Is the EU (Withdrawal) Bill Deficient in the Context of Continued Access to the Aviation Single Market?

In the context of post-Brexit access to the EU’s Aviation Single Market, it is doubtful whether the introduction draft of the European Union (Withdrawal) Bill (EUWB) is adequate to serve its intended purpose of providing a clear, certain and reliable legal framework to enable businesses, individuals and regulators (in the UK and EU) to plan ahead for a long term future.

My purpose is to analyse a few illustrative aspects of the EUWB in an aviation context. It should be read with the texts to which links are provided below (presentations at the DFE in Copenhagen and at the FIDE Foundation in Madrid, as well as Julian Gregory’s post on the EUWB). Some of my points concerning retained EU law, retained EU case law and the use of enabling powers are of wider application. But this post is not a comprehensive survey. Nor does it purport to tackle the question of whether or not the CJEU’s jurisdiction should continue beyond Brexit.

The underlying assumptions are as follows:

• The draft EUWB is chasing a moving policy target set by UK Ministers. It will undoubtedly be amended in the course of its parliamentary passage.
• Different sets of domestic rules will be needed to implement the different outcomes that will result from the EU/UK negotiations. As the Queen’s Speech said, eight bills will be introduced to give effect to UK policy on exit from the EU. That will include a trade bill and an immigration bill. Those bills, which have yet to be introduced, may have a bearing on the problems which will be identified.
• In any policy area, such as aviation, where the UK continues to seek access to the Single Market, the 27 other Member States (EU27) are likely to demand that the UK should continue to apply the substantive rules that apply to the EU27.
• The UK is unlikely to wish (as it could do) to join the European Common Aviation Area in its own right in the long term  since it would require adherence to EU laws in the aviation sector.
• Agreement on a post-Brexit future is urgent. For flight scheduling reasons, the practical deadline for a sustainable EU/UK agreement is far in advance of 29 March 2019.

A Mutual recognition of compliance standards has led to a thriving Aviation Single Market. Access to the Aviation Single Market is one of the key areas where the UK Prime Minister has said that the UK wishes to continue to have access to the Single Market (see point vi of the letter of 29 March 2017 from Mrs May to President Tusk). The central purpose of the Aviation Single Market is to create a mutual recognition system under which licences, authorisations and permissions granted to Community air carriers in one Member State are recognised in every other Member State of the EU, thus obviating the need for each carrier to meet regulatory compliance requirements in each Member State to and from which it flies. For present purposes, it suffices to say that this approach has resulted in a common EU framework for the protection of aviation safety and of aviation security, as well as for safeguarding of consumer interests. It is also a cost effective system, which has enabled the growth of “no frills” airlines.

Once the UK leaves the EU, its air carriers will no longer be able to benefit from this system unless either (a) relevant pre-existing bilateral air services agreements are said to have survived the advent of the Aviation Single Market and are capable of covering the necessary ground enacted in subsequent EU legislation or (b) the EU and the UK agree that UK air carriers should continue to have access (whether for a transitional period or longer) as if they were deemed still to be Community air carriers or otherwise by virtue of a mutually acceptable mechanism.

Initially there is little doubt that, at the point of exit, the UK domestic rules will in substance comply with the EU aviation acquis. But in order to benefit from continued access beyond the date of exit, the UK (including as necessary the devolved administrations) will have to demonstrate that its post-Brexit domestic rules are consistent with those that will continue to apply in the EU27. In their turn, the EU27 will have to demonstrate that they are in a position to honour their side of the bargain. That could be achieved by the adoption of a fresh interim EU regulation which imposes a fresh obligation to recognise UK licences, permissions and authorisations.

Will the EUWB, as drafted, fulfil its key objective of substantive legal certainty? The key relevant provisions of the EUWB to preserve EU-derived laws as national laws are clauses 2, 3 and 4. Together these provisions comprise a body of law to be called “retained EU Law”. Retained EU Law will comprise (a) preserved  legislation (in essence, domestic laws implementing EU obligations arising under directives) and (b) converted EU legislation (comprising directly applicable EU regulations and regulations adapted for EEA purposes , as well as rights that are recognised and available under the EU treaties). But retained EU laws will be frozen as at the date of exit.  Retained EU laws will no longer (clause 5) have primacy as EU law currently does. Moreover, all retained laws are subject to clause 7 (enabling powers to legislate to deal with deficiencies arising from Brexit), clause 8 (enabling powers to legislate to enable compliance with international obligations), clause 9 (enabling powers to legislate to implement the withdrawal agreement, available only up to exit day)and to Schedules 1 and 2/EUWB.

The UK Government’s hope is that fossilisation of EU law as UK domestic law will avoid the abyss of legal uncertainty. However, any seasoned EU negotiating team will question whether, from an EU27 perspective, the EUWB provides adequate assurance that the common rules underpinning the Aviation Single Market acquis would continue to be respected by the UK post-Brexit. Here are some examples of questions to be addressed:

• The effect of the EUWB is to bring back future legislative control to the UK. Politically, that seems to be an imperative. But if the UK wishes to enjoy continuing  access to the Single Market, if only in a transitional period, the EUWB carries no guarantee that future changes by the EU27 to the fossilised EU rules would also be implemented in the UK.
• The Bill confers enabling powers to make secondary legislation to correct deficiencies arising from withdrawal. The so-called Henry VIII powers allowing changes to primary legislation have come under heavy fire. But the availability as such of Henry VIII powers is not necessarily a fault line; rather it is the way in which the powers might be used.  After all, some amendments to primary legislation will be obvious – they will include defensible aims  such as amending references in retained EU law to the role of the European Commission which will no longer (at least from a UK Government perspective) have any jurisdiction  in a UK domestic context. Equally a deficiency would not exist simply because a UK Minister considered that pre-exit EU policy was itself flawed. But the terminology of “deficiency” is intended to be very wide. And, more importantly, what else might the definition permit?
• It is fair to say that the power to amend retained EU law contains a sunset clause (and cannot be used after a date two years from Brexit). But, beyond the sunset clause, the UK Government has made clear that, as part and parcel of taking back legislative control, the Government will be able to review and amend in the longer term any laws on the UK statute book.
• The UK Government would argue (paragraph 16 of its Enforcement and dispute resolution position paper) that, by virtue of clause 8 , it would implement its international obligations vis-a-vis the EU. That would in principle include compliance with any new aviation-related obligations adopted by the EU.  But it is debatable whether a government which favours deregulation (and has consistently criticised perceived EU overregulation) will in fact make any open-ended promises in respect of future EU legislative obligations arising in the aviation sector over whose content it will have no control.
• It is clear that there can be no gaps in the coverage of the compliance system at the point of exit since the necessary rules will have to be applied seamlessly before and after exit if the UK is to be granted continued access to the Aviation Single Market.
• It is debatable whether Clause 9 would  be available to avoid gaps in the system. It is limited to implementation of a withdrawal agreement under Article 50/TEU. Yet the content of rules on future access to the Aviation Single Market does not obviously fall within the scope of Article 50/TEU.

In summary, against this uncertain domestic legislative background, is it realistic to think that full access to the Aviation Single market is likely to be agreed by the EU27 unless the UK guarantees (which the EUWB does not) to play by the same rules as the EU27 are bound to do by virtue of their EU membership? Specifically, there is no obligation to implement new EU rules adopted after Brexit or to preserve retained laws in the long term or to give effect to continuing jurisprudence of the CJEU. On that basis, is the concept of retained law in the EUWB, if it is to be fossilised at the date of exit  but subject to amendment thereafter, going to guarantee the uniform application of the EU Aviation acquis post Brexit?

B Uniform interpretation of retained case law. If legal certainty is the aim of the EUWB, businesses, individuals and regulators will wish to have clarity not only about what substantive rules in a post-Brexit future will continue to apply but also about how the Courts will approach the interpretation of those rules. Uniform application of the law across all 28 States which adhere to the post-Brexit settlement is critical.

Under clause 5 (1), the principle of supremacy of EU law will only be applied in the context of the past, viz, it will not apply “to any enactment of rule of law passed or made on or after exit day”.

This approach is carried over into clause 6 which is the key provision on interpretation in the EUWB. In essence, as a matter of UK domestic law, any question as to the interpretation of retained EU law will be governed by retained CJEU case law and retained general principles of EU case law as they exist at the date of exit (clause 6(3)). But the Supreme Court will not be bound to adhere to retained CJEU case law (clause 6(4)). The UK courts may also apply future CJEU case law arising after exit day but need not do so (clause 6(2)).

Trust in the good sense and principled approach of the UK judiciary  is a reasonable stance to take. Thus, in the period prior to incorporation of the ECHR into UK domestic law in 1998, the UK courts took account of the jurisprudence of the Strasbourg court on the basis that their interpretation of the law ought not to be inconsistent with the UK’s international obligations under the Convention. But fossilisation of CJEU case law is a different concept altogether. Would it result in the legal certainty that is the UK’s goal in the context of the UK’s preferred, continued access to a future Aviation Single Market?

Four points arise. First it pre-supposes that CJEU case law as it applies to the EU aviation acquis at the point of exit is capable of being clearly articulated. The CJEU’s purposive approach to construction of EU Law in its judgments, as well as its forays, albeit infrequent, into judicial policy-making, do not always result in clarity. Secondly, the possibility that the Supreme Court will decide not to follow retained case law, even if the power is likely to be used sparingly, leaves open the possibility of divergence among the courts of the EU27 and of the UK. Thirdly, as Lord Neuberger has implied, the Supreme Court’s powers to depart from retained CJEU case law may amount to an abrogation of Parliament’s duty to legislate with clarity (“to blame the judges for making the law when parliament has failed to do so would be unfair” – BBC 8 August 2017). Fourthly, even if there remains a discretion to apply future CJEU jurisprudence (clause 6(2)), it is not obvious how the domestic courts will approach the discretion.

The EU position papers suggest that the protection of the CJEU’s role in the context of interpretation of the withdrawal agreement is near sacrosanct (see paragraph III.5 of the Annex to the Council Decision of 3 May 2017 authorising the commencement of negotiations with the UK). That is hardly surprising. The same approach is likely to apply in respect of a transitional agreement under which the Aviation Single Market rules continue to apply. The uniform application of the same legal rules should be the cornerstone of a legal system.

C Power to create new agencies. Clause 7 of the Bill contains enabling powers which will be of considerable importance in the aviation sector.  One such power is the power to “provide for functions of EU entities or public authorities in member States (including making an instrument of a legislative character or providing funding), to be …exercisable instead by a public authority (whether or not newly established for the purpose) in the United Kingdom…” The conferral  of enabling powers on the executive to create agencies with law-making powers is startling but a sign of the times.

Regulatory oversight in the EU aviation sector is split between the national designated bodies (the Civil Aviation Authority for the UK) and the European Aviation Safety Agency (EASA). On behalf of the Member States, EASA has the responsibility to certify each product used in aircraft manufacture for which a type certificate is required, as well as to certify each product for which an environmental certificate is required.

Taking the functions of the EASA as an illustration, there are four options available to the Government. One option would be for the UK to seek non-EU  membership of EASA, which would exclude voting rights at EASA. But such membership would require adherence to the EU aviation acquis. A second option would be to create a new agency by secondary legislation. But it is common ground that almost all the relevant home-grown expertise in the  certification of types of aircraft has relocated to Cologne, EASA’s current location. So there is a doubt about whether the relevant expertise could be home-grown in the available time scale. A related, third option would be for the Civil Aviation Authority to take on EASA functions, but they too would be hampered by the absence of home-grown expertise. But could the CAA (if powers permit) contract with EASA to continue to provide the type approval function that it currently does? The fourth option would be for a direct agreement to be reached at the interstate level in the proposed  transitional agreement and for the enabling power in clause 7(2)(c) to be used to make appropriate reciprocal arrangements in an interim period.

There is a stark question for Parliament in this kind of situation. The question who should provide type certification for the UK concerns grave questions about how to ensure aviation safety in a post Brexit future. Is it right for enabling powers to be used for the conferral of such a critical function as ensuring the safety of types of aircraft licensed to operate in the EU and, by extension, UK? Typically, issues such as this would have been properly considered as apt for the use of primary legislation. It is no answer to say that affirmative resolution procedure would adequately address the issue because even the affirmative procedure would not permit either House to amend the draft legislation. If of course a form of super scrutiny of the use of enabling powers were adopted by Parliament, this objection might fall away. But it seems that Parliament has not yet decided  how to exercise its duty to scrutinise secondary legislation under the EUWB  (see Recommendations in the 9th Report of the Session 2016/17 of the Parliamentary Select Committee on the Constitution).

In conclusion, the parliamentary process may result in amendments to the EUWB which have an impact on the points made above. Some deficiencies could be curable by the way in which secondary legislation under the EUWB’s enabling powers is framed. But the draft EUWB presently falls short of its stated aim of creating an adequate level of legal certainty for long term planning purposes.

Christopher Muttukumaru CB

Monckton Chambers

Formerly General Counsel to the UK Department for Transport.

Links

Danish Association for European Law : Monckton Chambers Brexit blog: 12 April 2017: Aspects of post-Brexit regulation in the Aviation sector: the last scene that ends this strange and eventful history.

FIDE Foundation, Madrid (Fundacion para la investigacion sobre el derecho y la impreso) 8 May 2017: Will this all end in tears (or how will this strange and eventful history end?)?

Julian Gregory’s Brexit blog post on the European Union (Withdrawal) Bill] The EU (Withdrawal) Bill: some initial thoughts