The Brexit Effect

The new year has begun with a heightened sense of the magnitude of the UK’s decision to leave the EU and the imminence of the departure date. The fuse was lit in the dying days of 2017 when Lord Andrew Adonis resigned from his position as Chair of the National Infrastructure Commission. In itself that would be unremarkable were it not for the fact that Adonis used his resignation letter to lambast the government for failing to keep the UK in the EU and instead acting complicitly in the ‘populist and nationalist spasm’ of Brexit.

This was soon followed at the very beginning of the year by an intervention by former UK Prime Minister Tony Blair. Blair made clear that 2018 would be the defining year for Brexit and for the UK. While claiming to accept the outcome of the 2016 referendum, nonetheless, he argued that the will of the people was not ‘immutable’ and could change as the facts of Brexit became clear. He went on:

Once we know the alternative, we should be entitled to think again, either through Parliament or an election or through a fresh referendum, which will, of course, not be a re-run of the first because it will involve this time a choice based on knowledge of the alternative to existing EU membership.

And now an unlikely voice has floated the idea of another Brexit referendum. Nigel Farage has tweeted that:

Maybe, just maybe, we should have a second referendum on EU membership. It would kill off the issue for a generation once and for all.

Aside from the opportunity to have one last dance in the limelight, Farage’s interest in a second referendum speaks to a certain confidence that even as the facts do emerge about the consequences for the UK of its decision to leave the EU, voters would still not be persuaded that they had made the wrong choice. The very fact that they were being asked again would be seized upon by Farage as evidence that the liberal élite never listened and so the anti-establishment and pro-Brexit rhetoric would just be louder. During the referendum the Remain campaign failed to articulate a different narrative of the benefits of international cooperation in the face of common global challenges. It is not evident that another referendum could or would do so.

But aside from all that, it’s just not obvious that there is any time for a re-think.

Referendums don’t just happen overnight. They take time. And the experience of the 2016 referendum is instructive. The referendum was held on 23 June 2016. That was almost exactly 13 months on from the Bill that would give legislative authority for the referendum – the European Referendum Bill – from being introduced into the Commons. We are now just fourteen months away from the UK’s departure from the EU. The Bill itself took nearly seven months to become law (admittedly the summer recess may have played a part in that).

The Electoral Commission’s best practice for the conduct of referendums also stipulates that referendum legislation should be clear at least six months before it is required to be implemented or complied with by campaigners and those responsible for the conduct of the referendum. Note, this is not six months before the referendum is held but rather six months before campaigning gets underway. That would also entail giving sufficient time for lead campaigners to put together their bids and for them to be evaluated. Thereafter, the Commission also recommends a 10-week referendum period during which campaigning and campaign-funding is regulated.

So even if there is enthusiasm for another referendum, once you add up the time it will take to legislate and implement, it is hard to see how it could be done in the time that is left for the UK to remain in the EU.

Holding another referendum on the EU at the same time as the clock ticks down on the Article 50 process that will see the UK leave the EU by the end of March 2019 would also profoundly shape the nature of the debate. For example, how could a Remain campaign credibly try to persuade UK voters of the capacity of the UK to lead and engage with other European governments at the very moment that their leaders are making a public display of their unity as an EU27 and their preparedness even for a ‘no deal’ Brexit? How could a UK government seek to extract promises of change and reform from an entity that it is actively organizing to leave?  And how could that entity countenance making promises  to try and keep the UK in the EU without creating exactly the type of ‘moral hazard’ that leads Cormac Mac Amhlaigh to wonder whether Brexit can be stopped under EU law.

As I argued in Brexit Time: leaving the EU – why, how and when?, time shapes Brexit. It does so in terms of the quantum of time, and in terms of timing. The idea of another EU referendum looks like it would fail on both counts. There may not be enough time left and the timing of a referendum as negotiations continued on departure would be horrible.

All of which leaves Remainers with a choice.

Either they accept that the UK is leaving the EU and put their energies into trying to make it work. Or they need to find an alternative political means of reversing the 2016 referendum outcome. With both main political parties locked into Brexit, it is hard to see what would change to keep the UK in the EU.

On Wednesday evening, UK MPs voted by 309 votes to 305 to approve amendment 7 to the European Union (Withdrawal) Bill with a view to giving the House of Commons a meaningful vote on the terms of the ‘withdrawal agreement’ currently being negotiated between the EU and the UK under the Article 50 exit process. This defeat for the Government a has been hailed by Conservative rebel MPs and the Labour and other MPs who supported the amendment as the moment that Parliament took back control over the Brexit process.

So what exactly does the amendment do? After this amendment, clause 9 of the Bill will read as follows:

A Minister of the Crown may by regulations make such provision as the Minister considers appropriate for the purposes of implementing the withdrawal agreement if the Minister considers that such provision should be in force on or before exit day, subject to the prior enactment of a statute by Parliament approving the final terms of withdrawal of the United Kingdom from the European Union.

It should be apparent that this new statute will only be required if two conditions are met.

Firstly, and obviously, the new statute is only needed if there is a withdrawal agreement. If the EU and UK fail to agree terms on a withdrawal agreement, then there is nothing for Parliament to approve. In which case the UK would simply leave the EU consequent to the triggering of Article 50, which Parliament authorised when it passed the European Union (Notification of Withdrawal) Act 2017.

Secondly, as an amendment to clause 9, the need for a new statute only arises if a Minister intends to use delegated powers to implement a withdrawal agreement. Yet there is reason to think that this clause may be superseded by moves to put any withdrawal agreement on a statutory footing.

The Institute for Government has previously noted its concerns about the use of a statutory instrument to implement the withdrawal agreement. Particularly given the importance of ensuring that the Citizens’ Rights aspects of the withdrawal agreement have a sound legal footing both in EU and domestic law, primary domestic legislation would always have seemed like a better idea. So back in November the Government announced that a new Withdrawal Agreement and Implementation Bill would be presented to Parliament to legislate for the terms of withdrawal and for any transitional arrangements. More recently, and following the conclusion of Phase One of the withdrawal negotiations, the joint text agreed by the EU and UK reiterated that this new Bill will implement the agreement and fully incorporate the Citizens’ Right part.

All of which does leave one to wonder what is now left to be done by way of statutory instrument under clause 9. And if the answer is nothing, then there is no basis for Parliament to approve by way of statute the terms of the withdrawal agreement.

Parliament would still have it says on the Withdrawal Agreement and Implementation Bill. And the provisions of the Constitutional Reform and Governance Act would be triggered to give both Houses of Parliament oversight of the final deal. But there would be no specific statutory approval of the terms of the final agreement.

The loss of the vote on the amendment does remind us of the weakness of the current government. But that does not necessarily mean that it signals that Parliament has taken back control over Brexit.

It’s Brexit Time

You really need to be afraid

At Brexit Time

We let no one in and we banish trade

And in our world of madness

Our eyes roll in despair

Throw your hands up in the air

At Brexit Time.

But say a prayer

Pray for the younger ones

At Brexit Time it’s hard

But if you’re lacking fun

There’s a world outside your window

And it’s a world of dread and fear

Where the only people crowing

Are the bitter Brexiteers

And the Brexit clock is ticking

Like the clanging chimes of doom

Dear God can’t we Remain

Instead of Leave?

And there won’t be dough for the NHS this Christmas time

The greatest lie we got last year from Leave (uh oh)

Where no one really knows

No truth or candour flows

Now we know its Brexit Time for all.

 

The Brexit Time blog is taking a break over the holiday season and will resume in the new year. Thanks to everyone for reading the blog and the book. And remember there is just time to give someone you love (or hate) a copy of Brexit Time this Christmas.

 

The UK Government has announced that it intends to propose an amendment to its own European Union (Withdrawal) Bill to specify the day and the time of the UK’s exit from the European Union. ‘Exit day’ is to be 29 March 2019 at 11.00pm.

Under the original Bill, ‘exit day’ would have been decided upon by ministers. This left open the possibility that the UK and the EU might agree to defer the UK’s withdrawal in order to give the UK more time to prepare for life outside the EU. This option to defer departure as a means of transitioning to a new UK-EU relationship has now apparently been closed off. So what might this new amendment tell us about the possibilities for transition and the domestic legal instruments to implement transition.

With colleagues at the University of Cambridge, we have been thinking a lot about how a transitional framework might be constructed, and we wrote a briefing paper in October setting out some options. There are two levels to consider. First we need to think about what is legally possible under the Article 50 process in terms of a transitional framework. Second, it is important then to work out how domestic legislation might interact with an EU transitional framework. Clearly, of particular importance would be how the European Union (Withdrawal) Bill might relate to an agreed transitional arrangement.

In a paper published this week, I set out the four main options for an EU-level transitional deal:

• An Article 50 withdrawal agreement that would contain a time-limited derogation to maintain certain ‘saved’ provisions of EU law. This body of ‘saved EU law’ would continue to impose reciprocal obligations as if the UK were still a Member State.
• A provisional trade or provisional association agreement.
• A transitional membership of EFTA and access to the Single Market via the European Economic Area Agreement.
• A deferred departure from the European Union to give the UK more time to prepare for non-membership.

Given the announcement of an exit day that would scupper a deferred departure – unless of course the Bill retains a power for ministers to change that day – and given the political and legal obstacles to either a provisional agreement on the future relationship, or an EFTA/EEA approach, the front runner for a transitional framework would seem to be some sort of continuation of a limited set of current obligations on a strictly time-limited basis.

In other words, the Article 50 agreement would seek to achieve something similar to the domestic Withdrawal Bill by trying to preserve key aspects of EU law. Whereas the Withdrawal Bill domesticates EU law lock, stock and barrel, an Article 50 transitional agreement would be limited to saving those key provisions that domestic law alone cannot put into operation, namely reciprocal obligations such as those ensuring trade that is free from tariff and non-tariff barriers.

The UK would likely have to concede that any such arrangement would entail acceptance of the institutional arrangements that go hand in hand with these obligations including the jurisdiction of the Court in interpreting and applying those provisions.

The problem of this option is that it potentially muddies the waters for the operation of the domestic Withdrawal Bill, whose working assumption even before today’s announced amendment was that there would be a single ‘exit day’. If a transitional arrangement were to save certain EU obligations on existing terms, that would then need to be reflected in domestic law.

Today’s announcement might then be a much more important signal that is apparent at first sight. It is possible that the Withdrawal Bill will not seek to manage an EU transitional framework at all. Rather, it’s possible that a new Bill will be proposed that will give domestic legal effect to a transitional agreement. The Withdrawal Bill will domesticate EU law up until 29 March 2019, whereas a new Bill will allow for the continued application of certain ‘saved’ provisions of EU law for the period of transition. The new Bill might look and feel much like the European Communities Act 1972 which is set to be repealed. Indeed, keeping the same sort of constitutional architecture in place may be key to the EU’s willingness to accept any sort of transition on these terms.

Politically, replicating aspects of the 1972 Act in a new Bill that would continue to impose EU obligations for a time-limited period would likely encounter strong headwinds from those keen to ensure that the UK leaves the EU by March 2019. The announcement of a specific ‘exit day’ and the removal of an option to defer departure might well be the political bone that the Government is willing to throw in order to make a transitional arrangement more palatable.

 

With a fourth round of Brexit negotiations drawing to a conclusion, David Davis and Michel Barnier held their customary joint press conference. Both negotiators were keen to highlight developments in the negotiations and drew particular attention to the progress made in respect of citizens’ rights. Indeed, both Barnier and Davies referred to giving a future Withdrawal Agreement “direct effect” to protect citizens’ rights.

For Barnier, the importance of this is that: “It will give the assurance to our citizens that they will be able to invoke their rights, as defined by the Withdrawal Agreement, before UK courts.”

For Davis, “… we have listened to the concerns that have been raised – and as a direct result of hearing those concerns the United Kingdom has committed to incorporating the final withdrawal agreement fully into UK law. Direct effect if you like.”

While there is apparent agreement on the idea that citizens’ rights will be capable of being enforced in UK courts, it is far less obvious that there is any real agreement as to how this is to be achieved legally. In particular, the use of the term “direct effect” is open to radically different views.

The concept of “direct effect” is a familiar one to EU lawyers, although even among EU lawyers it is capable of narrower or more expansive readings. Nonetheless, a key feature of directly effective law is its capacity to be invoked and enforced before national courts. This is the apparent common ground between Barnier and Davis.

However, it is an essential aspect of direct effect that it is a legal quality that arises independently of the legislation of a state. Accordingly, directly effective substantive provisions of EU treaties can be enforced in national courts without national legislation having to substantively incorporate or replicate those rules in national law. In other words, the source of the norms and the legal effects to be attached to those norms derive directly from EU law and its legal order, and not from domestic law and its legal order.

It rapidly becomes apparent that what Davis describes as “Direct effect if you like” is actually unlike what Barnier might have in mind. For Davis, domesticating a Withdrawal Agreement brings it within the control of the UK legal order in much the same way as the European Union (Withdrawal) Bill intends to do for substantive EU law. Indeed, clause 9 of the Bill makes provision for ministers to make regulations for the purpose of implementing the Withdrawal Agreement. It is not clear whether Davis is going further in the sense of creating an additional domestic legal instrument of primary law to incorporate the Withdrawal Agreement, or whether he is simply restating a power  that the Bill would create to use secondary legislation to implement the Withdrawal Agreement. As a matter of domestic law, this choice is important. But from an EU law perspective, this is not direct effect in the sense that it shifts the normativity of citizens’ rights from the EU to the national level.

That Barnier may have in mind a more EU law conception of direct effect is also revealed in the obvious point of continuing disagreement between the EU and the UK, namely, the role of the Court of Justice. Direct effect is itself a product of the case law of the Court of Justice. It is an effect that the Court can deploy not least in circumstances where Member States fail to ensure the protection of rights within their domestic systems. So the Court has found directives to be directly effective – notwithstanding that these instruments are specifically intended to be transformed into national law – to manage the situation where states fail to give effect to those right completely, or do so only partially, or do so in a manner that is contrary to what EU law intended. In other words, direct effect can act as a corrective for national failure. And not surprisingly, the EU might consider it important to ensure that the EU court ought to continue to ensure the effective protection of citizens’ rights, especially if – for the EU – those rights continue to derive their authority from  EU law itself.

Look at the wording of Barnier’s statement to the press. He refers to: “rights, as defined by the Withdrawal Agreement”. He doesn’t refer to rights “contained” in the Withdrawal Agreement.

The more that the Withdrawal Agreement simply refers to rights which remain part of the EU acquis the more that the EU is likely to insist that the meaning and effect of those rights must continue to be determined by EU law, including the jurisdiction of the EU courts.

On the other hand, if the Withdrawal Agreement itself is the source of a set of rights, then the enforcement of those rights may simply be a matter for UK courts, subject to the normal dispute resolution mechanism that will ensure that the parties abide by the obligations they have entered into under the Article 50 agreement. On that basis this may not include a role for the Court of Justice other than a right to give authoritative interpretations as to what EU law means, with their legal effects and their means of protection being subject to other mechanisms of enforcement and dispute resolution.

While it is good to see that the EU and UK negotiators are seeking common ground, it is important to look behind the warm words and to see whether agreement is apparent or real. There are worrying signs that the agreement on the direct effect of the Withdrawal Agreement does more to expose the differences between the two sides and their contrasting world views about citizens’ rights.

The positions of the UK Government and official Opposition on what exiting the European Union could look like is beginning to come into somewhat sharper focus after months of ambiguity (constructive or otherwise). In particular, for the Labour Party, keeping the United Kingdom in a single European market and in a customs union with the EU is key to its vision of the UK’s transition from EU membership. The position of the UK Government has been further clarified by answers given by the Secretary of State for Exiting the EU, David Davis in response to questions in the House of Commons. When asked by MP John Whittingdale whether he agreed that continuing ‘membership’ of the single market might be worse than membership of the EU, Mr Davis replied:

“The simple truth is that membership of the European Free Trade Association, for example, which would be one way to retain EEA [European Economic Area] membership, would do exactly that: it would keep us within the acquis, and it would keep us within the requirements of free movement, albeit with some limitations, but none of those have worked so far. In many ways, it is the worst of all outcomes. We did consider it—I gave it some considerable thought, maybe as an interim measure—but it seemed to me to be more complicated, more difficult and less beneficial than other options.”

And with the Government intent on having the freedom to conduct its own independent trade policy, it is clear that the idea of retaining a customs union with the EU is clearly not on its agenda.

But when opposition political parties say that are in favour of keeping the UK in a single market – as both Labour and the Scottish Government advocate – what do they really mean? After all, the Government seems also to want to maintain all of the same benefits of being in the EU single market but by reproducing and mirroring existing arrangements. If this sort of ‘bespoke Brexit’ is not what the opposition parties have in mind, then what might be a more ‘off-the-shelf’ solution?

Writing for LabourList, Stephen Kinnock MP is blunt in his assessment of the model which Labour should advocate as a transition from EU membership: “ … if we are looking for a ready-made transition model, then EEA/EFTA membership is the only viable option. As well established and well understood international frameworks the EEA and EFTA offer precisely the security, certainty and stability that our country so desperately needs, in these turbulent times.” I happen to agree.

But we need to deal with some of the legal arguments that have been swirling around this debate. There are two main strands to this. The first concerns the UK’s current legal relationship with the participating EFTA and EU states under the EEA agreement. The second highlights potential obstacles to keeping the UK in a single European market via a transitional EEA arrangement.

The European Economic Area Agreement between the European Union and the three participating EFTA states – Norway, Iceland and Liechtenstein – entered into force on 1 January 1994. Among the listed contracted parties is the United Kingdom. Which has led some to argue that unless and until the UK withdraws specifically from the EEA Agreement, using the mechanism laid down in Article 127 of the Agreement, it would remain bound by the Agreement and by virtue of that status, remain within the single market. Litigation was brought in the UK courts to test that very point, but the application for judicial review was considered to be premature. As I have argued elsewhere the idea that the UK would remain in a single European market simply by virtue of this agreement alone is unconvincing.  The purposes and intention behind the agreement is to create an ‘association agreement’ between the EU and willing EFTA states, with the institutional framework of the agreement reinforcing this ‘two-pillar’ approach. With the UK leaving the EU pillar, the continuing application of the agreement to the UK would seem to run counter to its clear purpose and intent.

Further, the UK signed the agreement insofar as the agreement covered matters within the competences of the Member States, whereas the EU signed the agreement for matters for which the Member States had transferred competences to the EU. Given the degree to which Member States have transferred powers to the EU for the purposes of completing a single market, this would suggest a somewhat residual role for the Member States in the enforcement of the agreement. Moreover, Article 126 of the agreement limits the territorial application of the agreement to the EU and to the participating EFTA states. In short, once the UK leaves the EU – and absent any other agreement – any attempt to enforce the agreement would encounter significant legal objections in terms of its material and territorial scope.

Perhaps unsurprisingly, for the Government, the question of whether the UK should formally withdraw from the EEA Agreement in terms of Article 127 of that agreement is largely a question of legal housekeeping. As David Davis stated in a reply to a question from Stephen Kinnock on 7 September:

“We are considering what steps, if any, we might need to take to formally confirm our withdrawal from the EEA agreement as a matter of international law.”

However, for those who advocate remaining in the single European market through the EEA, not triggering the formal withdrawal process may still be of some importance even if – of itself – the UK’s current legal position within the EEA Agreement would not be enough. In other words, not triggering a formal withdrawal may be a necessary but not a sufficient basis to keep the UK in the single market through the EEA.

Which leads us to the more direct issue of the legal means by which the UK might use the EEA Agreement as a transition from EU membership.

Writing earlier in the month, Jean-Claude Piris – the former Director General of the Legal Service to the Council of the EU – confirms the view expressed above that the UK would not ‘remain’ in the single market through the current EEA agreement after Brexit. But he went further in raising legal obstacles to any future use of the EEA as a transitional vehicle. In particular, he suggest that the correct legal route would be for the UK to seek to re-join the European Free Trade Association and only once its candidacy was accepted and the UK joined EFTA could it then seek to become a party to the EEA Agreement in the terms laid out in Article 128 of the EEA Agreement. That provision requires an agreement between the contracting parties and the state joining the agreement and for the agreement to be ratified by the contracting states in accordance with their own procedures. So for Piris – and indeed, it would seem, for David Davis – the time this will take and the procedural obstacles to be overcome, do not make this a suitable vehicle for a transitional arrangement. If right, then there would be a need for a transition to transition, with the risk that the conditions of trade would simply fall back onto WTO terms.

Nonetheless, I think there is value in continuing to explore whether existing legal resources might fashion a transitional relationship between the UK, the participating EFTA states and the EU through the EEA Agreement. I can foresee two possibilities.

If we think back to the original EEA Agreement, it came into force before the accession of more than a dozen new EU Member States. The accession of these states to the EEA agreement has followed the path described by Piris (but on the EU rather than the EFTA side). So when Bulgaria and Romania joined the European Union on 1 January 2007, an EEA enlargement agreement was signed with the two new countries on 25 July 2007, but the agreement did not enter into full force following ratification until 9 November 2011. But that did not mean that the EEA agreement did not apply during this four year hiatus. Because on 7 July 2007, the EU entered into an exchange of letters with the participating EFTA states to ensure the provisional application of the agreement pending formal ratification.

If an exchange of letters is enough to provisionally apply an agreement that would see Bulgaria and Romania become parties to the EEA Agreement, why could the same not be true for the UK if it sought to use the EEA Agreement on a transitional basis?

The circumstances are different. Bulgaria and Romania were Member States of the EU at the time that their accession to the EEA Agreement was agreed in July 2007. The UK would not be in a position to join EFTA and to access the EEA Agreement until it left the EU. Nonetheless, there is nothing in principle to prevent the EFTA Council preparing a decision unanimously approving UK membership of EFTA that would come into force simultaneously with the UK’s withdrawal from the EU. At the same time, the UK’s accession to the EEA Agreement could be agreed by the EEA Council and signed by the contracting parties ready for formal ratification. Pending ratification, an exchange of letters could secure its provisional application without the hiatus that Piris anticipated.

But there also remains the issue of whether there is anything in the UK’s existing legal relationship with the single market through the EEA Agreement which can be built upon. In other words, even if one takes the view that the current legal position would not, in itself, be sufficient to keep the UK in a single market, could that legal framework, nonetheless, be amended to do so.

Article 89 of the EEA Agreement establishes the EEA Council which takes decisions, including concerning any amendment to the agreement. This is also the means by which new states join the agreement. It is not beyond the legal imagination to contemplate circumstances in which the status of the UK as an autonomous contracting party to the agreement was clarified and amended to retain existing rights and duties under the agreement, on the understanding that competences previously exercised on the UK’s behalf through the EU would now revert back to the UK. Additional institutional changes might also need to be agreed to manage the unusual nature of the transition. Indeed, this may only be an arrangement on a temporary basis – indeed be the very transition to transition that Piris suggests – with the arrangement lapsing if formal EFTA membership and EEA accession described above was not completed within a certain time period. While any such amendment to the EEA agreement would entail agreement by all parties and likely also trigger approval procedures, nonetheless, provisional application of the agreement pending completion of approval procedures could be agreed.

Of course, this does not resolve every issue relating to the UK’s future relationship with the EU. The UK would not be in a customs union with the EU unless it reached an agreement in those terms. If it did so, the UK would find itself in an EEA+ position.

Without a customs agreement, there would remain the issues of the customs frontier between Ireland and Northern Ireland. But even here, there are means and mechanism by which goods originating between the contracting parties as well as goods from third countries can be subject to customs and transit procedures that would not require goods to be customs cleared at a border but instead would move through approved economic operators, freight forwarders and warehousing systems that would handle the clearance processes. Maintaining regulatory convergence on EU health and safety standards would, of course, be important to prevent the need for inspections. And there is good experience under the EEA agreement which sees non-EU states like Norway checking that non-EU goods imported into the single market meet EU standards, with mutual recognition of those checks ensuring that once cleared by Norwegian authorities further checks when the goods enter the EU is not required.

David Davis has called for ‘flexibility and imagination’ in negotiations. With flexibility and imagination it is possible to see a way in which the EEA could facilitate the UK’s transition from EU membership. That option should be kept on the table and it would be wrong for the UK Government to formally notify its intention to withdraw from the EEA Agreement unless and until it is clear that there is no viable means of adapting the EEA to the needs of Brexit. Indeed, to take such an unnecessary step at this point would be a deliberate and overtly political tactic designed to undermine the kinds of contributions that have been made not just by the Labour Opposition but also by the Scottish Government.

But Labour also needs to have some flexibility and imagination too. Particularly where it is unclear where transition might lead the UK, there is every good reason to see EFTA membership and the EEA as a viable medium-term strategy and not a short term delaying tactic. As both the EU and EFTA contemplate where European cooperation is heading beyond Brexit, there is more that is in flux than just the UK’s departure from the EU. It is time to think of the EEA as more than just transition except in the sense that, historically, it might be view as a stepping stone to a more longer term settlement of European cooperation in a single market beyond EU membership.

 

 

Following on from yesterday’s blogpost on the UK Government’s new position paper on enforcement and dispute-resolution beyond the “direct jurisdiction” of the Court of Justice, today, I publish an extract from Brexit Time: Leaving the EU – Why, How and When? (Cambridge University Press) that looks at why the Court became a focal point of the referendum debate.

 

Control over law is also about having control over who interprets the law. The role of the Court of Justice as the authoritative interpreter of EU law was at the fore of criticisms about a loss of control over law. The Court’s interpretation of the primary law of the treaties is crucial because the treaties contains fundamental rules on inter alia the reach of EU free movement rules, citizenship, aspects of equality law and competition law, together with the fundamental rights protected by the EU Charter of Fundamental Rights. Given that primary law can only be changed by national governments through a treaty revision process requiring the unanimous consent of national governments as well as ratification by all Member States, it is clearly extremely difficult for an individual state to try and reverse a Court of Justice ruling with which it disagrees.

The Court’s extension of gender equality protection in respect of pay to include occupational pensions schemes can be cited as an example where the preferences of the Court and national governments diverged. It is also a rare example of a situation where Member States sought to regain control by agreeing the Barber Protocol to the treaties to limit the temporal effects of the Court’s judgment in the occupational pension sphere thereby minimising its financial repercussions.

The Court of Justice’s interpretation of EU legislation is also significant. As with the interpretation of the primary law of the treaties, there are examples where the Court gives binding interpretations that are out of step with the preferences of governments, employers and sometimes also employees. The example of the Working Time Directive is again a case in point. Clarifications given by the Court on what constitutes working time – to include the time that a person is required to be available for work (even if the person may rest while ‘on call’) – have been criticised for their impact on the organisation of emergency and health services. Legislative acts are not burdened by the same constitutional impediments to their alteration but it may, nonetheless, be difficult to find majority support for legislative change. Indeed, following controversial interpretations of the Posted Workers Directive by the Court of Justice, the Commission found it extremely difficult to come up with substantive legislative proposals that would meet the very different interests of workers from ‘old’ and ‘new’ Member States. The Member States are also not free to amend EU legislation in a way that would conflict with the primary law of the treaty as interpreted by the Court of Justice.

In an earlier time when the sorts of cases coming before the Court concerned prosaic issues such as the imposition of customs duties on the import of urea formaldehyde or the requirement that imports of Scotch whisky be accompanied by a certificate of origin, it was possible for the Court to cloak its institutional role in the guise of terse, abstract legalism. With national courts also willing to supply the Court of Justice with a steady stream of new cases, the domain of legal integration could continue to expand. But in more modern times when the issues before the Court are more controversial, the Court, as an institution, is more socially and politically exposed, and its apparent ‘activism’ scrutinised.

Yet for all this, it is difficult to pinpoint clear examples of judgments of the Court of Justice which generated the sort of level of political or social controversy that might lead voters to consider that the UK should leave the EU. Indeed, the complaints were more typically about the judgments of the European Court of Human Rights – an organ of the Council of Europe and not of the European Union.

The EU courts were also useful to the UK in two ways. Firstly, a strong compliance machinery increases the functional capacity of the EU to achieve its aims by ensuring that Member States comply with their obligations. Secondly, governments are also litigators before the EU courts. Member States may litigate before the EU courts for a number of reasons but one of those reasons concerns the adoption of EU rules by Qualified Majority votes. It is one thing for a Member State to accept the primacy of EU rules when those rules require all national governments to agree to them: the power of veto gives each state control over what it will or will not accept. Where primacy doesn’t just bite, but hurts, is when EU rules are adopted by a Qualified Majority of EU states. With successive treaty revisions – and following successive enlargements of the EU –majority voting has become the norm. To be sure, institutional practice is such that where possible, a consensus is sought without the need for a vote. But, there are instances where EU rules are adopted in the face of opposition by a state and this is where a state may wish to instil the help of the Court of Justice in striking down the offending rule.

An example of the UK Government challenging an EU legislative measure before the Court of Justice concerns the controversial Working Time Directive that set down limits on the number of hours that a worker could legally work. In fact, the UK had not voted against the measure but merely abstained. The Commission had also agreed to water down the directive by allowing derogations to allow individual workers to contract out of the time limits. The Court of Justice rejected the UK’s claims that the legislation had an incorrect legal basis in the treaties and was an employment policy measure, rather than one correctly relating to health and safety. But it became a totemic example of claimed EU interference in a sphere of social and employment relations that British Conservative governments sought to insulate from EU control.

In the years leading up to the referendum, the UK Government became a more frequent litigator before the Court of Justice in its challenge to EU rules on ‘short-selling’, the proposal for a Financial Transaction Tax and caps on bankers’ bonuses. The UK lost in the first two cases and abandoned the third. Outside the legislative context, the UK did win an important case before the EU’s General Court challenging a policy of the European Central Bank that would require institutions clearing Euro-denominated securities to be based in a Eurozone Member State. But these examples illustrate not just how much post-crisis regulatory responses have heightened tensions between the UK and the EU but also how even sceptical governments in practice rely on EU courts to try and regain what they have lost in the political arena.

Nonetheless, it is misleading to evaluate the impact of EU law on the UK legal order simply through examples of situations of conflict or controversy. Day-to-day, national courts have simply got on with the task of interpreting and applying EU law. If the political task of doing EU business is a routine aspect of national administrative life, then enforcing EU law in national courts may also be regarded as unexceptional. Indeed, discontents with EU law may not be a function of conflict, but on the contrary, the willingness of the judiciary to carry out its responsibilities to ensure the effective enforcement of EU law in the UK.  Much like complaints about the application of the European Convention on Human Rights by UK courts, it is a sense of the empowerment of unelected judges that seems to drive antipathy towards ‘European’ law and which, in part, motivates Brexit.

British workers and citizens have, of course, been the beneficiaries of a capacity to apply and enforce EU law in national courts and tribunals. But, it is not obvious that this capacity has engendered a wider social affinity between the EU and citizens and indeed, litigating EU rights may seem like the preserve of the few not the many.