Today’s White Paper sets out the broad framework of the laws that will bring about Brexit. But, as detail starts to replace rhetoric, it is clear that conflicting policy aims are still not fully resolved. Businesses will need to follow the process closely to gauge the risks and spot the opportunities to influence the legislative process.
The Government has today published its White Paper on its proposed “Great Repeal Bill”.
The Great Repeal Bill has three primary aims:
- To repeal the European Communities Act 1972, which currently establishes the supremacy of EU law in the UK;
- To preserve EU law where it stands at the moment before the UK leaves the EU. Parliament will then be able to decide which elements of that law to keep, amend or repeal; and
- To enable changes to be made by secondary legislation to those laws that would otherwise not function sensibly after Brexit.
This approach is intended to avoid the significant gaps and consequent uncertainty if all EU-derived law was repealed without replacement. Its superficial simplicity conceals the fact that such a unilateral approach will not allow many existing laws to function sensibly or at all. Our previous blog post identified some of the difficulties, such as:
- Laws based on reciprocity with EU Member States;
- Laws relying on EU regulators or courts; and
- Treaties signed by the EU and directly applicable in the UK by virtue of s2(1) of the European Communities Act 1972.
The broad objective of maintaining continuity through the transfer of power to the UK Parliament will be welcomed by business. However, there are a number of places where this is at odds with the intention to transfer powers to the UK Parliament. We set out below some of the issues to watch closely.
Court of Justice of the European Union
A declared aim of the government in the Brexit process was that the Court of Justice of the European Union (the CJEU) would no longer bind courts in the UK. This is at odds with continuity in two ways. Firstly, existing EU-derived law has been interpreted by a large body of CJEU decisions. If these were suddenly removed from consideration, it would lead to significant uncertainty in interpreting EU-derived law. Secondly, EU-derived law may continue to evolve in light of future CJEU decisions. If laws in the UK were to evolve in a different direction, this would affect the equivalence of UK and EU laws and jeopardise any future deal that depended on this equivalence (for further detail on this, see yesterday’s blog post on the Article 50 notification).
On the first issue, the White Paper’s solution risks the displeasure of Brexiteers; on the second issue, it risks worrying Remainers.
The White Paper proposes that CJEU decisions before Brexit will have the status of Supreme Court decisions, thereby preserving continuity. It follows that, technically, the UK Courts will be supreme, in that the Supreme Court is able to overturn its previous decisions and therefore will be able to depart from existing CJEU decisions. But the High Court and the Court of Appeal do not have this power. They will remain bound by existing CJEU decisions (at least until the relevant legislation is changed).
The White Paper states that there will be no requirement for UK Courts to consider any new CJEU cases (and they will certainly not have to follow them). This creates the risk that EU law will gradually diverge from UK law, even where they both remain bound by identical legislation. This is an obstacle to future deals that require continued convergence between UK and EU law (on environmental or consumer protections, for instance). Those deals will need special provisions dealing with future CJEU case law.
To explain the problem with delegated powers that the Great Repeal Bill tries to solve, we first need some background.
Subordinate legislation is made by the Executive, i.e. Ministers or officials on their behalf, in accordance with a power granted by primary legislation. Parliament has limited scope to amend or reject subordinate legislation. However, it may be struck down by the Courts. The Court will examine both the purpose of the subordinate legislation and its effect to decide whether it falls within the scope of the power used to create it and, if it decides that it does not, the legislation will be declared void. This judicial oversight is a key part of the role of the Courts in upholding the supremacy of Parliament over the Executive.
In rare cases, powers are granted that actually enable subordinate legislation to amend primary legislation. These are known as ‘Henry VIII powers’. The role of the Courts in defending the supremacy of Parliament is particularly striking in the case of Henry VIII powers.
Courts will construe the scope of powers granted to create subordinate legislation, including Henry VIII powers, using their normal rules of statutory construction. They will look primarily at the natural meaning of the legislation but may also examine the statute as a whole, debates in Parliament and any other preparatory material that helps to explain the purpose of the power.
The Courts have indicated that they will interpret Henry VIII powers restrictively because they are so exceptional. Nevertheless, if a Henry VIII power is clear, the Courts will not try to impose an artificial construction to cut it down.
One possible trap when drafting a Henry VIII clause is that the wider the power, the more likely the Court will construe the purpose behind it restrictively. That is, if a power is granted in vague, general terms, the Courts will be more ready to examine the purpose behind that clause, to hold that the purpose was very limited and to disallow subordinate legislation that appears to fall within the literal words of the power but does not fall within its purpose. So simply trying to draft Henry VIII powers that maximise flexibility for the government to amend the statute book may not be effective.
Delegated powers in the Great Repeal Bill
The White Paper sets out, as expected, that wide-ranging Henry VIII powers will be needed to amend EU-derived law before and for some time after Brexit. In the Government’s view, these powers will give sufficient scope to correct or remove laws that would otherwise not function properly after Brexit.
The trap described above has clearly been considered by the Government. Their solution is to propose extremely wide Henry VIII powers but to constrain them with a narrow purpose.
Wide powers are needed because there are many pieces of primary legislation that need amending. The powers will be limited in time, but this is of more political than legal importance – it will not significantly affect how the Courts interpret them.
The main limitation, intended to avoid an overly strict interpretation by the Courts, is to prevent the powers being used to create ‘new policy’. This is formulated in different ways through the White Paper: broadly, it appears to distinguish the mechanical process of converting EU law to UK law, which will fall within the Henry VIII powers, from the discretionary process of creating new policy in areas previously covered by EU law, which will not.
This concession is probably necessary to allow exercises of the power to survive judicial scrutiny (and presumably also for political reasons). However, it exposes lawmakers to a risk of litigation – protracted in duration and possibly vast in scale (the total number of legislative acts required is equivalent to about one year’s total subordinate legislation for the whole of the UK, approximately 1,000 instruments). There is inevitably a discretionary and subjective element in deciding whether a piece of subordinate legislation fits within this narrow purpose. Each piece of subordinate legislation could be considered, and attacked, separately.
For this plan to be workable, the Government will need widespread consensus on the majority of administrative changes to be made to each piece of EU-derived legislation. There is a clear opportunity here for business to monitor the process of incorporating EU-derived law into UK law and possibly to advocate for a practical and commercial approach.
What is not in the White Paper
The White Paper deals with the key issues of EU case law and subordinate legislation to incorporate EU-derived law. However, it completely neglects several other central issues:
- What is the approach when EU-derived law is ineffective in the absence of reciprocal arrangements with the EU? (The Brussels Regime for jurisdiction and enforcement of foreign judgments, for instance.)
- There is no draft text of the Great Repeal Bill, nor any timescale for producing one. There is a general call for feedback on the White Paper but no formal consultation period.
- There are statements both that powers returned to the UK may be passed to the devolved administrations and that the devolved administrations may be subject to new UK-wide frameworks.
- There is no mention of what new regulators may be set up in the UK to replace the corresponding EU bodies.
- There is no comprehensive listing of primary legislation that will be required in addition to the Great Repeal Bill. (There is a mention only of immigration and customs acts.)
- International non-EU treaties that do not directly create individual rights are outside the scope of the Great Repeal Bill and are not addressed in the White Paper.
The White Paper is a start towards making the legal changes that will effect Brexit. It covers two main issues: EU case law and EU-derived legislation. For both of these, the new level of detail reveals the issues that are raised when trying to satisfy competing policy aims. Many other issues are not yet dealt with at all. Overall, the White Paper demonstrates a practical approach that prioritises avoiding any ‘cliff edge’. But the process is at an early stage and businesses will need to follow it closely.
 Government White Paper: The UK’s exit from, and new partnership with, the European Union. February, 2017