Professor Panos Koutrakos has addressed an international audience of180 senior procurement executives from the most influential corporations across the globe at the Europe Forum 2016 (organized by Procurement Leaders). The Forum took place in Amsterdam on 6 October.

Professor Koutrakos participated at a panel on ‘Brexit Update:How is procurement dealing with the fallout from Brexit?’ He discussed the likely arrangements between the UK and the EU and the legal issues raised by the introduction of a ‘Great Repeal Act”. He examined issues of timing and the possibility for transitional arrangements. He also answered questions about the legal risks that companies face in the context of both existing and future contracts.

Since the EU Referendum,  lawyers and the public have asked when the Government would start the process of exit from the EU and what , in substantive terms, Brexit would mean. This post, together with George Peretz’s post “The Great Repeal Bill: a giant Henry VIII clause? “, seeks to provide some answers.

As a consequence of the Prime Minister’s speech to the Conservative Party Conference  on 2 October, we are beginning to see what the UK Government’s opening gambit on Brexit might mean. But the Prime Minister has made clear that she will not disclose the detail of the negotiation as it unfolds. Whatever the stated aim and whatever the starting  point, be prepared for stormy water and a change of course. Anyone previously  involved in interstate negotiations will recognise that life is full of surprises.

First, as to timing of notice to the EU, the giving of notice under Article 50 will take place by the end of March 2017. The question whether giving of notice requires an act of parliament before Article 50 can be triggered is about to be litigated. If the claimants are right, the UK Courts could order/declare that the Secretary of State should  introduce  primary legislation, which would be constitutionally innovative. It would mean that, by the effective date of Brexit,  at least three acts of parliament would have been necessary to give effect to withdrawal from the EU.

Secondly, the Prime Minister announced the introduction of a Great Repeal Bill, which would mean that the European Communities Act 1972 would no longer apply from the date when the UK leaves the EU. That is hardly a surprise , given that the 1972 Act provides for the supremacy of EU Law over  UK domestic law.

Thirdly, as to the content of the Great Repeal Bill,  the Prime Minister said: “ As we repeal the [1972 Act] , we will convert the acquis – that is, the existing body of existing EU Law – into British law. When the Great Repeal Bill is given Royal Assent, Parliament will be free –subject to international agreements and treaties with other countries  and the EU on matters such as trade – to amend, repeal and improve any law it chooses. But by converting the acquis into British law, we will give businesses and workers maximum certainty as we leave the European Union. The same rules and laws will apply to them after Brexit as they did before. Any changes to the law will have to be subject to full scrutiny and proper Parliamentary debate.”

This passage helpfully  recognises the complexity of repealing, amending, improving  and/or  re-enacting EU Law. Those laws are contained in the EU treaties some of whose provisions are directly applicable; in regulations which are directly applicable, but whose enforcement machinery may already be contained in domestic laws; in directives which have been incorporated into domestic law. There are also questions about the fate of  broader horizontal EU legal concepts such as the doctrine of direct effect. Even if EU Law were to be swept away, there are frequently  international treaty obligations which sit behind  EU Law, for example, in the environmental law field (the Aarhus Convention or the  Strategic Environment Assessment Protocol)  or  in the aviation field (the Chicago Convention) .

Does the passage mean that , by the time of the enactment of the Great Repeal Bill, Parliament will already have decided which laws were to be re-enacted and which laws were to be amended, repealed or improved?  Is it practical for the process of reconsidering EU laws and of consulting on changes  to be completed within a two year time frame ?   If not , the answer must be that the acquis would  be re-enacted lock, stock and barrel, subject to further amendment over the ensuing years. That would be the only way to ensure the “maximum certainty” that the Prime Minister seeks.

But, fourthly,  if a lawyer is advising a client who is thinking more strategically in a longer time frame , what might the amendments, repeals or improvements comprise? Lawyers might find some of the answers in the Government’s own Balance of Competence Reviews carried out in each policy sector by Government departments between 2012 and 2014. This was a serious attempt by the Coalition Government to ascertain how, in  the view of stakeholders and commentators  ,  the balance between EU competence and national competence should be articulated.

Fifthly, for the future, the Prime Minister said three things:

(a) The future was to be a global future;

(b) “It is not a… negotiation to establish a relationship anything like the one we have had for the last forty years or more. So it is not going to be a “Norway model” . It’s not going to be a “Switzerland model”…. I want it to include cooperation on law enforcement and counter-terrorism work. I want it to involve free trade in goods and services . I want  to give British companies the maximum freedom to trade with and operate in the Single Market – and let European companies do the same here…”

(c)  But ….we are not leaving the [EU] only to give up control of immigration again. And we are not leaving to return to the jurisdiction of the European Court of Justice”

That seems a clear signal that the UK will not seek to retain membership of the EEA. The UK has also recognised the shortcomings of the Swiss model, involving the negotiation of an endless stream of individual bilateral agreements, which the EU has itself criticised. Moreover, in signalling that the UK will not accept free movement of workers , that  is surely a tacit acceptance that full access to the Single Market has been abandoned since free movement is likely to be a non-negotiable pre-condition of full access to the Single Market. Finally, without rulings by the CJEU, it is difficult to see how the uniform application of EU laws that do apply to the UK in the future can be guaranteed.

It is challenging to predict what the Brexit endgame will produce.  Yet in practical terms, lawyers need to try to manage legal risk in an environment where a future legal framework has yet to be articulated .  Given the significant uncertainties ahead, lawyers should not be afraid to raise their concerns and suggested solutions with the Government now. In that way, lawyers, acting with their clients,  can start to influence thinking in a positive way.

This text is based on a talk given at a workshop for lawyers at Eversheds LLP on 4 October. Other panellists at the workshop were David Unterhalter SC, Peter Oliver and Professor Panos Koutrakos.

The Prime Minister has now announced that the 2017/2018 session of Parliament will feature a “Great Repeal Bill” to achieve the repatriation of EU law to the UK.

The Bill will, in particular, repeal section 2 of the European Communities Act 1972, which has long been a target of attack by those concerned by the impact of EU law on Parliamentary sovereignty.  Section 2(1) of that Act provides that EU law has effect in the UK and must be followed by the courts; section 2(2) gives wide powers to ministers to amend UK law to make it consistent with the requirements of EU law.

Section 2(2) is frequently criticised for being a “Henry VIII” provision: that is to say, it allows ministers to make wide-ranging changes to UK law without having to go through the process of primary legislation.

However, it is unlikely that the Great Reform Bill will see the end of Henry VIII clauses.  Indeed, a prominent lawyer on the “leave” side of the Brexit debate has argued that section 2(2) should not be repealed.  Instead, it should be “extended” to give ministers more power to amend UK law by statutory instrument.

Why will that be necessary?  The problem is that, before Brexit takes effect, something will need to be done about all the areas where EU law forms the legal basis for UK regulations: and it is common ground that very large parts of those regulations will need to be kept after Brexit.

Unfortunately, that is not going to be a simple task.  It is not possible just to pass a short Act saying the old rules remain in force, because they were drafted on the assumption that the UK is a member of the EU.  So, for example, EU regulations on agriculture frequently refer to the powers of the European Commission; and EU rules on medicines are a complex web of regulations giving powers to European institutions (the Commission and the European Medicines Agency) and involve recognising decisions of those bodies and of regulators in other Member States. Similarly the regulatory framework for telecoms, railways, energy, airports and air traffic all stem from European law.   There are countless other examples.  In order to avoid legal black holes, these rules will all have to be reviewed and replaced before Brexit with a new version that works in the post-Brexit world.  Much of this is technical stuff – vitally important to those affected and requiring political judgments, but not likely to be regarded as a matter of intense political controversy.  Some of it, though, will require important decisions on politically contentious matters such as environmental protection and workers’ and consumers’ rights.

So, in the period before Brexit comes into effect, a vast amount of work will have to be done to establish whether rules needed amending in areas such as financial services, regulation, pharmaceuticals, employment, agriculture, product safety and so on.  Daniel Greenberg, a former Parliamentary draftsman, describes this as “the largest scale legislation and policy exercise that has ever been carried out”.  The exercise will be even more complex (and accelerated) because it is likely that uncertainty as to the precise arrangements between the EU and UK after Brexit will persist until quite late in the day, so that detailed regulation will not be able to be finalised until that point.

There is no way in which Parliament will be able deal with this by primary legislation, within the 2 year time limits imposed by Article 50.  Once that time limit expires, the EU provisions will no longer apply, leaving the UK with a legal vacuum.  To reduce the length of uncertainty, the Great Repeal Bill will necessarily have to give power to ministers to make new laws in all these fields by statutory instrument.

That raises profound issues for Parliament.  When section 2(2) of the 1972 Act has been employed as a basis for secondary legislation, it has been used to implement EU legislation that has already undergone considerable scrutiny at EU level (by member states and the European Parliament).  In contrast, Parliament’s scrutiny of UK statutory instruments is widely regarded as seriously deficient (not least because there is no power to propose amendments).

It also raises important questions for Whitehall: in particular, it is not clear that the Government Legal Department (whose numbers have been very substantially reduced in recent years) will have the capacity to take on the amount of extra work that needs to be done, at least without a substantial recruitment campaign. And expertise in the numerous technical and policy areas affected cannot be acquired overnight.

So there is a serious risk that swathes of legislation, drafted in a hurry by overworked civil servants with inadequate knowledge of the areas concerned, will be waived through without Parliament having the means or capacity to scrutinise effectively what is being proposed. The extent of Parliamentary scrutiny depends on the terms of the parent act, and in most cases Parliament’s control is limited to approving, or rejecting, the instrument as laid before it: it cannot (except in very rare cases) amend or change it.  Not only would that sit uneasily with many leavers’ concerns to improve democratic control of the executive and to restore Parliamentary sovereignty, but it would create the risk of generating serious costs for business in dealing with inadequate, unclear, or even perverse, legislation.  The scale of the task of getting this right should not be underestimated by either Parliament or Whitehall.  Parliament will need to make certain, as it considers the Great Repeal Bill, that the powers that the Bill is bound to confer on ministers should be exercisable only after proper scrutiny by Parliament and after wide consultation and careful consideration.  If the price of a quick Brexit is rushed and incoherent legislation, prepared with inadequate democratic scrutiny and giving rise to substantial costs to business, even many leavers will wonder if that is a price worth paying.

On 23 June 2016, the UK’s voters were asked to give a one word answer to a simple question: “Should the United Kingdom remain a member of the European Union or leave the European Union?”. 52% chose “leave”. However, what comes next is far from simple.

Political debate is now dominated by the big and complex questions that Brexit throws up: What relationship should Britain have with Europe? How do we go about unpicking the economic, political and legal integration of the UK into the EU? The business press is focused on what this will mean for business in both the short term and the longer term: What will happen to our access to the single market, in particular for services? How will business regulation change as a result? EU nationals are asking about their rights to remain in the UK, British citizens about their rights to live elsewhere in the EU.

All of these questions will ultimately be determined by political decisions and diplomatic agreements to be made over the next months and years. Many of those decisions will be taken within the framework of UK, international and European law.

That is why we have created the Monckton Brexit Blog.

We believe that, as leaders in the fields of international, European, public and regulatory law, we can provide objective and politically neutral insight into the pressing questions that government, business and individuals face as a result of Brexit.

We are going to be posting a range of content, aimed at specialists and non-specialists alike. Some of the pieces will be primers on the law that underlies the big stories in the news: What is Article 50 TFEU and how does it really work? What really is the so-called “Norway model” and how would it differ from staying in the EU? Others will look in more depth at specific issues from specialist areas where EU law is important, and where Brexit may reshape the landscape, such as competition law, tax, procurement, financial services, telecommunications or immigration.

Our aim is to make rigorous and objective legal analysis available not only to our clients, but also to help inform the press, policy makers and the wider public debate.

If you want to get in touch, to ask us about anything we have written or with any suggestions, please contact us at blog@monckton.com.

Christopher Muttukumaru CB writes: in circumstances where the successful “Leave” campaign provided little by way of a collective vision of a post-Brexit world, it is essential that the UK Parliament is provided with sufficient information about the Government’s negotiating strategy to enable Parliament to hold the UK executive to account.

This post is principally concerned with parliamentary scrutiny. One of the key responsibilities of the UK Parliament is that it should perform an in-depth  role in scrutinising the way in which the Government performs its functions. The Brexit negotiations and their emerging  outcome are no exception. The House of Lords EU Committee is currently conducting an inquiry into the role of Parliament in scrutinising the Brexit negotiations.

In that regard, the Prime Minister’s recent comments are highly instructive.  There is considerable force  in her assertion that the Government should neither give away its negotiating strategy nor provide a running commentary on the negotiations. But, sometimes, parliamentary select committees might need to test aspects of sweeping statements such as hers.

First, the starting point for any proposals for parliamentary scrutiny should be rooted in the reality of the referendum campaign. The successful Leave campaign failed to articulate a coherent, collective vision of a post-Brexit world for the United Kingdom. As a consequence, there was no in-depth scrutiny, as one would normally expect, say, at a General Election, of the differing policy arguments. Anneli Howard’s post on 12 July (“Brexit- not too late for proper impact assessment”) is also relevant in this connection.  The failure to provide such a vision  lends considerable weight to the need for effective parliamentary scrutiny of both the negotiations and the emerging outcome. The Brexit negotiations will be the single most important set of international  negotiations for the UK  in a lifetime.

Secondly, most commentators  would not suggest that the Government should disclose the detail of its negotiating strategy, such as its “bottom line” on any given subject. Equally, it would be in the national interest for the Government to disclose meaningful information about its aims , both in respect of vertical issues (sector by sector) and horizontal issues (cross-cutting issues).

By the same token, it is essential  that  the Government should keep parliament and the public properly informed of where the negotiations have got to. The Government needs to avoid tokenism. Specifically, a distinction ought to be drawn between (a) areas where there is  objective and persuasive evidence that advance disclosure would harm the national interest and (b) the cases where disclosure would not harm the national interest although it might conceivably be administratively inconvenient to provide disclosure. In the sectoral areas of policy making, for example, the outcome of the Balance of Competences Reviews might already provide the EU with a shrewd idea of what the UK might seek to achieve in negotiations in each sector.

In determining how the balance should be struck between the countervailing national interests, the Government should seek to avoid the traditional Whitehall power game where Ministers and officials hold all the cards and thus Parliament is at risk of being emasculated save where a select committee has the appetite doggedly to pursue an inquiry.  A failure to provide adequate information to Parliament and the public may even damage the interests of companies and individuals since they might otherwise be driven to make major decisions without any inkling of what the Government’s preferred outcomes might look like. To blindfold Parliament and the public could be very unfair.

The Coalition Government made a virtue of its commitment to genuine transparency. Surely  the present Government would want to do no less in relation to a subject of such significance?

Since the June referendum, the question of the trade relations between the UK and third countries has been raised in different contexts. These have included the status of the existing trade agreements that bind the EU as a matter of EU law (see my analysis here) and the legal issues regarding the application of WTO rules post-Brexit (see my analysis here).

The question that has been raised recently is whether the UK would be free to negotiate trade agreements with third countries before Brexit. The International Trade Secretary, Liam Fox, has stated that ‘we want to have discussions and to scope out any possible deals that we might want to do’. How much freedom does the UK have pre-Brexit, as a matter of EU law, in the area of international trade negotiations?

Trade policy falls within the EU’s exclusive competence. This is an area where the Member States have given the EU the power to act and are prevented from adopting any measure unless specifically authorized to do so under EU law. Even in policy  areas where the EU has non-exclusive competence (and which it shares with the Member States), the latter are still bound by a duty of co-operation. This duty has been interpreted by the European Court of Justice in broad terms. For instance, a Member State may not depart from a position agreed by the EU in international negotiations.

The UK is, therefore, prevented under EU law from negotiating trade agreements with third countries whilst still a Member State. A violation of the UK’s obligations may lead to infringement proceedings before the European Court of Justice by the European Commission under Article 258 TFEU (or by another Member State under Article 259 TFEU – such actions are, however, rare).

There is also a practical consideration: the post-Brexit relationship between the UK and the EU would be directly relevant to the content of trade negotiations between the UK and third countries. As long as the former has not been settled, the latter are difficult to envisage.

The post-Brexit trade relations with third countries add yet another layer of complexity to the already complex process of the UK’s disengagement from the EU. In fact, they may even feature in the negotiations between the UK and the EU under Article 50 TEU. For instance, the position of the UK under existing agreements with third countries in which it participates along with the EU could be addressed. In this context, the spirit in which the Article 50 TEU negotiations will be carried out would be crucial.

Blog post written by David Unterhalter SC and Thomas Sebastian.

Amidst the speculation as to what legal regime is likely to govern the UK’s trading relationships with its major trading partners after Brexit, the safest view is that it is far too soon to tell. But one outcome is tolerably clear. The UK’s membership of the World Trade Organization (“WTO“) will provide the floor of rights and obligations that will govern the UK‘s relationship with other WTO members, including the EU post-Brexit. In a worst case, if the two year period under Article 50 runs out without agreement on key areas of trade, the WTO Agreements are likely to be determining until some future agreement is reached. And the same is true of the UK’s relationship with other trading partners: until bilateral agreements are concluded, the WTO Agreements are likely to prevail. However, the UK’s position as a member of the WTO, once it leaves the EU, is not without some legal complexity (and we will return to this topic separately).

To view the blog post please click here.

Christopher Muttukumaru CB argues that, in cases where a reference has been made to the Court of Justice under Article 267 of the TFEU, the UK and the EU should reach agreement on transitional cases in order to ensure legal certainty. Otherwise, could the interests of justice be timed out?

Some proponents of Brexit have argued that the UK should “take back control” of lawmaking and that the domestic courts alone should determine the legal rights and obligations that arise under the laws of the United Kingdom, including those that are derived from EU Law.

This post will cover the issues that could arise in cases under Article 267 of the TFEU (requests for preliminary rulings by the CJEU). It will cover neither direct actions which, while they might indirectly have effects in respect of private citizens and legal entities, are essentially disputes between the EU institutions or between Member States and the EU institutions, nor Competition Law cases. That said, some general observations that are made might also be applicable in other cases.

Where the domestic courts are asked to determine a dispute between private parties or between private parties and the State, the courts will generally apply the law as it is presumed to have applied at the time at which legal relations were entered into. In so far as EU Law is relevant and applicable to the determination of a dispute, it will at least continue to apply until the effective date of withdrawal by the UK from the EU. In practical terms, what would that mean ? In parenthesis, one commentator (Lord O’Donnell) has floated a fresh idea that the rules of EU Law , as implemented into UK domestic law, could outlast Brexit until such time as, sector by sector, the Government decides which laws should survive and which should be revoked or amended. This post does not address that possibility.

CJEU jurisdiction under Article 267/TFEU The CJEU has jurisdiction to give preliminary rulings upon the interpretation of the Treaties and/or the validity of acts of EU institutions, bodies, offices or agencies. National courts are entitled to request a preliminary ruling in any such case if they consider that a decision of the CJEU is necessary to enable it to give judgement. For present purposes, the question of mandatory references from national courts from which there is no further judicial remedy does not require separate consideration.

The potential problems for practitioners. Once Article 50 is triggered, parties to litigation involving points of EU Law that might be apt for reference to the CJEU are going to have to address the consequences of different scenarios pending the outcome of Brexit negotiations. Here are a few illustrations. Given the long lead times for references, what happens if, by the time that a preliminary ruling has been given by the CJEU, the effective date of withdrawal by the UK pursuant to Article 50/TEU has already passed? Absent any specific provision in the agreement made between the UK and the 27 remaining Member States pursuant to Article 50/TEU, is the CJEU likely to discontinue the proceedings ? What happens if a preliminary ruling has been made by the CJEU before the effective date of withdrawal , but the national court has not yet applied the ruling by that date ? If the UK has been found to be in breach of its EU Law obligations, what might happen to consequential claims, such as actions for damages, for breach of EU Law?

The withdrawal agreement under Article 50 ought to make provision for transitional cases. While the outcome of the negotiations under Article 50 cannot be predicted with any certainty, there are some general pointers that might be useful to consider. The most obvious proposition is that the withdrawal agreement should make clear what should happen in respect of transitional cases under Article 267/TFEU:

• On one hypothesis, if it is agreed that the UK should continue to have access to the Single Market, is it conceivable that it could realistically hope to abandon adherence to the rulings of the CJEU. After all, the very rationale for the supremacy of EU Law is that it ensures that the law applies uniformly across the EU, taking account (as only the CJEU can) “…of [its] panoramic view of the Community and its institutions, a detailed knowledge of the Treaties and of much subordinate legislation made under them , and an intimate familiarity with the functioning of the Community market which no national judge denied the collective experience of the Court of Justice could hope to achieve…” (Commissioners of Customs and Excise v Samex: Bingham J).
• On another hypothesis, the UK might seek a clean break without access to the Single Market. If so, the withdrawal agreement might provide for a cesser of jurisdiction for the CJEU to determine requests for preliminary rulings, including those on which it had yet to rule at the time of the effective date of withdrawal. In that eventuality, the UK courts would be faced with a conundrum. Ex hypothesi , the courts would have asked for a preliminary ruling on a question of EU Law which was relevant and necessary to the determination of a dispute on which the answer was not clear.

Procedural issues If the withdrawal agreement expressly provides for a cesser of CJEU jurisdiction and no further CJEU involvement, the withdrawal agreement ought itself to provide for withdrawal of existing references . Failing that, the CJEU could, on a request from the referring court, send back the reference on the basis that there was no longer any point in the reference.

But this post presupposes that a dispute did still exist. So long as a reference had not been designed to obtain a tactical advantage and had not been an indirect way of seeking an advisory opinion of a general or hypothetical nature, could the Council , having consulted the CJEU and the other institutions, provide for the CJEU to give a ruling on a preliminary question referred to it prior to the effective date of withdrawal? There is more than one plausible view on this possibility.

Substantive issues That said, what substantive approach might be adopted by the domestic courts in such cases ?

• If left to develop the jurisprudence themselves in cases involving the interpretation of EU Law, the domestic courts are likely to want to protect the rights of parties as if the rules of EU Law developed prior to the effective date of withdrawal still applied. That could be the only fair approach, since to do otherwise could defeat the expectations of both parties, subject only to legitimate (non-Brexit) arguments that might properly be argued, such as questions of application of national time limits.
• Assuming that the domestic courts choose to apply the pre-existing rules of EU Law, there is a body of UK case law which, not least in the context of Strasbourg jurisprudence, suggests that the domestic courts are likely, even if rulings of a supra-national court are not binding on them, to take account of its jurisprudence as persuasive authority in support of a particular interpretation of the law.
• But the long lead times for rulings by the CJEU will create problems for litigants. At the time when cases are being referred by the national courts, lawyers will need to address (as they now do) the competing merits of the arguments in relation to the question of interpretation at the heart of the dispute. But time does not stand still. No doubt the CJEU would, for example, continue to adopt a teleological approach to interpretation in the light of developments arising during the period after the reference but before a preliminary ruling. This approach could (possibly at the instance of the UK Government in its observations to the CJEU) include reasoning which takes account of wider political realities, such as the UK’s imminent withdrawal. That could threaten the interests of legal certainty.
• A separate (but significant) question is whether, even if a litigant were to succeed, the same remedies, such as actions for damages for breach of EU Law, would avail them in a post Brexit environment. This in turn raises a different fundamental question. Where the CJEU has itself developed a line of jurisprudence to ensure that EU Law rights are afforded effective and non-discriminatory protection, should such protection be available to litigants in transitional cases involving a breach of EU Law that meets the criteria for liability under (say) the Francovich doctrine ? There would of course be powerful arguments in support of continuing liability under the Francovich doctrine (as subsequently extended in Factortame III and Brasserie du Pecheur) since, otherwise, the UK might be in a position to evade the consequences of a failure to comply with its Treaty obligations.
• Yet that could mean that actions for damages for breach of EU Law rights arising pre-Brexit could continue to be litigated for many years to come. In that event, what would happen if a point of interpretation of EU Law in respect of effectiveness of remedies were to be raised which itself required (in the domestic court’s view) a preliminary ruling by the CJEU?
• This could give rise to tactical decisions to argue for, or against, a reference irrespective of the legal criteria applicable to the use of Article 267.

There are complex issues that lie ahead for lawyers and litigants. It behoves the UK Government and the EU to provide clarity.