Government consultation on lower courts departing from retained EU law

This post, written by Philip Moser Q.C. of Monckton Chambers, discusses the Government’s new consultation on lower courts departing from retained EU law, which was published today (2 July 2020).

After 31 December 2020, retained EU case law will have the same binding, or precedent, status in domestic courts and tribunals as existing decisions of the UK Supreme Court and High Court of Justiciary in Scotland in relation to any question as to the validity, meaning or effect of any retained EU law. UK courts and tribunals may also have regard to decisions of the Court of Justice of the European Union taken (“CJEU“) after the UK’s departure from the EU, where they are relevant to any matter the court or tribunal is considering.

Thus, pursuant to section 6 of the European Union (Withdrawal) Act 2018, as amended by the European Union (Withdrawal Agreement) Act 2020 (“the 2018 Act”), UK courts and tribunals will continue to be bound by principles laid down by the CJEU, or any decisions made by that court, before the end of the Transition Period (11pm on 31 December 2020) and retained EU law, as far as that law is unmodified on or after the end of the Transition Period, and as far as is relevant to it, is to be interpreted in line with retained case law.

As also presently provided for in the 2018 Act, only the highest courts in the UK, the UK Supreme Court and the High Court of Justiciary (as the final criminal court of appeal in Scotland in cases where there is not a route of further appeal to the UK Supreme Court) are able to depart from retained CJEU decisions.

Today, the Government has published a consultation document (which is here) on whether to extend that power to lower UK courts and tribunals. The Government is currently minded to do so, considering it desirable that courts and tribunals other than the UK Supreme Court and High Court of Justiciary in Scotland should be able to depart from retained EU case law “to allow for the more rapid development of retained EU law”.

The two options being consulted on are:

(1) extending the power to the Court of Appeal of England and Wales and its closest equivalents in other UK jurisdictions; or

(2) extending the power, in addition to the Court of Appeal and equivalent courts, to the High Court of Justice of England and Wales and its closest equivalents in the other UK jurisdictions.

The consultation paper also raises the prospect of “equivalent” courts or tribunals under option 2 being read quite widely. Most obviously, in the tribunals structure, to include the Upper Tribunal and Employment Appeal Tribunal which hear appeals from the First-Tier Tribunal and Employment Tribunal respectively prior to any determination by the Court of Appeal (the Upper Tribunal, as the late Sir John Laws once memorably put it, being “the alter ego” of the High Court). Another such alter ego that may spring to mind would be the Competition Appeals Tribunal (“CAT”). On the courts side, similarly, the Crown Court, whose decisions dealing with cases on indictment are appealed straight to the Court of Appeal.

What is envisaged here, before the ink on the Withdrawal Agreement is quite dry – or at least before the Transition Period has even ended – is an early departure from the concept that was emphasised during the negotiations leading to Brexit, namely that pre-Brexit CJEU decisions would be treated as equivalent to decisions of the UK Supreme Court and would only be departed from – if at all – by further decision of that highest court.

The potential difficulty identified in the consultation paper is the delay and difficulty for litigants having to argue any challenge to retained EU case law all the way up to the Supreme Court, with its limited provisions for “leapfrog” appeals. As the paper also identifies, however, this is to be balanced against (possibly outweighed by) the greater risk of divergence between cases within and across UK jurisdictions, and therefore uncertainty in the law.

Currently, the UK Supreme Court and High Court of Justiciary are required under s6(5) of the 2018 Act to apply the “same test as [they] would apply in deciding whether to depart from [their] own case law” in deciding whether to depart from retained EU case law. The UK Supreme Court test in deciding whether to depart from its own case law is set out in the House of Lords Practice Statement of 26 July 1966, namely “whether it appears right to do so”.  It is this test which the Government favours extending to the lower courts and tribunals.

It is a much broader and less certain standard for departure from retained EU law than even the  test in section 60A(2) and (7) of the Competition Act 1998, as amended by the Competition (Amendment etc.) (EU Exit) Regulations 2019.

Whilst the Olympian standard of “whether it appears right to do so” may be appropriate for a final court of appeal (which traditionally only considers it right to do so in very rare cases), this would be a remarkably vague test to extend to – potentially – a first-instance court. It highlights the conceptual difference between the current situation, of a departure only at the highest level and after the point of challenge has been at least raised and commented upon at several levels of appeal, and a potential departure from binding authority at the first opportunity.

To extend the relevant power to a first-instance court would de facto negate the current binding precedent status of retained CJEU case law (and retained EU law) in UK courts. Far from being equivalent to existing decisions of the UK Supreme Court, they could be departed from wherever and whenever it appeared “right” to the judge to do so.

If that is the intention and desire of the UK Government and Parliament, so be it. It would however lead to a plethora of challenges, as litigants sought to re-litigate the tenets of EU law, and to widespread legal uncertainty as lower courts reached inconsistent decisions on retained EU law. This is particularly likely in the area of EU law, where UK courts have traditionally found a consistent interpretation less than straightforward (to cite one recent example, see the three first-instance decisions in the Sainsbury’s v Mastercard appeals, [2020] UKSC 24 , where two High Court judges and the CAT, on essentially identical facts, came to three conflicting decisions).

On the other hand, if the overriding intention were to provide legal certainty and a continuity of procedural and substantive law, then a useful compromise might be the suggestion put forward by Lord Mackay, the former Conservative Lord Chancellor, which envisaged a sort of national reference procedure for a preliminary ruling from the Supreme Court on a point of retained EU law where a lower court considers that retained CJEU case law should be departed from. This would be, in effect, a procedural legacy from the Treaty of Rome, but that ought not to be considered a disqualifying factor.

The consultation will be open for six weeks from today. The Government intends to make regulations, if any, following this consultation via the affirmative resolution procedure. That is, without full Parliamentary debate. The power to bring such regulations expires on 31 December 2020, so any regulations would have to be made by the Government before the end of this year.

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