Competition damages claims and the Great Repeal Bill: the fate of Articles 101 and 102

According to many Leavers, Brexit would allow the UK to recover its liberty by casting off a yoke of bondage imposed by EU law. Most competition lawyers could have been forgiven for thinking that after Brexit Articles 101 and 102 would no longer have direct effect in the UK.

The Government’s White paper on the Great Repeal Bill may therefore have come as something of a surprise. The Government announced that, at least for the time being, it intends to incorporate into UK law any EU treaty provisions which create rights that can be relied on directly in court by an individual – as Articles 101 and 102 undoubtedly do.

What difference will this make?

The main benefit is that, so long as Articles 101 and 102 are part of UK law, you have a straightforward legal basis for bringing claims based on them in the national courts, i.e. as claims for breach of statutory duty.

As and when those articles stop being part of UK law, such claims will probably need to be brought as claims for a breach of a foreign tort. The claimant will have to prove that the EU rules formed part of the law of, say, France, and will be obliged to call expert evidence to prove their substantive content as a matter of fact.

Show me a lawyer who thinks this sort of additional complexity would be a good idea, and I will show you someone who thinks they can make money out of it.

But we should distinguish between claims relating to pre-Brexit and post-Brexit periods.

One of the main reasons to base claims on Article 101 or 102 after Brexit will probably be to bring a ‘follow on’ action relying on a European Commission infringement decision (assuming these are preserved). If you need to prove the infringement yourself, it will generally be easier to claim under the Competition Act.

Even after we have left the EU there should be a steady flow of Commission infringement decisions covering the pre-Brexit period: competition investigations are lengthy affairs, and unlawful activities can remain hidden for years.

It may not, though, be strictly necessary to incorporate the main EU antitrust provisions in order to facilitate such claims. That is because, while section 2(1) of the European Communities Act 1972, which currently gives Articles 101 and 102 legal effect in this country, is due to be repealed, section 16 of the Interpretation Act 1978 states that, unless the contrary intention appears: “where an Act repeals an enactment, the repeal does not … (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under that enactment … [or] (e) affect any … legal proceeding or remedy in respect of any such right, privilege obligation, liability, penalty, forfeiture or punishment”.

As a result, if you acquired a right to sue someone for breach of statutory duty as a result of a pre-Brexit infringement of Article 101 or 102, then you should still be entitled to bring legal proceedings to vindicate your rights even after the repeal of the 1972 Act (perhaps basing your claim on both the 1972 and 1978 Acts).

Turning to claims covering the post-Brexit period, it is difficult at the moment to know how beneficial it would be to retain Articles 101 and 102 within our domestic legal framework over the medium term.

That is because it will partly turn on the outcome of the Brexit negotiations. The UK and EU might agree, for example, that Articles 101 and 102 should continue to apply to the UK for the purpose of any Commission competition investigations already underway at the date of Brexit.  And the potential attractiveness of the UK as a forum for damages claims relating to EU or global cartels will depend on what is agreed in respect of jurisdictional and choice of law rules.

But there are at least three good reasons to domesticize Articles 101 and 102 at least for the time being.

First, despite the possibility of relying on the Interpretation Act, having Articles 101 and 102 within the domestic legal framework will remove any doubt as to the legal basis for bringing claims relating to the pre-Brexit period. Given there will be a great deal of legal uncertainty around, any opportunity to reduce it should be grasped.

Second, and however unhelpfully from our perspective as lawyers, cartelists and abusive companies are not going to end their unlawful activities the day before Brexit and initiate a new set of practices a day later. Claims will inevitably straddle the pre-Brexit and post-Brexit periods, and if you need to base your pre-Brexit claim on the EU antitrust provisions in order to take the benefit of a Commission infringement decision it will be a lot easier if you can use the same legal basis for your post-Brexit claim.

Third, depending on what is negotiated, there may be real benefit to facilitating EU law claims even if they only cover the post-Brexit period.

Set against this, there is no obvious down-side to keeping Articles 101 and 102 within UK law. The ‘inter-state trade’ jurisdictional threshold means that the EU rules don’t apply to UK-specific practices, and any UK companies which export to the continent will need to comply with them in any event. All it does it make it easier for people to bring claims in the UK courts.

Even if the Government felt that it would be incongruous to keep Articles 101 and 102 as part of UK law over the long term, it would be unwise for it to try to specify an end-date while the future situation remains as unclear as it is at the moment. More sensible would be if the relevant secondary legislation under the Great Repeal Act gave ministers the power to repeal the provisions if and when that was considered appropriate at some point in the future – after properly consulting the sector.

That would be consistent with the broader approach set out in the White Paper, namely that we should maintain the current legal status quo for the time being and work through whether or not we want to repeal or make changes to EU-derived law over time, i.e. after we have left the EU.

It would certainly be nice if the Government took advantage of the extra time it has bought itself by calling a general election two years after the last one and avoided taking rushed decisions in this and other areas. I love the an election night infographic as much as the next man or woman, but some more concrete benefits in exchange for the joys of the next few weeks would be greatly appreciated.

The implications of Brexit for the UK competition regime: new report published

The Brexit Competition Law Working Group (“BCLWG”) has today published its draft report on the implications of Brexit for UK competition law and policy.

The draft report will be discussed at a half-day conference on 2 May 2017 and written comments are also invited by 15 May 2017 (  A final report will be then be produced.

Some of the key recommendations are as follows.

  • Section 60 of the Competition Act 1998 (“CA98”) should be amended such that, when applying the Chapter I and Chapter II prohibitions, UK authorities and courts are only required to ‘have regard to’ EU judgments relating to Articles 101 and 102 (at the moment these are effectively binding).
  • Existing EU block exemption regulations should continue to exempt agreements from the Chapter I prohibition.  However, new regulations issued after Brexit should not result in ‘parallel exemptions’ under the CA98.  Instead, the CMA should enact its own domestic block exemptions under section 6 CA98.
  • Sections 47A and 58A of the CA98 should be retained so as to preserve the ability of private parties to bring EU ‘follow-on’ damages actions relating to breaches of Articles 101 and 102 in which Commission infringement findings are binding on the issue of liability.
  • The current statutory criteria for mergers and market investigations should be retained.  In particular, the group recommends against expanding the role of public interest criteria under the merger regime.
  • Commitments from past antitrust and merger cases should be ‘nationalised’ under the Great Repeal Bill, and the CMA should adopt any pre-Brexit leniency offers made by the Commission.
  • Arrangements will need to be put in place for close cooperation between the CMA and Commission, not least to deal with difficult transitional issues arising from cases which straddle the date of Brexit.
  • Brexit will lead to a significant increase in the CMA’s merger workload, i.e. because of the end of the one-stop-shop.  A substantial increase in the CMA’s resources will be needed if its other activities are not to be squeezed.

There is considerable common ground on these points between the BCLWG draft report and the two other weighty reports that have been produced on this subject, namely those by COMBAR and the City of London Law Society. This largely reflects a widespread desire amongst the legal community to promote legal certainty by minimising regulatory upheaval, an objective shared by the Government.

The Government’s proposed approach has recently been set out at some length in its White Paper on the Great Repeal Bill.  The White Paper is mentioned in the BCLWG document, but it was published relatively late in the day after the group had done much of its thinking.  One issue for discussion at the 2 May conference and which needs to be considered further before the report is finalised is whether the broader legislative approach of the Government that is starting to emerge has additional implications in the field of competition policy.

This and various related issues will be discussed in subsequent posts.

Jon Turner QC is a member of the BCLWG and Julian Gregory has been helping the group with its work.

All the World’s a stage: the UK’s global future : UK White Paper on Brexit and later texts

Danish Association for European Law: seminar 6 April 2017: Copenhagen

Post Brexit aims of the UK Government : White Paper on exit from the EU and later texts .

(Florentine map of the world from an early 17th century atlas in the Fellows’ Library – with thanks to the Principal and Fellows of Jesus College, Oxford)

Note: a White Paper is a description of a document containing a synthesis of facts and argument leading to a statement of UK Government policy,


1. The UK seeks a global future

The aim of this presentation is to describe the key strategic issues that will arise in  the UK/EU Brexit negotiations; to identify, assuming  agreement is reached, how many agreements are contemplated; and  to offer a view on what (in practice) the negotiations will involve .

The UK intends not only to form a new partnership with Europe but also with the rest of the world. The Government foresees a “truly global” Britain.

” All the world’s a stage

And all the men and women merely players;

They have their exits and their entrances ;

And one man in his time plays many parts,

His acts being seven ages.”

2. Key Brexit policy documents

The UK Prime Minister has made two speeches (2 October 2016 and 17 January 2017) in which she has set out her wish list for the upcoming Brexit negotiations. On 2 February, a White Paper was published by the UK Government (The United Kingdom’s exit from and new partnership with the European Union). On 29 March, the UK Prime Minister notified the EU of its intention to leave under Article 50/TEU, together with a further elaboration of the UK Government’s aims and its preferred approach to the negotiations. On 30 March, the European Council published its “Draft guidelines following the United Kingdom’s notification under Article 50 TEU“.

3. A summary of the agreements for negotiation.

  • A withdrawal agreement under Article 50 of the TEU.
  • The UK “will pursue a new strategic partnership with the EU, including an ambitious and comprehensive Free Trade Agreement and a new customs agreement” (chapter 8 of the White Paper).
  • A transitional agreement.
  • Thus at least four agreements would be required to establish a new strategic partnership with the EU.

4. Phasing of negotiations – the competing arguments.

How shall we start? How long have we got? In her letter of 29 March, the UK Prime Minister argued that the right way is to negotiate a withdrawal treaty and future trade agreement(s) simultaneously with one another.

By contrast, in the draft EU Guidelines, the EU follows the approach that is contemplated in Article 50. As to simultaneous negotiations, the Council will monitor progress on the terms of the withdrawal agreement. When “sufficient progress has been made”, it will determine whether to allow negotiations to proceed to the next phase.

5. The Withdrawal agreement

The Withdrawal Agreement under Article 50 would seek the disentanglement of the UK from the EU and “from all the rights and obligations the United Kingdom derives from commitments… as Member State”. The exit invoice is already a major issue. So is the position of EU citizens in the UK and UK citizens in other Member States. It will have to provide for handling the future of UK membership of EU agencies and for the future of UK officials in the EU institutions. It will have to deal with transitional matters such as legal certainty and equal treatment in respect of cases before the CJEU; and for administrative procedures pending before the Commission or the agencies.

Separately the UK will also have to handle the implications of exit for obligations that it has adopted under international treaties negotiated on its behalf by the EU, such as air services agreements with third countries like the USA.

6. The free trade agreement.

The UK aim.

The White Paper says that the UK will not seek membership of the Single Market. In paragraph 8.1, it states: “It is in the interests of the EU and all parts of the UK for the deeply integrated trade and economic relationship between the UK and the EU to be maintained after our exit from the EU. Our new relationship should aim for the freest possible trade in goods and services between the UK and the EU”. That agreement may take in elements of the current Single Market arrangements in certain areas. In her letter of 29 March, the UK Prime Minister asserts that it should “cover… sectors crucial to our linked economies such as financial services and network industries”. The network industries include transport, energy and telecommunications

The EU aim.

The EU guidelines recall that Article 50 requires the parties to take account of the framework for future relationship with the EU in arrangements for withdrawal . Specifically the EU has stated that “[p]reserving the integrity of the Single Market excludes participation based on a sector-by-sector approach. A non-member of the Union that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member”.

7. The Customs Agreement.

The UK wishes to take advantage of the opportunity to negotiate its own preferential trade agreements around the world. So it will not be bound by the Common External Tariff or participate in the Common Commercial policy (paragraph 8.43). It further observes (paragraph 8.2) that “The UK already has zero tariffs on goods and a common regulatory framework with the EU Single Market. ” The implication seems to be that that is what the UK will seek.

8. Security cooperation: has a threat been made by the UK?

The UK has, on one view of its Article 50 letter, linked future security and intelligence cooperation with securing an acceptable trade deal. No responsible government should bargain on the basis of threatening to undermine a friendly State’s national security.

9. The unpredictable timeline for the period of negotiation, including national constitutional requirements (if any)

Point (a) Timing: the impact of uncertainty

The possible length of the negotiations is totally unclear. If the European Parliament is to be given a reasonable opportunity to consider the texts, it will need at least six months. But some sectoral industries are already alarmed at the prospect of the negotiations going down to the wire. Few observers would doubt that unquantifiable delay is going to result in instability, both for businesses and for individuals.

Point (b) : National constitutional requirements. Could national constitutional requirements be triggered in the 27 other Member States by the agreements between the UK and the EU, however many there are?

The withdrawal agreement will be governed by Article 50 and will be concluded by the Council and not by the individual Member States. It is unlikely to require ratification by each Member State.

Any future trading agreement (and other agreements) will be negotiated in line with the Treaty provisions on agreements with third countries (Article 218/TFEU) . A trading agreement (and other agreements) could therefore be subject to ratification in line with national constitutional requirements, if applicable.

10. Transitional trade arrangements

The challenge of the timeline of two years has brought some realism into each side’s thinking. Both sides recognise (but the EU holds the whip hand) that there may have to be a transitional agreement to provide legal certainty while a permanent trade deal is finalised.

The EU’s guidelines: “To the extent necessary and legally possible, the negotiations may also seek to determine transitional arrangements which are in the interest[s] of the Union…Any such transitional arrangements must be clearly defined , limited in time and subject to effective enforcement mechanisms. “

Crucially, the guidelines make clear that , if a transitional trade agreement is entered into, by the EU, existing EU regulatory, budgetary , supervisory and enforcement instruments will continue to apply – namely the Commission and CJEU will continue to have jurisdiction.

11. International Law obligations.

What will happen to the international treaties negotiated by the Commission , binding on each Member State?

12. The negotiations

The Commission will lead the negotiations for the EU. But while it has a negotiating mandate, the Member States will decide the fate of the negotiations on the basis of the voting procedure in Article 50. The guidelines make a significant point about the nature of the endgame. The Union will approach the negotiations with unified positions and will only engage with the UK exclusively through the channels anticipated in the negotiating mandate.

The negotiations on the Article 50 Agreement, the EU/UK Trade Agreement and the Customs Agreement will be separated , save where there are overlaps. In each area, the negotiators will split it into sectoral technical working groups, such as a working group on financial services and a working group on each of the main network industries, as well as on cross-cutting issues.

In line with established practice, “nothing is agreed until everything is agreed”. In the endgame, there will be a cauldron full of the biggest issues. Then the trade offs will begin. The assumption is that these negotiations are too big to fail. But what if the unthinkable happens?

Aspects of post Brexit regulation in the Aviation sector

DFE presentation 6 April 2017: Aspects of post Brexit regulation in the Aviation sector: The last scene that ends this strange and eventful history

(As you like it – William Shakespeare)

(Florentine map of Denmark from an early 17th century atlas in the Fellows’ Library – with thanks to the Principal and Fellows of Jesus College , Oxford)

Summary and key texts

The issues raised by this presentation may help to illustrate aspects of the Brexit endgame. “The last scene that ends this strange and eventful history”

 1. Context: How important is the Aviation sector to the UK and the EU?

This presentation assists in understanding the rules governing the EU Aviation Single Market; in the light of that understanding, it notes what UK air carriers stand to lose if no agreement is reached at UK/EU level; and it identifies practical considerations for lawyers to address. The points raised are illustrative, not comprehensive.

The UK Prime Minister has signalled the importance of an ambitious free trade deal covering the Financial Services industry and the EU’s network industries, including transport. They were, she said, crucial “to our linked economies”.

Context on the contribution that air transport makes to the economies of the UK and the EU:

  • In 2014 (UK Civil Aviation Authority evidence to the UK Balance of Competences Review in the Transport sector), the CAA said: “overall, air transport contributes E365 billion yearly to European GDP and directly supports 5.1 million jobs. Air transport is the main vehicle for tourism in Europe, generating E900million per day and provides direct or indirect employment for 23 million people”;
  • In its evidence to the UK Balance of Competences Review, the British Air Transport Association said: “EU oversight over air transport has been extremely beneficial , creating a very liberalised and efficient sector in Europe, allowing the industry entry to markets in Member States and to grow across borders, delivering better and cheaper travel for the public”;
  • Easyjet, the world’s third largest low cost carrier, said: “Easyjet is a product of the EU’s deregulation of Europe’s aviation market. Without deregulation, we would not exist.

2. Summary of coverage of this presentation:

a) The strategic air transport vision within the EU:

b)  The rules on safety – an interface between domestic law, EU Law and International Law

c)  An  Institutional snapshot:  the future  role of an EU agency in the safety field;

d)  The rules on security- another interface between domestic law, EU Law and International Lawe) The Futuroscope : beyond the Great Repeal Bill : the Denied Boarding Regulation

This presentation is not a discussion of many other matters that arise in a post Brexit aviation context, eg:

  • How the EU and UK might agree to treat tariff free movement of aeronautical parts and equipment ;
  • How the UK will need to determine urgently the future of bilateral air services agreements that the EU has concluded with third countries, most importantly the EU/US Open Skies agreement .

3. The strategic vision : access to the liberalised aviation single market in the EU

The EU principle of freedom of access means that every Community air carrier is entitled to operate any intra Community air services. Access to this market is permitted by a system of licensing and certification.

  • A Community air carrier is defined as an air carrier with a valid operating licence. Under Regulation 3.1 of Regulation 1008/2008, no EU undertaking is permitted to carry by air passengers, mail or cargo unless they have an appropriate operating licence. To obtain one, an undertaking must meet the criteria in Chapter II
  • Under Chapter II, an undertaking must be granted an operating licence by the competent licensing authority of a Member State if a number of criteria are satisfied.
  • The first criterion in Regulation 4 is that its principal place of business should be located in that State.
  • A second criterion in Regulation 4 is that an undertaking must hold a valid air operator certificate issued by a national authority of the same Member State whose competent licensing authority is responsible for granting , refusing, revoking or suspending the operating licence of the Community air carrier
  • An air operator certificate means a certificate confirming that the operator ” has the professional ability and organisation to ensure the safety of operations specified in the certificate.” [Regulation 2.8]
  • From the effective date of Brexit, subject to a transitional or permanent EU/UK agreement, a UK airline will no longer be a Community air carrier for Single Market purposes since it will not hold an operating licence as defined.

Key practical points for consideration

a) Revival of dormant bilateral air services agreements between the Member States and the UK to fill any  gap in a post-Brexit  future?

b) Moving the principal place of business of UK carriers to one of the other 27 Member States?

c) Post Brexit day, the probability is that there will be continuing technical compliance with EU rules by UK carriers . So how might the framework for access to the Aviation Single Market be adjusted if, politically, the 27 wished it, eg, in the transitional agreement, deeming a UK air carrier to be a Community air carrier or providing  a UK air carrier with access to the Aviation Single Market? Politically, would the former be acceptable to the UK Government?

d) Joining the European Common Aviation Area? But that too would mean compliance with Single Market rules.

e) If an EU/UK deal is agreed, UK compliance with the EU rules will rely on the way that the EU acquis is incorporated  into UK national law. Across all areas of regulation, Danish lawyers would be wise to keep under scrutiny  the progress of the Great Repeal Bill . Remember that the Commission will no longer have a role.

4. Aviation safety

5. The future role of an EU agency – the European Aviation Safety Agency

  • Major airlines operate within the EU and outside it. It is business critical to comply with both EU and International Civil Aviation Organisation (ICAO) safety standards; but if regulatory cost burdens are to be minimised by cooperative means, so much the better. So the EU and ICAO have entered into a memorandum of understanding which aims to give a framework for enhanced cooperation in aviation safety, aviation security, environmental protection and so on.
  • Regulation 216-2008 confirmed the continued existence of the European Aviation Safety Agency and established the basic rules governing the operation of civil aviation in the Community.
  • Article 1 provides for the application of common standards (a) to the design, production , maintenance and operation of aeronautical products , as well as to the personnel and organisations involved in the design of such products; (b) to personnel and organisations involved in operation of aircraft; (c) design, maintenance and operation of aerodromes.
  • Article 2 contains important overarching principles such as establishing and maintaining a high level of aviation safety in Europe; ensuring a high level of environmental protection; facilitating the free movement of goods, persons and services ; promoting cost efficiency in regulatory and certification processes; assisting Member States to fulfil their obligations under the Chicago Convention.
  • The responsibility for regulatory oversight and certification processes is split between EASA and the competent authority designated by each Member State.
  • Critically for businesses and passengers, there is mutual recognition of certificates. Article 11 provides that Member States must , without further technical requirements or evaluation , recognise certificates which are issued in accordance with Regulation 216-2008.Mutual recognition maintains high common standards and reduces costs.

Key practical points for consideration

a) On Brexit day, UK air carriers are likely to be in technical compliance with EU safety rules.

b) Dormant bilateral air services agreements will need to be examined to check relevant coverage..

c) Strict position is that, absent an EU/UK agreement,  certificates of safety issued by the UK CAA would cease to be valid in the Single Market on Brexit-day. Without valid safety certificates, an air operator certificate could not be issued to a UK based air carrier which seeks access to the Aviation Single Market. Equally if there is no agreement at the EU/UK level , the UK could refuse to recognise EU carriers’ safety certificates. But that would be wholly implausible;

d) The biggest headache would be for the UK to replicate the role of EASA, not least in connection with its type approval functions.

6. Aviation Security

  • EU Aviation standards are intended to be consistent with the Chicago Convention requirements
  • On 11 March 2008, Regulation 300-2008 on Common Rules on Aviation Security was adopted. This provides for common basic standards for security at EU airports.
  • Member States are entitled to adopt more stringent standards, based on a local risk assessment.

Key practical points for consideration

a) Aviation security should not become a pawn in a negotiating game;

b) Some countries have a greater security risk profile. The UK is one. If the UK imposes more stringent measures, they are capable of undermining airline schedules and adding to cost burdens.

7. The Futuroscope: what EU rules might the UK Parliament decide to revoke or amend in a post Brexit phase? Illustrative case: Denied Boarding Regulation

  • The UK Government has said that, notwithstanding the incorporation of EU Law into domestic law, the UK Parliament will later have the right to consider whether to amend or repeal those laws after Brexit.
  • Under Regulation 261-2004, the Denied Boarding Regulation, there is a right to compensation for cancellations or denied boarding on defined flights. There is also a right to assistance in the case of long delays to flights.
  • The Regulation was opposed by air carriers because of the costs of compliance.
  • In cases C402/07 Sturgeon and C432/06 Block, the CJEU extended the availability of compensation for passengers in a way that did some injustice to the drafting of the Regulation. This increased the costs exposure of airlines. Low cost carriers are especially at risk.
  • But if the UK Government acts as it has promised, the Regulation will be duly implemented into UK national law.

Key practical points to be considered

a) Aspects of the Regulation are an obvious target for subsequent amendment in a deregulatory policy environment in a post-Brexit UK. Yet deregulatory measures, if out of step with the EU rules, would result in a competitive advantage for UK carriers if they had continued to enjoy access to the EU Aviation Single Market. The EU’s negotiating guidelines make clear that, if a transitional agreement is reached, existing EU regulatory rules would have to continue to apply.

b) Even if the Regulation is properly implemented into UK law, what about the incorporation of subsequent amendments to the Regulation at  EU level?  In this case, the Commission has in fact proposed legislative amendments to the Denied Boarding Regulation.

8. How ends “this strange and eventful history” ?

  • Will there be a deal on UK access to the Aviation Single Market? The EU’s negotiating guidelines emphasise that nothing is agreed until everything is agreed.
  • Overall, taken on a sectoral basis, it is doubtful whether the EU, even if it holds most of the cards, would want to deny continuing access. There are many significant economic interests to consider, which could be undermined by instability , such as the impact on the tourism industry.
  • But there are also some Member States which may see advantage in denying access on Single Market terms to powerful UK low cost carriers if that could help to safeguard their national air carriers.
  • Will either side want to stare into the abyss?

“……Last scene of all

That ends this strange and eventful history is second childishness and mere oblivion

Sans teeth, sans eyes, sans everything” (As you like it).

Monckton presentations in Denmark on post Brexit regulation of the Aviation and Telecommunications sectors

At a Brexit seminar in Copenhagen at the Danish Association for European Law on 6 April, Tim Ward and Christopher Muttukumaru were principal speakers. Their presentations included post Brexit regulation of the Aviation and Telecommunications sectors.

The event was chaired by Professor Ulla Neergaard , Professor of EU Law at the University of Copenhagen. The third principal speaker was Ros Kellaway, head of EU and Regulatory group, Eversheds-Sutherlands.

The seminar was attended by private practitioners, academics and law students.

The speakers covered the following topics:

  1. ” All the world’s a stage ” – the UK Government’s White Paper on Brexit , including the UK’s new global outlook; the Article 50 letter of 29 March and the Commission’s response;
  2.   Aspects of post-Brexit regulation in the Competition field;
  3.   Aspects of post-Brexit regulation in the Telecommunications field;
  4.   Aspects of post-Brexit regulation in the Transport (Aviation) field;
  5.   The Great Repeal Bill – its purpose and coverage;
  6.   The roles of the national courts, of the CJEU and of the Commission in a post Brexit world.

There followed a very lively series of questions and answers about a post-Brexit future . Topics raised by the audience included questions about cartel investigations in a post Brexit world; UK support for the EU environmental acquis ; and the “what if ” questions about the future of Scotland.

The speakers’ written materials have been published on the organisers’ website here.


Gibraltar: a Sting in the Tail, but not a Surprise

Last week, the status of Gibraltar arose on two occasions in relation to Brexit.  The first passed wholly or virtually unnoticed, while the second caused a furore which has remained in the headlines for several days.

Before we consider those incidents, what is the status of Gibraltar with regard to the EU?  As a matter of UK constitutional law, it is not part of the UK, but a colony.  It is the only British colony in the EU, by virtue of Article 355(3) TFEU which reads: “the provisions of this Treaty shall apply to the European territories for whose external relations a Member State is responsible”.  However, by virtue of Article 28 of the Act of Accession of 1972, Gibraltar is not subject to the Common Agricultural Policy or VAT and, being outside the territory of the customs union (see Article 4 of the Union Customs Code), the Treaty provisions on the free movement of goods do not apply to it.

First of all, Chapter 5 of the Government’s White Paper on the Great Repeal Bill on which Julian Gregory commented (here and here ) began with the following statement: “The Crown Dependencies and the Overseas Territories, including Gibraltar, are not part of the UK for the purposes of EU law …” As regards Gibraltar, this statement is almost certainly incorrect for the reasons set out recently by Advocate General Szpunar (here); (the judgment is that case is still awaited).  After all, Gibraltar is in the EU by virtue of being a dependency of the UK; since it is not a Member State in its own right, it necessarily follows that the colony is part of the UK for the purposes of EU law.

Unsurprisingly, this apparent error has not caused a stir. Was I the only person to notice it?

In contrast, the second occasion on which Gibraltar was mentioned last week in one of the key Brexit documents caused a national outcry that does not yet appear to have abated.   The final paragraph of the European Council’s draft negotiating guidelines (here), reads as follows: “After the United Kingdom leaves the Union, no agreement between the EU and the United Kingdom may apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the United Kingdom.”

In his post on the draft guidelines (here), Ben Rayment aptly described this assertion as a sting in the tail (for the British).   But it came as no surprise.

That Gibraltar would be vulnerable to Spanish pressure in the event of a British vote to leave the EU was never in doubt.   During the referendum campaign, the Government of the colony campaigned very hard for Remain and made this point most forcefully. So it is little wonder that 95.9% of the population of Gibraltar voted to remain in the EU.  The uncertainty of Gibraltar’s sovereignty after Brexit is also plain from the report on Gibraltar by the House of Lords Select Committee on the EU (here), published just a month ago, is replete with detailed information on the issue, including the witness statement by the Chief Minister of the colony.

However, the European Council’s draft negotiating guidelines on Brexit do not say that Spain would seek to regain sovereignty over Gibraltar.   In any case, such a move seems unlikely in the near future: the diplomatic and political hurdles would be dramatic; and, considering that the population of the colony opposes returning to Spain almost to a man, any attempt to force the Gibraltarians to accept this arrangement might not be altogether plain sailing in terms of international and human rights law.

On the other hand, there are a number of delicate issues to be solved, including the rights of frontier workers (said to account of 40% of the colony’s workforce) and aviation, a long-standing bone of contention since Spain claims that Gibraltar’s airport encroaches onto Spanish territory.  What is more, as the Financial Times suggests, the Iberian Member State might take advantage of the situation to press for the rights of its citizens who wish to live and work in the UK.

In any case, none of this comes as a surprise.

The fate of Charter rights under the Great Repeal Bill

In yesterday’s White Paper, the Government announced that the EU Charter of Fundamental Rights will not be converted into law by the Great Repeal Bill, on the basis that it “cannot be right that the Charter could be used to bring challenges against the Government, or for UK legislation after our withdrawal to be struck down on the basis of the Charter” (para 2.23). The Government, it appears, does not wish to have the rough with the smooth.

The White Paper’s summary of the Charter is at least accurate, insofar as it describes it as being “not designed to create any new rights or alter the circumstances in which individuals could rely on fundamental rights to challenge the actions of the EU institutions or member states in relation to EU law” but rather intended to make the rights “that already existed in EU law more visible by bringing them together in a single document” (para 2.24).

However, the White Paper is on more uncertain ground when it proclaims that the removal of the Charter “will not affect the substantive rights that individuals already benefit from in the UK”, claiming that “many of these underlying rights exist elsewhere in the body of EU law which we will be converting into UK law”. As EU law is “converted” into UK law by the GRB, the White Paper predicts that it will “continue to be interpreted by UK courts in a way that is consistent with those underlying rights”. Rights will still be relevant to case law, but the reference will be “only to the underlying rights, rather than to the Charter itself” (para 2.25).

While it is true that the Charter is a compendium of existing rights under EU, drawn from a number of different sources, it hardly follows that its removal won’t affect “the substantive rights that individuals already benefit from in the UK”, not unless you grant the rather dubious premise that rights under the Charter aren’t themselves substantive rights under UK law.

The reality is that, although the Charter contains a great many rights that the UK had already signed up to by way of various international human rights instruments (including the International Covenant on Civil and Political Rights, the Convention on the Elimination of all Forms of Discrimination Against Women, and the UN Convention against Torture, just to name a few), very few of those rights are enforceable (other than by way of the Charter itself) because they were never incorporated into domestic law. Although the government’s obligations under those instruments can sometimes affect the interpretation of primary legislation, the orthodox position remains that they can’t therefore create rights or impose duties.

The notable exception here is, of course, those ECHR rights which have been incorporated into UK law by way of Schedule 1 of the Human Rights Act. To this extent, the White Paper affirms that the UK’s withdrawal from the EU “will not change the UK’s participation in the ECHR and there are no plans to withdraw from the ECHR” (para 2.22). Plans to amend the HRA itself have been quietly shelved for the time being. It seems, therefore, that any EU measures which the Great Repeal Bill transfers into UK law will continue to be subject to challenge for compatibility with Convention rights under the HRA for the time being.

The overlap between the Charter and the Convention is itself addressed in article 52(3) of the Charter, which provides that – where there is an overlap – “the meaning and scope of those rights shall be the same as those laid down by the said Convention”. But article 52(3) also provides that the overlap between the ECHR and the Charter “shall not prevent Union law providing more extensive protection”, and in many places the Charter does go further than the Convention. The right to a fair trial under Article 6 ECHR, for instance, does not apply to all civil proceedings but only those which involve “the determination of … civil rights and obligations”, a phrase which has been held to exclude such things as immigration and asylum cases, or a challenge to a local authority’s refusal to house a homeless person. Article 47 of the Charter, by contrast, has no such limitation.

These are not the only rights which will be lost under the White Paper’s proposals. There are, for instance, those Charter rights that reflect rights in protocols which the UK government has not signed up to, such as the prohibition against being tried twice for the same crime under Article 4 of Protocol 7, but which has force in the UK vis-à-vis EU measures under article 50 of the Charter. Or the right to an effective remedy under article 13 ECHR which simply doesn’t appear in Schedule 1 of the Human Rights Act. There are the many Charter rights which don’t appear in the text of the ECHR, but which the Strasbourg Court has from time to time recognised as being implicit: e.g. the right to human dignity under article 1, the right to data protection under article 8 of the Charter, or the principle of academic freedom under article 13. These rights may continue to be protected to some degree under the HRA but plainly the precise extent will be the subject of extensive satellite litigation. And then there are those Charter rights which the Strasbourg Court has simply never grappled with, such as the prohibitions against eugenics and reproductive cloning in article 3(2) of the Charter.

Plainly, with the UK’s withdrawal from the EU, some of the rights contained in the EU Charter necessarily fall away, such as the right to vote and stand in elections for the European Parliament under article 39. But it seems ambitious, to put it politely, to suppose that the UK can transfer or transpose the entire corpus of EU law into UK law without affecting the balance between rights and obligations contained within those laws.

As it stands, the White Paper proposes keeping the obligation to obey a vast realm of rules and regulations derived from EU law but jettisoning the fundamental rights that go with them. As Lord Bingham once said, it is the kind of unfairness that would be apparent to even a child. The White Paper suggests that the courts will still be permitted to have regard to the ‘underlying rights’, but it seems unlikely that the courts themselves will welcome so much digging through the substrate. The risk for the government is that the courts may shortcut the excavations and resort to alchemy instead, declaring those rights previously contained in the Charter are now common law rights in any event. That would still leave a significant shortfall in the effective protection of the former Charter rights, but it would demonstrate the continuing supremacy of at least one body of law, namely that of unintended consequences.

The EU Council’s draft Art 50 Negotiating Guidelines: the ‘cliff edge’ recedes but no free trade agreement until 2022?

The EU Council has today published its draft Negotiating Guidelines setting out the overall positions and principles that the EU will pursue throughout the negotiation.

Article 50 provides that upon notification of a member state’s intention to withdraw from the EU “… the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.”

In her letter triggering the Art 50 process the Prime Minister stated that Her Majesty’s Government believed that “it is necessary to agree the terms of our future partnership alongside those of our withdrawal from the EU.” As things stand withdrawal will take effect on 29 March 2019.

Although written in a constructive tone the Guidelines unsurprisingly stick closely to the structure of Art 50 and confirm that the EU intends to follow a “phased approach” with the terms of withdrawal needing to be established first. As for the future relationship with the UK the Guidelines refer only to “Preliminary and Preparatory Discussions on a Framework for the Union-United Kingdom future relationship.” In particular they state that any free trade agreement (FTA) could only be “finalised and concluded once the United Kingdom is no longer a Member State.”

In his recent remarks in Malta on the EU Council’s phased approach to the negotiations the President of the EU Council, Donald Tusk, has also said,Once, and only once we have achieved sufficient progress on the withdrawal, can we discuss the framework for our future relationship. Starting parallel talks on all issues at the same time, as suggested by some in the UK, will not happen.”

In practical terms the 2-year period for withdrawal negotiations is in fact closer to 18 months because of the period likely to be needed for the ratification process of any agreements. The withdrawal issues alone are likely to be relatively complicated to settle. Some of the key ones referred to by President Tusk are: (1) settling the status and situation of citizens from all over the EU who live, work and study in the UK with reciprocal, enforceable and non-discriminatory guarantees; (2) preventing a legal vacuum for EU companies stemming from the fact that after Brexit the EU laws will no longer apply to the UK; (3) financial commitments and liabilities undertaken by the UK as a Member State; (4) solutions aiming at avoiding a hard border between Northern Ireland and Ireland. There is also a sting in the tail regarding Gibraltar giving Spain an effective veto over the applicability of the agreement to Gibraltar.

Once “sufficient progress”, which is not defined, is made on these issues the EU will then be prepared to discuss the framework for a future relationship, but this is some way from the hoped for comprehensive FTA ready to sign upon withdrawal.  Moreover, even discussions about the framework of future relations cannot according to the Guidelines commence before withdrawal issues are resolved, which include the thorny issue in any divorce of the finances.

If withdrawal with no deal is seen as unattractive by both sides and there is insufficient time or willingness to agree a comprehensive FTA, which could take effect upon the UK’s withdrawal (both likely), then the compromise solution would appear to be a transitional arrangement of some sort to enable such an FTA to be negotiated and finalised. Whilst practically and legally possible a transitional period will nevertheless raise political issues at least in some quarters of the UK as any such arrangements will need to have mechanisms of supervision and enforcement including potentially the involvement of the European Court of Justice. On the sensitivities of dispute resolution mechanisms see my colleague Peter Oliver’s blog post  The Prime Minister’s letter does not mention a transitional period in terms. It does however say that “In order to avoid any cliff-edge as we move from our current relationship to our future partnership, people and businesses in both the UK and the EU would benefit from implementation periods to adjust in a smooth and orderly way to new arrangements. It would help both sides to minimise unnecessary disruption if we agree this principle early in the process.” That is probably a realistic acknowledgment that not only is it likely that future arrangements will not be comprehensively sorted out by 29 March 2019, but also that there is no advantage to citizens or businesses in either the EU or UK in fuelling the notion that a true “cliff edge” come exit day is a realistic possibility.

The Council is not the only relevant actor in the negotiation process. As also foreseen in Article 50 any withdrawal agreement will also have to be approved by the European Parliament. On 5 April 2017 the European Parliament will debate a draft resolution setting out their conditions for a final approval by the European Parliament of any withdrawal agreement with the UK. Like the Council the European Parliament’s Press Release (29 March 2017) stresses the importance of settling the status of EU-27 citizens in the UK, the position of Northern Ireland and the need to address the UK’s financial commitments under the current EU long-term budget, even if these go beyond the withdrawal date. The draft resolution also appears to envisage that talks can start on possible transitional arrangements based on plans for the future relationship but only if and when good progress is made towards the withdrawal agreement. Furthermore any agreement regarding future transitional arrangements should not last longer than 3 years. The implication is that concluding a withdrawal agreement in addition to one governing future UK-EU relations after exit would take up to 5 years. Furthermore, to the extent that the UK remains a member of the EU during such transitional period the position is that the rules would continue to be overseen by EU institutions including the Commission and the Court of Justice.

Finally, the Guidelines are at this stage in draft and are due to be considered by the EU 27 at the end of April. The finalised Guidelines will be carefully scrutinised by those seeking to glean any change in direction or emphasis by the EU.

The Great Repeal Bill and the risk of enforcement black holes: some further thoughts based on environmental law

As noted in my blog post yesterday, one of the main concerns about the Great Repeal Bill is whether Brexit-related secondary legislation will receive proper Parliamentary scrutiny.

The Government’s line as set out in its White Paper is that secondary legislation will only be used to make technical changes needed to ensure EU laws work sensibly after Brexit, i.e. once they have been incorporated into UK law. It says that primary legislation will be used for any policy reforms.

But any distinction between technical changes (warranting less scrutiny) and policy reforms (warranting greater scrutiny) quickly collapses.

For example, the White Paper went out of its way to say positive things about environmental law and stated that the “Bill will ensure that the whole body of existing EU environmental law continues to have effect in UK law”.

Separately, though, it gave an example of the sort of technical changes that might be required, noting that the Offshore Petroleum Activities (Conservation of Habitats) Regulations 2001 requires the UK to obtain an opinion from the European Commission on certain types of project. The White Paper states that the Government’s delegated powers will allow it to either replace the reference to the Commission with a UK body or remove this requirement completely.

But the Commission’s environmental role is not limited to providing the odd opinion here and there. It also shares information, monitors progress and reports on Member State compliance. Crucially, it can bring infraction proceedings against governments that fail to comply with their obligations – and impose fines on them.

And, as became evident from internal Government documents relating to the 2015 Air Quality Plan that was the subject of the Client Earth (No.2) v DEFRA proceedings, the possibility of being on the receiving end of infraction proceedings provides a major incentive for the Government to comply with EU-derived environmental law.

If the legislative changes made under the Great Repeal Bill simply remove all references to the Commission’s environmental activities, rather than establishing an equivalent UK body to carry out the same tasks, the bottom line is that environmental law will be enforced less effectively.

And that is a change with significant policy consequences that would under normal circumstances be the subject of rigorous Parliamentary scrutiny, e.g. if the Government was trying to neuter a domestic regulator by taking away its enforcement powers.

The White Paper hints that the Government may reassess the environmental regulatory framework ‘over time’, i.e. after Brexit has taken place. But it could be years before sufficient Parliamentary time is available to put in place a new regulatory regime. Parliament will need to pass laws to implement whatever new trade arrangements are agreed with the EU, and there will be a backlog of other legislation to deal with given that there will not be much time for anything else other than Brexit over the next 24 months.

In short, there is a very real risk of ‘enforcement black holes’ opening-up if the Government simply removes references to all the Commission’s activities from the existing body of EU law. To avoid it, battles will need to be fought in Parliament to ensure that the changes made under the Great Repeal Bill ensure that independent UK bodies are put in place to carry out the Commission’s current enforcement functions.

And the rules of engagement for those battles will be determined by the detail of the Parliamentary procedures used for the mass of secondary legislation that will be passed under the Bill. The Commons Procedure Committee’s current inquiry into this issue could be of huge importance.

See also, in relation to environmental law after Brexit, this earlier post by Peter Oliver.