In this post, Jack Williams of Monckton Chambers addresses obiter dicta in the recent Supreme Court judgment in Lipton v BA Cityflyer Ltd [2024] UKSC 24 concerning the status of, inter alia, the Trade and Cooperation Agreement (“TCA”) in domestic law.
I have set out the factual background in Lipton in a previous blog post concerning the Supreme Court’s assessment of the status of causes of action for breaches of EU law prior to Brexit that have nonetheless accrued and remain enforceable even post Brexit. The judgment of Lord Sales and Lady Rose (with whom Lady Simler agreed) is also interesting in another respect concerning the distinct topic of “relationship agreement law” (the law stemming from the UK’s implementation of the new relationship deals between the UK and EU post Brexit, most notably the TCA). I have addressed that body of law before here.
As I set out more fully in that blog post, the European Union (Future Relationship) Act 2020 (“2020 Act”) implements the TCA (and other agreements) by three techniques: first, certain provisions of the agreements have been specifically incorporated in domestic law, whether within the Act itself or by amendments to other enactments; second, other provisions of the agreements have been made directly applicable in domestic law; and third, the Act creates powers for ministers or devolved administrations to make secondary legislation to enable other provisions to be implemented.
Section 29 of the 2020 Act, as part of the second category in that schema, makes provision for the general implementation in domestic law of, otherwise unimplemented, TCA provisions. It provides that “existing domestic law” has effect “with modifications as are required for the purposes of implementing in [domestic law] the [TCA]”. This requires public authorities, private parties, and the Courts to conduct three exercises in respect of international agreements (without any guidance): first, to identify relevant domestic law; second to consider whether the domestic law is compatible with any corresponding provision of the TCA (if applicable); and third, to modify domestic law to the extent necessary.
Although a somewhat broad and ill-defined power, it must be recalled that section 29 of the 2020 Act applies only:
- to “existing domestic law”, which is defined in a narrow way – essentially only any domestic law in force prior to the TCA: see section 29(4). This means that later Acts of Parliament, for example, are not subject to the modification duty.
- to obligations of the TCA “not otherwise so implemented” already. It is thus overridden by any specific legislation designed to implement the relevant provisions of the TCA. One would imagine (indeed, hope) that over time section 29 thus becomes less relevant once other mechanisms in the Act to implement the Agreements are utilised.
- insofar as modifications are “required” for the purposes of implementing the TCA and so far as such implementation is “necessary” for the purposes of complying with the international obligations of the UK under the TCA. Since much of the TCA is intended to operate on the international plane only and without creating domestic rights and obligations, the material scope of section 29 is thus likely to be limited.
In the Court of Appeal in Lipton, Green LJ nonetheless commented on the apparent breadth of section 29 of the 2020 Act and its impact in the following terms:
“The section transposes the TCA onto domestic law, expressly and mechanistically changing it in the process. Following section 29 domestic law on an issue means what the TCA says.… The phrase ‘has effect’ is important. Parliament has mandated a test based upon the result or effect. The phrase ‘has’ makes clear that this process of modification is automatic ie it operates without the need for further legislative intervention. The concept of modification is interpreted broadly in section 37(1) to ‘include’ (and therefore is not limited to) amendment, repeal or revocation. Section 29 is capable of achieving any one or more of these effects.”
He also stated that the provision “ensures that the construction of domestic law which best secures compliance by the United Kingdom with its international law obligations is to be applied” and that if “there is inconsistency, daylight or a lacuna then the inconsistent or incomplete [domestic] provision is amended or replaced, and the gap is plugged”.
Considering these remarks, Lord Sales and Lady Rose (with whom Lady Simler agreed) noted that, if this approach were correct, then section 29 of the 2020 Act is “a most extraordinary statutory provision” since it would go beyond the approaches in section 3 of the Human Rights Act 1998 and pursuant to the Marleasing duty in EU Law: [78]. Instead, the Justices held at [79] that:
“section 29 does not have the effect Green LJ suggests in relation to provisions in the [TCA] which are expressed in such general and aspirational terms …. The UK and EU expressly agreed in article COMPROV.16 that nothing in the [TCA] permits that agreement to be directly invoked in the domestic legal system of the UK and that it does not confer rights on individuals. Given that the aim of Brexit was to remove the influence of EU law from our domestic law, it would be entirely inconsistent with that aim and with the wording of article COMPROV.16 to interpret section 29 as having such an intrusive and automatic effect in our law.”
As such, the Supreme Court explicitly states that where, in any future case, a party wishes to put forward an argument that the effect of section 29 of the 2020 Act is to modify the wording
of some existing domestic law on which that party relies, then the court or tribunal “should not have regard to what has been said by the Court of Appeal in this case” or consider itself as required to conduct its own assessment as to whether any modification has taken placed “when the parties are not inviting the court to recognise any such modification”: [80].
Three practical implications arise from this:
- firstly, any party seeking to rely on section 29 to modify domestic law must raise it proactively rather than expect the court to raise the point of its own motion;
- secondly, one should tailor any arguments for the modification of domestic law pursuant to section 29 carefully by applying, as much as possible, provisions of the TCA which can be said to (i) be specific, (ii) confer rights on individuals, and (iii) require implementation on the domestic plane for the UK to be compliant with its international law obligations; and
- thirdly, parties should tailor their proposed remedy (i.e. the modification of the domestic law that is said to offend against the TCA) as narrowly as possible. The clear ‘mood music’ from the Supreme Court appears to be that section 29 of the 2020 Act, even where it applies, may not be as far-reaching in its impact as suggested by Green LJ.
In short, both the application and impact of section 29 of the 2020 Act have potentially been reduced considerably by the Supreme Court.
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