European Union: Retained EU Law - A Practical Guide

Last Updated: 13 March 2019
Article by Kieran Laird

Retained EU law is a legal term introduced into UK law under the European Union (Withdrawal) Act 2018. It captures EU-derived rights and legislation the government intends to retain and preserve in UK law for legal continuity after Brexit. There is no specific list of retained EU law for lawyers to refer to. It is a matter of statutory interpretation. A must-read for lawyers looking to understand this new legal concept, in this analysis Kieran Laird, director and head of constitutional affairs at Gowling WLG, examines its meaning, scope and status, and provides essential tips for navigating and interpreting retained EU law.

What is retained EU law?

EU law takes effect in the UK through the European Communities Act 1972 (ECA 1972). The ECA 1972 will be repealed by section 1 of the European Union (Withdrawal) Act 2018 (EU(W)A 2018) on 'exit day.' Exit day is defined in the section 20 of the EU(W)A 2018 as 11pm on 29 March 2019.

For the purposes of legal continuity, the government wishes to preserve, as far as possible, the legal position which exists immediately before exit day by taking a snapshot of all of the EU law that directly applies in the UK at that point and bringing it within the UK's domestic legal framework as a new category of law-retained EU law.

The EU(W)A also provides powers for the government and devolved legislatures to amend retained EU law through statutory instruments (SIs) to ensure that it operates effectively after Brexit.

When will the snapshot of retained EU law be taken?

The intention in the EU(W)A 2018 is to repeal the ECA 1972 on exit day and for the snapshot to be taken just before that point.

However, the situation has been complicated by the Withdrawal Agreement negotiated between the UK and the EU27 which provides for a transition period until at least 31 December 2020, during which all EU law will continue to apply in the UK as it does now (and not in any amended UK version). The EU(W)A 2018 is not drafted to accommodate this.

Although the simplest way to deal with this would be to amend the definition of exit day to align with the end of the transition period (and the EU(W)A 2018 includes a power for Ministers to do so), this is likely to prove politically unpalatable for the government.

Instead, in its White Paper of 24 July 2018 on a proposed Bill to give effect to the Withdrawal Agreement, the government stated its intention to retain the definition of exit day and repeal the ECA 1972 on that date. However, the proposed Bill would save and amend certain parts of the ECA 1972 during the transition period so that EU law would continue to flow through the ECA 1972 into UK law.

The proposed Bill would also change the date at which the 'snapshot' was taken for the purposes of retained EU law until the end of the transition period.

So, if a Withdrawal Agreement is approved by Parliament and contains a transition period as currently envisaged, the point at which retained EU law is created as a new category will be postponed until the end of the transition period. If, however, the UK leaves the EU without a Withdrawal Agreement, the snapshot to create retained EU law will be taken immediately before exit day.

What will the snapshot capture?

Retained EU law will be made up of the four following components -

  1. EU-derived domestic legislation section 2 of the European Union (Withdrawal) Act 2018 (EU(W)A 2018)―secondary legislation made under section 2(2) of the European Communities Act 1972 (ECA 1972), and other domestic legislation which implements EU obligations, made prior to exit day. This will include provisions in UK primary legislation;
  2. Direct EU legislation section 3 of the European Union (Withdrawal) Act 2018 (EU(W)A 2018)―EU law that has direct effect in the UK prior to exit day, such as EU regulations and decisions:
    • The retained provisions will include those that are in force before exit day, the effect of which will crystallise later. The explanatory notes to the EU(W)A give the example of Regulation (EU) 517/2014 on fluorinated greenhouse gases. This Regulation has been in force since 2015 and prohibits the supply of equipment containing certain substances from specified dates, some of which fall after 29 March 2019. Because the latter prohibitions are in force now they will be retained, even though they do not apply until after exit day;
    • however, the EU(W)A 2018 carves out 'exempt EU instruments' (EU(W)A 2018, s 20(1) and Sch 6)―these are certain decisions and regulations which by virtue of certain protocols do not apply to the UK on exit day. This includes legislation on the Euro as well as certain freedom, justice and security measures that the UK did not opt into. Decisions of EU bodies aimed at other EU Member States are also carved out; and
    • where direct EU legislation is retained, it will be the English language text of such legislation that will be authoritative
  3. Any remaining 'rights, powers, liabilities, obligations, restrictions, remedies and procedures' which are available in domestic law through ECA 1972, s 2(1) prior to exit day (EU(W)A 2018, section 4)―this will include rights under EU Treaties and directly effective provisions of directives which confer rights without the need for domestic implementation:
    • Rights under directives will only be retained where they are 'of a kind' recognised by the Court of Justice of the European Union or 'any court or tribunal' in the UK in a case decided before exit day section 4(2)(b) of the European Union (Withdrawal) Act 2018. What this will mean in practice is open to debate and is sure to be tested in the courts; and
  4. Retained EU case law section 6(7) of the European Union (Withdrawal) Act 2018―principles laid down by, and decisions of, the Court of Justice of the European Union in relation to the above three categories which have effect in EU law before exit day, except where excluded by other parts of the EU(W)A 2018.

It should also be noted that the Charter of Fundamental Rights of the EU will not form part of retained EU law section 5(4) of the European Union (Withdrawal) Act 2018.

In addition, no general principle of EU law will be retained unless it was recognised as such by EU case law before exit day and, even where it is retained, from three years from exit day, failure to comply with it cannot give rise to a right of action (EU(W)A 2018, Sch 1, paras 2 and 3).

How are existing ambulatory references to EU law treated? How far do the provisions on interpretation of ambulatory references stretch? Do they extend to contracts or other legal documents?

An ambulatory reference is a reference in a provision which cross-refers to a provision in EU law as it is amended from time to time. It therefore tracks the provision referred to as it changes over time. The ambulatory references which are dealt with in the EU(W)A 2018 are those contained in -

  • any enactment;
  • any EU regulation, EU decision, EU tertiary legislation or provision of the EEA agreement; which will become part of retained EU law by virtue of EU(W)A 2018, s 3; or
  • any document relating to anything falling into the above two categories

Where the reference is to a provision of direct EU legislation which becomes retained EU law under EU(W)A 2018, s 3 (EU regulations, decisions, tertiary legislation or provisions of the EEA agreement) the reference will track the retained version as it is amended by UK law from time to time (EU(W)A 2018, Sch 8, para 1).

Where the reference is to a provision in any other type of EU law, such as a directive, it will be read as a reference to the provision as it had effect immediately before exit day (EU(W)A 2018, Sch 8, para 2), save where an SI made under the EU(W)A 2018 provides that the provision should be read in a particular way. An example is the current draft of the Electricity and Gas etc. (Amendment etc.) (EU Exit) Regulations 2019, which makes specific provision for the way in which references in the Gas Act 1986 (GA 1986) to certain provisions in the Gas Directive, Directive 2009/73/EC are to be read.

The ambulatory references caught by the EU(W)A 2018 are only those in particular types of legislation, legal instrument, or document. Ambulatory references in standard commercial contracts will not be caught and, depending on the drafting, it may be that these continue to track the subject provision as it exists and develops in EU law.

In addition, ambulatory references will not be caught where they are contained in powers in retained EU law under EU(W)A 2018, s 2 (i.e. domestic law which currently implements EU law) to make, confirm or approve subordinate legislation which is subject to a procedure before Parliament or the devolved legislatures.

What are the key rules for application/interpretation of EU-derived laws in the UK pre-/post exit day?

Currently, under the principle of supremacy of EU law, where there is a conflict between EU law and UK domestic law, the latter is disapplied. Indeed, a conflict with EU law is the only basis on which a UK judge can disapply an Act of Parliament.

The existing hierarchy will be retained in relation to domestic laws passed before exit day section 5(2) of the European Union (Withdrawal) Act 2018 (EU(W)A 2018). So, for example, where an Act of the UK Parliament passed before exit day conflicts with a regulation of EU origin retained under EU(W)A 2018, s 3, the retained regulation will prevail.

However, after exit day, the principle of supremacy of EU law will not apply to any domestic law passed after exit day (EU(W)A 2018, s 5(1)). So domestic law passed after exit day will trump provisions in retained EU law that are of EU origin and which would have benefitted from the principle before Brexit.

Any question as to the meaning of a provision of retained EU law which has not been modified by UK law is to be decided by reference to relevant domestic case law and pre-exit EU case law (where retained) and the general principles of EU law insofar as these have been retained (EU(W)A 2018, s 6(3)).

So a UK court will follow the case law of the EU courts before exit day when interpreting unmodified retained EU law (even the approach in EU case law subsequently diverges).

However, a court or tribunal in the UK will not be bound by any decisions of the EU courts which are handed down after exit day (EU(W)A 2018 s 6(1)). It can, however, have 'regard'to any decision of the Court of Justice of the European Union, or any other EU entity, made after exit day where this is relevant to the matter before it (EU(W)A 2018, s 6(2)).

The Supreme Court is not bound by retained EU case law and neither is the High Court of Justiciary when sitting in relation to certain matters of Scottish law (EU(W)A 2018, s 6(4)). They may depart from retained EU case law where they consider it appropriate to do so.

Can retained EU law be challenged? If so, how? Are there any particular areas where a challenge is likely?

Domestic law which becomes retained EU law by virtue of EU(W)A 2018, s 2 will continue to be classed as primary or secondary legislation as relevant (EU(W)A 2018, s 7(1)).

The primary legislation which falls within EU(W)A 2018, s 2 will be capable of challenge only on the basis that it contravenes another provision of retained EU law which would have benefitted from the principle of supremacy. The secondary legislation which falls within EU(W)A 2018, s 2 can be challenged on the same basis, as well as on the same general public law grounds as any other secondary legislation.

Under EU(W)A 2018, Sch 1, para 1, no provision of retained EU law can be challenged on or after exit day on the basis that an EU instrument, such as an EU regulation or decision, was invalid. However, this preclusion does not apply where the Court of Justice has found the EU instrument to be invalid prior to exit day, or where regulations made by a Minister allow the challenge.

At the time of writing the Challenges to Validity of EU Instruments (EU Exit) Regulations 2019 are making their way through Parliament and will become law if both Houses of Parliament approve them. If made, the Regulations will allow the courts to decide challenges to the validity of EU instruments which have been begun before exit day but are not yet concluded.

The EU(W)A 2018 draws a distinction between:

  • retained direct principal EU legislation―EU regulations which are not tertiary legislation, and annexes to the EEA agreement, retained under EU(W)A 2018, s 3; and
  • retained direct minor legislation―all other EU law retained under EU(W)A 2018, s 3 (mainly tertiary legislation and decisions of EU bodies).

Retained direct principal EU legislation is treated as primary legislation for the purposes of challenges under the Human Rights Act 1998 (HRA 1998), i.e. it can be found incompatible, but that finding does not affect continued validity. Conversely, retained direct minor EU legislation is treated as subordinate legislation for HRA 1998 purposes, so it can be disapplied it found to be incompatible (EU(W)A 2018, Sch 8, para 30).

The majority of challenges are likely to be in relation to modifications made to retained EU law by Ministers using the powers conferred by the EU(W)A 2018. EU(W)A 2018, s 8 confers broad powers to amend retained EU law to ensure that it operates effectively or to remedy any other deficiency within it. Deficiencies are defined widely in EU(W)A 2018, s 8(2).

These powers caused a great deal of debate during the passage of the EU(W)A 2018 and continue to be controversial. Practitioners will be scrutinising carefully whether any amendments made to retained EU law are within the powers conferred by EU(W)A 2018, s 8, and it is almost certain that some will be challenged.

What are your top tips for navigating retained EU law?

Firstly, be absolutely clear about what will be retained and what will not. The big issue here will be around rights in EU directives which, unlike directly applicable EU legislation, will not automatically be retained. Be prepared to do some digging in the case law to establish whether or not a particular right is retained, and be prepared to argue your position.

Secondly, be aware of the form in which a particular piece of legislation has been retained. By 29 March 2019, the government aims to have in place around 600 statutory instruments amending retained EU law, and some pieces of legislation will be amended by several different SIs.

Thirdly, keep an eye on the courts as the application of the EU(W)A 2018, and the validity of the SIs made under it, will be the subject of much judicial consideration over the next few years. Remember that decisions of Court of Justice of the European Union made before exit day will be binding on UK courts and tribunals (except the Supreme Court and High Court of Justiciary as noted above), but not those made after exit day―although the latter should be referenced where relevant as the domestic court or tribunal may take account of them.

Finally, be alive to situations in which advice is required on both retained EU law (in the UK) and EU law (in the EU27). There are times when clients operating in both jurisdictions will need to know the differences between the two bodies of law and the effect that such differences may have on the client's operations.

This article was first published on Lexis®PSL Public Law analysis on 25 February 2019. Click for a free trial of Lexis®PSL.

Read the original article on GowlingWLG.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
 
Email Address
Company Name
Password
Confirm Password
Country
Position
Industry
Mondaq Newsalert
Select Topics
Select Regions
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions