Cases before the CJEU at the time of Brexit: could the interests of justice be timed out?

31 Aug 2016

Christopher Muttukumaru CB argues that, in cases where a reference has been made to the Court of Justice under Article 267 of the TFEU, the UK and the EU should reach agreement on transitional cases in order to ensure legal certainty. Otherwise, could the interests of justice be timed out?

Some proponents of Brexit have argued that the UK should “take back control” of lawmaking and that the domestic courts alone should determine the legal rights and obligations that arise under the laws of the United Kingdom, including those that are derived from EU Law.

This post will cover the issues that could arise in cases under Article 267 of the TFEU (requests for preliminary rulings by the CJEU). It will cover neither direct actions which, while they might indirectly have effects in respect of private citizens and legal entities, are essentially disputes between the EU institutions or between Member States and the EU institutions, nor Competition Law cases. That said, some general observations that are made might also be applicable in other cases.

Where the domestic courts are asked to determine a dispute between private parties or between private parties and the State, the courts will generally apply the law as it is presumed to have applied at the time at which legal relations were entered into. In so far as EU Law is relevant and applicable to the determination of a dispute, it will at least continue to apply until the effective date of withdrawal by the UK from the EU. In practical terms, what would that mean ? In parenthesis, one commentator (Lord O’Donnell) has floated a fresh idea that the rules of EU Law , as implemented into UK domestic law, could outlast Brexit until such time as, sector by sector, the Government decides which laws should survive and which should be revoked or amended. This post does not address that possibility.

CJEU jurisdiction under Article 267/TFEU The CJEU has jurisdiction to give preliminary rulings upon the interpretation of the Treaties and/or the validity of acts of EU institutions, bodies, offices or agencies. National courts are entitled to request a preliminary ruling in any such case if they consider that a decision of the CJEU is necessary to enable it to give judgement. For present purposes, the question of mandatory references from national courts from which there is no further judicial remedy does not require separate consideration.

The potential problems for practitioners. Once Article 50 is triggered, parties to litigation involving points of EU Law that might be apt for reference to the CJEU are going to have to address the consequences of different scenarios pending the outcome of Brexit negotiations. Here are a few illustrations. Given the long lead times for references, what happens if, by the time that a preliminary ruling has been given by the CJEU, the effective date of withdrawal by the UK pursuant to Article 50/TEU has already passed? Absent any specific provision in the agreement made between the UK and the 27 remaining Member States pursuant to Article 50/TEU, is the CJEU likely to discontinue the proceedings ? What happens if a preliminary ruling has been made by the CJEU before the effective date of withdrawal , but the national court has not yet applied the ruling by that date ? If the UK has been found to be in breach of its EU Law obligations, what might happen to consequential claims, such as actions for damages, for breach of EU Law?

The withdrawal agreement under Article 50 ought to make provision for transitional cases. While the outcome of the negotiations under Article 50 cannot be predicted with any certainty, there are some general pointers that might be useful to consider. The most obvious proposition is that the withdrawal agreement should make clear what should happen in respect of transitional cases under Article 267/TFEU:

  • On one hypothesis, if it is agreed that the UK should continue to have access to the Single Market, is it conceivable that it could realistically hope to abandon adherence to the rulings of the CJEU. After all, the very rationale for the supremacy of EU Law is that it ensures that the law applies uniformly across the EU, taking account (as only the CJEU can) “…of [its] panoramic view of the Community and its institutions, a detailed knowledge of the Treaties and of much subordinate legislation made under them , and an intimate familiarity with the functioning of the Community market which no national judge denied the collective experience of the Court of Justice could hope to achieve…” (Commissioners of Customs and Excise v Samex: Bingham J).
  • On another hypothesis, the UK might seek a clean break without access to the Single Market. If so, the withdrawal agreement might provide for a cesser of jurisdiction for the CJEU to determine requests for preliminary rulings, including those on which it had yet to rule at the time of the effective date of withdrawal. In that eventuality, the UK courts would be faced with a conundrum. Ex hypothesi , the courts would have asked for a preliminary ruling on a question of EU Law which was relevant and necessary to the determination of a dispute on which the answer was not clear.

Procedural issues If the withdrawal agreement expressly provides for a cesser of CJEU jurisdiction and no further CJEU involvement, the withdrawal agreement ought itself to provide for withdrawal of existing references . Failing that, the CJEU could, on a request from the referring court, send back the reference on the basis that there was no longer any point in the reference.

But this post presupposes that a dispute did still exist. So long as a reference had not been designed to obtain a tactical advantage and had not been an indirect way of seeking an advisory opinion of a general or hypothetical nature, could the Council , having consulted the CJEU and the other institutions, provide for the CJEU to give a ruling on a preliminary question referred to it prior to the effective date of withdrawal? There is more than one plausible view on this possibility.

Substantive issues That said, what substantive approach might be adopted by the domestic courts in such cases ?

  • If left to develop the jurisprudence themselves in cases involving the interpretation of EU Law, the domestic courts are likely to want to protect the rights of parties as if the rules of EU Law developed prior to the effective date of withdrawal still applied. That could be the only fair approach, since to do otherwise could defeat the expectations of both parties, subject only to legitimate (non-Brexit) arguments that might properly be argued, such as questions of application of national time limits.
  • Assuming that the domestic courts choose to apply the pre-existing rules of EU Law, there is a body of UK case law which, not least in the context of Strasbourg jurisprudence, suggests that the domestic courts are likely, even if rulings of a supra-national court are not binding on them, to take account of its jurisprudence as persuasive authority in support of a particular interpretation of the law.
  • But the long lead times for rulings by the CJEU will create problems for litigants. At the time when cases are being referred by the national courts, lawyers will need to address (as they now do) the competing merits of the arguments in relation to the question of interpretation at the heart of the dispute. But time does not stand still. No doubt the CJEU would, for example, continue to adopt a teleological approach to interpretation in the light of developments arising during the period after the reference but before a preliminary ruling. This approach could (possibly at the instance of the UK Government in its observations to the CJEU) include reasoning which takes account of wider political realities, such as the UK’s imminent withdrawal. That could threaten the interests of legal certainty.
  • A separate (but significant) question is whether, even if a litigant were to succeed, the same remedies, such as actions for damages for breach of EU Law, would avail them in a post Brexit environment. This in turn raises a different fundamental question. Where the CJEU has itself developed a line of jurisprudence to ensure that EU Law rights are afforded effective and non-discriminatory protection, should such protection be available to litigants in transitional cases involving a breach of EU Law that meets the criteria for liability under (say) the Francovich doctrine ? There would of course be powerful arguments in support of continuing liability under the Francovich doctrine (as subsequently extended in Factortame III and Brasserie du Pecheur) since, otherwise, the UK might be in a position to evade the consequences of a failure to comply with its Treaty obligations.
  • Yet that could mean that actions for damages for breach of EU Law rights arising pre-Brexit could continue to be litigated for many years to come. In that event, what would happen if a point of interpretation of EU Law in respect of effectiveness of remedies were to be raised which itself required (in the domestic court’s view) a preliminary ruling by the CJEU?
  • This could give rise to tactical decisions to argue for, or against, a reference irrespective of the legal criteria applicable to the use of Article 267.

There are complex issues that lie ahead for lawyers and litigants. It behoves the UK Government and the EU to provide clarity.