Preliminary references during the transition period: business as usual?

In this post, Alexandra Littlewood of Monckton Chambers explores the basis for UK courts’ power to make preliminary references during the transition period, the CJEU’s jurisdiction to answer those references, and the extent to which references handed down after the transition period will be binding on UK courts.

UK courts’ jurisdiction to make references during the transition period

During the transition period, EU law continues to apply in the UK by virtue of section 1A(2) of the European Union (Withdrawal) Act 2018 (the “2018 Act”) and Article 127(1) of the Withdrawal Agreement. This body of EU law includes Article 267 TFEU, under which the UK courts have the power (or duty, in the case of the Supreme Court) to refer questions of EU law to the CJEU if a question meets the criteria for a reference.

UK courts therefore continue to have the power or duty to make preliminary references until 31 December 2020 (or later, if the transition period is extended – see here for discussion). Section 6(1)(b) of the 2018 Act makes clear that a UK court or tribunal cannot refer any matter to the CJEU on or after 11pm on 31 December 2020. As noted below, this is subject to a specific exception for questions concerning the interpretation of the Withdrawal Agreement itself.

CJEU’s jurisdiction during and after transition

The CJEU’s jurisdiction to give preliminary rulings during the transition period (whether the request for a reference was made before or after the UK’s formal exit from the EU on 31 January 2020) is preserved by Article 131 of the Withdrawal Agreement. Article 131 states (emphasis added) that:

“During the transition period, the institutions, bodies, offices and agencies of the Union shall have the powers conferred upon them by Union law in relation to the United Kingdom and to natural and legal persons residing or established in the United Kingdom. In particular, the Court of Justice of the European Union shall have jurisdiction as provided for in the Treaties.”

Under Article 86(2) of the Withdrawal Agreement, after the transition period ends, the CJEU will continue to have jurisdiction to answer questions referred before the end of the transition period:

“The Court of Justice of the European Union shall continue to have jurisdiction to give preliminary rulings on requests from courts and tribunals of the United Kingdom made before the end of the transition period.”

A request for a preliminary ruling shall be considered as having been “made” for this purpose at the moment at which the document initiating the proceedings has been registered by the registry of the CJEU (see Article 86(3)). Pursuant to Article 88, the usual procedural rules shall apply in respect of all preliminary references.

Two recent cases considering references during transition

A recent case management decision of the Court of Appeal indicates that the impending deadline for UK courts to make preliminary references may be a valid reason for expediting the hearing of an appeal involving a request for a reference.  In granting expedition in an appeal against the Competition Appeal Tribunal’s decision in Trucks ([2020] CAT 7), Lady Justice Rose relied on the fact that some of the appellants were seeking a reference, and that such a reference, if made, would have to be made before the end of the transition period.

Earlier this week, however, the Supreme Court sounded a word of caution to litigants rushing to secure a reference before the end of the year. In the course of the hearing in the case of Servier v Secretary of State for Health and others (UKSC 2019/0150), the President of the Supreme Court appeared to express some disquiet about litigants seeking a “hypothetical  reference before the deadline at the end of the year, so there is something in the bank… just in case it might come in useful” (see here at 1:54). Whilst the Supreme Court’s judgment in this matter is awaited, this is a clear reminder that the criteria for making a preliminary reference during the transition period remain the same: the question must be necessary to enable the Court to give judgment – or in other words, not hypothetical – as well as not acte clair.

The binding force of references handed down after the transition period

Any judgment handed down by the CJEU on a reference made during the transition period will have binding force on UK courts, even if handed down after the transition period. This is set out in Article 89(1) of the Withdrawal Agreement:

“Judgments and orders of the Court of Justice of the European Union handed down before the end of the transition period, as well as such judgments and orders handed down after the end of the transition period in proceedings referred to in Articles 86 and 87, shall have binding force in their entirety on and in the United Kingdom.”

Article 89 is given effect in domestic law by section 7A of the 2018 Act.

The binding force conferred by Article 89 of the Withdrawal Agreement on these preliminary rulings will have wider implications than merely determining the interpretation of EU law in the proceedings in which the question was referred. The wording of Article 89 (“in their entirety on and in the United Kingdom”) indicates that the CJEU’s ruling will also have binding force in any future case that comes before the UK courts that raises the same question. The result is that, as well as having regard to retained EU case law (as defined in section 6(7) of the 2018 Act), UK courts will also have to take into account any relevant preliminary rulings handed down by the CJEU after transition on a reference made by a UK court.

Furthermore, it is conceivable that, when answering a preliminary ruling in a case referred by the UK courts before the transition period expired, the CJEU might rely on EU case law which post-dates the end of the transition period. That would arguably have the effect of indirectly making that post-transition EU case law binding on UK courts. This sets up a potential tension between section 6(1)(a) of the 2018 Act, under which a UK court is not bound by any EU court decision made after the end of the transition period, and section 7A of the same Act, which incorporates Article 89 of the Withdrawal Agreement.

New types of preliminary references

Under the Withdrawal Agreement, following the expiry of the transition period, the CJEU will gain certain new powers. This includes the power to give a binding interpretation where a question of EU law arises in a dispute between the UK and EU (Article 174 of the Withdrawal Agreement), and the power to give rulings on the interpretation of certain aspects of the Withdrawal Agreement on a reference by a UK court in the eight years following transition (Article 158). These novel roles for the CJEU will be explored in more detail in a future blog post.

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