Retained EU law: a guide for the perplexed

In this post, Jack Williams of Monckton Chambers explains “retained EU law”, as introduced into domestic law at the end of the transition period by the EU (Withdrawal) Act 2018 (the “2018 Act”).

The incoming tide of retained EU law

Lord Denning famously referred to EU law (then EEC law) as an incoming tide, flowing into the United Kingdom’s estuaries and up the rivers, unable to be held back once Parliament had opened or circumvented the floodgates by means of the European Communities Act 1972 (the “1972 Act”). More recently, the Supreme Court adapted the analogy: the incoming tide flowed not across the channel, but only because of, and down, carefully-construed domestic “conduit pipes” in the 1972 Act – needed because of the United Kingdom’s dualist nature, necessitating Parliamentary construction works before the waters could join. The flood gates had been circumvented.

At the end of the transition period, those 1972 conduit pipes (kept temporarily in place, or at least stuck back together again, by sections 1A and 1B of the 2018 Act during the transition period, as discussed here) are set for demolition. Without more, the floodgates would be back in action. This rather leaves a water shortage problem. It turns out that we have been heavily reliant upon, and in some respects quite like, all that European water to which we have grown accustomed over the decades. The flow carried down the conduit pipes was, at the very least, certain and predictable. The solution? Keep some of that water for ourselves before the tide turns and do our best to replicate it – retained EU law.

What is retained EU law?

The 2018 Act – the newly constructed reservoir and processing plant – will convert the body of existing EU law, as it applied to and within the UK prior to the end of the transition period, into domestic law and will preserve the laws that implemented the UK’s obligations whilst an EU Member State. This body of converted EU law and preserved domestic law is referred to in the 2018 Act as “retained EU law”. It is distinct from accrued EU law rights, discussed here.

There are five categories of “retained EU law” (section 6(7), 2018 Act). These are: (i) EU-derived domestic legislation (section 2), (ii) direct EU legislation (section 3), (iii) saved directly effective rights (section 4), (iv) retained case law (section 6), and (v) retained general principles of law (section 6). I have seen some commentators collapse categories (iv) and (v) into category (iii), but I think that this is a mistake. The definition of “retained EU law” in section 6(7) specifically includes a distinct reference to section 6(3), which is where “retained case law” and “retained general principles of EU law” are first mentioned. Moreover, it is conceptually helpful to think of retained case law and retained general principles as distinct from the ‘catch-all’ provision of section 4 of the 2018 Act. It is certainly true, however, that open questions remain as to how sealed the ‘separate’ categories are.

Each of the five categories has several sub-categories and nuances, as shown in the diagram below, which sets out “retained EU law” in full. I explain each category (and sub-category) in turn below.  

1.EU-derived domestic legislation

Description: The first category of “retained EU law” is “EU-derived domestic legislation”. This is found in section 2 of the 2018 Act. In short, this catches all pre-existing domestic enactments (primary and secondary legislation, plus, e.g., regulatory rules permitted under such legislation), which implemented or are otherwise related to EU or EEA law. This is achieved by the use of four sub-categories of EU-derived domestic legislation:

• Implementing Regulations: secondary legislation (e.g. the Working Time Regulations 1998) made under section 2(2) or paragraph 1A of Schedule 2 to the 1972 Act (section 2(2)(a));

• Converted EU law: any domestic enactment implementing EU obligations (e.g. the Health and Safety at Work etc Act 1974) (section 2(2)(b));

• Related Converted EU law: any domestic enactment relating to Implementing Regulations (defined above), Converted EU law (defined above), Direct EU legislation (see below), or Saved Directly Effective Rights (see below) (section 2(2)(c)); and

• Residual EU-related domestic legislation: any domestic enactment relating to the EU or EEA (a catch-all provision e.g. if an Act contains cross-references to a definition in an EU law) (section 2(2)(d)).

Comments: First, the category is very broad. Despite the label, this category of “retained EU law” captures domestic law, which is in some way connected or related to the EU or EEA. This category thus includes legislation – such as domestic primary legislation or secondary legislation other than that passed under the 1972 Act – that did not technically need “saving” at all, because it would have continued to exist even after the 1972 Act’s demise. One example is the Equality Act 2010. Second, the Converted EU law sub-category includes enactments “made or operating for” the implementation of EU law. This is designed to include legislation which was not specifically passed or made to implement our EU obligations (for example, because the EU had not legislated in that area at the time the legislation was made) but has since become part of the way in which the UK demonstrates compliance with EU requirements. Third, the Related Converted EU law sub-category ensures that a provision which goes beyond the minimum needed to comply with requirements under EU law (a so-called ‘gold-plated’ provision) is within the scope of “EU derived domestic legislation”. Fourth, “enactments” is defined very broadly in section 20 of the 2018 Act.

Specific exclusions: Paragraph 1A of Schedule 2 to the 1972 Act is captured by the first sub-category (Implementing Regulations). That allowed for ambulatory cross-references to EU instruments “as amended from time to time”, which means the references to the EU instruments automatically update when that EU instrument is amended. Paragraphs 1 and 2 of Schedule 8 to the 2018 Act, however, makes further provision about such ambulatory references to EU legislation, so that modifications made by the EU on or after IP Completion day do not form part of retained EU law. See, also, general exclusions below.

2. Direct EU legislation

Description: The second category of “retained EU law” is “Direct EU legislation”. This is found in section 3 of the 2018 Act. In short, this saves directly-effective EU legislation (except for Directives) that would have flowed down the section 2(1) conduit pipe in the 1972 Act. It therefore encompasses (i) EU regulations, (ii) EU decisions, and (iii) EU tertiary legislation (the latter of which means provisions made under EU regulations, decisions, and directives under Article 290 or Article 291(2) TFEU: see section 20 of the Act). It also encompasses (iv) the Annex to the EEA Agreement and (v) Protocol 1 to the EEA Agreement.

Comments: First, in accordance with section 3(4), this section only brings into force the English language version of any EU legislation, and does not bring into force any EU legislation for which there was no English language version. Second, it is to be noted that EU Directives are excluded from the concept of Direct EU legislation (which fall within section 4, discussed below). Third, it is unclear what domestic legal status is given to this category of retained EU law (i.e. whether direct EU legislation is to be treated as if it were primary or secondary legislation: see questions 7 – 9 of Mark Elliott’s commentary on the (then) Bill.) What is clear, however, is that some (principal) direct EU legislation is to be treated as primary legislation for the purposes of the Human Rights Act 1998: paragraph 30 of Schedule 8. Fourth, “Direct EU legislation” can be further broken down into two sub-groups, namely “retained direct principal EU legislation” and “retained direct minor EU legislation” (section 7 of the 2018 Act). The former includes, inter alia, EU regulations that are not tertiary legislation with the result that decisions and tertiary legislation are retained direct minor EU legislation. This is set out in the diagram below. The distinction affects how the retained EU law can be modified and how it is characterised for Human Rights Act purposes.

Specific exclusions: First, Section 20 and Schedule 6 of the 2018 Act provide that certain instruments (decisions) are “exempt EU instruments”, which are not incorporated into “retained EU law”. These exemptions reflect that certain EU instruments did not apply to the UK because the UK did not adopt the Euro, or because the UK did not participate in certain aspects of the EU acquis, in the area of freedom, security and justice. Second, EU decisions which are addressed only to a Member State other than the UK are also not converted into domestic law. Third, so far as EU-derived domestic legislation under section 2 of the 2018 Act (i.e. EU-derived domestic legislation) reproduces the effect of an EU regulation, decision or tertiary legislation, these instruments are not converted under this section. This is to avoid duplication. See, also, general exclusions below.

3. Saved directly effective rights

Description: The third category of “retained EU law” is the catch-all provision of section 4 of the 2018 Act, what might be called “saved directly effective rights”. This category ensures that any remaining EU rights and obligations which do not fall within sections 2 and 3 continue to be recognised and available in domestic law after the transition period. This category can be divided into four sub-categories:

• directly effective rights contained within EU treaties (the TEU and TFEU);
• directly effective rights contained in other treaties;
• directly effective directive rights (see section 4(2)); and
• other rights, powers, liabilities, obligations, restrictions, remedies and procedures.

Comments: First, directly effective rights are those provisions of EU treaties which are sufficiently clear, precise and unconditional as to confer rights directly on individuals and which can be relied on in national law without the need for implementing measures. Second, in relation to directly effective EU Treaty rights, one has to be cautious. Whilst these trickle down the conduit pipe in principle, in practice many are immediately stopped from doing so by domestic regulations under section 8 of the 2018 Act. For example, the Freedom of Establishment and Free Movement of Services (EU Exit) Regulations 2019 remove Articles 56 and 57 (freedom to provide services) from retained EU law. Third, it is to be noted that section 2(1) of the 1972 Act did not simply function for the EU Treaties. Directly effective rights may also arise under other treaties which were brought into domestic law by virtue of the ECA, such as the EEA Agreement, Euratom and international agreements made by the EU with third countries, as well as certain multilateral agreements to which either or both of the EU and UK are a party (e.g. the Hague Convention of 19 October 1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children).

Specific exclusions: First, there is an open question as to what section 4(2) means in relation to Directives, namely whether a directly effective right derived from a Directive is retained only if the specific right in question has been judicially determined to be directly effective, or if the words “of a kind” in section 4(2)(b) mean that rights contained in directives that satisfy the criteria for direct effect will be brought into domestic law, irrespective of whether there is a judicial determination as to whether those criteria are satisfied in respect of the specific right in question. I have set out the case for the second interpretation in a detailed blog post, here. Separately, but relatedly, one also has to have regard to paragraph 38 of Schedule 8 to the 2018 Act, which essentially extends section 4(2)(b) by permitting a post-IP Completion day case where it was begun before IP completion day. Second, the section does not bring in any rights, powers etc. if they already form part of domestic law by virtue of section 3. See, also, general exclusions below.

4.Retained case law

Description: “Retained case law” is defined in section 6 of the 2018 Act. It is formed of two sub-categories, namely: (i) retained domestic case law and (ii) retained EU case law (both only where the judgment or decision was handed down before IP Completion day). “Retained domestic case law” is any principles set out by, and any decisions of, a domestic court or tribunal prior to IP Completion day, which relate to anything falling within the definition of retained EU law in sections 2, 3 or 4 of the 2018 Act (“as those principles and decisions are modified by or under this Act or by other domestic law from time to time”). “Retained EU case law” means any principles set out by, and any decisions of, the CJEU prior to IP Completion day, which relate to anything falling within the definition of retained EU law in sections 2, 3 or 4 of the 2018 Act (“as those principles and decisions are modified by or under this Act or by other domestic law from time to time”).

Comments: Watch an excellent primer on retained case law by Dr Emily Hancox of the University of Cambridge here. I make the following comments. First, retained case law is relevant to the validity, meaning, or effect of any retained EU law (section 6(3)). Second, although domestic courts and tribunals are not bound by any CJEU principles or decisions made after IP Completion day, they “may have regard” to them “so far as it is relevant to any matter before the court or tribunal” (section 6(2)). Third, generally, a domestic court or tribunal cannot refer any matter to the CJEU on or after IP completion day (section 6(1) of the 2018 Act); however, this (apparently definitive “cannot”) must be read subject to the overriding provisions in relation to the Withdrawal Agreement. It is somewhat unsatisfactory that an express provision in one part of the Act is heavily conditioned by implication in another part of the Act. See this blog post by Alexandra Littlewood for the CJEU’s new jurisdiction to give preliminary rulings after the transition period in relation to the interpretation of the Withdrawal Agreement (in particular, regarding citizens rights, Ireland/NI Protocol provisions, the financial settlement provisions, and the protocol on the Sovereign Base Areas), and arising out of disputes between the UK and EU regarding the Withdrawal Agreement.

Specific exclusions: In England and Wales neither the Supreme Court, nor the Court of Appeal are bound by retained EU case law (see section 6(4) of the 2018 Act and European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020). The test is the same test as the Supreme Court would apply in deciding whether to depart from the case law of the Supreme Court – whether it appears right to do so. Domestic regulations also purport to provide that other courts and tribunals are not bound by retained case law and set different tests for departure (see, e.g., Regulation 23 of Competition (Amendment etc.) (EU Exit) Regulations 2019 regarding the Competition Appeals Tribunal and the High Court). The vires for this power is debateable. See, also, below, concerning section 5 and Schedule 1 of the 2018 Act.

5.Retained general principles of EU law

Description: Section 6 of the 2018 Act defines “retained general principles of EU law” as “the general principles of EU law, as they have effect in EU law immediately before IP Completion day and so far as they (a) relate to anything falling within the definition of retained EU law in sections 2, 3 or 4 of the 2018 Act and (b) are not excluded by section 5 or Schedule 1.

Comments: Whilst retained general principles of EU law form part of “retained EU law”, their effect is substantially reduced compared with how general principles operated when the UK was an EU Member State and during the transition period. Paragraph 3 of Schedule 1 to the 2018 Act essentially suggests – subject to what I say below – that general principles are relevant only to the interpretation of retained EU law. It states that there “is no right of action in domestic law…based on a failure to comply with any of the general principles of EU law” and “[n]o court or tribunal…may… disapply or quash” any law or conduct on the ground that it is incompatible with any general principle. Whilst general principles apparently cannot – subject to what I say below – found a ground of action, my prediction is their use as interpretive principles will be pushed quite far to have similar outcomes in most cases. The exclusion in paragraph 3 of Schedule 1 is, however, subject to two important exceptions in paragraph 39(5) and (6) of Schedule 8 to the Act:

• There is a three-year grace period (beginning with IP Completion day) to bring a case founded upon general principles in relation to challenges to anything which occurred before IP Completion day (insofar as the challenge is not for the disapplication or quashing of an Act or an enactment necessitated by an Act) (paragraph 39(5) of Schedule 8); and

• The exclusion does not apply (at any time) in relation to any decision of court, tribunal or public authority after IP completion day “which is a necessary consequence of” any decision of a court or tribunal made before IP Completion Day or afterwards where the decision was handed down on a case which started before (paragraph 39(6) of Schedule 8). This essentially gives priority to retained case law and in doing so potentially revives general principles as a ground of review. Where there is an applicable retained case, which applies (presumably, in the sense of its being a central tenant of its reasoning) a general principle of EU law, a court in a post IP Completion day case, will seemingly not be bound by the general principle per se to disapply a domestic law, but will be bound by the retained case to disapply or quash the domestic law. It is very hard to see how this does not significantly reduce or un-do the impact of the ‘rule’ in paragraph 3 of Schedule 1. General principles are dead! Long live general principles!

Specific exclusions: Paragraph 2 of Schedule 1 to the 2018 provides that “no general principle of EU law is part of domestic law on or after IP Completion day 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).”  See below, concerning section 5 and Schedule 1 of the 2018 Act.

General exclusions from retained EU law

There are a number of EU norms that are excluded from retained EU law at the outset. These are set out in section 5 and Schedule 1 to the 2018 Act.

First, the EU Charter of Fundamental Rights is excluded (section 5(4)). However, section 5(5) retains “any fundamental rights or principles which exist irrespective of the Charter (and references to the Charter in any case law are, so far as necessary for this purpose, to be read as if they were references to any corresponding retained fundamental rights or principles)”. Essentially, EU cases dependent upon the Charter are still retained EU case law (and thus applicable). See, also, paragraph 5 of Schedule 1 to the 2018 Act and paragraph 39 of Schedule 8 to the 2018 Act.

Second, pursuant to section 5(1) and (2), the EU principle of supremacy will not apply in respect of the disapplication of legislation which is passed or made on or after IP Completion day. So, for example, if an Act is passed on or after IP Completion day which is inconsistent with EU law which is preserved or converted by the Act (for example, a retained EU regulation), that new Act will take precedence. Where, however, a conflict arises between pre-IP Completion day domestic legislation and retained EU law, section 5(2) provides that the principle of the supremacy of EU law will continue to apply. So, for example, a retained EU regulation would take precedence over pre-IP Completion day domestic legislation that is inconsistent with it. See, also, paragraph 5 of Schedule 1 to the 2018 Act.

Third, the right to damages in accordance with the rule in Francovich is excluded (paragraph 4 to Schedule 1 of the 2018 Act). See, however, the exceptions to that exclusion set out in paragraph 39 of Schedule 8 to the 2018, as discussed at length here and here. Moreover, it will be interesting to observe how any domestic principles for damages awarded on a breach of retained EU law rights develop: the case of San Giorgio (restitutionary rights) is not exempted from the concept of “retained EU case law”, for example. See, also, paragraph 5 of Schedule 1 to the 2018 Act.

Fourth, there is no right in domestic law after the transition period to challenge any retained EU law on the basis that, immediately before the end of the transition period, an EU instrument was invalid: paragraph 1 of Schedule 1 to the 2018 Act. See, also, the Challenges to Validity of EU Instruments (EU Exit) Regulations (SI 2019/673) (as amended by the Challenges to Validity of EU Instruments (Amendment) (EU Exit) Regulations 2020 (SI 2020/1503).This exception is addressed in a separate blog post here. In short, the exception is narrower than it first appears.

Ambulatory nature of retained EU law

“Retained EU law” is not the same as “EU law” as it applied to the UK during the UK’s membership of the EU or during the transition period. From discussion of accrued EU law rights, see here. Retained EU law, in all of its forms, is generally a snapshot of EU law as it stands on one day (immediately before IP Completion day, currently 11 p.m. on 31 December 2020): sections 2(1), 3(1), 4(1) and 6(3) and paragraphs 1 and 2 of Schedule 8 to the 2018 Act. In this sense – from an EU law perspective – it is non-ambulatory.

From another – domestic law – perspective, however, retained EU law is ambulatory. This is because the definitions of each category “retained EU law” includes phrases such as: “as that body of law is added to or otherwise modified by or under this Act or by other domestic law from time to time” (see section 6(7)). See, also, for example, Section 5(3), which states that the principle of supremacy can continue to apply to pre-IP Completion day law which is amended on or after IP Completion day where that accords with the intention of any modifications. In short, this all means that the norms will keep their “retained EU law” status for a considerable period of time.

Relationship with relevant separation agreement law

Retained EU law is only the first pillar of four, together forming EU Relations Law. It deals essentially with converting EU law, to ensure a working statute book on Day One following IP Completion day. It does this by incorporating and preserving EU and EU-related laws. It is not the end of the story, however. In early 2020, the UK and the EU entered into the Withdrawal Agreement. Many of its provisions are not relevant just for the transition period, but apply for years to come. That Agreement, in turn, therefore needed to be implemented into domestic law. This was achieved by the EU (Withdrawal Agreement) Act 2020, which amended the 2018 Act. This created a species of law entitled “relevant separation agreement law”. That law – and its interaction with retained EU law – is addressed in a subsequent blog post, as is retained EU law’s interaction with distinct law flowing from the TCA (discussed here). For now, I leave you with news of the tantalising possibility that the same underlying EU law may ultimately be both retained EU law and relevant separation agreement law at the same time.

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