The House of Lords European Union Justice-Sub Committee (‘the Committee’) today published its report Dispute resolution and enforcement after Brexit (15th Report of Session 2017-19: HL Paper 130) (PDF). The Committee’s report is detailed and wide ranging, focusing on four distinct matters:

1. the enforcement of the Withdrawal Agreement concluded under Article 50 of the Treaty on European Union;
2. arrangements during the proposed transition period;
3. the dispute resolution system that will be implemented under any agreement on future relations between the EU and the UK; and,
4. the related question of how to deal with justice cooperation issues in civil, family and criminal law.

The second issue has now been agreed in principle: during the transition period the UK will continue to be bound by the judgments of the Court of Justice of the European Union (CJEU).  The final matter will be the subject of further work by the Committee, which expressed concern that justice cooperation between the UK and the EU remains unresolved.

Accordingly, this post focuses on questions that arose in respect of only two of these issues – the enforcement of the Withdrawal Agreement; and, dispute resolution in respect of the future relationship.

Both have a common thread: the UK Government’s ‘red line’ on the jurisdiction of the CJEU. The Prime Minister has said consistently that, after Brexit, the Government would end “the direct jurisdiction” of the CJEU in the UK. This is clearly causing some tensions between the UK Government and the EU 27. However, unlike the question of the Irish border, it has, thus far, received rather less attention from commentators.

The Committee took the view that, assuming the Government is successful in its ambition to end the direct jurisdiction of the CJEU, it is essential for the rule of law in the UK that an adequate replacement is found to help resolve any disputes between the UK and EU post-Brexit. Yet, after assessing the evidence, it concluded that there was no ‘one size fits all’ dispute resolution model which could deal with all these issues.

Enforcement of the Withdrawal Agreement

Starting with the Withdrawal Agreement, the Committee noted that liabilities and obligations under the Agreement could extend for a period longer than the UK was a member of the EU.

Although the Government has accepted that there should be a special regime in respect of citizens’ rights (which comes with a role for the CJEU) the Committee concluded that it would be “problematic” to leave the interpretation of the entirety of the remainder of the Withdrawal Agreement to the CJEU.  It said that the CJEU was “associated with one of the parties to the agreement” and that any possible perception of bias should be avoided. However, the Committee criticised the Government’s proposed solution – which appears to be to leave any disputes to be settled in the political sphere by the proposed UK-EU Joint Committee that will be established under the Withdrawal Agreement – since it concluded that this could leave intractable disputes between the UK and the EU unresolved.

Tensions arise because, while Article 50 provides that the Treaties shall cease to apply to the UK on exit, the EU’s position is that the legal autonomy of the Union (as defined by the CJEU in past cases) demands that only the CJEU has final say on the interpretation of EU law. Moreover, there is a risk that the Withdrawal Agreement could be referred to the CJEU to determine whether it is compatible with the Treaties. In that context, the Committee warned that a “pragmatic solution” would have to be found between the parties – and quickly, given that the Withdrawal Agreement needs to be concluded in a matter of months.

The Committee considered several proposed models, including ‘docking’ with the EFTA Court for the purpose of settling disputes arising from the Withdrawal Agreement. The Government seemed uninterested in this idea and it would have to commence negotiations with the EU 27 and EEA/EFTA states as a matter of some urgency, if it now wished to avail itself of this option.

Dispute resolution under the agreement on future relations

On the question of future relations, the Committee did not recommend a precise model of dispute resolution, since much will depend on the closeness of the partnership between the UK and the EU. It noted that if the UK wants to pursue a “deep and special partnership”, which involves participation in EU agencies, and mechanisms such as the European Arrest Warrant, then it will have to “respect the remit” of the CJEU in those areas. Indeed, the Prime Minister has already recognised this fact in her speeches at the Mansion House and in Munich.

Yet it also observed that, whatever formal structure is adopted for future UK-EU relations, it is likely to be composite in nature, with different levels of integration in different areas. Thus, the Government might only be obliged to accept the jurisdiction of the CJEU in specific and limited areas: namely those involving direct cooperation with EU agencies, or that fall within the field of co-operation on justice and home affairs.

The Committee also recognised that whatever agreement is eventually reached, while the Government might be able to exclude the direct jurisdiction of the CJEU, the influence of the Court would remain. Cases such as Schrems and Petruhhin demonstrate the effect CJEU caselaw can have on ‘third countries’ outside the EU, whether in the sphere of data sharing/data protection or extradition.

Finally, the Committee stressed that it was important that the dispute resolution mechanism should be transparent and accessible to citizens and businesses. It concluded that “the interests of citizens and businesses would be prejudiced” if the system only operated at a state-to-state level.

It is plain from the Committee’s report that there are still a number of challenges ahead for the parties to the negotiations.  But securing an effective dispute resolution system will be essential to ensure the enforceability of any agreements that the UK and the EU enter into.

Alexander Horne is Legal Adviser to the House of Lords European Union Committee and an honorary lecturer at University College London. This post is written in his personal capacity. The EU Justice Sub-Committee’s report is available here (PDF).

(Suggested citation: A. Horne, ‘Dispute Resolution and Enforcement after Brexit’, U.K. Const. L. Blog (3rd May 2018) (available at https://ukconstitutionallaw.org/))