The High Court is currently considering the argument that the Crown has no power to trigger Article 50 of the Treaty on European Union by use of the Royal Prerogative and without an Act of Parliament. One issue that has arisen in commentary on that case is whether it could result in a reference to the Court of Justice of the European Union (“CJEU”).

It is important to be clear about what a reference to the CJEU is and when it can be (or in some cases has to be) made.

Article 267 of the Treaty on the Functioning of the EU provides that, where a national court has to resolve a point of EU law in order to decide a case, it may refer that point of law to the CJEU for a preliminary ruling. It goes on to provide that where the national court is one from which there is no appeal (for example, in the UK, the Supreme Court), it must make such a reference – though the CJEU has also ruled that such a court need not do so where the answer to the question of EU law is clear (the “acte clair” principle).

The key point for present purposes is that the power (or duty in the case of a national supreme court) to make a reference to the CJEU arises only when the answer to the question is necessary to decide the case. If the case can be answered without resolving the point of EU law, that is what the national court must do. In short, a national court cannot use the preliminary ruling procedure to resolve a point of EU law to which it might be nice to know the answer but which is not necessary to the decision of the case before it. And there are a number of cases where the CJEU has declined to rule on a question which it thinks it is being asked as a matter of academic curiosity rather than because its answer is needed to resolve the case.

The point of EU law that has been identified as potentially requiring a reference to the CJEU is the question of whether an Article 50 notification can be withdrawn by the Member State making it before it leaves the EU. Article 50 is silent on the question, and it is hard to see that it could be regarded as “acte clair”. (For what it is worth, my view is that such a notification is reversible by the Member State concerned: the silence of Article 50 on the point is not a reliable basis for arguing the contrary, and it would, in my view, be an extraordinary result, in a Union founded on democratic values and with the aim of sharing a peaceful future – see the preamble to the EU Charter of Fundamental Rights – for a Member State that had democratically changed its mind on the question of leaving the EU then to be forced out against its will. That view is shared by a number of commentators including Sir David Edward KCMG, a former Judge of the CJEU.)

The question, however, is whether there are any circumstances in which it would be “necessary” for the High Court (or in due course the Supreme Court) to answer that question in order to decide whether Article 50 can be triggered by the Crown under the Royal Prerogative.

In my view, it is hard to see that there could be such circumstances.

At present, the claimants are proceeding on the basis that Article 50 is not reversible (or at least that it has to be assumed that it is not), and the Crown is not seeking to argue that it is. The Crown’s position may well be because in a wider context it does not suit the present Government, mindful of possible political difficulties ahead, to argue that there is room for the Article 50 process to be reversed. But, in any event, that is its position.

The fact that the parties are agreed on the point does not of course mean that the courts are bound by that. It is open to a court to decide – whatever the parties say – that a point is open to argument and that it needs to be resolved before a case can be decided. And the question of a reference to the CJEU is for the court, not the parties.

But I do not see that a CJEU reference is likely in this case. It has to be remembered that, whether or not Article 50 is reversible, there are a number of other reasons (no matter how unlikely politically) that could stop it resulting in the exit of the Member State giving the notification. The most obvious of those is a renegotiation of the Treaties during the Article 50 period. Or the other Member States could, acting unanimously, agree to postpone the date of exit far into the future.

The Claimants’ case does not therefore, in my view, depend on asserting that an Article 50 notification is irreversible. Rather, it depends on asserting that it sets in train a process that has two features: (i) unless something else happens, the Member State falls out of the Treaties two years later; and (ii) the “something else” (reaching an Article 50 agreement with a longer period; unanimous extension of the Article 50 negotiating period; renegotiation of the Treaties, or withdrawal of the Article 50 notification) is not an event over which Parliament has any legal control. (Note that if the Government is right that invoking Article 50 is a matter of the Royal Prerogative, withdrawing an Article 50 notification must also be a matter for the Prerogative and over which Parliament has no legal control – a point on which Brexiteers championing the powers of the Crown in the present case might want to reflect.) Since point (ii) does not depend on whether Article 50 is reversible, it is hard to see why the question of reversibility would have to be resolved before deciding the case. And, as I explained above, unless the point of EU law has to be resolved by a national court, the national court does not have to (and indeed should not) refer it to the CJEU.

So, as a matter of law, and subject to the general caveat that unexpected things happen in courts, I do not see that a CJEU reference is likely. It also seems to me to be highly unlikely that the Supreme Court (whose decision it would be) would want to take that step: the Supreme Court would be well aware of the political storm that would arise, and of the delay inevitably caused by a reference. Further, although those of us who have appeared before the Supreme Court may sometimes struggle to remember this, even Supreme Court judges are human: and I suspect that this is just too fascinating and important a case for them to want to leave anyone else to decide it.

Unfortunately, that will leave unresolved the important question of whether an Article 50 notification is reversible. I have set out my view that it is: but uncertainty on the point may be something with which we shall all have to live.

 

Both Christopher Muttukumaru CB (here) and I (here) have already commented on some aspects of the Great Reform Bill that has been promised by the Prime Minister in her speech to the Conservative Party conference.

This post sets out some further serious legal and policy challenges that will have to be tackled in the Bill.

These challenges arise because of the Government’s acceptance that, given the impossibility of revising all areas of our law affected by EU law before Brexit and the need to avoid a legal black hole, the substance of EU law will need to be retained post-Brexit until Parliament can get round to reviewing or amending it.  There seems to be a political consensus across the Brexit spectrum that that is the right approach in principle.

However, delivering that approach is far more difficult than it might sound.  The comparison is sometimes made to the position of former UK colonies as they achieved independence (who typically chose on independence to retain existing colonial laws until their new legislatures were able to reform them).  But the exercise is in fact far more complex than that.

To understand why that is so, it is necessary to recall some basic points about EU law.

First, the EU Treaties themselves create a range of rights and obligations affecting Government and private parties that are directly effective in, and have profound effects in, domestic law (examples include many aspects of the four freedoms, the competition rules, and so on).  But whatever Brexit means, it must mean no longer being subject to the EU Treaties.

Second, EU law requires certain remedies for breaches of EU law obligations: these include the general right to effective protection, and in particular the right to damages (eg for manifest and serious failure to implement EU law obligations and for breaches of the competition rules), the right to repayment of tax levied in breach of EU law, and the right to injunctive relief.

Third, any EU legal instrument is to be interpreted against the background of fundamental principles.  These include, among many others, principles such as non-discrimination on grounds of nationality, proportionality, achieving the single market, the prohibition of abuse of right, and (in the tax field) fiscal neutrality.   Those principles also apply to national measures, both legislative and administrative, that give effect to EU law obligations (such as legislation implementing EU directives and regulatory and administrative decisions in areas governed by EU law): and they are combined with a principle that (so far as at all possible) all national law is to be construed so as to comply with those EU obligations, and that even where it does not, private parties are entitled to assert those non-implemented obligations against the State.  Many fundamental principles of EU law are set out in the Charter of Fundamental Rights, which includes not just principles derived from the European Convention on Human Rights (in relation to which the Human Rights Act 1998 will continue to have effect) but also a number of principles drawn from the case-law of the European Court of Justice (such as the right to good administration, to take just one at random).

Fourth, much EU regulation involves a complex web of decision-making as between national and EU authorities, with decisions by EU and other Member State authorities being given effect to or recognised in national law: medicines regulation is a good example.

Against that background, it can be seen that any attempt to maintain the substance of EU law post-Brexit needs to grapple with some difficult and important questions.  These are just some.

(a) To what extent will UK courts, in interpreting the “preserved” EU law provisions, be permitted or required to follow post-Brexit decisions of the European Court of Justice on the meaning of those provisions?  On the one hand, following such later interpretations amounts to giving continued effect to decisions of the ECJ, and to do so in a situation where the UK will not have been able to argue for its preferred approach before the ECJ.  On the other hand, not following them allows divergences to grow between EU and UK law in areas where there might be much to be said for trying to maintain consistency in order to facilitate trade and to avoid UK companies with significant EU exports from the costs of having to comply with two different regimes.

(b) Will those parts of the Treaties that confer directly effective rights be preserved?  Removing them would amount to major legal change and would have knock-on implications that would require careful thinking-through; but preserving them (and in particular ones that reflect EU objectives such as non-discrimination) would seem difficult to reconcile with not being in the EU.

(c) Are the fundamental rights and principles set out in the Charter to remain part of UK law, at least in relation to the “preserved” areas of EU law?

(d) Where substantive rights and obligations are retained, to what extent will UK courts be required to interpret them consistently with EU law principles?  If they are so required, that would lead to odd results where the principle is one that sits uneasily with our no longer being in the EU.  If they are not, that will amount to a substantial but highly uncertain change in the right/obligation supposedly being preserved.  (An example here is the EU competition rules, which are interpreted against the background of the objective of completing the single market, resulting in a strict approach to restrictions of parallel imports between Member States; the world of VAT is also full of examples where the meaning of VAT provisions is significantly affected by general EU law principles.)

(e) Will national rules passed pre-Brexit to implement EU law obligations such as directives still, post-Brexit, be subject to the principle that they are required to be interpreted, if possible, so as to comply with those (no longer existing) obligations?  What happens when those EU directives are amended post-Brexit?

(f) Will remedies provided for by EU law (including remedies against the State) be retained?

(g) What is to be done about regimes that give effect to or recognise decisions of EU authorities or other Member States?

(h) What will the continuing effect be of Commission and other EU guidelines and recommendations (a key part of the administration and interpretation of many EU law regimes)?  What happens as those guidelines and recommendations develop post-Brexit?

These are only some of the issues that need to be decided.  Refusing to decide them would lead to such serious uncertainty that it is hard to see how it would be consistent with the rule of law (and on a more mundane level the uncertainty would harm vital sectors of the UK economy, such as pharmaceuticals, agriculture, telecommunications, and financial services).  But deciding them will involve complex and case-by-case analysis of the implications of the different options and, in many cases, important policy choices with a significant impact on business and private citizens.  And, as will be clear, these decisions will include decisions about whether UK citizens will continue to have the benefit of various fundamental rights and remedies that they currently enjoy as a matter of EU law.

As my earlier blog (here) pointed out, Parliament will, when it considers the Great Repeal Bill, need to consider carefully the extent to which it is prepared to allow Ministers to take such decisions and how it will scrutinise them when they do: there are profound issues here for the rule of law and for the role of Parliament in determining the basic rights and obligations of the citizen.

Professor Panos Koutrakos has addressed an international audience of180 senior procurement executives from the most influential corporations across the globe at the Europe Forum 2016 (organized by Procurement Leaders). The Forum took place in Amsterdam on 6 October.

Professor Koutrakos participated at a panel on ‘Brexit Update:How is procurement dealing with the fallout from Brexit?’ He discussed the likely arrangements between the UK and the EU and the legal issues raised by the introduction of a ‘Great Repeal Act”. He examined issues of timing and the possibility for transitional arrangements. He also answered questions about the legal risks that companies face in the context of both existing and future contracts.

Since the EU Referendum,  lawyers and the public have asked when the Government would start the process of exit from the EU and what , in substantive terms, Brexit would mean. This post, together with George Peretz’s post “The Great Repeal Bill: a giant Henry VIII clause? “, seeks to provide some answers.

As a consequence of the Prime Minister’s speech to the Conservative Party Conference  on 2 October, we are beginning to see what the UK Government’s opening gambit on Brexit might mean. But the Prime Minister has made clear that she will not disclose the detail of the negotiation as it unfolds. Whatever the stated aim and whatever the starting  point, be prepared for stormy water and a change of course. Anyone previously  involved in interstate negotiations will recognise that life is full of surprises.

First, as to timing of notice to the EU, the giving of notice under Article 50 will take place by the end of March 2017. The question whether giving of notice requires an act of parliament before Article 50 can be triggered is about to be litigated. If the claimants are right, the UK Courts could order/declare that the Secretary of State should  introduce  primary legislation, which would be constitutionally innovative. It would mean that, by the effective date of Brexit,  at least three acts of parliament would have been necessary to give effect to withdrawal from the EU.

Secondly, the Prime Minister announced the introduction of a Great Repeal Bill, which would mean that the European Communities Act 1972 would no longer apply from the date when the UK leaves the EU. That is hardly a surprise , given that the 1972 Act provides for the supremacy of EU Law over  UK domestic law.

Thirdly, as to the content of the Great Repeal Bill,  the Prime Minister said: “ As we repeal the [1972 Act] , we will convert the acquis – that is, the existing body of existing EU Law – into British law. When the Great Repeal Bill is given Royal Assent, Parliament will be free –subject to international agreements and treaties with other countries  and the EU on matters such as trade – to amend, repeal and improve any law it chooses. But by converting the acquis into British law, we will give businesses and workers maximum certainty as we leave the European Union. The same rules and laws will apply to them after Brexit as they did before. Any changes to the law will have to be subject to full scrutiny and proper Parliamentary debate.”

This passage helpfully  recognises the complexity of repealing, amending, improving  and/or  re-enacting EU Law. Those laws are contained in the EU treaties some of whose provisions are directly applicable; in regulations which are directly applicable, but whose enforcement machinery may already be contained in domestic laws; in directives which have been incorporated into domestic law. There are also questions about the fate of  broader horizontal EU legal concepts such as the doctrine of direct effect. Even if EU Law were to be swept away, there are frequently  international treaty obligations which sit behind  EU Law, for example, in the environmental law field (the Aarhus Convention or the  Strategic Environment Assessment Protocol)  or  in the aviation field (the Chicago Convention) .

Does the passage mean that , by the time of the enactment of the Great Repeal Bill, Parliament will already have decided which laws were to be re-enacted and which laws were to be amended, repealed or improved?  Is it practical for the process of reconsidering EU laws and of consulting on changes  to be completed within a two year time frame ?   If not , the answer must be that the acquis would  be re-enacted lock, stock and barrel, subject to further amendment over the ensuing years. That would be the only way to ensure the “maximum certainty” that the Prime Minister seeks.

But, fourthly,  if a lawyer is advising a client who is thinking more strategically in a longer time frame , what might the amendments, repeals or improvements comprise? Lawyers might find some of the answers in the Government’s own Balance of Competence Reviews carried out in each policy sector by Government departments between 2012 and 2014. This was a serious attempt by the Coalition Government to ascertain how, in  the view of stakeholders and commentators  ,  the balance between EU competence and national competence should be articulated.

Fifthly, for the future, the Prime Minister said three things:

(a) The future was to be a global future;

(b) “It is not a… negotiation to establish a relationship anything like the one we have had for the last forty years or more. So it is not going to be a “Norway model” . It’s not going to be a “Switzerland model”…. I want it to include cooperation on law enforcement and counter-terrorism work. I want it to involve free trade in goods and services . I want  to give British companies the maximum freedom to trade with and operate in the Single Market – and let European companies do the same here…”

(c)  But ….we are not leaving the [EU] only to give up control of immigration again. And we are not leaving to return to the jurisdiction of the European Court of Justice”

That seems a clear signal that the UK will not seek to retain membership of the EEA. The UK has also recognised the shortcomings of the Swiss model, involving the negotiation of an endless stream of individual bilateral agreements, which the EU has itself criticised. Moreover, in signalling that the UK will not accept free movement of workers , that  is surely a tacit acceptance that full access to the Single Market has been abandoned since free movement is likely to be a non-negotiable pre-condition of full access to the Single Market. Finally, without rulings by the CJEU, it is difficult to see how the uniform application of EU laws that do apply to the UK in the future can be guaranteed.

It is challenging to predict what the Brexit endgame will produce.  Yet in practical terms, lawyers need to try to manage legal risk in an environment where a future legal framework has yet to be articulated .  Given the significant uncertainties ahead, lawyers should not be afraid to raise their concerns and suggested solutions with the Government now. In that way, lawyers, acting with their clients,  can start to influence thinking in a positive way.

This text is based on a talk given at a workshop for lawyers at Eversheds LLP on 4 October. Other panellists at the workshop were David Unterhalter SC, Peter Oliver and Professor Panos Koutrakos.

The Prime Minister has now announced that the 2017/2018 session of Parliament will feature a “Great Repeal Bill” to achieve the repatriation of EU law to the UK.

The Bill will, in particular, repeal section 2 of the European Communities Act 1972, which has long been a target of attack by those concerned by the impact of EU law on Parliamentary sovereignty.  Section 2(1) of that Act provides that EU law has effect in the UK and must be followed by the courts; section 2(2) gives wide powers to ministers to amend UK law to make it consistent with the requirements of EU law.

Section 2(2) is frequently criticised for being a “Henry VIII” provision: that is to say, it allows ministers to make wide-ranging changes to UK law without having to go through the process of primary legislation.

However, it is unlikely that the Great Reform Bill will see the end of Henry VIII clauses.  Indeed, a prominent lawyer on the “leave” side of the Brexit debate has argued that section 2(2) should not be repealed.  Instead, it should be “extended” to give ministers more power to amend UK law by statutory instrument.

Why will that be necessary?  The problem is that, before Brexit takes effect, something will need to be done about all the areas where EU law forms the legal basis for UK regulations: and it is common ground that very large parts of those regulations will need to be kept after Brexit.

Unfortunately, that is not going to be a simple task.  It is not possible just to pass a short Act saying the old rules remain in force, because they were drafted on the assumption that the UK is a member of the EU.  So, for example, EU regulations on agriculture frequently refer to the powers of the European Commission; and EU rules on medicines are a complex web of regulations giving powers to European institutions (the Commission and the European Medicines Agency) and involve recognising decisions of those bodies and of regulators in other Member States. Similarly the regulatory framework for telecoms, railways, energy, airports and air traffic all stem from European law.   There are countless other examples.  In order to avoid legal black holes, these rules will all have to be reviewed and replaced before Brexit with a new version that works in the post-Brexit world.  Much of this is technical stuff – vitally important to those affected and requiring political judgments, but not likely to be regarded as a matter of intense political controversy.  Some of it, though, will require important decisions on politically contentious matters such as environmental protection and workers’ and consumers’ rights.

So, in the period before Brexit comes into effect, a vast amount of work will have to be done to establish whether rules needed amending in areas such as financial services, regulation, pharmaceuticals, employment, agriculture, product safety and so on.  Daniel Greenberg, a former Parliamentary draftsman, describes this as “the largest scale legislation and policy exercise that has ever been carried out”.  The exercise will be even more complex (and accelerated) because it is likely that uncertainty as to the precise arrangements between the EU and UK after Brexit will persist until quite late in the day, so that detailed regulation will not be able to be finalised until that point.

There is no way in which Parliament will be able deal with this by primary legislation, within the 2 year time limits imposed by Article 50.  Once that time limit expires, the EU provisions will no longer apply, leaving the UK with a legal vacuum.  To reduce the length of uncertainty, the Great Repeal Bill will necessarily have to give power to ministers to make new laws in all these fields by statutory instrument.

That raises profound issues for Parliament.  When section 2(2) of the 1972 Act has been employed as a basis for secondary legislation, it has been used to implement EU legislation that has already undergone considerable scrutiny at EU level (by member states and the European Parliament).  In contrast, Parliament’s scrutiny of UK statutory instruments is widely regarded as seriously deficient (not least because there is no power to propose amendments).

It also raises important questions for Whitehall: in particular, it is not clear that the Government Legal Department (whose numbers have been very substantially reduced in recent years) will have the capacity to take on the amount of extra work that needs to be done, at least without a substantial recruitment campaign. And expertise in the numerous technical and policy areas affected cannot be acquired overnight.

So there is a serious risk that swathes of legislation, drafted in a hurry by overworked civil servants with inadequate knowledge of the areas concerned, will be waived through without Parliament having the means or capacity to scrutinise effectively what is being proposed. The extent of Parliamentary scrutiny depends on the terms of the parent act, and in most cases Parliament’s control is limited to approving, or rejecting, the instrument as laid before it: it cannot (except in very rare cases) amend or change it.  Not only would that sit uneasily with many leavers’ concerns to improve democratic control of the executive and to restore Parliamentary sovereignty, but it would create the risk of generating serious costs for business in dealing with inadequate, unclear, or even perverse, legislation.  The scale of the task of getting this right should not be underestimated by either Parliament or Whitehall.  Parliament will need to make certain, as it considers the Great Repeal Bill, that the powers that the Bill is bound to confer on ministers should be exercisable only after proper scrutiny by Parliament and after wide consultation and careful consideration.  If the price of a quick Brexit is rushed and incoherent legislation, prepared with inadequate democratic scrutiny and giving rise to substantial costs to business, even many leavers will wonder if that is a price worth paying.