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European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020

Volume 808: debated on Wednesday 25 November 2020

Considered in Grand Committee

Moved by

That the Grand Committee do consider the European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020.

Relevant document: 32nd Report from the Secondary Legislation Scrutiny Committee

My Lords, the instrument before the Grand Committee today relates to the question of which courts should be able to depart from retained EU case law. From January, UK courts, rather than the Court of Justice of the European Union, or CJEU, will be the final arbiter of laws that govern our lives. In order to promote legal clarity and certainty in our law following our departure from the EU, Parliament has provided that EU law that we have chosen to retain is to be interpreted in line with EU case law which we have also chosen to retain.

The way in which our law is interpreted by courts and tribunals does not remain static over time. Our departure from the EU has, naturally, brought with it a change to the context in which the law is considered, and we want our courts to be able to reflect that in their decisions where appropriate. Without the ability to depart from EU case law, there is a risk that UK law will remain tied to an interpretation from the CJEU that is no longer appropriate in the UK.

For that reason, the European Union (Withdrawal) Act 2018 vested in the UK Supreme Court and, in Scotland, the High Court of Justiciary, in specified cases, the power to depart from retained EU case law, applying their own tests for deciding whether to depart from their own case law when doing so.

This instrument will extend the number of UK courts with the power to depart from retained EU case law to include courts at Court of Appeal level across the UK. In making such decisions, the test to be applied by these courts is to be the same as that used by the UK Supreme Court in deciding whether to depart from its own case law—namely, whether it is right to do so.

The instrument will achieve our aim of enabling retained EU case law to evolve in a more timely way than otherwise might have been achieved through the status quo. It will also help to mitigate the operational impacts on the UK Supreme Court and the High Court of Justiciary that would have arisen if the power to depart from retained EU case law were reserved solely to those courts. It will further assist those courts by providing prior judicial dialogue on these complex issues from the Court of Appeal level.

I am sure that your Lordships are familiar with the terminology but, first, I shall briefly explain what I mean by retained EU case law. Retained EU case law is defined in the 2018 Act as, broadly, any principles and decisions of the CJEU as they have effect in EU law prior to the end of the transition period. This includes cases which were referred to the CJEU by the UK, as well as those referred by other member states. This is a vast and complex body of case law that spans many different areas of law.

In amending the 2018 Act through the European Union (Withdrawal Agreement) Act 2020, Parliament provided the power to make regulations to extend the list of courts which may depart from retained EU case law, to set the test to be applied by those courts and to specify any considerations that courts should take into account in coming to such decisions. This instrument extends the list of courts that can depart from retained EU case law to: the Court of Appeal of England and Wales, the Court Martial Appeal Court, the Court of Appeal of Northern Ireland, the High Court of Justiciary, when sitting as a court of Appeal in relation to a compatibility issue or a devolution issue, and the Inner House of the Court of Session, the Lands Valuation Appeal Court and the Registration Appeal Court in Scotland.

The instrument also sets out that the test to be applied by these additional courts when deciding whether to depart from retained EU case law will be the same test used by the UK Supreme Court in deciding whether to depart from its own case law. This test is well established and is capable of being easily understood and applied without any further guidance. It is anticipated that applying the same test to that used by the UK Supreme Court will foster a consistent approach across the jurisdictions and, in turn, on appeal to the UK Supreme Court. There is a wealth of case law underpinning the UK Supreme Court’s test which has evolved over time to ensure that courts consider changing circumstances and modern public policy.

The Government have decided against specifying a list of factors to be considered by the courts with the power to depart from retained EU case law, as the UK Supreme Court’s test is underpinned by a significant amount of case law, which provides considerable guidance. The instrument does not change the operation of the doctrine of precedent, which, practically speaking, means that when a court reaches a decision on whether to depart from retained EU case law, that judgment has the same precedent status as other judgments from that court.

As required in statute, the Government have consulted senior judiciary across the UK, a consultation process that was also extended to the devolved Administrations, as well as to representatives across the legal services sector, businesses and other organisations, and was open to the public. The consultation ran from 2 July to 13 August, with a response published on 15 October. That consultation sought views on whether to extend the power to depart from retained EU case law to the Court of Appeal and its equivalents across the UK, or to the High Court and its UK equivalents.

Having considered the responses fully, the Government have concluded that extending the power to Court of Appeal level courts strikes the appropriate balance between enabling retained EU case law to evolve more quickly, where appropriate, and providing legal clarity and certainty. It also assists in managing the operational impacts by ensuring cases are considered in a timely way. Furthermore, extending the power at this level will mitigate the impacts of potentially large volumes of divergent decisions, both within and across the UK jurisdictions, as decisions of these courts are binding on themselves and courts below as well as being persuasive across the UK’s three legal systems. Where such divergence occurs, this can be resolved more quickly by the UK Supreme Court if it is not required to consider all questions of whether to depart from retained EU case law.

I know that there was significant interest from your Lordships when the power to make this statutory instrument was introduced during the passage of the 2020 Act. I hope that your Lordships will be reassured by the consultation that has taken place and the careful approach that is being taken in extending the power to Court of Appeal level courts only.

An impact assessment has been published alongside the consultation response. Any impact is heavily dependent on both litigant behaviour in bringing proceedings seeking a departure from retained EU case law and, of course, the outcome of that litigation. However, based on a qualitative assessment, we assess that any impact on an increase in case volume as a result of this instrument is manageable at Court of Appeal level, helps to maintain legal certainty and mitigates pressure on the UK Supreme Court.

This instrument enables our courts to be better able to consider whether to depart from retained EU case law than the status quo provided in the 2018 Act. Providing these seven courts with the ability to depart from retained EU case law will allow timely evolution of our case law. It will relieve pressure on the UK Supreme Court and avoid our case law becoming fossilised. We are taking an approach that balances the importance of legal clarity and certainty with the need for the law to evolve with changing circumstances.

My Lords, when the EU withdrawal agreement Bill was being considered in the House, the Constitution Committee had serious concerns about the provisions under which this statutory instrument is being made. We were concerned that the Bill left it to Ministers to decide which courts could depart from previous European case law on retained European law and what test they should apply when doing so. That has quite serious rule of law implications that were neatly illustrated by the Minister when he described the possibility of a range of factors being specified when courts are considering such matters, an option that helpfully, the Government in the end did not take. That is one of the good features of this statutory instrument.

These are not powers that we were content to leave in the hands of Ministers. There is the added problem that the powers could be extended to the lower courts whose judgments could not bind other courts—even to magistrates’ courts. This would lead to legal confusion. In a powerful debate in the House at Report, I moved an amendment drafted by the noble Lord, Lord Pannick, that we would return to the matter. The noble and learned Lord, Lord Keen of Elie, offered to table a compromise government amendment very much along the lines of this instrument, restricting the extension so that it would cover only the Appeal Court or its equivalents, and specifying that the test to be applied when deviating from previous case law was the same test that the Supreme Court would apply. But he was embarrassingly overruled by a higher authority in No. 10, apparently because the Prime Minister wanted no amendments to the Bill at all, presumably for broader political reasons.

The noble and learned Lord, Lord Mackay of Clashfern, indicated in a speech in that debate that the Prime Minister had in fact committed himself in the election to every court in the land being able to deviate from retained EU law. Anyway, we won the vote, but it was overturned by the Commons, so we were left with Ministers holding the power to choose the courts to which this would be extended and to choose the test that would be applied. Everything would depend on the regulations. As the Minister has pointed out, there was a consultation that revealed differences of view. The results were open to different interpretation depending on how you count those respondents who wanted no deviation from previous case law. That is not my view. While based on precedent, law has to evolve over time. For my part, the statutory instrument brings us to the outcome that I sought in my amendment, albeit by a very long way round.

I accept that these provisions may have avoided what could have been a bottleneck in the Supreme Court, as the noble and learned Lord, Lord Thomas of Cwmgiedd, warned. However, I am bound to question some curiously chosen words in Paragraph 7.5 of the Explanatory Memorandum:

“Extending the power to this limited list of additional courts will help to achieve our aim of enabling appropriate and timely departure from retained EU case law.”

Is that phrase in place to please the Brexiteers? Is it meant to be a signal to the courts that they should deviate as much and as soon as possible?

If so, I think that it creates false expectations, because I do not think that that is what the courts will actually do. The scale of activity will depend on how much litigation is brought forward and the courts can be expected to abide to apply the test of the Supreme Court with due regard to the facts, to precedent, and to the need to keep the law up to date with changing circumstances. I do not believe that the courts will be drawn into a rush to get rid of as much European case law as possible as quickly as possible. However, all in all, I think that the instrument is what is needed.

My Lords, it was of great interest to me to listen to my noble and learned friend explain so clearly the origin and scope of this instrument. As the noble Lord, Lord Beith, said, the House of Lords was very interested in this particular provision when it came forward in this year’s withdrawal Bill. The Prime Minister had apparently said during the election that every court would be able to entertain this question of whether a decision of the European Court which was part of the retained case law should be departed from.

This House noticed that the provision in the Bill did not contain any machinery for taking a case from, for example, the magistrates’ court to a court that could decide the issue. In the amendment that the noble Lord, Lord Beith, referred to—which I proposed—there was a provision for a method of doing that, so that the Prime Minister’s wish, or answer, that all courts would be able to do it would be met by, for example, the magistrates’ court referring the matter in the way that I had proposed to the Supreme Court or whichever court might then be able to deal with it.

That amendment was, as the noble Lord, Lord Beith, said, passed by a substantial majority in this House but, because of the rush to get the withdrawal Act approved, it was decided to not give effect to it in the House of Commons. There is, therefore, no method in place for reaching from, for example, the magistrates’ court in England to the Court of Appeal. I raised this point with my right honourable friend the Lord Chancellor when he sent me a copy of the instrument. The truth is that there is no way of doing that effectively.

This leaves me with a question which I would be glad if my noble and learned friend could answer. If a point is to be raised about the validity of a judgment of the European Court that is part of the reserved EU case law and it needs to be dealt with in a case coming forward in the magistrates’ court, would the magistrates’ court be allowed to consider that case at all, or is there some provision in the jurisdiction of the other courts to allow a case that would normally be within the magistrates’ court’s jurisdiction to be referred instead to another court that is not of the same level but which is able to deal with this particular problem? It was suggested to me that there are various methods of going from the lower courts to the higher court, but I am not aware—I would be glad if my noble and learned friend could make me aware—of whether there is a mechanism to get, for example, from the magistrates’ court in England to the Court of Appeal. If not, it means that the Prime Minister’s answer to the question at the election may not be open for a result at the moment unless and until primary legislation can be introduced in order to make such arrangements. I would have thought that such arrangements could possibly be made using the rule powers of the various rule-making committees, but I am not sure whether that it so. Anyway, I am glad to raise it in order that my noble and learned friend is able to deal with it.

My Lords, I think a Division is about to be called and I therefore recommend that we do not call the noble Lord, Lord Thomas of Gresford, until after the Division in order not to have to interrupt him. Is the noble Lord content to wait until the Division has been completed?

Sitting suspended for a Division in the House.

My Lords, it is an allergy—an itch that has to be scratched. This bumbling Government are allergic to the very sound of the name “the European Court of Justice”. It sends a shiver down the spine—if they have one at all—of a significant section of the Conservative Party. I have never understood this, since, as I have pointed out on a number of previous occasions, the United Kingdom was remarkably successful in developing the procedures of that court and in conducting cases successfully before the court on behalf of the UK Government, with a success rate of over 90% of contested cases.

In 1966, Lord Gardiner, then Lord Chancellor, made a Statement on behalf of the Judicial Committee of the House of Lords to the effect that the committee was prepared to modify its previous practice and to depart from a previous decision when it appeared right to do so. He added the very important rider:

“In this connection they will bear in mind the danger of disturbing retrospectively the basis on which contracts, settlements of property and fiscal arrangements have been entered into and also the especial need for certainty as to the criminal law.”—[Official Report, 26/7/1966; col. 677.]

Some time ago the Minister told us that that Statement is well understood; I am not so sure that that is right.

That need for certainty could not be more important than in the context of commercial dealings between this country and the EU, over which we are agonising at this crucial time—this very day. Retained EU law will remain part of our domestic law after the transition period, in five or six weeks’ time. What could be more disturbing to contractual arrangements, trade and to prosperity than to have differing interpretations of the same provisions, set out in the same terms, in both UK domestic law and EU law as it is understood by our near neighbours?

I have direct experience of the way in which the Judicial Committee, now the Supreme Court, exercised its power to modify a previous decision. In 1982, I appeared for the appellant before the Judicial Committee in the case of Caldwell. My case was that recklessness as an ingredient of a criminal offence involved a subjective state of mind. My argument was defeated by 3:2 in the Judicial Committee on the basis that recklessness could be established objectively even if the defendant gave no thought at all to the risk. Lord Diplock delivered the majority opinion but Lord Edmund-Davies was on my side. The result of the case drew intense academic criticism, led by Professor Glanville Williams, whom some of us will remember with affection, if only for his magisterial textbook on the criminal law. Some 20 years went by, until in the case of R v G&R, the Judicial Committee reversed that decision. Lord Bingham, who delivered the unanimous opinion of the committee, said:

“Despite its power under Practice Statement … [1966] … to depart from its earlier decisions, the House should be very slow to do so, not least in a context such as this.”

However, to return to the present and being “reassured by the consultation”—I take it that that is a touch of wry Scots humour on the part of the Minister. From the Government’s point of view it was a complete failure. The Explanatory Memorandum shows that only 20% of the consultees agreed with this proposed extension of the power to depart from retained EU case law to other courts and tribunals. Further, only 9% believed that these proposals strike the right balance between legal certainty and the evolution of the law. Only 5% thought it maintained the necessary degree of predictability in the law and provided certainty.

On the contrary, a decisive majority of those consulted about the changes proposed in this statutory instrument were against any change at all, on the basis that it was a recipe for uncertainty. Why did the Government go on with this SI? Allergy—it is that nagging itch.

The clue to the problems which arise is in paragraph 7.4 of the Explanatory Memorandum, which states:

“Without the ability to depart from retained EU case law, there is a risk that retained EU law remains tied to an interpretation from the Court of Justice of the European Union that is arguably no longer appropriate in the UK.”

I stress “arguably”. I was wondering whether I should say anything adverse to this SI at all, since it will undoubtedly make good money for lawyers. The Minister will know that certainty of the law assists the settling of disputes without litigation. Uncertainty breeds litigation, from which, frequently, only the lawyers benefit. I would have thought that, under current practice, the Supreme Court’s power in the ultimate to depart from European case law would be more than enough to satisfy the Tory itch in the rare cases where the need for departure arises, but now litigants will argue at Court of Appeal level for a departure from settled EU case law. If the protagonist of a departure is successful, it is inevitable that the losing party will take the case for a final decision to the Supreme Court, which could hardly refuse leave to appeal if our Court of Appeal or its equivalent had introduced an ambiguity into the law. The changes will not reduce the burden on the Supreme Court, as has been suggested.

Whoever drafted this SI and the Explanatory Memorandum is not in touch with the real legal world, the world that responded to the consultation. Paragraph 10.9 of the memorandum states:

“The risk of driving large volumes of cases and legal uncertainty was the main reason cited in opposition to this proposed approach. It was also noted that the risk of divergence in decisions between jurisdictions was greater with this approach.”

The Bar Council submitted to the consultation that

“departing from the CJEU precedent is pointless unless the lower court has power to depart from the domestic precedent as well—but a power to depart from precedents set by high courts (or, in the case of the Court of Appeal, its own past judgments) would be a major disruption of the system of precedent on which legal certainty depends in a common-law system.”

In response, the Government have preferred specifically to stick with the current system of domestic precedent, thereby making the policy behind this SI, to quote the Bar Council, “pointless”.

Another area which introduces a sense of unreality is the courts to which this power to depart is extended. I know nothing of the land valuation court in Scotland nor am I anxious to know, but, as chair of the Association of Military Court Advocates, I cannot conceive how the decisions of the European Court of Justice are relevant to courts martial proceedings in any way whatever, yet the Court Martial Appeal Court heads the list. Was the drafter of this SI confusing the European Court of Human Rights, which has had a great deal to say on military justice and, as a result of its decisions, has considerably improved our system, with the European Court of Justice? It is frequently done. Perhaps the Minister can enlighten me. I do not suppose that he has, as yet, caught the itch.

My Lords, the Labour Party does not support these regulations. When responding to the government consultation, both the Bar Council and the Law Society expressed a strong preference for the power to depart from retained EU case law to be reserved only to the Supreme Court and the High Court of Justiciary in Scotland. In its response to the proposed changes, the Law Society clearly stated that

“the power to depart from retained case law should not be extended to UK courts … beyond the Supreme Court ... Any change from this position constitutes a major shift in the administration of justice. This could result in a lack of legal certainty through the emergence of novel judgments that are either not binding on other courts or are inconsistent with precedent.”

Those serious concerns should not be overlooked by the Government.

On 2 July this year, the Government launched a consultation on whether the extension would be the right thing to do. The noble Lord, Lord Thomas, went through the findings of that consultation, and he teased the Minister about his wry Scottish sense of humour, because of course the results of the consultation were very different and far more negative than he intimated.

My honourable friend Alex Cunningham, when speaking in the other place, explained that granting the power to depart from retained EU case law to the lower courts is likely to encourage litigation by parties who hope to overturn an earlier judgment that relied on EU case law, and subsequently will increase the volume of cases. That will inevitably put additional pressure on the courts, which already face a significant backlog due to both the pandemic and the cuts that we have seen in the courts system over the past 10 years.

Both the legal sector and trade unions expressed their opposition to the Government’s proposals. Unions are hugely concerned about the impact that a mass departure from retained EU case law would have on workers’ rights. Unions were also clear that the Government should not go ahead with the plan because it would undermine the doctrine of precedent and cause significant uncertainty and disruption to both employers and employees.

We accept that the courts should have the power to divert from EU case law vested in UK law, but that power should remain exclusively with the Supreme Court. We request that the Minister address all the concerns expressed by the legal profession and the trade unions. Will he outline why the Government have chosen to proceed with these regulations? Can he help outline what they plan to do to ensure that the courts under the Supreme Court are able to operate effectively, and to ensure that the changes do not simply result in increased litigation and, ultimately, in even more appeals to the Supreme Court? What reassurance can he give to trade unions that their fears are unfounded and that workers’ rights will not be compromised as a result of the changes proposed in this statutory instrument?

We believe that, based on current evidence, the Government cannot truly justify the changes brought in by the statutory instrument. The Labour Party has sought to work constructively with the Government as they have embarked on their programme of introducing necessary secondary legislation across all areas for use after the transition period. However, on this occasion, we do not feel that the changes to be implemented by these regulations are justified. We will not vote against the regulations, but we do not support them.

My Lords, I am grateful for the contributions to this debate and I would like to respond to the points made.

First, I acknowledge the contribution of the noble Lord, Lord Beith, who pointed out that consultation has taken place. I emphasise that the terms of the legislation seek to strike a balance which is intended to prevent an overwhelming rush of work to the court at the highest level. We also intend to maintain judicial independence.

My noble and learned friend Lord Mackay of Clashfern raised the matter of the approach which he had urged at an earlier stage whereby there should be a means of referral from the lower courts to the higher—to those courts which are capable of taking a decision in these matters. There is no provision for any courts to refer below the Court of Appeal, including the magistrates’ court. Matters will find their way into the appellate level of courts capable of hearing these matters in the normal way by decisions being taken and themselves appealed against. It seems very likely that appeals in these contexts would be more or less inevitable given the novelty of the situation but also acknowledging the likely temporary nature of the situation as the law recovers full independence.

The noble Lord, Lord Thomas of Gresford, spoke about there being an allergy on the part of the Government and the Conservative Party against mention of the CJEU. Having gone over my notes and counted four occasions when I mentioned that court in the first two pages of my notes, I am driven to conclude that the noble Lord was speaking figuratively, although at the end of his speech he said that I had perhaps not yet developed the allergy.

On the matter of the response of the consultees, the noble Lord said that I might perhaps be exercising something of a sense of humour when I spoke positively of it, given the overall terms in which the consultation had been responded to. However, I take from the consultation that there was support for the cautious approach taken in terms of the SI, balancing competing needs between access to the courts, the need to avoid a particular higher level of court being overwhelmed with applications and the need for legal clarity. In the circumstances, it seems inevitable that there will be some increase in the burden of work on the higher courts resulting from the unprecedented decision of this country to leave the European Union. That degree of disruption is, as I say, inevitable. However, I submit that the terms of this SI admit a useful and productive method by which that new burden of work can most readily be assimilated over time.

On the noble Lord’s point about the range of courts capable of taking on this function with regard to the statutory instrument, he made reference to the Lands Valuation Appeal Court in Scotland. The seven courts were chosen specifically for their appellate status, the availability of appeals to them and the absence of availability of appeals from them.

The noble Lord, Lord Ponsonby of Shulbrede, indicated the Labour Party’s position and sought reassurance with regard to the concerns that were raised by trade unions and the legal profession. Nothing in this statutory instrument seeks to impose at all on any of the courts any view which the Government may hold. Indeed, the statutory instrument may be read as emphasising the importance that the Government place on the independence of the courts and of judicial discretion. Other than through reiteration of the 1966 test laid down by the House of Lords, there is no prescriptive list of factors to be taken into account by the courts taking on this function.

The Government see this instrument as an important part of the United Kingdom’s future standing to ensure that more courts are able to depart from retained European Union case law but in a timely and appropriate manner. We consider this to be a proportionate and sensible approach to this unprecedented and novel situation as the United Kingdom becomes the first country to leave the EU. We consider that extending the power to courts at the Court of Appeal level, to the Court of Appeal and to its equivalents, strikes the right balance between the provision of legal clarity and certainty and enabling the law to appeal more flexibly.

I am grateful for your Lordships’ learned contributions to the debate. I hope that your Lordships agree that the statutory instrument is a necessary one, therefore I commend this draft instrument to the Committee.

Motion agreed.

The Grand Committee now stands adjourned until 6.15 pm. I remind Members to sanitise their desks and chairs before leaving the Room.

Sitting suspended.