The European Union (Withdrawal) Bill is introduced into Parliament

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The entirety of the ECA 1972 will be repealed by the Bill, but the above effects of section 2(1) of the 1972 Act are retained as regards all rights, powers, obligations and remedies which (pursuant to the ECA 1972) were already recognised and available in domestic law immediately before exit day.

Similarly the Bill provides that the principle of supremacy of EU law does not apply to any enactment of rule of law made on or after exit day, but continues to apply to the interpretation or disapplication of any enactment or rule of law made before exit day.

Retention of existing direct EU legislation

The Bill 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 exit day.  Rather than attempting to do so by listing all specific regulations and other measures, the Bill will achieve this by means of generic provisions (in clause 2 of the Bill).  

However, such EU laws were written in the context of the EU free movement rules and the reciprocality 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 Bill provides (in clause 7) 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.  The permitted regulations to be made by ministers can also provide for the functions of EU entities or public authorities in member states to be exercised instead by a UK public authority, or be abolished, replaced or modified, and  can also provide for the establishment of new UK public authorities to carry out such functions.  All such regulations must be made within a two-year period following exit day.

The task of adapting the vast swathes of directly applicable EU legislation into domestic law will be complex.  It remains to be seen how this huge task will be progressed during the two years period following the exit day, taking into account the volume of the legislation, the significant amendments that in many cases will be needed and the limited time period.  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. The Bill states that the regulations to be made under the Bill (when enacted) may make any provision that could be made by an Act of Parliament. This is clearly open to criticism as going against the proper purpose and scope of ministerial regulations (statutory instruments).

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 Bill adopts and retains such statutory instruments in domestic law. 

There is no need for the Bill 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 Bill.  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 Bill 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 exit day (or are recognised by a UK court after exit day in a case begun before exit day). 

Status of judgments of the European Court

The Bill provides that European Court judgments made prior to exit day 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.  European Court judgments pre-dating Brexit will therefore in effect be given the same status as Supreme Court judgments in the domestic legal system.

As regards European Court judgments after exit day, the Bill 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 Bill, but the Bill leaves it to the discretion of individual judges to decide what weight to attach to such post-Brexit European Court judgments.

It is doubtful that the Bill in its current form will be the final word on the status of the European Court and its judgments following Brexit.  This is an area where there are differences between the positions of the UK and the EU in the current negotiations regarding the UK's withdrawal agreement.  An EU position paper dated 12th July on "On-going Union Judicial and Administrative Procedures" proposes that the UK's withdrawal should not deprive the European Court of its competence to adjudicate proceedings which are pending on the withdrawal date or preliminary references that may be submitted by UK courts after the withdrawal date relating to facts that occurred before the withdrawal date (or infringement proceedings against the UK after exit date relating to facts prior to exit date). If these principles are reflected in the withdrawal agreement, then at least in these respects the Bill would need to go further so as at least to allow for the relevant European Court judgments concerning pre-Brexit facts to be binding in the UK system.

The Bill provides that retained EU law is to be interpreted in accordance with European Court case law pre-dating Brexit and the retained general principles of EU law. (It also makes clear that no general principle of EU law is part of domestic law after exit day unless it was recognised as a general principle of EU law by the European Court before exit day.)  By contrast, the Bill expressly excludes any new rights of action in domestic law after exit day based on a failure to comply with any of the general principles of EU law. It also expressly excludes the possibility of disapplying any enactment or declaring any conduct unlawful, after exit day, on grounds of it being incompatible with general principles of the EU law.  (There are exceptions in each case for court or tribunal proceedings commencing before exit day.)  The Bill also excludes any right in domestic law after exit day 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. 

Conclusion

The contents of the Bill are without doubt of huge significance. The final form of the Bill may differ, influenced partly by the ongoing UK/EU negotiations of the withdrawal agreement, in which the future status of the European Court and its judgments are one of several negotiating issues. 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 remains to be seen how effective the proposed system of ministerial revision of EU legislation for purposes of domestic law will be, just as it is open to question whether this exercise should for all such pieces of EU legislation be left to ministers. Arguably in some cases Parliament should deal with the necessary enactments. There will be an ongoing need for legal scrutiny of how the relevant measures affect businesses, and there will no doubt be potential disputes as a result of the transposition process envisaged in the Bill.