In this post, Ben Rayment and Harry Gillow (Barristers, Monckton Chambers) explore the continuing effect of pre-Brexit EU law in domestic law and, in particular, the contrasting approaches of two cases (Lipton and Adferiad).
The EU (Withdrawal) Act 2018 (as amended) (“the 2018 Act”) sets out those parts of EU law that flowed up the legal estuaries and rivers of the UK during its membership of the EU and which remain, for the time being at least, part of the legal reservoir of domestic law after Brexit. This reservoir of legal rules is called retained EU law.
For those perplexed by this topic and seeking a general guide as to the different types of retained EU law should refer to an earlier blog here.
The provisions of the 2018 Act are complex as illustrated by the fact that two early cases Lipton ([2021] EWCA Civ 454) and Adferiad ([2021] EWHC 3049 (TCC)) take seemingly different approaches under the 2018 Act to the status of general principles of EU law in domestic law.
Lipton concerned a passenger’s claim for compensation for a cancelled flight under Regulation (EC 261/2004). There was no dispute between the parties that the Regulation was binding as retained EU law pursuant to s.3 of the 2018 Act, nor any dispute concerning what the terms and effect of the retained Regulation were. The Court of Appeal nevertheless considered it desirable to provide general guidance on the new measures in the 2018 Act which regulate the extent to which the existing corpus of EU law is incorporated into domestic law following Brexit. See here.
In the course of that explanation Green LJ interpreted paragraph (2) of Schedule 1 to the 2018 Act, which states:
“No general principle of EU law is part of domestic law … if it was not recognised as a general principle of EU law by the European Court in a case decided before IP completion day (whether or not as an essential part of the decision in the case).”
Green LJ (at [64]) held that “Schedule 1 paragraph (2) [of the 2018 Act] entitled “General Principles of law”, makes general principles part of domestic law provided that they were recognised in relevant case law prior to IP completion day [i.e. 31 December 2020].” In other words, the effect of Schedule 1 paragraph (2) is to incorporate all general principles of EU law into domestic UK law.
Adferiad concerned an application to strike out a public procurement claim that sought to rely on certain general principles of EU law that it was alleged had been recognised in relevant case law prior to IP completion day. In its judgment the court in Adferiad (HHJ Keyser QC) said (at [117]) that it disagreed that paragraph 2 of Schedule 1 to the 2018 Act has the effect suggested by Green LJ. Although it concluded that the general principles of EU law relied on by the claimant to found its cause of action were not part of domestic law it stated that general principles of EU law could be part of domestic law for some other reason – possibly by virtue of s.6(3) of the 2018 Act.
Irrespective of the correct interpretation of paragraph 2 of Schedule 1 to the 2018 Act, it concluded that the claimant’s cause of action based on general principles of EU law was precluded by paragraph 3 of Schedule 1, which provides “there is no right of action in domestic law on or after IP completion day based on a failure to comply with any of the general principles of EU law” (nor, in summary, may a court or tribunal or other public authority find any rule or conduct unlawful on this basis).
In Court’s judgment, paragraph 3 of Schedule 1 to the 2018 Act was “straightforward”: general principles of EU law do not ground a cause of action in domestic private or public law. The upshot, so far as the Court was concerned, was that general principles of EU law “are a form of interpretative rule as regards any question concerning the validity, meaning or effect of any retained EU law” pursuant to s.6(3) of the 2018 Act.
The reasoning in both cases in relation to the status in domestic law of general principles of EU law is to a degree unsatisfactory. Indeed, it is striking that in both cases it was not actually necessary to reach a conclusion on the precise status in domestic law of general principles of EU law.
In Lipton there was no dispute that the Regulation in question was part of retained EU law and therefore the position in relation to general principles of EU law was entirely irrelevant: Green LJ’s comment at [64] was not based on any argument or detailed analysis.
In Adferiad, too, the real question was whether the general principles of EU law being invoked were part of retained EU law or not. That question falls to be determined pursuant to s.4 of the 2018 Act, which in turn refers to the rights incorporated by s.2(1) of the European Communities Act 1972 (“the ECA”), namely:
“All such rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under the Treaties, as in accordance with the Treaties are without further enactment to be given legal effect or used in the UK shall be recognised and available in law, and be enforced, allowed and followed accordingly; and the expression ‘enforceable EU right’ and similar expressions shall be read as referring to one to which this subsection applies.”
Although no consideration was apparently given to s.2(1) of the ECA in Adferiad, the way general principles of EU law have been developed by the European Court prior to IP completion day in the procurement field have created at least indirectly rights “arising by or under the Treaties” within the meaning of section 2(1) ECA, and which are therefore retained as part of domestic law by the operation of section 4 of the 2018 Act (unless specifically excluded). Accordingly, the 2018 Act does not confine general principles of EU law solely to an interpretive function in relation to retained EU law but may also confer on them the status of retained EU law and therefore having effect as enforceable rights of action.
The obiter conclusion expressed by the Court of Appeal in Lipton that general principles could be part of domestic law is correct, but the reason given for it (paragraph 2 of Schedule 1) is not the actual reason for this effect (although paragraph 2 does reflect the fact that general principles can be part of domestic law as the result of the operation of s.4 of the 2018 Act).
In Adferiad the Court rejected the claim based on general principles on a number of independent grounds one of which (see [129]) was the existence of certain regulations that exclude from domestic law certain rights derived from the free movement provisions of the TFEU viz., the Freedom of Establishment and Free Movement of Services (EU Exit) Regulations 2019 (“the Two Freedoms Regulations”) regs 2 to 4, and the Public Procurement (Amendment etc) Regulations 2020, reg.25.
But what is not clearly stated in the judgment is that these regulations exclude from domestic law rights derived directly or indirectly from the TFEU that would otherwise be part of domestic law. They do not exclude general principles of EU law from domestic retained EU law. As such the regulations provide further support for the position that rights derived from general principles of EU law which are themselves derived from the TFEU can in principle be part of domestic law rather than serving a solely interpretive function.
Although the analysis in Adferiad centred on paragraphs 2 and 3 of Schedule 1 to the 2018 Act, those provisions only determine the status of general principles of EU law qua general principles of EU law, namely as aids to interpretation of retained EU law. They do not address the question as to whether a general principles of EU law per se can give rise to enforceable rights that are part of domestic law. Schedule 1, para 3 strongly suggests they cannot. One further provision of the 2018 Act, however, that was not examined by the Court and which may need consideration in future in this context is paragraph 39(6) of Schedule 8 to the 2018 Act. That provision expressly qualifies the exclusion in paragraph 3(2) of Schedule 1 for rights of action in public law based on general principles of EU law:
“in relation to any decision of a domestic court or tribunal, or other public authority, on or after IP completion day which is a necessary consequence of any decision of a court or tribunal made before IP completion day or made on or after that day by virtue of this paragraph.”
This exclusion from paragraph 3(2) of Schedule 1 to the 2018 Act is unclear, but it may confer some status in domestic public law proceedings on rights identified in decisions by domestic courts and tribunals prior to Brexit that have been derived from general principles of EU law established in the caselaw of the European Court and which have now been given effect in domestic law via s.4 of the 2018 Act. See, for example, here.
Early indications from these two cases are that the 2018 Act is likely to continue to raise difficult and complicated legal puzzles about the continuing effect of pre-Brexit EU law in domestic law for some time to come.
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