The UK will cease to be bound by EU law on 31 December 2020, when the transition period provided for in the Withdrawal Agreement between the EU and the UK comes to an end. UK legislation calls the transition period the “implementation period” and identifies its end as “IP completion day”.

Retained EU law

At IP completion day, EU law will cease to apply in the UK, but large parts of the law currently applicable in the UK which is derived from EU law or is directly effective EU law will continue to apply in amended or unamended form as types of domestic UK law, described overall as “retained EU law”. The main categories of retained EU law, as described in ss 2, 3, and 4 of the European Union (Withdrawal) Act 2018 (the “Withdrawal Act”) are:

  • Retained EU-derived law made in the UK by statute or statutory instrument to implement EU law when it was binding in the UK;
  • Retained direct EU law, largely in the form of EU Regulations, which currently apply in the UK without the need for any national legislation, but will become a new category of UK law; and
  • Other rights, obligations etc derived from s2(1) of the European Communities Act 1972, not falling in one of the above categories.

Retained EU case law

Decisions of the of the Court of Justice of the European Union (“CJEU”), which will also include decisions at the first instance level by the General Court of the CJEU, are recognised as an important part of EU law and are binding on UK courts and tribunals up until IP completion day. After IP completion day UK courts will continue to consider issues of EU law, not only in cases where pre-IP completion day law is relevant, but in cases where the UK courts are asked to consider the correct interpretation or application of retained EU law.

Accordingly, EU case law is itself identified as a species of retained EU law. Because the CJEU will become a foreign court, not part of the UK legal order, care was taken in the Withdrawal Act to identify how far UK courts would be bound by EU case law.

  • Firstly, retained EU case law is limited to any principles laid down by, and any decisions of, the European Court (ie the CJEU), as they have effect in EU law immediately before IP completion day, broadly speaking so far as they continue to be relevant and are not excluded by other provisions of the Withdrawal Act.
  • Secondly, s 6 of the Withdrawal Act as originally conceived provided that the Supreme Court could depart from retained EU case law in circumstances where that court could depart from one of its own previous decisions, that is where the court considers it right to do so. This is not a power which the Supreme Court uses lightly and it has to be convinced that there are compelling reasons to depart from a previous decision on the same point. A similar power was given to the ultimate court of appeal on Scottish criminal law (which is not within the jurisdiction of the Supreme Court).

Widening of the power of the courts to depart from EU case law

In late 2019 there was a change in the leadership of the Conservative party and the new administration agreed with the EU the terms of the Withdrawal Agreement. The Government decided to revisit the extent to which CJEU decisions would be binding on UK courts and tribunals, being concerned that if only the Supreme Court could depart from retained EU case law, then desirable divergence from CJEU case law would be an unnecessarily long time in coming. This was provided for by amendments to s 6 of the Withdrawal Act introduced by the European Union (Withdrawal Agreement) Act 2020.

The Ministry of Justice consulted on two forms of broadening of the right to depart from retained EU case law:

  • Departure by all appellate courts; or
  • Departure by a wider range of higher courts and some tribunals.

Following this consultation, the Ministry decided on the former option, recognising that the latter option would cause confusion in relation to the normal system of precedence in the UK legal system: for example that the Court of Appeal in England and Wales is normally bound by its own decisions and that decisions of the Court of Appeal and the Supreme Court are binding on lower courts and tribunals. If any courts below appellate level were able to depart from retained EU case law, there could be a series of competing decisions, without any authoritative precedent being created.

One concern with the extension of the power to depart from retained EU case law, was that this process should not be capable of being repeated ad infinitum, but that once an appellate court had considered a piece of retained EU case law and had either applied it or departed from it, that new decision should have precedent value as a UK appellate decision binding on all courts normally bound by that decision. The Ministry of Justice agreed that this should be the case and the legislation that extends the right to depart, which is now before Parliament, makes provision for this: The European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020, regulation 4(2).

The main additional appellate courts that can exercise this power to depart from retained EU case law are the Courts of Appeal for England and Wales and Northern Ireland respectively, and the Scottish Equivalent, known as the Inner House of the Court of Session. Additional specialist appeal courts are given this power, in particular the Lands Valuation Appeal Court, the Court Martial Appeal Court and the court hearing appeals under s57(10)(b) of the Representation of the People Act 1983.

Do decisions of the CJEU made after 31 December 2020 have any status?

The Withdrawal Act provides that UK courts and tribunals are not bound by any principles laid down or any decisions made by the European Court (the CJEU) after IP completion day, but goes on to say that they may have regard to anything done on or after IP completion day by the European court, another EU entity or the EU so far as relevant to any matter before the court or tribunal.

This means that the UK courts can have regard not only to CJEU decisions, but administrative decisions by, for example, the European Commission or the European Banking Authority and also new EU law, if they consider it appropriate to do so. In practice they might choose to follow new CJEU decisions if they agreed with them. This may be particularly important in cases which relate to actions in the EU involving British businesses that occur after the end of this year.

The UK courts cannot, however, initiate CJEU decisions by referring questions to the CJEU after the end of this year. This applies in existing as well as new cases. It is rather less clear whether later CJEU decisions bearing on the interpretation of EU law in cases where the cause of action is based on the law at a time before 31 December 2020 are merely to be had regard to or have a more authoritative status. As a practical matter, however, UK Courts can be expected to pay a great deal of attention to CJEU decisions where relevant to the cases before them.