Brexit: preparing for exit day

Emyr Thomas, Sharpe Pritchard

The European Union (Withdrawal) Bill will repeal the European Communities Act 1972 on the day the United Kingdom leaves the European Union. Termed ‘exit day’ in the bill, it is currently scheduled to take place on Friday 29 March 2019.

The constitutional consequences arising from the bill are enormous since it ends both the supremacy of EU law in the UK and removes the processes by which EU law becomes part of UK law.

To ease the transition, and ensure legal certainty post-Brexit, the bill provides for the continued application of EU law in force and applicable to the UK before our official departure.

Retention of EU law: incorporation of direct EU legislation

By section 2(1) of the 1972 Act, certain types of EU legislation which are directly applicable, such as EU regulations, are automatically incorporated into UK law and bind our courts and tribunals without Parliament having to pass implementing legislation.

To prevent EU legislation incorporated in this way ceasing to have effect when we leave the EU, the bill provides that direct EU legislation – which includes any EU decision, EU regulation or EU tertiary legislation – which is operative immediately before exit day will form part of domestic legislation on and after that day (clause 3). Helpfully, the bill requires the Queen’s printer, within The National Archives, to prepare and publish a list of this legislation (paragraph 1, Schedule 5).

Retention of EU law: saving for EU-derived domestic legislation

By section 2(2) of the 1972 Act, EU law which is neither directly applicable nor has direct effect, such as an EU Directive, can be given effect in UK law by secondary legislation. Unless expressly saved, secondary legislation usually expires when the primary legislation under which it is made has been repealed.

The bill therefore provides that such EU-derived domestic legislation which has effect in UK law immediately before exit day will continue to have effect in UK law when the 1972 Act is repealed and afterwards (clause 2).

Other categories of EU-derived domestic legislation which are saved, include:

  • legislation not made under section 2(2) of the 1972 Act but which was passed or made for the purpose of implementing EU obligations (the explanatory notes accompanying the bill cite health and safety law made under the Health and Safety at Work etc. Act 1974 as an example);
  • legislation relating to anything falling within the categories mentioned above or other EU law (which means that provisions which go beyond what is required by EU law will continue to have effect);
  • any enactment relating to the EU or the EEA (to cover, among other things, an enactment which cross refers to a definition included in an EU instrument).

The scope of EU-derived domestic legislation is wide and, unlike direct EU legislation, there is no requirement for the Queen’s printer to publish a list of it. This is possibly because of the difficulty in identifying all the legislation covered under clause 2, particularly under the categories summarised in the three bullet points above.

EU law not retained: the Charter of Fundamental Rights

While the bill provides for the continuity of much of EU law in the UK on and after exit day, a notable exception is the Charter of Fundamental Rights.

The charter brings together in a single document the fundamental rights protected in the EU. It contains 50 rights and freedoms under six titles – dignity, freedoms, equality, solidarity, citizens’ rights and justice – which have all been recognised by decisions of the European Court of Justice.

The charter became legally binding on the EU with the entry into force of the Treaty of Lisbon in December 2009. It binds EU institutions, including member states, when they implement EU law and has the same legal status as EU treaties. A consequence of this is that when the UK acts within the scope of EU law it must do so compatibly with the charter, and UK primary legislation which conflicts with a directly effective right under the charter must be set aside if it cannot be read compatibly with it.

The bill provides that the charter will not form part of domestic law on or after exit day (clause 5(4)); however, this will not affect the retention in domestic law on or after exit day of any fundamental rights or principles which exist irrespective of the Charter of Fundamental Rights. It also provides that references to the charter in any case law are to be read as if they were references to any ‘corresponding retained fundamental rights or principles’ (clause 5(5)). While these are not defined, they are presumably rights and principles set out in retained EU law and other human rights treaties which are applicable in the UK and which are captured by the charter.

EU law not retained: the abolition of the rule in Francovich

In Francovich, the European Court of Justice held that in some circumstances states have to pay damages to individuals and organisations for damage that they suffer as a result of the state’s breach of its EU obligations. The bill abolishes this rule on exit (paragraph 4, Schedule 1).

In order, perhaps, to counter criticism that this amounts to a drastic removal of directly effective rights, the explanatory notes which accompany the bill state: ‘This provision does not affect any specific statutory rights to claim damages in respect of breaches of retained EU law (for example, under the Public Contracts Regulations 2015) or the case law which applies to the interpretation of any such provisions.’

UK courts and the European Court of Justice

The bill explains how the relationship between the European Court of Justice and the UK’s courts will operate after exit day. It provides that EU decisions made post Brexit will not bind domestic courts, that domestic courts cannot refer cases to the European Court of Justice after exit day, and that while a domestic court will not be required to have regard to anything done on or after exit day by the European Court of Justice or another EU entity, or indeed the EU more generally, it may do so if it considers it appropriate (clause 6). Given this discretion, it is difficult to anticipate what approach the courts will adopt when interpreting EU law.

In respect of this latter point, Lord Neuberger, before retiring as President of the Supreme Court, called on the government to clarify whether it wants UK courts to take into account rulings of the European Court of Justice. He told the BBC: ‘If [the government] doesn’t express clearly what the judges should do about decisions of the ECJ after Brexit, or indeed any other topic after Brexit, then the judges will simply have to do their best. But to blame the judges for making the law when parliament has failed to do so would be unfair.’

Henry VIII and the temporary powers to make secondary legislation

The bill allows ministers to make regulations to prevent, remedy or mitigate any failure or deficiency in any retained EU law which arise from the UK’s withdrawal from the EU (clause 7(1)). Most strikingly, these regulations may make any provision that could be made by an Act of Parliament (clause 7(4)). The power to amend primary legislation by using secondary legislation is known as a Henry VIII power and the inclusion of the power in the bill is one of its most controversial aspects because of the limited scrutiny to which secondary legislation is subject compared with primary legislation.

The power to make regulations is not unconstrained: it is limited by time (it expires after two years (clause 7(7))) and subject matter (clause 7(6)). For instance, the regulations cannot, among other things, impose or increase taxation, create criminal offences for which an individual can be imprisoned for more than two years or amend, repeal or revoke the Human Rights Act 1998. Despite this, the power is wide ranging.

While regulations will be used to perform a technical purpose, such as correcting EU references that are no longer appropriate, they may also be used to create UK public authorities to do things previously done by EU institutions (clause 7(5)) and transfer EU functions to the new authority.

The majority of regulations will be subject to the less onerous negative resolution procedure and so will come into force unless annulled by the House of Commons or House of Lords. However, if the regulations concern fees or propose to do one of the following things then, pursuant to paragraph 1, Schedule 7, they will be subject to the draft affirmative procedure:

  • establish a new public authority;
  • transfer an EU function to a newly created public authority;
  • transfer an EU legislative function to a UK body;
  • create or widen the scope of a criminal offence;
  • or create or amend the power to legislate.

Where ministers consider there is reason for urgency, they will be able to make regulations under clause 7(1) without a draft being laid before, and approved by a resolution of, each House of Parliament (paragraph 3, Schedule 7). Regulations made in these circumstances will cease to have effect after one month unless, during that period, the instrument is approved by a resolution of both houses (paragraph 5, Schedule 7).

Further regulation-making powers under clauses 8 and 9 allow ministers to, respectively, prevent or remedy any breach of the UK’s international obligations which might arise as a result of withdrawal from the EU and to implement a withdrawal agreement concluded by the UK and EU under Article 50(2).

It is clear that a considerable volume of secondary legislation will follow the enacting of the bill; the House of Commons Library briefing paper on the bill states that more than an estimated 12,000 regulations will need to be adopted into UK law, and the scrutiny of this legislation will present Parliament with an unparalleled administrative challenge.

Devolution

The devolved legislatures of Northern Ireland, Scotland and Wales cannot currently legislate in a way which is incompatible with EU law. The bill changes this so that after exit day, the devolved legislatures will not be able to legislate contrary to retained EU law (clause 11). Constitutionally, this is a significant change: presently, the restriction is based on the devolved legislatures being part of an EU member state, but after Brexit the restriction will be based on an Act made by the UK Parliament.

Put simply, powers which are now exercised at EU level will initially return to Westminster and while there is provision for certain powers to be passed to the devolved legislatures, this will be done at the discretion of UK ministers. Moreover, while the bill grants to the devolved administrations the power, similar to those in clause 7, to make regulations to deal with deficiencies in retained EU law arising from the UK’s withdrawal from the EU (paragraph 1, Schedule 2), the regulations may not be made if they are inconsistent with modifications of EU law, whether or not in force, made by or under the bill by the UK government (paragraph 3, Schedule 2).

The purpose behind the devolution provisions seems to be to prevent the grant of further powers to the devolved legislatures via Brexit and to ensure that legislating for Brexit is carried out in a centralised fashion. While this might be administratively convenient for the UK government, it is perhaps surprising that areas of EU law which fall within the competence of the devolved legislatures will not be domesticated by those bodies.

Under the Sewel Convention, where an Act of the UK Parliament proposes to amend the competence of a devolved legislature, that legislature must approve the proposal by legislative consent motion. Currently, the Scottish and Welsh governments have indicated they intend to oppose the bill in its current form and so it appears unlikely they would approve a motion. Notwithstanding the fact that the use of legislative consent motions is not legally binding (because their use is contained in a memorandum of understanding between the UK government and the devolved administrations), as things stand we face the unappealing prospect of the UK government proceeding with a bill which affects Scotland and Wales without the consent of those countries’ legislatures.

In addition to devolution to Cardiff, Edinburgh, Stormont and Westminster, the Local Government Association is calling for further devolution to local authorities. In its briefing paper for a House of Commons debate on devolution and district councils on 15 November 2017, the LGA said there must be no loss of powers for councils on exit day and demanded that the post-Brexit position of councils be formally enshrined in law.

Progress

At the time of writing this article, the European Union (Withdrawal) Bill was about to start its Commons Committee stage where it will receive line-by-line scrutiny by MPs.

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