On 26 June 2018, after nearly a year of deliberation by Parliament, the European Union (Withdrawal) Act 2018 (the “Act”) received royal assent. It is a statute of profound importance to the legal systems of the UK. This post seeks briefly to summarise the purpose and architecture of the Act and to outline ten key implications for UK law and lawyers.

Purpose and architecture of the Act

The basic purpose of the Act is to repeal the ECA 1972 but then retain in effect after “exit day” almost all UK laws which have been derived from the UK’s membership of the European Union since 1 January 1973. “Exit day” is defined as 29 March 2019 at 11pm (section 20(1)). The central architecture of the Act is this:

• Section 1 repeals the ECA 1972 on exit day;
• Section 2 continues in force all “EU-derived domestic legislation”, which is principally delegated legislation passed under the ECA 1972 to implement directives;
• Section 3 converts all “direct EU legislation”, being EU regulations, decisions and tertiary legislation, into domestic law; and
• Section 4 converts all other “rights, powers, liabilities, obligations, restrictions, remedies and procedures” recognised and available by reason of section 2(1) ECA 1972 into domestic law.

The intended effect is continuity: the existing body of EU law is frozen as at exit day, and adopted as UK law. The content of EU law as it stands at 29 March 2019 is therefore going to be a critical piece of legal history for the purpose of UK law for decades to come. The legal reality will not, however, be one entirely of continuity – far from it. At this early stage, ten particularly important implications for UK law can be identified.

(1) Farewell to Francovich – but a two year grace period for accrued claims

First, the Act removes, with some very limited exceptions, any action for Francovich damages. Schedule 1, paragraph 4 of the Act provides that “[t]here is no right in domestic law on or after exit day to damages in accordance with the rule in Francovich.” This applies even to “anything occurring before exit day (as well as anything occurring on or after exit day)” (Schedule 8, paragraph 39(1)).  So even existing causes of action for breach of EU law are likely to be extinguished unless either (1) proceedings have been “begun, but not finally decided, before a court or tribunal in the United Kingdom before exit day” (Schedule 8, paragraph 39(3)), or (2) proceedings are “begun within the period of two years beginning with exit day so far as the proceedings relate to anything which occurred before exit day” (Schedule 8, paragraph 39(7)).

(2) No future direct effect of directives: such effect must have been recognised before exit day

Secondly, retained EU law will have no doctrine of direct effect of directives. Directives are not in themselves “retained EU law”: only the domestic legislation made to implement them (section 2) and any directly effective rights under such directives already existing before exit day (section 4(1)).  Further, section 4(2)(b) prevents any rights arising “…under an EU directive (including as applied by the EEA agreement)” if those rights are “not of a kind recognised by the European Court or any court or tribunal in the United Kingdom in a case decided before exit day (whether or not as an essential part of the decision in the case).” So any directives which the UK has transposed inaccurately or inadequately as at exit day will be incapable of giving rise to directly effective rights after exit day unless the right has been already recognised by the EU or UK courts.

(3) No future validity challenges: such invalidity must have been recognised before exit day, subject to further delegated legislation in the future

Thirdly, retained EU law will not – absent future delegated legislation – incorporate any doctrine of invalidity. Schedule 1, paragraph 1(1) provides that “There is no right in domestic law on or after exit day to challenge any retained EU law on the basis that, immediately before exit day, an EU instrument was invalid.” Schedule 1, paragraph 1(2)(a) then makes an exception to this rule “so far as the European Court has decided before exit day that the instrument is invalid.” So the basic position is that retained EU laws will remain UK law even if the CJEU subsequently recognises them to have been invalid. The only exception is if the Government makes regulations under Schedule 1, paragraphs 1(2)(b) and 1(3), which permit invalidity challenges to retained EU law if they are “of a kind described, or provided for, in regulations made by a Minister of the Crown”. The Government therefore has the power to decide the circumstances, if any, in which retained EU law might be capable of being declared invalid.

(4) No more references to the CJEU, and no more absolute supremacy for CJEU decisions: not bound by any after exit day, and the Supreme Court and High Court of Justiciary are not bound at all (the test for departing is the test applied to their own decisions)

Fourthly, our relationship with the CJEU is set to change dramatically. Most obviously, there will be no references to the CJEU after 29 March 2019 (section 6(1)(b)). Furthermore, future CJEU decisions will be simply a discretionary consideration for the UK courts. Under section 6(1)(a), a court or tribunal “is not bound by any principles laid down, or any decisions made, on or after exit day by the European Court”. Such principles and decisions will simply be a discretionary consideration, section 6(2) providing that “[s]ubject to this and subsections (3) to (6), a court or tribunal may have regard to anything done on or after exit day by the European Court, another EU entity or the EU so far as it is relevant to any matter before the court or tribunal.” By contrast, past CJEU decisions on retained EU law – known as “retained EU case law” – are binding on all courts below the Supreme Court/High Court of Justiciary.  Under section 6(4), the Supreme Court/High Court of Justiciary are “…not bound by any retained EU case law …”, and in deciding whether to depart from any retained EU case law, each “must apply the same test as it would apply in deciding whether to depart from its own case law” (section 6(5)).

(5) The status of retained EU law: “retained direct principal EU legislation”, “retained direct minor EU legislation” and “retained EU law by virtue of section 4”

Fifthly, we must become used to some new categories of domestic law. The Act divides retained EU law into three main classes, being “retained direct principal EU legislation” (section 7(6)), “retained direct minor EU legislation” (section 7(6)) and “retained EU law by virtue of section 4” (section 7(4)).  In very broad terms, the first and third categories are made akin to primary legislation: they can be modified by delegated legislation only if made under the Act itself, or an existing recognised Henry VIII power (section 7(2), (4)).  By contrast, the second category can be modified by any existing or future powers to make, confirm or approve subordinate legislation (section 7(3) and Schedule 8).

(6) Supremacy of EU law, but only over pre-exit day laws

Sixthly, the doctrine of supremacy of EU law will have no application to laws passed after exit day. Under section 5(1), the “…principle of the supremacy of EU law does not apply to any enactment or rule of law passed or made on or after exit day.” So post-exit day laws will take precedence over retained EU law.  As to pre-exit day domestic laws, the “…principle of the supremacy of EU law continues to apply on or after exit day so far as relevant to the interpretation, disapplication or quashing of any enactment or rule of law passed or made before exit day” (section 5(2)).

(7) Continued Treaty Articles on free movement, state aid etc – but how will they work?

Seventhly, the courts will have to try to make sense of many laws which are difficult to construe or apply as domestic UK laws. The Explanatory Notes to the Act give (¶94) a non-exhaustive list of some 28 directly effective rights in the TFEU, including EU citizenship rights (Article 20), the customs union (Articles 28-30), free movement of goods (Articles 34-36), free movement of workers (Article 45), freedom of establishment (Article 49), services (Article 57) and capital (Article 63), which are intended to be continued in effect by section 4.  Few of these rights however, read literally, make sense as provisions of UK law applicable only within the UK. They refer, mostly, to “Member States”, the “internal market” and effect on trade between “Member States”. What, for instance, are the Courts to make of a UK law that “[q]uantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States” (Article 34 TFEU, which will be carried into UK law by section 4)?  There are no doubt all sorts of possible solutions, but the Act offers no guide to the Courts in making the delicate policy decisions which arise.

(8) The critical importance of delegated legislation, and the role of judicial review

Eighthly, delegated legislation will be of critical importance. Section 8 of the Act is entitled “Dealing with deficiencies arising from withdrawal”. It enables a Minister of the Crown, by regulations, to “…make such provision as the Minister considers appropriate to prevent, remedy or mitigate—(a) any failure of retained EU law to operate effectively, or (b) any other deficiency in retained EU law, arising from the withdrawal of the United Kingdom from the EU.” The definitions of “deficiency” in sections 9(2) and 9(3) of the Act are extremely long and broad and are likely to be engaged by many pieces of retained EU law. In principle, delegated legislation is capable of being subjected to judicial review on ordinary public law grounds: see e.g. R (Javed) v Secretary of State for the Home Department [2002] QB 129. Given the scale of the delegated legislative exercise likely to be necessary to make retained EU law work, judicial review may have an important role.

(9) General principles of EU law

Ninthly, the operation of the general principles of EU law will be very different.  Schedule 1 paragraph 2 prohibits the recognition of any general principle of EU law after exit day “if it was not recognised as a general principle of EU law by the European Court in a case decided before exit day”. There is no right of action on or after exit day “based on a failure to comply with any of the general principles of EU law” (Schedule 1, paragraph 3(1)).  And no enactment or rule of law or decision may be unlawful, “because it is incompatible with any of the general principles of EU law” (Schedule 1, paragraph 3(2)).  The general principles are therefore being frozen in their development and made an interpretative aid only (section 6(3)(a)).

(10) Farewell to fundamental rights

Tenthly, the Charter of Fundamental Rights will not be part of retained EU law (section 5(4)). This is so despite the fact that the purpose of the Charter was, as the Supreme Court has recognised, “the assembly in a single instrument of those fundamental rights which European Union law had previously identified in legislation or in decisions of the CJEU” (RFU v Viagogo [2012] 1 WLR 3333 at ¶26 per Lord Kerr). The exclusion of the Charter does not, however, “affect the retention in domestic law on or after exit day in accordance with this Act of any fundamental rights or principles which exist irrespective of the Charter” (section 5(5)). The question whether a particular right exists irrespective of its recognition in the Charter is therefore likely again, as it was before the Lisbon Treaty, to become important.

James Segan is a Barrister at Blackstone Chambers, London. His previous writing on the Withdrawal Bill, including an extended version of this post, can be found here, here and here.

(Suggested citation: J. Segan, ‘The European Union (Withdrawal) Act 2018: Ten Key Implications for UK Law and Lawyers’, U.K. Const. L. Blog (26th Jul. 2018) (available at https://ukconstitutionallaw.org/))