The UK Government has today, 23 August 2017, published a paper considering how the withdrawal agreement and any future agreements between the UK and the EU (together, the “Agreements“) can be enforced, and how any disputes which arise in relation to the Agreements can be resolved (the “Paper“).

The Paper, which can be found here, is part of the Future Partnership Papers series, which set out the key issues that form part of the Government’s vision for the “future deep and special partnership” between the UK and the EU after Brexit.

The content of the Paper indicates a change in direction from the Government in relation to the ongoing position of the Court of Justice of the European Union (the “CJEU“) in the UK after Brexit. The Government’s previous position has been very firm that leaving the EU will end the jurisdiction of the CJEU in the UK. However, today’s Paper notes that leaving the EU will bring about an end to the “direct” jurisdiction of the CJEU. This raises questions as to the impact of the “indirect jurisdiction” (however defined) of the CJEU going forward.

Further, some of the possible mechanisms identified in the Paper for resolving disputes between the UK and the EU that arise in relation to the interpretation or application of the Agreements necessarily continue the influence of the CJEU in the UK.

Enforcement of the Agreements

The Paper notes that it is in the interests of both the UK and the EU – and of UK citizens and businesses – that any rights and obligations conferred under the Agreements can be relied upon and enforced in appropriate ways.

In order to enable UK citizens and businesses to enforce those rights and obligations, it will likely be necessary for the UK Government to legislate to ensure that the Agreements (and rights and obligations conferred thereunder) become part of the national legal order. The Government has confirmed that, if such steps need to be taken, it will do so and the domestic implementation will be set out in clear and binding domestic legislation, and be capable of scrutiny by the EU and third countries.

We note that the EU will also need to ensure that the Agreements become part of the EU legal order if its citizens and businesses are to enforce the same rights and obligations.

The Paper argues that it is not necessary for the CJEU to have direct jurisdiction in relation to the Agreements in order for individuals and businesses to enforce the rights and obligations conferred. Rather, UK and EU individuals and businesses will have recourse to the internal legal orders of the UK and EU, respectively, and individuals and business will be able to enforce their rights and obligations accordingly.

Dispute resolution

It is in the interests of both the UK and the EU to agree a dispute resolution mechanism which would be invoked to determine any disputes arising in relation to the Agreements. Examples of such disputes include disputes concerning the implementation of the Agreements; subsequent actions taken under the Agreements which are considered by one party to be incompatible with obligations thereunder; and/or a future divergence from or failure to comply with the terms of the Agreements.

The Paper considers a number of different dispute resolution mechanisms which are used in various existing international agreements. The dispute resolution mechanisms include: i) the establishment of a Joint Committee comprising of representatives from both the UK and the EU; ii) recourse to an arbitration panel (though note that an arbitration panel cannot make binding decisions on matters of interpretation of EU law); iii) reporting and monitoring requirements; and iv) supervision and monitoring by an independent body. None of these options would require any recourse to the CJEU.

However, the Paper does consider a number of dispute resolution mechanisms which would require at least some level of consideration/influence of the CJEU. There are three options cited, all of which would serve to determine how language in the Agreements which is identical in substance to EU law is interpreted:

  1. Interpreted and applied in line with any relevant interpretations of the CJEU which preceded the relevant Agreement. The Paper confirms that the Repeal Bill will give pre-Brexit CJEU case law the same binding status in UK courts as decisions of the Supreme Court.
  2. Interpreted and applied in line with any relevant interpretations of the CJEU in post-Agreement judgments. Such a mechanism could provide for reciprocal interpretation so the CJEU could also be required to take into account relevant judgments of the English courts. Note that the examples cited include language such as “take account” and “pay due account” so query the extent to which such interpretations would be binding on an English court.
  3. Voluntarily refer the question of interpretation to the CJEU, which would issue a binding determination on the meaning of substantive EU law. This goes further than the other options because it would maintain the CJEU’s jurisdiction over certain questions of interpretation. Although the Paper notes that such references are voluntary, and cannot be made by one party to the dispute unilaterally, where a reference is made the English courts will be bound by the CJEU’s determination. This raises very interesting constitutional questions as to the precedential status of the decisions going forward, something which will need to be grappled with if this option is indeed included as a dispute resolution mechanism in the Agreements.

The final form of the dispute resolution mechanism in the Agreements will necessarily be determined during the course of the UK and EU negotiations, the next round of which is expected to commence next week. However, the EU has made clear (for example in the negotiating directives issued by the European Council on 22 May 2017) that its position is that, in matters concerning the application and interpretation of the withdrawal agreement, the jurisdiction of the CJEU should be maintained where such application and interpretation involves question of EU law.