The Issue

Following the end of the UK’s transition period for withdrawing from the EU, the status of earlier case law on retained EU law is somewhat complicated.  Section 6(3) and (4)(a) and (b) of the European Union (Withdrawal) Act 2018, as amended by the European Union (Withdrawal Agreement) Act 2020, provides that the Supreme Court and in criminal matters the High Court of Justiciary are not to be bound by any retained EU case law, but other courts and tribunals are to determine issues of retained EU law in accordance with retained EU case law.  In relation to certain aspects of competition law, section 60A(7) of the Competition Act 1998, inserted by reg. 23 of the Competition (Amendments etc.) (EU Exit) Regulations 2019, SI 93 of 2019, provides that any court or tribunal, the Competition and Markets Authority, and anyone acting on behalf of the Authority, may depart from retained EU case law.  In addition, section 6(5A) of the 2018 Act allows regulations to be made to designate other courts and tribunals as ‘relevant courts’ or ‘relevant tribunals’ which, by virtue of section 6(4)(ba), are not to be bound by retained EU case law to the extent specified in the regulations.

Following the publication of a Consultation Paper in July 2020, and the Government’s response to comments, the Lord Chancellor made the European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020, SI 1525 of 2020 (‘the regulations’), which came into force immediately after the end of the transition period.  Regulation 3 designates the following as ‘relevant courts’: throughout the UK, the Court Martial Appeal Court and courts for hearing election appeals under section 57(1)(b) of the Representation of the People Act 1983; in England and Wales, the Court of Appeal; in Scotland, the Inner House of the Court of Session, the High Court of Justiciary when hearing a compatibility or devolution issue, and the Lands Valuation Appeal Court; and in Northern Ireland, the Court of Appeal. 

This post considers how the changes might work and their impact on legal certainty and the separation of powers.

Legal Certainty

Stare decisis helps to limit inconsistent decision-making by requiring judges to follow the ratio decidendi of judgments of courts sitting higher, and in some cases on the same level, in the hierarchy of courts.  Under the regulations, retained EU case law no longer binds a ‘relevant court’ except so far as it has been applied or modified by post-transition case law of a UK court or tribunal whose decision binds the relevant court according to ordinary principles of stare decisis: reg. 4(1), (2).  For example, the Court of Appeal in England and Wales will be bound to follow post-transition decisions of the Supreme Court or (subject to the usual exceptions) the Court of Appeal, whereas judgments of the Court of Appeal in England and Wales are merely persuasive in Scotland and Northern Ireland.

The Consultation Paper raised the possibility of extending freedom to depart from retained EU case law to courts and tribunals below the level of those which have now been made ‘relevant courts’.  That would have significantly increased the risk of uncertainty and diverging interpretations of retained EU law.  Limiting the freedom to the higher appellate courts helps to reduce that risk.  It also discourages a litigation free-for-all in which individuals, pressure groups and corporations try to relieve themselves of burdens arising under earlier interpretations of retained EU law.  Anyone seeking to change the approach to the law through litigation will need sufficient determination and pockets deep enough to sustain the risks of litigating to appellate level.

Nevertheless, a significant risk of uncertainty remains.  ‘Retained EU case law’ includes judgments of courts and tribunals in the UK as to the interpretation and application of retained EU law: European Union (Withdrawal) Act 2018, section 6(7).  The newly designated ‘relevant courts’ are now free to decide whether to follow judgments on retained EU law made on or before 31 December 2020 not only by the Court of Justice of the European Union but also by themselves and, even more significantly by the Supreme Court of the United Kingdom.  When deciding how to use this freedom, reg. 5 requires a relevant court to ‘apply the same test as the Supreme Court would apply in deciding whether to depart from the case law of the Supreme Court’.  This is problematic, for two reasons.

First, the ‘test’ is hardly a test at all.  The Consultation Paper correctly noted that the Supreme Court (like the House of Lords before it) when considering whether to depart from its earlier case law asks ‘whether it appears right to do so’.  The origin of this lies in the 1966 Practice Statement by which the Lord Chancellor and the Lords of Appeal in Ordinary announced that they proposed, ‘while treating former decisions of this House as normally binding, to depart from a decision when it appears right to do so’: [1966] 1 W.L.R. 1234.  But no court is likely to depart from retained EU case law if it appears wrong to do so.  The important question is when it will appear right.  There can be no hard-and-fast answer to this.  A number of relevant considerations have been identified in case law and academic discussion.  Looking at the use made by the House of Lords of the Practice Statement in its early years, Professor Alan Paterson listed a number of principles which Lord Reid had articulated: the Practice Statement should be used sparingly; it ought not to be used where it would upset the legitimate expectations of people who had arranged their affairs in reliance on it; it ought only very rarely to be used to change the interpretation of legislation or documents; it ought not to be used where the Law Lords could not foresee the consequences, or where it would produce a change that ought to be part of a comprehensive reform of a legislative kind; it ought not to be used where the Law Lords merely considered the earlier decision to be wrong; it ought to be used to overrule a decision that has caused great uncertainty; and it ought to be used to overrule a decision that is not in keeping with some broad consideration of justice or with contemporary social conditions or modern perceptions of public policy (Alan Paterson, The Law Lords (London: Macmillan, 1982), pp. 156-157). 

The Consultation Paper tried to explain certain cases in which the House of Lords had departed from its own previous decisions on the basis that earlier decisions did not reflect modern public policy (Miliangos v. George Frank (Textiles) Ltd. [1976] A.C. 443, departing from Re United Railways of the Havana and Regla Warehouses Ltd [1961] A.C. 1007) or had caused uncertainty (Murphy v. Brentwood District Council [1991] 1 A.C. 398, departing from Anns v. Merton L.B.C. [1978] A.C. 728).  This misrepresented the reasons given in those cases for departing from earlier case law.  Miliangos was not concerned with public policy: it was a case in which procedural hurdles to awarding damages assessed in foreign currency at the time of the earlier decision had since been overcome; assessment of damages in foreign currency had come to be internationally acceptable; and currency fluctuations had left foreign plaintiffs inadequately compensated.  The decision was based on the long-standing principle of fair compensation in circumstances where there were no longer insuperable obstacles to giving effect to it.  Murphy was not concerned with uncertainty but with rectifying unsatisfactory consequences flowing from a novel development in the earlier decision, which had imposed new, very extensive negligence liability for latent defects in buildings on public bodies performing their statutory duty to oversee compliance with building regulations.  The earlier decision was shown to have been analytically defective; it had been wrong for judges to impose a liability on a public body performing statutory functions when Parliament had not seen fit to impose it by legislation; and the earlier decision had not been followed in other common-law jurisdictions.  One cannot describe the possible criteria succinctly, and at a normative level, there remain sharp divisions of opinion as to how willing final courts of appeal should be to overrule their own previous decisions: see, e.g., J. W. Harris, ‘Towards principles of overruling: when should a final court of appeal second guess?’ (1990) 10 O.J.L.S. 135; B. V. Harris, ‘Final appellate courts overruling their own “wrong” decision: the ongoing search for principle’ (2002) 118 L.Q.R. 408. 

Secondly, making lower courts use the ‘test’ used by the Supreme Court when considering whether to depart from its own case law fails to take account of the different roles and status of the Supreme Court and lower courts and tribunals respectively.  The reason for allowing an apex court a degree of latitude as to the binding effect of its own case law is that the apex courts’ judgments are not subject to review by or appeal to any other court.  This justifies limiting legal certainty to the extent necessary to allow them to correct their mistakes and adjust the law to new circumstances, where that can be done without crossing the admittedly fuzzy line between adjudication and legislation.  Judgments of lower courts, by contrast, are usually subject to review or appeal, so the rule-of-law arguments for allowing them to depart from their own case law is less persuasive, and there can rarely, if ever, be any justification for allowing them to depart from case law of the apex court (although that case law needs to be interpreted like any other).

It is hard to know how the operation of principles articulated previously for final courts of appeal will apply, if at all, to the entirely new context in which (a) lower appellate courts are being freed to depart from decisions of final appellate courts and (b) this is happening in relation to case law of a system of law in which the former apex courts, the Court of Justice of the EU, itself operates no formal stare decisis (although concern for consistency makes this less significant in practice).  Courts should be slow to upset established expectations on the basis of which people have organised their affairs, or to make changes that would require new institutions to be established or resources to be provided.  Section 60(A)(7) of the Competition Act 1998 identifies a number of factors for consideration by competition-law institutions considering departing from retained EU case law, including changes in the domestic legislative framework following completion day, differences between market conditions as between the EU and the UK, and changes in forms of economic activity.  Analogous considerations might be relevant to non-competition contexts.

One may be reasonably confident that the Court of Appeal in England and Wales will be very slow to depart from a decision of the Supreme Court on retained EU law.  Departing from a Supreme Court decision would be a step too far from traditional respect for judicial hierarchies.  It will virtually always be more appropriate to follow the earlier decision, even if thought to be wrong, and leave the Supreme Court to decide whether to overrule itself.  Where the decision in question was given by the Court of Justice, different considerations apply, but, even then the principles of legitimate expectation and concern about unforeseen consequences should make courts cautious.

Separation of powers and the judicial role

The regulations require relevant courts to be creative in their approach to retained EU law, including areas of social and economic policy.  Courts are likely to have only limited information about the social, economic or governmental impacts of their decisions.  Law reform is essentially a legislative function: normally only legislation can upset settled case law.  In relation to retained EU law, even the powers of devolved legislatures are tightly circumscribed, so it is surprising that the regulations appear to extend quasi-legislative power to courts.  Politicians frequently criticise judges for exceeding the bounds of the judicial role when developing the law, and ministers have ample power to make subordinate legislation to change retained EU case law.  The Government’s enthusiastic encouragement of judicial creativity pulls in a new direction.  It can perhaps only be explained on the basis that the Government will not have time to make all the subordinate legislation that would be needed, and foresees a role for litigants in accommodating the law to post-withdrawal needs.  But there can be no doubt that, if one wants well-thought-out law reform in sensitive social and economic areas, consultation followed by legislation is better than litigation.

There is no system for ensuring that reforms that are in the public interest are raised in litigation.  The chance of a particular matter being litigated depends on people with a legal interest being willing to risk their money, or being able to secure funding from other people, with no assurance of a favourable outcome.  The scale of the risk is heightened by needing to go beyond first instance to have a chance of overturning retained EU case law.  Litigation is not often the best way of pursuing systematic change.  See, e.g., Sir Richard Buxton, ‘How the common law gets made: Hedley Byrne and other cautionary tales’ (2009) 125 L.Q.R. 60-78.  The high risk of unintended consequences increases still further when the number of courts empowered to depart from precedent increases.  The risks could be moderated if the Government were to fund a test-case system and expedited appeals to the Supreme Court, although that would present its own problems of cost and management.  In the absence of such a system, we cannot be confident that socially useful cases will be brought and desirable departures from retained EU case law made.

Judges are usually sensitive to such problems, and conscious of the need to avoid legislating.  Non-apex courts are likely to want to behave interpretatively rather than legislatively, in order to stay as far as possible within their judicial role.  They should therefore proceed as far as possible interpretatively and incrementally, being loyal to the language and structure of retained EU law as well as domestic law if their decisions are to be seen as within constitutional functions.  They will probably, quite rightly, be reluctant to make use of their freedom save where the earlier case law cannot continue to be given effect following the legal and constitutional changes brought about as a result of withdrawal from the EU or where it is incompatible with well established constitutional and legal principles in the UK.  In other cases, courts will probably follow the retained EU case law while facilitating appeals to the highest court so it can consider the matter.

Conclusion

If this is correct, the practical effect of the regulations will probably be limited.  It is to be hoped that people will not be induced to risk their resources, or put other people’s resources at risk, in the hope of persuading middle-tier appellate courts to exercise an essentially legislative function.  This does not mean, however, that retained EU case law will be frozen until cases reach the Supreme Court.  In common-law systems, distinguishing, explaining or developing previous decisions incrementally produces change far more often than overruling or departing from them, and occurs at all levels of the judicial hierarchy.  This inherent flexibility of most case law is as much a feature of retained EU case law as of domestic authorities.  These traditional common-law techniques may be more often used to adjust retained EU case law to post-transition needs than the freedom conferred by the regulations.

David Feldman, Emeritus Rouse Ball Professor of English Law, University of Cambridge.  This post draws on the response submitted by seven members of the University of Cambridge’s Centre for Public Law and Centre for European Legal Studies to the Government’s consultation on departing from retained EU case law.  I acknowledge my debt to them, and to others who participated in a webinar on 16^th July 2020 to discuss the Consultation Paper.

(Suggested citation: D. Feldman, ‘Departing from Retained EU Case law’, U.K. Const. L. Blog (11th Jan. 2021) (available at https://ukconstitutionallaw.org/))