Posted on Mar 31, 2017 by Liam McMonagle
The Great Repeal Bill will be one of the most important pieces of legislation in decades.
The Great Repeal Bill: How Great Will It Be? – Lawyer Monthly
The somewhat declaratory, if not aspirational, title refers to its key purpose: repeal of the European Communities Act 1972 and the legal implementation of Brexit. Actually, its most significant effect will be the opposite: it will update UK law to incorporate the body of existing European law – the acquis communautaire – as at the point we leave the EU.
The Government has presented the law reform required to implement Brexit as a two-stage process. Firstly, the acquis will be transposed into UK law so as to apply continuously from cessation of the UK’s EU membership. Secondly, and on an ongoing basis, the UK executive and legislative branches can review whether or not individual pieces of legislation should be retained, amended or repealed in accordance, we must assume, with the policy objectives of the Government of the day.
To date, the Government has been keen to talk up the “great” nature of the repealing provisions to be featured in the Bill. The transposition of EU law into the UK, by contrast, is often set out as a technical matter of legal detail.
While the Bill gives rise to a number of public law issues, the process it begins is not particularly surprising. Prior to the referendum, it had always been assumed that some kind of ‘grandfathering’ of EU law would need to take place for practical reasons. While the content and subject of the Bill has been described in a Government White Paper, no draft text has been issued and so much of the commentary on it is speculative in nature.
Existing EU Law
The current body of EU legislation is significant. Presently, this amounts to approximately 20,000 instruments, of which around 5,000 are directly applicable in the UK and all other EU member states while the remainder have bene transposed into UK law via primary or secondary legislation. Of this, the House of Commons Library estimates that approximately 13.2% of UK legislation enacted between 1993 and 2004 was derived from the EU.
EU legislation, in its various forms, makes its way into domestic law through various routes which are principally enabled through the European Communities Act 1972 (ECA). For example, section 2(1) of ECA incorporates the directly effective provisions of the EU treaties and EU regulations into UK law. EU legislation which is not directly applicable, but must be transposed into UK law, is incorporated under section 2(2) of ECA which allows ministers to enact statutory instruments to enact it. So, for example, the Working Time Directive (2003/88/EC) became the Working Time Regulations (1998). With the repeal of ECA, the basis upon which all of this is included in our law will be removed. This will also see the end of other key provisions of ECA which establish that EU law is supreme over UK law and that the Court of Justice of the European Union (CJEU) will be binding on UK courts.
There are several areas of difficulty with the transposition process:
Removal of EU jurisdiction and regulatory oversight. A significant amount of EU will be affected by the process of Brexit itself: particularly provisions which establish EU-wide regulatory bodies or regulate interactions between regulatory bodies in member states.
Brexit negotiations. Certain provisions might depend on the outcome of the Brexit negotiations – e.g. if special arrangements are made to preserve ‘passporting’ of financial services or any other kind of preferred market access this could be subject to agreement that the legislative provisions in the UK and EU will remain aligned, at least to a degree. The final position might not be clear until near the end of the process. Many provisions of EU law are also underpinned by reciprocity between different jurisdictions based on their status as EU member states. This may also be impossible to preserve given that the basis for such reciprocity will disappear.
Devolution issues. The transfer of legislative competence from the EU to the UK will necessitate reconsideration of the devolution settlements in place within Scotland, Wales and Northern Ireland. The Scottish and Welsh devolution settlements operate on the basis that any powers not explicitly retained at UK level are deemed devolved, albeit in each case the devolution arrangements put in place specifically envisaged ongoing interaction with, and incorporation of, EU law. Section 29(2)(d) of the Scotland Act provides that any legislation passed by the Scottish Parliament is unlawful unless it is compatible with EU law and this will need to be updated. Section 88 of the Government of Wales Act 2006 imposes similar constraints on the Welsh administration. Relations between the UK Government and devolved administrations are, to varying degrees, somewhat strained – particularly in the case of Scotland, whose Government sees the Brexit process as a justification for another referendum on independence if certain issues and priorities set out by it are not adhered to. While the UK Government has indicated a willingness to work with the devolved administrations and certain structures for decision-making have been put in place, it has not yet committed to devolve all repatriated areas of legislative competence. This will affect economically and politically significant sectors such as agriculture, fisheries and environmental legislation. In many cases it is also likely that the body of EU law will straddle existing reserved and devolved matters where there may be a need for legislative consent motions and joint action.
Legal developments. EU law, like all law, is not static and nor does it exist in isolation. Incorporating the existing body of EU law as at the point of Brexit will, at best, synchronise the law for a short period of time following which it will diverge. This is not an unforeseen consequence, of course; it is essentially what Brexit is all about. However, there is also a significant amount of the acquis which is not written down in legislative form. Much of it exists by way of CJEU case law interpreting the law itself, decisions and precedent established by EU regulatory bodies. Post-Brexit, it seems none of this will be binding in the UK. The extent to which it is necessary, or desirable to follow it, and the degree to which the UK courts are directed to, or might choose to, “have regard” to this will also need to be clarified – and indeed, may not become apparent until some years after Brexit itself.
Incorporation of EU law into the UK
There are differing views on how this part of the process is likely to work. It is generally accepted that there will need to be additional primary legislation alongside the Great Repeal Bill and concerns have been raised that Parliament simply does not have the legislative capacity to prepare, review, scrutinise and debate the volume of legislation that will be needed. The Institute for Government estimates that around 15 new major pieces of legislation will be required to enable the Brexit process to be completed. At the moment, Parliament passes around 20 bills per year so this renders it unlikely that there might be legislative capacity for anything else.
Given the practical challenges and limited capacity of Parliament to enact the volumes of legislation which will be needed, there will almost certainly be heavy reliance on secondary legislation. The Government’s White Paper anticipates that new ministerial powers will be needed for this purpose. These powers are likely to allow Ministers to make changes to reflect agreed positions in the Brexit negotiations themselves.
Legislative provisions by which Ministers are enabled to amend Acts of Parliament by secondary legislation are known as “Henry VIII” clauses. Their use is often criticised as it amounts to a transfer of legislative power from Parliament to the Government and could enable legislation to be enacted in politically or administratively sensitive areas with minimal Parliamentary scrutiny.
The Brexit Minister, David Davis, has indicated that this this would not be the Government’s intention but rather ought to be seen as a ‘technical’ exercise. Ministerial powers could be limited in time, scope or purpose as a means of addressing these concerns. The current body of EU law covers large areas of political sensitivity: discrimination law, employment protections, environmental matters and individual rights and obligations. Pressure will be brought to try and limit to extent to which significant changes in the law in any of these areas can be made by Ministers with the substantially reduced degree of Parliamentary scrutiny that is applied to secondary legislation. The House of Lords’ Delegated Powers and Regulatory Reform Committee has already suggested that more extensive Parliamentary procedures could be applied to introduce committee stage scrutiny of certain measures where significant ministerial powers are created.
Impact on Business
To date, the Government has sought to reassure the business community and the wider public that it is getting on with the Brexit process but also that any change will be gradual, rather than drastic, in nature. Over the years, there have been significant policy differences between UK Conservative Governments and the EU – such as the refusal of the Major administration to incorporate the Social Chapter in the 1990s. These arguments appear to have been parked, at least for the time being. The Prime Minister has indicated that there is no appetite to review employment protections as part of the process. However, many of those who favoured a ‘Leave’ vote in last year’s referendum expressed, at least in general terms, dissatisfaction with the tenor and content of some European legislation and it is unlikely that such concerns will lie dormant.
In the short-term, legislative activity in almost all non-Brexit related areas of Government will be limited and politically controversial changes in law may be limited given the all-consuming nature of the Brexit process and perhaps also in the interests of maintaining continuity and certainty at least until it is complete.
It will generally be open to the UK Government, and possibly the devolved administrations, to keep UK and EU law broadly aligned on a voluntary basis if they wish to. Much of the acquis will involve relatively uncontroversial and mundane areas of law where there will be limited scope for material policy differences to emerge. For example, there might be limited appetite to disrupt the broad harmonisation of trade mark law and practice even if the UK acquires the powers to do so.
The result of this process, however, will be to create a structure in which EU law will begin to diverge from UK. This, in a sense, is the whole point of Brexit – “taking back control.” It could well lead to an intense period of law reform (or lobbying to that end) once the process nears completion.
Many UK businesses will, of course continue to trade and deal with businesses and individuals throughout the EU single market and will need to ensure their ongoing compliance with the laws that regulate that market. For example, a food manufacturer wishing to make health claims about features of its products will continue to be subject to EU laws where it is selling its wares in the EU, even if (as has been argued) equivalent UK legislation takes a more permissive approach in future.
However, in the medium to long term, there could be much greater scope for legislative activism. Laws in future could be changed more radically, and more quickly, than we have become used to. This uncertainty may need to be provided for in a wider range of contracts and transactions than are currently affected by “change in law” risk. For those businesses who want to push the case for law reform in specific areas, this could become easier.
Within the UK itself, there could be scope for further divergence if areas of EU competence are transferred to devolved administrations. It will be important, therefore, for businesses to assess how their operations are affected by an increasingly divergent and multi-layered legal framework.
Lastly, it has been suggested that the law reforms brought on by the Brexit process will be “a bonanza for lawyers.” My personal view is that this is most unlikely!
Liam McMonagle is a Partner in our Business Law department. If we can help you please contact us at Brexit@thorntons-law.co.uk.