The European Union (Withdrawal) Act 2018 as amended by the European Union (Withdrawal Agreement) Act 2020

The EU Withdrawal Act 2018 is of constitutional significance because it aims to revise UK law in important ways in consequence of the UK's forthcoming exit from the EU. It is amended by the European Union (Withdrawal Agreement) Act 2020 (“the Withdrawal Agreement Act 2020”) which gives legal force in domestic UK law to the Withdrawal Agreement and in particular to the transition period, referring to it as the "implementation period", and contains further enabling provisions for ministers to make regulations to implement the Withdrawal Agreement. The 2020 Act provides for an extended period of the effectiveness of the EU Treaties and of EU law up to the end date of the transition or implementation period, i.e. 31 December 2020 which the 2020 Act refers to as "IP completion day". The Withdrawal Agreement Act also amends the EU Withdrawal Act by providing for the supremacy of EU law (over domestic law) to end on IP completion day rather than on exit day.

The EU Withdrawal Act (as amended) repeals (with effect from 31st December 2020) the European Communities Act 1972 ("ECA 1972"). The ECA 1972 is the channel by which the EU Treaties, and thereby EU regulations and decisions, were given direct force in UK domestic law. The Act contains provisions converting, into UK domestic law, directly applicable EU legislation which is in operation on IP completion day (as opposed to exit day), which would otherwise lapse on the end of the transition period. This is subject to powers given to ministers to revise such laws by means of regulations to remove provisions concerning the EU, EU institutions and other member states, which will no longer be appropriate in the UK following Brexit. This approach is designed to ensure the continuation of a functioning statute book in the areas covered by EU law, although the principle of widespread use of secondary legislation to achieve the necessary transposition of EU law into domestic law has been subject to criticism.

Repeal of the European Communities Act 1972

The ECA 1972 provided that all rights, powers, obligations and remedies from time to time created or arising under the EU Treaties which the Treaties require to be given direct effect "shall be recognised and available in law" and be enforceable in the UK "without further enactment" (section 2(1)). This has been one of the most constitutionally significant provisions ever included in UK statutes.

The EU Withdrawal Act provides that the principle of supremacy of EU law does not apply to any enactment or rule of law made after the end of the transition period, but continues to apply to the interpretation or disapplication of any enactment or rule of law made before or during the transition period. It also provides that the Charter of Fundamental Rights is not part of domestic law after the transition period.

However, the EU Withdrawal Act also provides (in section 4) that any rights, liabilities, obligations and remedies that were recognised and available in domestic law immediately before the end of the transition period by virtue of section 2(1) of the ECA 1972 will continue to be recognised and available in domestic law after the exit date. The proper scope of this provision is unclear, because rights under the EU Treaties, which are given force in domestic law by that provision of the ECA 1972 (for example free movement) require reciprocity as between the UK and the EU Member States. Such reciprocity will no longer exist once the UK exits the EU. It therefore remains to be seen what interpretation and effect will be given to this particular provision.

The Northern Ireland/Ireland border

The EU Withdrawal Act contains specific provisions relating to the border between Northern Ireland and Ireland and the continuation of north-south co-operation. The Act requires that in the exercise of their powers under the Act, a minister (or devolved authority) must act in accordance with the Northern Ireland Act 1998 and must have regard to the joint report of the EU and UK negotiators on progress during phase 1 of the Article 50 negotiations. (Please see our report of those negotiations.) No regulations made under the Act may reduce any north-south co-operation provided for in the Belfast Agreement or create any Northern Ireland border arrangements involving physical infrastructure unless agreed between the UK and the EU.

The EU Withdrawal Act contains specific powers to make regulations implementing the provisions of the Northern Ireland Protocol of the Withdrawal Agreement. For further information on the Northern Ireland Protocol, please see The UK/EU Withdrawal Agreement and Political Declaration.

Retention of existing direct EU legislation

The EU Withdrawal Act aims to safeguard in domestic law all directly applicable EU legislation, principally EU regulations and decisions, which are in force in the UK immediately before the end of the transition period. Rather than attempting to do so by listing all specific regulations and other measures, the Act achieves this by means of generic provisions (in section 2 of the Act).

However, such EU laws were written in the context of the EU free movement rules and the reciprocity of obligations as between the member states of the EU, and in many cases conferred powers and obligations on EU institutions. To deal with this, the Act provides (in section 8) for a power for ministers to make provisions by regulations (statutory instruments) to prevent or remedy all references to the EU, EU entities or other member states which will no longer be appropriate in the UK following Brexit. Such "deficiencies" include provisions conferring functions on EU entities; reciprocal arrangements between the UK and the EU, an EU entity or an EU member state; and other arrangements which involve the EU, an EU entity or an EU member state which are otherwise dependent on the UK's membership of the EU. All such regulations must be made within a two-year period following the end of the transition period. By virtue of amendments made by the Withdrawal Agreement Act, provisions in such regulations for their entry into force by reference to exit day are to be read by reference to the end of the transition period instead of exit day.

In some cases, it will be difficult to see how certain EU law provisions can properly and effectively be transposed into domestic law having regard to the functions required by the EU legislation to be performed by various entities. For example, certain provisions of the REACH Regulation involves steps being taken by the European Commission, a member states' committee and an EU agency (the European Chemicals Agency) making the transfer of the relevant functions to UK public authorities a challenging matter, to say the least.

There is a broader issue of whether it is appropriate to delegate to ministers the task of such adaptation of directly applicable EU law, given that the normal purpose of ministerial regulations is to set out provisions of a relatively technical nature. By contrast, some of the provisions that will be required for the transposition of directly applicable EU legislation into domestic law will require substantive decisions to be taken, which arguably should be made by Parliament and not at ministerial level. 

EU Directives

The ECA 1972 allowed for statutory instruments to be made (under section 2(2)) to implement EU directives into national law. Since such instruments would otherwise fall away on repeal of the primary legislation under which they were made (the ECA 1972), the Act adopts and retains such statutory instruments in domestic law.

There is no need for the Act to make provision regarding EU directives that have been implemented into UK law by means of primary legislation, because such primary legislation is already on the statute book and is outside the scope of the Act. However, EU case law allows for the provisions of EU directives to be directly effective and enforceable against an EU member state in certain circumstances, where the relevant member state has failed to implement the directive into national law by the required date. The Act expressly excludes such directly effective rights from domestic law following Brexit, except where such rights have been recognised by a judgment of the European Court or a UK court or tribunal before the end of the transition period (or are recognised by a UK court after the end of the transition period in a case begun before or during the transition period).

Status of judgments of the European Court

The amended EU Withdrawal Act provides that European Court judgments made prior to the end of the transition period will continue to be binding in domestic law as to the meaning or effect of any retained EU law. However, the Supreme Court will be free to depart from such precedent European Court judgments, in the same way that it is permitted to depart from its own previous judgments. By virtue of amendments made by the Withdrawal Agreement Act, ministers can make regulations, but only before the end of the transition period, removing the requirement on other courts and tribunals to follow retained EU case law, subject to tests which may be specified in such regulations. Before making such regulations, the relevant minister must consult with the President of the Supreme Court, the Lord Chief Justice of England and Wales, the Lord President of the Court of Session, the Lord Chief Justice of Northern Ireland, the Senior President of Tribunals and such other persons as the minster considers appropriate.

As regards European Court judgments after the end of the transition period, the EU Withdrawal Act states that a court or tribunal is not bound by them, but that it may have regard to them. It is likely that future European Court judgments will be very relevant and at least persuasive in interpreting existing EU law which will have been retained in domestic law by the Act, but the Act leaves it to the discretion of individual judges to decide what weight to attach to such post-Brexit European Court judgments.

The EU Withdrawal Act also makes clear that no general principle of EU law is part of domestic law after the end of the transition period unless it was recognised as a general principle of EU law by the European Court before or during the transition period.

Actions based on EU law

The Act expressly excludes any new rights of action in domestic law after the end of the transition period based on a failure to comply with any of the general principles of EU law. The Act also expressly excludes the possibility of disapplying any enactment or declaring any conduct unlawful, after the end of the transition period, on grounds of it being incompatible with general principles of EU law. (There are exceptions in each case for court or tribunal proceedings commencing before the end of the transition period. The Act also allows new actions after the end of the transition period for failure to comply with the general principles of EU law, provided that they are commenced within three years of the end of the transition period, relate to prior facts, and do not seek directly or indirectly to disapply an Act of Parliament or other rule of law.)

The Act also excludes any right in domestic law, after the end of the transition period, to damages based on the Francovich rule, i.e. the European Court precedents allowing for a member state to be made liable in damages to individual businesses for breach by the state of EU law. However, this does not apply to proceedings commenced before the end of the transition period, and by way of further exception, such proceedings can be brought within two years of the end of the transition period if they relate to anything which occurred before or during the transition period.

The EU Withdrawal Act provides that the EU Charter of Fundamental Rights does not form part of domestic law after the end of the transition period. However, this does not affect legal proceedings commenced before or during the transition period.

Conclusion

The EU Withdrawal Act has huge significance. The principle of incorporating existing directly applicable EU legislation into domestic law is welcome in principle as it will as a general matter provide a level of certainty for businesses in the aftermath of Brexit. However, it is open to question whether the system of ministerial revision of EU legislation for purposes of domestic law should have been introduced for all such pieces of EU legislation. Arguably in some cases Parliament should deal with the necessary enactments.

The amendments introduced by the Withdrawal Agreement Act enabling ministers to make regulations to the effect that judgments of the EU Court of Justice will become non-binding on specified courts and/or tribunals for the interpretation of retained EU law, causes concern because of the uncertainty potentially resulting in the meaning and interpretation of established law. However, it is important to note that any such regulations can only be made before the end of the transition period, i.e. before 31 December 2020 and only after extensive consultation by the relevant minister.

The ratification of the Withdrawal Agreement and the passing of the Withdrawal Agreement Act will be welcome to businesses because they create a further period of certainty for businesses (albeit only until the end of 2020) during which EU law will continue to apply in the UK. It gives businesses based in the UK an extension of the benefits of EU Single Market and Customs Union membership until the end of 2020 and gives them a further period in which to adapt following the UK’s exit from the EU on 31 January 2020.