Chapter 7: Interpretation of retained EU law
124.The separation of powers is a fundamental constitutional principle. Parliament makes the law and the courts interpret and apply it. However, in order for the separation of powers to operate effectively in this regard, Parliament must properly play its part. That means, among other things, that legislation must be sufficiently clear. A risk attached to any uncertainty in the law is that courts will be required to fill gaps, which may engage them unavoidably with political or policy decisions.
125.As we set out in the preceding chapters, the creation of retained EU law by the Bill will introduce uncertainties and ambiguities into the law. These will be compounded if the Bill does not direct the courts clearly as to how they should go about the task of interpreting retained EU law.
126.In our report, The ‘Great Repeal Bill’ and delegated powers, we anticipated that the Bill would need to address how the UK courts interpret judgments of the CJEU post-Brexit:
“the Government may wish to consider whether the Bill should provide that, as a general rule, UK courts ‘may have regard to’ the case law of the Court of Justice (and we stress that it should be optional) in relation to judgments made both before and after the UK’s exit from the EU in order to assist in the interpretation of UK law. This will allow UK courts to take into account the judgments of the Court of Justice, but not be bound by them.”67
127.The Bill addresses the question of the post-exit status of CJEU case law, albeit it does not adopt the model that we advocated. In particular, the Bill draws a distinction between pre- and post-exit CJEU case law.
128.While we primarily refer in this chapter to courts and tribunals, we note that the applicability of post-exit CJEU case law will also be an issue for regulators. Many of the rules of regulators such as the Prudential Regulation Authority and the Financial Conduct Authority implement EU directives or transpose EU regulations, and therefore they will also need clarity as to how they should treat post-exit CJEU case law.
Pre-exit CJEU case law
129.Clause 6(3) sets out the general principle that questions about the “validity, meaning or effect” of retained EU law must be decided “in accordance with any retained case law and any retained general principles of EU law”. “Retained case law” is defined in clause 6(7) as including both “retained domestic case law” (pre-exit domestic case law that relates to retained EU law) and “retained EU case law” (pre-exit CJEU case law that relates to retained EU law).
130.Clause 6 requires the courts “to decide in accordance with” retained case law (i.e. pre-exit CJEU case law). However, the requirement is subject to important provisos:
- It applies only in respect of retained EU law insofar as that law “is unmodified on or after exit day.”68 Retained EU law that has been amended may be decided upon in accordance with reatined EU case law if doing so is consistent with the intention of the modifications.69
- It applies only insofar as retained case law is “relevant” to the question about retained EU law with which the domestic court is dealing.70
- The Supreme Court and (in certain circumstances) the High Court of Justiciary are not “bound” by retained EU case law; those courts, where relevant, can depart from retained EU case law on the same basis as they can depart from their own case law.71
131.The Bill takes a clear and sensible approach to the applicability of pre-exit case law post-Brexit.
Post-exit CJEU case law
132.The Bill provides that domestic courts and tribunals are not bound by post-exit CJEU case law. They are not required to “have regard to” post-exit CJEU case law but “may do so” if they consider it “appropriate”.72 Thus, a clear distinction is drawn between pre- and post-exit CJEU case law: the former is, in general, binding, while the latter is not.
133.However, as the Faculty of Advocates pointed out “Clause 6 offers only vague advice … In the absence of any explanation of underlying policy, the assessment of appropriateness is effectively rendered arbitrary.”73
134.The President of the Supreme Court, Baroness Hale of Richmond, called for Parliament to tell the courts “what we should be doing … [and] saying how much we should be taking into account” CJEU judgments.74 Her predecessor as President, Lord Neuberger, raised similar concerns about the level of guidance provided by the Bill on the domestic role of post-exit CJEU case law.75 In evidence he considered whether the type of factors which courts might be expected to take into account in deciding appropriateness might include economic and political factors. He concluded:
“Judges are not naturally the people to take into account factors of that sort. It puts them very much into policy issues, where, on the whole, the tradition in this country has been to keep them out. If they have to decide whether to take those factors into account—and, if so, how—they will do their duty, as they must, but they may not make decisions that are welcome here. It would be better to give them guidance.”76
The Learned Society of Wales suggested, “Allowing the courts to decide on a case by case basis whether regard should be had to post exit day decisions of the ECJ is tantamount to delegating to the courts a policy decision which rightly belongs elsewhere.”77
135.Lord Neuberger said:
“If Parliament wants to do its job rather than to get the judges to do what is ultimately a policy job, it should give guidance on that to judges. It should say that they can or cannot take it into account or that they may or may not do so … If this course is taken, I would favour at least a list of “mays” and “may nots”. The problem of simply having “may” is that it implies that you should probably not take other things into account. If you have “may not” only, it implies that anything else is okay. If you have ‘may’ and ‘may not’, it gives the court a degree of flexibility.”78
136.Richard Gordon QC proposed that clause 6(2) should be amended to provide that a court should take into account post-exit case law “if it considers it relevant to the case before it.”79
137.We discussed with witnesses whether guidance should be given to the courts and whether such guidance should be in the Bill. Lord Neuberger said that “in a perfect world … it would be carefully thought out and in the statute.”80 Tom Brake MP concurred: “It would be helpful to have it in primary legislation, because it reduces the scope for doubt and the ability for it to be changed in the future.”81 However, Richard Gordon said “if one opts for a model of guidance, I would prefer to see it in guidance and not in statute. It might create a lack of clarity to have it in the Act itself, particularly if it is a list of what you may take into account, leaving quite difficult questions as to whether or not one is caught by the type of things in the permissive part of the statute.”82
138.The Solicitor General said:
“although it is tempting to try to create some sort of list of dos and don’ts for the judiciary, that in itself is fraught with danger … the Government could be properly criticised for unduly fettering the discretion of courts and judges, who, frankly, can and should be trusted to interpret the law as they have done for many generations. I am therefore of the school of thought that errs on the side of brevity when it comes to directions or provisions of this nature … I note the arguments about the use of the word ‘appropriate’ … I do not think that there will be a perfect solution to this, but I am all ears when it comes to phraseology that—subject to my rule about brevity—could be used to achieve the desiderata not just of Lord Neuberger but of all members of the judiciary who might be faced with this task in future.”83
139.He continued:
“because we are leaving the EU, the idea that they [judges] would be required to take into account the judgments of another jurisdiction would not be true to the purpose of Brexit. Having said that, there is nothing to stop judges considering the case law, as they do with case law from a number of jurisdictions. Inevitably, because of our 43-year relationship with the EU and the closeness of it, the case law of Luxembourg will continue to be germane in some cases, but a clear line has to be drawn post exit as to its effect.”84
140.A degree of flexibility is needed; it would be imprudent to prescribe a one-size-fits-all approach, given the enormous variety of cases that may arise, and the way in which the situation may evolve over time. It is likely that the relevance of post-exit CJEU case law will wane as UK and EU law grow apart. However, the extent to which UK and EU law will diverge is likely to vary from area to area. There may, for instance, be areas in which the UK chooses (or, pursuant to any new legal relationship with the EU, is required) closely to align domestic law with EU law. In those areas, post-exit CJEU case law will remain relevant.
141.The Bill leaves it to judges to decide when it is appropriate to be guided by post-exit CJEU case law—and, when it is, what amount of weight should be ascribed. We are concerned that the Bill leaves courts without proper guidance on this fundamental question of policy and that, by deciding to attach weight or indeed not to attach weight to post-exit CJEU cases, judges may become involved in political controversy.
142.We recommend that the Bill should provide that a court or tribunal shall have regard to judgments given by the CJEU on or after exit day which the court or tribunal considers relevant to the proper interpretation of retained EU law. We further recommend that the Bill should state that, in deciding what weight (if any) to give to a post-exit judgment of the CJEU, the court or tribunal should take account of any agreement between the UK and the EU which the court or tribunal considers relevant.
Modified retained EU law
143.Clause 6(3) requires UK courts and tribunals to decide questions concerning retained EU law in accordance with retained case law and retained general principles of EU law only “so far as that [retained EU] law is unmodified on or after exit day”. However, clause 6(6) provides that clause 6(3) “does not prevent” relevant questions concerning modified retained EU law from being decided in accordance with retained case law and retained EU general principles “if doing so is consistent with the intention of the modifications”. Professor Young said, “this creates uncertainty surrounding whether the modified retained EU law should be interpreted in line with EU case law up to exit day, particularly as many of these modifications would occur through delegated legislation which may provide little information as to the intention of these modifications.”85
144.We recommend that the Government’s statement accompanying regulations which modify retained EU law (see para 211) should also provide an explanation of the intention of the modification, to guide the courts in applying clause 6(3).
145.The Faculty of Advocates noted that the requirement in clause 6(3) (to decide relevant questions concerning retained EU law in accordance with retained case law and retained general principles of EU law) “is equally unclear. It applies only so far as the retained law is unmodified. It tells the court to have regard ‘among other things’ to the limits of EU competences; but there is no indication as to what other things may be relevant.”86
146.The inclusion of “among other things” in clause 6(3) generates unnecessary uncertainty about the provision and should be removed or replaced with specific other factors.
Pending cases
147.Two issues arise with extant litigation that involves EU law. The first is pending cases in the domestic courts that would, if Brexit were not taking place, potentially involve a referral to the CJEU. The second is pending cases already lodged with the CJEU before exit day.
148.On the first type of pending cases, the Law Society of Scotland said:
“There is no provision in [clause 6] which expressly deals with the situation where there are pending cases before the domestic courts on exit day. But, given that clause 6(1)(b) appears to be quite absolute in its terms, it could be argued that it would apply to such pending cases and prevent such a court from referring a matter to the ECJ on or after that day even although it could have done so on the previous day. However, it is thought that such a construction might be objectionable on the grounds that it is retrospective if it applies to pending cases.”87
149.The Government’s policy is that the UK’s withdrawal from the EU necessitates a cut-off point for references to the CJEU. The timing of that cut-off point will depend on the provisions of any withdrawal or transition agreement for the jurisdiction of the CJEU, but whenever it arrives the issue of pending cases will need to be addressed.
150.Preventing new references to the Court of Justice of the European Union after exit day provides clarity and certainty for new litigation; however it may undermine procedural fairness and access to justice in cases that were already under way, albeit that they had not, by exit day, resulted in a reference to the CJEU. Litigants in cases that began before the notification of withdrawal under Article 50 of the Treaty on European Union, or indeed before the referendum in 2016, will be treated differently in a way that was not reasonably foreseeable when their cases began. We recommend that the Government seek to clarify in any withdrawal or transition agreement whether domestic courts can continue to make references to the CJEU in relation to cases that began before exit day.
151.On the second type of pending cases, those already lodged with the CJEU, the Law Society of Scotland asked “Whether all cases, or only some selection of those cases, which are pending before the ECJ on exit day should continue to be dealt with by the ECJ?”88 In the House of Commons, Bill minister Dominic Raab MP said “When we exit the EU, we will know exactly how many pending UK cases are registered with the European Court, awaiting a preliminary reference and thus covered by any proposed agreement we have with the EU on the treatment of pending cases. That is important to deliver certainty about how and when the Court’s jurisdiction in the UK will be brought to an end.”89
152.The Solicitor General told us:
“That would be one of the potential functions of clause 9 [which allows ministers to make regulations for implementing a withdrawal agreement], which would deal with some of the necessary and important technical provisions that would ensure continuity so that ongoing cases were not disrupted. It is not at all the intention to upset the apple cart when it comes to cases that have been commenced prior to exit.”90
He continued “I do not think that it would have any effect on ongoing cases. If you are already a litigant and your case has been referred to the CJEU—that is, you have commenced your case pre exit—it will carry on.”91
153.The Government proposes to provide for the handling of pending cases with the CJEU in the withdrawal agreement and implementation bill. However, in the event that a withdrawal agreement is not reached, a bill would be needed to make provision on pending cases. We recommend that, irrespective of any implementation bill, pending cases are dealt with in the European Union (Withdrawal) Bill. We further recommend that rulings on cases that have been referred to the CJEU before exit day are treated as pre-exit case law—such that they form part of “retained EU case law”—and that the Government publishes, on exit day, a list of all such cases.
154.Outside of pending cases, an additional scenario exists where the cause for legal action arises before exit day, but litigation does not commence until after the UK has left the EU. As noted above, the Bill provides that proceedings which begin three months from exit day may challenge a failure to comply with any of the general principles of EU law, as long as the challenge involves something that occurred before exit day and that does not seek the disapplication or quashing of an Act of Parliament.92 In effect, this provides a short transition period, post-exit day, for the commencement of litigation relating to the general principles of EU law, though no reference to the CJEU would be possible. We recommend that, as with cases that have already commenced (see para 150), the Government seek to clarify in any withdrawal or transition agreement whether domestic courts can make references to the CJEU after exit day in relation to new cases, where the cause of action arose prior to exit day, subject to the normal statute of limitations.
Transition period
155.The scheme for interpreting CJEU case law post-Brexit set out in the Bill does not take into account the possibility of a transition period. Robin Walker MP told us “In the event that an implementation period is agreed between us, it will be enabled in UK law through the withdrawal agreement and implementation bill, which will specify the role that the European Court of Justice will have during the implementation period, as recognised under UK law … there will be a role for the European court in enforcing those rules and regulations during an implementation period.”93
156.If a transition period is agreed, the Government will need to provide for the operation of retained EU case law and its interaction with the CJEU in the withdrawal agreement and implementation bill.
67 Constitution Committee, The ‘Great Repeal Bill’ and delegated powers (9th Report, Session 2016–17, HL Paper 123), para 27
68 Clause 6(3)
69 Clause 6(6)
70 Clause 6(3)
71 Clause 6(5)
72 Clause 6(1)(2)
74 O. Bowcott, ‘UK’s new supreme court chief calls for clarity on ECJ after Brexit’, The Guardian, (5 October 2017): https://www.theguardian.com/law/2017/oct/05/uks-new-supreme-court-chief-calls-for-clarity-on-ecj-after-brexit [accessed 24 January 2018]
75 BBC News, ‘UK judges need clarity after Brexit: Lord Neuberger’ 8 August 2017: http://www.bbc.co.uk/news/uk-40855526 [accessed 24 January 2018]
88 Ibid.
91 Ibid.
92 Schedule 27, paragraph 27(5), as read with schedule 1, paragraph 3(1)