In this blog post, Jack Williams of Monckton Chambers discusses the recent case of E-Accounting Solutions Ltd (t/a Advancetrack) v Global Infosys Ltd (t/a GI Outsourcing) [2023] EWHC 2038 (Ch) (“E-Accounting”) in which HHJ Tindal makes a number of observations about the future impact of the Retained EU Law (Revocation and Reform) Act 2023 (“REUL Act”) and the interpretative role of EU law even after 2023.
In E-Accounting, it was held that the defendant’s use of the claimant’s “ADVANCE TRACK” trade mark as a Google “keyword” or “ad word”, and then in internet adverts themselves, amounted to trade mark infringement and passing off. What is interesting for the purposes of more general application, however, is the Judge’s remarks concerning the future impact of the REUL Act and the interpretative role of EU law even thereafter. Although these are strictly obiter (since the underlying facts of the case pre-dated the commencement of the relevant provisions of the REUL Act: see [107]), they are nonetheless a timely and helpful reminder of what is to come from the end of the 2023.
At [13] of the judgment, HHJ Tindal provides a neat summary of the REUL Act’s key provisions:
“Firstly, whilst the planned ‘sunset clause’ for all ‘retained EU Law’ was abandoned, s.1 REULA will scrap a long list of retained EU Law at the end of this year. Secondly, ss.9-16 REULA provide a range of new statutory powers to amend or revoke retained EU Law (which s.5 re-names ‘assimilated law’) more easily, so the list of abrogated or overhauled provisions may grow exponentially on the ‘EU Law Dashboard’. Thirdly, for remaining ‘assimilated law’, the test in s.6 EUWA for the Court of Appeal and Supreme Court to depart from retained case-law is relaxed. Fourthly, ss.6A-C EUWA will now provide a new ‘reference’ mechanism (which can be instigated by the Government even if not a party) for points to be leapfrogged to higher courts by lower courts which are still so bound. Fifthly, ss.2-4 REULA will fundamentally change the relationship between (now) ‘assimilated law’ and EU Law: s.2 REULA dispenses with rights and powers originally retained by s.4 EUWA; s.4 REULA amends EUWA to remove ‘General Principles of EU Law’ completely from domestic law; and likewise, s.3 REULA amends s.5 EUWA to remove the Supremacy of EU Law in respect of domestic enactments whenever passed. (Indeed, it turns it on its head for direct EU Legislation retained in our law, which must now be read compatibly with domestic law). So, come 2024, ‘Indirect Effect’ will be no longer be part of our law.”
The concept of ‘Indirect Effect’, referred to in the last sentence of [13], is sometimes referred to as the ‘duty of consistent interpretation’. It is an interpretative obligation that requires EU Member States’ national legislation to be interpreted, as far as possible, in a way that is compatible with EU Law obligations. See, for instance, Case 14/83 Von Colson v Land Nordrhein-Westfalen [1984] ECR 1891 at [28] and Case C-106/89 Marleasing SA v La Comercial Internacional de Alimentación SA [1990] ECR I-4135 at [8]. For discussion of the obligation by domestic courts see, for example, Assange v Swedish Prosecution Authority [2012] UKSC 22, [2012] 2 AC 471 at [203]-[217] per Lord Mance.
HHJ Tindal considers that Indirect Effect is “one reflection of the principle of the Supremacy of EU Law” ([11] of E-Accounting) and, as a result of section 3 of the REUL Act (abolishing of the principle of supremacy), “will no longer be part of our law” come 2024 ([13]). The Explanatory Notes to the REUL Act, at paragraph 92, also take this position:
“[Section 3 of the REUL Act] ends the principle of supremacy by the end of 2023 in relation to all domestic legislation, whenever made. This also has the effect of removing at the same time the principle of consistent interpretation in relation to all domestic legislation, and the conflict rule requiring domestic legislation to give way to [retained direct EU legislation] where a consistent interpretation is not possible.”
It is open to debate whether the duty of consistent interpretation is best seen simply as a reflection of, or part of, the principle of supremacy and thus only formed part of retained EU law pursuant to section 5 of the EU (Withdrawal) Act 2018. For present purposes, however, let us assume that that is correct, and take it as our starting point that the concept of Indirect Effect / the duty of consistent interpretation no longer forms part of domestic law for facts and matters arising from 2024 because of the REUL Act. (It will still form part of domestic law for facts and matters before 2024 on account of section 22(5) of the Act.)
In this post-2023 scenario, if domestic legislation was enacted originally to implement an EU obligation, what role, if any, does that EU obligation play in the interpretation of the domestic measure?
HHJ Tindal provides a neat answer to that question at [13]:
“[The abolition of the concept of Indirect Effect] does not mean EU Law becomes irrelevant. If domestic legislation was enacted to implement a directive, that may be relevant context in its statutory interpretation on orthodox principles: see Brent LBC v Risk Management Partners [2011] 2 WLR 166 (SC) para 25 (Although of course that is a very different proposition than EU Indirect Effect).”
One has to wait until [109] of the judgment for the reasoning, which is worth citing in full:
“On the same ordinary domestic principles of statutory interpretation – and without reference to or reliance on ‘EU Law Supremacy’, ‘Indirect Effect’ or any other EU Law Principle, an EU directive leading to domestic legislation can also be seen as a form of ‘external aid’ to its interpretation, as Lord Hope discussed in Brent LBC v Risk Management Partners [2011] 2 WLR 166 (SC). The case concerned public procurement, like trade mark law currently governed by EU-derived law. The Supreme Court, following ECJ authority which held the directive was subject to an implied exception, wrote the same exception into domestic law by its interpretation of the statutory word ‘contract’. This was not ‘Indirect Effect’ as the exception was not in the directive. Instead, Lord Hope reached for orthodox domestic ‘purposive’ statutory interpretation at para 25:
“As for the meaning and effect of the 2006 Regulations, I think it would be wrong to apply a literal approach to the words and phrases used in it, such as in the definitions of ‘public contract’ and ‘public service contract’. A purposive approach should be adopted. As Lord Diplock indicated in Kammins v Zenith [1971] AC 850, 881, this means that regard must be had to the context in which the Regulations were made, to their subject matter and to their purpose….Having regard to the background of EU law against which the Regulations were made, the definitions in the Regulations can be taken to express the same idea as those in the Directive. Thus, something which amounts to a contract in domestic law can nevertheless be held, without doing undue violence to the words of the Regulations, not to be a relevant contract for the purpose of the [Regulations].”
I would stress Kammins was decided well before the UK joined ‘the Common Market’ as it was then. It had nothing to do with EU Law, but was an exercise in ordinary domestic ‘purposive interpretation’ (which Lord Diplock championed from the 1960s-1980s). In Lord Hope’s analysis in Brent, EU Law was simply the ‘context’ in which the domestic law was made which threw light on the ‘Parliamentary Intention’ for the regulations (in the sense explained in [R(PRCBC) v SSHD [2023] AC 255 (SC) at [29]-[31]]). Of course, sometimes Parliament may have intended to go beyond the EU directive – what EU Law practitioners call ‘gold-plating’: as Lord Mance found in USA v Nolan [2016] AC 463 (SC) paras 20-5. However, if Parliament intended a statutory provision simply to implement an EU Directive as it was (‘back-to-back’ as Lord Mance put it in Nolan para 23), then the principle in Brent shows how that directive may guide the interpretation of that statutory provision. However, this will only be as an ‘external aid’ in the [R(PRCBC) v SSHD [2023] AC 255 (SC).] sense and as stressed there, the statutory words will always be paramount. That is a very long way indeed from ‘EU Law Supremacy’ and ‘Indirect Effect’.”
The upshot, therefore, is that, whilst what Lord Sumption in FII Group Litigation v Revenue and Customs Commissioners [2012] UKSC 19 at [176] called the “highly muscular” duty of consistent interpretation is no more, EU law will nonetheless continue to play an interpretative role even for matters arising after 2023. Hello darkness my old friend…
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