The status of "retained EU Law"

Repeal of the European Communities Act

The European Union (Withdrawal) Act 2018 (EUWA) repeals the European Communities Act 1972 (ECA) effective on “exit day” (31 October 2019). In so doing, it removes the domestic constitutional basis for EU law having effect in the United Kingdom. The basis in international law for EU law having effect on the UK will simultaneously have been extinguished by the operation of Article 50 of the Treaty on European Union.

Retention of some EU law

However, this does not mean that EU law is of no consequence to the UK after that point. The EUWA also provides for the retention of most of that law, as it stands on exit day, by “converting” or “transposing” it into a freestanding body of domestic law. The intention of this is to provide legal certainty in the period immediately following EU exit, by (in effect) adopting a rulebook and set of institutional arrangements that is initially as close as possible to that which currently exists.

How is EU law retained?

This new body of law is called “retained EU law” and will replicate several different sources of EU law as domestic equivalents. It retains this law under three distinct provisions:

• Section 2 preserves EU-derived domestic legislation. This (typically) concerns the regulations made (usually but not always under s. 2(2) ECA) or any primary legislation passed in order to implement one or more EU directives (though sometimes other sources of EU law).
• Section 3 preserves direct EU legislation. This is defined as all EU regulations, decisions or tertiary legislation and certain parts of the EEA agreement.
• Section 4 preserves any directly effective residual rights, powers, liabilities, obligations, restrictions, remedies and procedures in EU law, subject to several specified exceptions.

What EU law is retained?

In practice, this means (broadly) that the UK is retaining:

• EU regulations, decisions and tertiary legislation and elements of the EEA agreement (as they existed on exit day);
• domestic legislation passed to implement EU directives (and other EU law);
• most general principles of EU law (as they existed on exit day);
• most rights and obligations that currently exist in domestic law because of s. 2(1) ECA (as they existed on exit day); and
• relevant case law of the Court of Justice of the European Union issued before exit day (though the UK Supreme Court and High Court of Justiciary need no longer follow it).

But the UK is specifically not retaining:

• the Charter of Fundamental Rights of the European Union;
• the legislative instruments known as EU directives themselves (as opposed to the legislation implementing them or rights and obligations under them, which will be retained);
• the principle of supremacy of EU law (for prospective legislation); and
• the Francovich principle of state liability (in relation to post exit facts).

Status of retained EU law

EUWA also provides a scheme that determines the constitutional status of these elements of EU law. Whereas previously the principle of supremacy of EU law would have given all EU law priority over any domestic law or legislation, this is not the status afforded to retained EU law.

EU law retained under section 2 of EUWA already has a domestic status, as it is either secondary legislation (mainly but not exclusively made under s2(2) ECA) or in some cases Acts of Parliament.

EU law retained under sections 3 and 4 of EUWA, however, is neither primary nor secondary legislation. It is instead a unique, new category of domestic law with new bespoke rules determining how it may be modified. The EUWA sets out these rules in section 7 and Schedule 8.

Retained direct EU legislation

The status of retained EU law not falling into existing domestic categories is defined by section 7 EUWA. It subdivides retained direct EU legislation into two categories:

• retained direct “principal” EU legislation; and
• retained direct “minor” EU legislation.

These two categories do not directly correspond to “primary” and “secondary” legislation, which are the normal distinctions drawn in domestic law. Instead, the EUWA sets out the rules that govern how those two categories of law can be modified or repealed and by what type of conventional domestic legal instrument.

Although the principle of supremacy applies to interpretation of retained direct EU legislation in relation to domestic legislation passed before exit day, the real challenge concerns interpretation of legislation passed after exit day, which may modify or repeal it (whether expressly or impliedly). The key difference between “minor” and “principal” retained direct EU legislation is that, whereas the former can be modified routinely by secondary legislation, the latter must be modified by primary legislation unless and to the extent that the provisions under which secondary legislation is made provides otherwise.

The Act also treats retained direct “principal” EU legislation as though it were “primary” legislation for the purposes of the Human Rights Act 1998. This immunises it against being declared invalid for incompatibility with the European Convention on Human Rights.

What this briefing paper does not cover

Statutory instruments already making changes to retained EU law

The European Union (Withdrawal) Act 2018 includes several time limited delegated powers specifically concerned with making changes to retained EU law in anticipation of exit day. More than 550 statutory instruments have been laid in connection with EU withdrawal (mostly under section 8 of EUWA, the so-called “correcting power”).

These statutory instruments deal with a broad range of issues and hundreds of instruments of retained EU law. Some make relatively minor drafting changes, such as clarifying the meaning of references to “Member States”. However, these instruments are also responsible for more significant changes, such as the transfer of functions previously exercised by EU institutions to domestic bodies, or even the repeal or revocation of certain parts of retained EU law before it ever comes into force.

Primary legislation directly connected to Brexit

The Government has also sought to pass several Brexit-related Acts of Parliament. Those already on the statute book include:

• The Taxation (Cross-border) Trade Act 2018
• The Nuclear Safeguards Act 2018
• The Sanctions and Anti-money Laundering Act 2018
• The Haulage Permits and Trailer Registration Act 2018
• Healthcare (European Economic Area and Switzerland Arrangements) Act 2019

There are also several Bills which have yet to complete their passage through Parliament:

• The Trade Bill
• The Agriculture Bill
• The Fisheries Bill
• The Immigration and Social Security Co-ordination (EU Withdrawal) Bill
• The Financial Service (Implementation of Legislation) Bill

All of these statutes either modify retained EU law, confer delegated powers to do so, or do both. These allow for explicit policy divergence in these areas, which are currently impacted to a significant degree by EU competencies and EU legislation.