The Government conceded an amendment to limit the scope of these powers to circumstances listed in an exhaustive rather than illustrative list. However, ministers could add to this list if it resulted in a deficiency in regulations. However those regulations would have to be approved by Parliament.

The House of Lords is expected to seek further amendments to the Bill on this particular issue.

Repeal of the ECA

The central function of the Bill is to repeal the ECA on Exit Day which is defined as 11.00 pm on 29 March 2019 pursuant to the provisions of Article 50 of the Treaty on the European Union. However an amendment put forward in the House of Commons was accepted by the Government and now Exit Day can be changed by way of a regulation by a Minister in the event that the UK cessation dates from the EU changes. The repeal of the ECA has the effect of removing the legal mechanism through which EU law is automatically transposed into UK law (via section 2(1)). It also removes the power to implement EU obligations (under Section 2(2)).

Retained EU law

The Bill expressly transposes all retained EU law on Exit Day into UK domestic law. This is because the ECA is being repealed and UK secondary legislation lapses automatically if the primary legislation from which it is derived is repealed. This body of law will apply immediately after Exit Day as it did immediately beforehand and unless or until Parliament enacts domestic legislation which amends it or a judgment of the Supreme Court or High Court of Justiciary in Scotland departs from it.

Therefore unless Parliamentary passes legislation modifying any provision of EU retained law it is possible that elements of retained EU law will remain enforceable for some time after Exit Day.

But what is retained EU law? This is defined as follows:

– EU derived domestic legislation. This includes any domestic secondary legislation that implements the UK’s obligations under EU. It includes primarily EU directives that have been incorporated into UK law by regulations made under Section 2(2) of the ECA. However it is much wider and preserves aspects of any UK statute or any other enactment that gives force to EU law into domestic law.

– Direct EU legislation. This legislation is all EU legislation which forms part of domestic law on or before Exit Day and is directly effective. This means it does not need to be specifically incorporated into domestic law to have effect in the UK. By virtue of the provisions of the ECA this legislation is part of UK law. However as the ECA is being repealed it needs to be specifically incorporated into UK law by the Bill. Direct EU legislation is defined as any EU regulation, EU decision or EU tertiary legislation (including any recitals) that has effect in EU law immediately before Exit Day. EU tertiary legislation includes EU delegated acts, implementing acts or acts adopted using EU regulatory procedure with scrutiny adopted by the European Commission or the Council of the European Union under powers delegated to it by the European Parliament or the Council. A common example would be EU competition law block exemption regulations issued as Commission Regulations. It excludes any obligations relating to the euro currency or any decisions directly addressed to a member state other than the UK.

– Rights granted by EU Treaties. The Bill ensures that any remaining EU rights other than EU-derived legislation and direct EU legislation continue to form part of domestic law after Exit, including, for example, directly effective rights derived directly from the EU Treaties. Under EU law directly effective rights are rights in EU provisions that are sufficiently clear, precise and unconditional to confer rights directly on individuals and which can be relied on in national courts without the need for national implementing measures. These include the following key treaty provisions; non-discrimination on grounds of nationality, freedom of movement and residence derived from EU citizenship, the prohibition on anti-competitive agreements and concerted practices, the abuse of a dominant position and workers’ equal pay. It is unclear how rights that depend on reciprocity with the EU will take effect. Of particular importance are those rights dealing with freedom of movement and passporting rights in the financial sector. A lot will hang upon the outcome of the UK and EU’s withdrawal negotiations.

– Retained case law. This includes retained domestic case law and retained EU case law. The former is defined as any decision or principle established by a UK court or tribunal immediately before Exit Day that relates to retained EU law subject to certain exceptions. The latter includes any decision or principle established by the CJEU immediately before Exit Day that relates to retained EU law. Within this definition also is a contained retained general principle of EU law that are preserved for the purpose of interpreting retained EU law that has not been modified on or after Exit Day. These principles includes the following key principles; proportionality, no-retroactivity (a presumption against retroactive effect), equivalence and effectiveness.

Interpreting EU Law in UK post Brexit

(i) Supremacy of EU Law

For the sake of legal certainty it is important to understand how retained EU law will be interpreted in the UK after Brexit happen.

The fundamental principle of supremacy of EU law, under which EU law took precedence over domestic law in the event of a conflict, ends with Brexit. However supremacy of EU law will still continue either when questions arise post-Exit about the interpretation, disapplication or quashing of enactments and rules passed before Exit Day or to domestic legislation enacted on or after Exit Day to modify pre-Exit Day legislation. The effect of this is to preserve Supremacy of EU law in so far as it relates to pre-Exit Day domestic legislation. However, overall the aim of Parliament in the Bill is to be able to amend the EU retained law in future after Exit Day without being bound by the supremacy of EU law.

(ii) CJEU Decisions Post-Brexit?

This has been the subject of a hotly contested debate. Currently UK courts and tribunals have to follow any CJEU judgments in the interpretation of EU law and may also refer questions of EU law to the Court for preliminary determination. After the Exit Day, UK judges need clear and unambiguous guidance about what weight to give to judgements of the CJEU, especially when they relate to the interpretation of retained EU law. The Government takes the view that it would be unpalatable to allow the Courts to be bound by CJEU judgements after Brexit.

So a quick solution was needed. The end result is very unsatisfactory. It leaves it to the Courts to exercise their own judgment (and hence leave them open to political attack) rather than politicians having the courage to decide what are clearly political rather than legal questions. This issue may well be debated more fully in the House of Lords.

The Bill at the present time states that UK courts or tribunals will not be bound by any principles established by or decisions of the CJEU on or after Exit Day. Nor can they refer cases to the CJEU. However the tricky bit is that a court or tribunal may, however

“have regard” to “anything done…by the European Court, another EU entity or the EU” on or after Exit Day if it considers it appropriate to do so

This rule applies to a court or tribunal’s pre-exit interpretation of retained EU law. However post-exit amendments to retained EU law can only be determined in accordance with CJEU case law and principles, if this was Parliament’s clear intention. The Bill introduces a rather strange power giving the Minister the power to make regulations that “require judicial notice to be taken” or provide for the admissibility of “relevant matters” including retained EU law or (post-Exit Day) EU law. Presumably this is in the law to give a statutory basis for evincing Parliament’s clear intention to give effect to CJEU case law.

Interpretation of Retained EU law post-Exit Day

On or after Exit Day, UK courts must interpret the validity, meaning or effect of law in accordance with retained Case law and retained general principles of EU law in so far as they are relevant to interpreting retained EU law (so long as that has not been modified on or after Exit Day). Notwithstanding this, the UK Supreme Court is entitled under its normal practice of departing from its own precedents disregard or overturn pre-Exit Day CJEU principles and decisions if it wishes to do so. This provision reinforces that the UK Supreme Court is now the ultimate court of appeal for UK law post Brexit and gives pre-Exit Day CJEU case law the same binding and precedent status as domestic cases determined by the Supreme Court. This will inevitably mean that the Courts will now have a greater political role.

EU law based claims

EU law has been used successfully in the past to challenge the provisions of UK law, or indeed as a defence against a cause of action based on domestic law. However the Bill includes several provisions that will impact on the ability to bring legal claims based on EU law post-Exit Day. The use of EU law to challenge UK law is restricted as follows:

– There will be no right to challenge the validity of any retained EU law on the basis that, immediately before Exit Day, an EU instrument was invalid.

– Subject to certain limited exceptions a breach of the general principles of EU law will no longer be actionable on or after Exit Day, nor may a court or tribunal disapply or quash any enactment, rule of law or “conduct” in view of them.

– There will be no right to damages in accordance with the rule in Francovich (Francovich v Italy (Case C-453/99) against the UK for failure to implement EU law unless the case had already begun before Exit Day.

Concern had been expressed that the repeal of this rule might deprive individuals of the right to claim damages for breach of specific statutory rights based on EU law. For example damages for breach of the public procurement rules. However the explanatory notes on the Bill suggest that this provision “does not affect specific statutory rights to claim damages in respect of breaches of retained EU law… or the case law which applies to the interpretation of any such provisions” This seems to allay concerns that claims under the Public Contracts Regulations will, be affected.

The loss of individuals’ EU rights on Brexit was the subject of considerable debate in the House of Commons. The Government was clearly on the back foot. It had previously asserted that Brexit would not lead to a diminution of individuals’ rights. In the face of considerable pressure from the House of Commons, the Government accepted an amendment permitting legal challenges to be brought within three months of Exit Day for a breach of the general principles of EU law, where these relate to anything that happens before Exit Day, provided the cause of the action is not and does not relate to the disapplication or quashing of an Act of Parliament or the common law. The decisions of courts, tribunals or other public authorities on or after Exit Day that relate to these legal challenges are also subject to challenge.

The EU Withdrawal Bill received its first reading in the House of Lords on 18 January 2018, and is scheduled for its second reading on 30 January 2018. Any amendments will be tabled at the Committee Stage, following the second reading.