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Brexit: should lower courts be allowed to depart from EU caselaw?

Overview

The UK Government is consulting on proposals to allow lower courts to diverge from EU caselaw which predates the end of the transition period.  This is potentially significant for many areas of law as it could speed up the process of divergence from the EU after the end of the transition period.  But is it the right policy?  And will it have the effect the Government appears to want?

The position if the Government doesn't do anything

If the Government were to leave things as they are, the process of diverging from EU caselaw pre-dating the end of the transition period is likely to be relatively slow. This is because the European Union (Withdrawal) Act 2018 provides that such caselaw has the same status as judgments of the Supreme Court – so only the Supreme Court can depart from it. Since it generally takes years for a dispute to reach the Supreme Court, this approach means that change is unlikely to come particularly quickly.

PROS AND CONS OF THE CURRENT POSITION

The current position means that businesses facing numerous other Brexit-related uncertainties do not (at least in the short to medium term) have to contend with the risk of a significant number of additional changes being made by the courts.  It also means that if there is to be divergence, the merits of doing so are likely to have been explored extensively through the appeals process – and it does not stop the Government legislating if it wants to force the pace of divergence (which would have the added benefit of democratic scrutiny through the Parliamentary process).

On the other hand, if you take the view that departing from EU caselaw represents an opportunity for the UK to do things differently, you may – as the Government appears to – favour changing the system so that divergence can take place more quickly (and can be driven by private litigation rather than requiring government to take the initiative).  There are undoubtedly some areas where businesses would welcome a different, more pragmatic approach than the Court of Justice has sometimes adopted.  However, the key question is whether the potential gains in those areas outweigh the loss of the benefits of the current position, as outlined above.

The Government's proposals

The Government's proposals would mean that parties could seek to overturn pre-Brexit EU caselaw in courts below the Supreme Court.  It is considering two options:

The options being considered

  1. The Court of Appeal and courts at a broadly similar level (or higher) would be able to diverge – but not lower courts;

  2. The High Court and courts at a broadly similar level (or higher) would be able to diverge – which could include the Upper Tribunal and the Employment Appeal Tribunal

As the Government appears to accept, Option 2 could increase uncertainty not only by significantly widening the scope for divergence but because you could end up with conflicting rulings at the same level (e.g. two High Court judges reaching different conclusions on whether it is appropriate to depart from pre-Brexit EU caselaw).

The test that the Government suggests courts should apply when deciding whether to diverge is the same as that applied by the Supreme Court when deciding whether to depart from its own caselaw, namely "whether it appears right to do so."  It is not proposing any further criteria or guidance. 

What will be the impact?

Given how divisive Brexit has become as a political issue, it is possible that – if the proposals become law – the courts may be uncomfortable with being cast in the role of arbiters of whether further divergence is appropriate.  This may lead to a tendency to conclude that, whilst there are often valid arguments in favour of departing from EU caselaw, change should be through legislation rather than the courts – which would allow for a wider process of public consultation and debate in Parliament. 

It is also possible that courts could set the bar quite high for raising arguments relating to divergence from pre-Brexit EU caselaw in the first place and look to rein in "over-enthusiastic" litigants by an essentially procedural route.  So it may be that even if the proposals go ahead, their impact could be more limited than the Government appears to be hoping for (and equally, the increase in uncertainty may not be as great as some critics of the proposal might suggest).  That said, the proposals would certainly add to the level of uncertainty facing businesses – which is already well above normal levels because of both Brexit and the COVID-19 crisis

What happens next?

The deadline for responses to the Government's consultation is 13 August 2020.  Because of amendments to the EU (Withdrawal Agreement) Act 2019 made after the Government took power in December 2019, these changes can be made by statutory instrument without any Parliamentary debate; as a result, MPs will have relatively limited scope to discuss or block the legislation.

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