My Lords, as a result of the lack of time to address the amendments to Clause 7 last Thursday, the noble and learned Lords, Lord Judge, Lord Hope and Lord Thomas of Cwmgiedd, are not able to speak to the amendments to Clause 7 in their names. As your Lordships will see, I have been asked to do so on their behalf. These are Amendments 83, 87, 87A, 87B, 90, 91 and 93. I will also support Amendments 85 and 88 in the name of the noble Baroness, Lady Ludford. A number of these amendments are quite technical so, rather than weary the House with detailed observations on each of them, I will take a broad approach, in the hope that the Minister will permit a meeting when the others can be elaborated further.
Broadly speaking, the amendments fall into two parts, the first of which comprises amendments to the provisions in Clause 7(3) and (4), about the circumstances in which the court may depart from retained EU case law and retained domestic case law—these are Amendments 83 to 89. The second group concerns the procedure on references of points of law arising from retained law in lower courts or tribunals—this is in Clause 7(8). Like many of the earlier provisions of the Bill that were discussed, the issue of legal certainty runs through the first group of amendments. They either involve removing provisions that create uncertainty, or invite the insertion of new provisions to bolster certainty and predictability. The noble Viscount, Lord Hailsham, referred to one of the most egregious of these tests: that of
“any changes of circumstances which are relevant to the retained EU … law”—
this is in Clause 7(3), which inserts new Section 6(5)(b) into the 2018 Act. I also cite another test:
“any changes of circumstances which are relevant to the retained domestic case law”—
this is in Clause 7(4), which inserts new Section 6(5ZA)(b) into the 2018 Act. These are too wide, too uncertain and, above all, subjective.
Looking at the issue from a slightly different perspective from those that have been debated in the past, I will concentrate, in broad terms, on the position of UK plc. Legal certainty is critical to the position of the courts of this country as one of the most important litigation centres in the world. The United Kingdom attracts international disputes of huge value and complexity because of the intellectual standard of the judges in our higher courts, the absence of corruption in the judiciary and, critically, the predictability and certainty of our legal principles.
This is true not only of general business cases but of particular specialist areas, such as intellectual property. These cases contribute very large amounts to our GDP through the engagement of lawyers, bankers,
accountants, experts and other relevant disciplines. In its report, published on 7 December 2022, TheCityUK stated:
“Legal services contributed £30.7 billion to the UK economy in 2021”,
posting a trade surplus of £5.4 billion, and:
“Parties from 75 countries used the Commercial Courts in 2021/22”.
It continued:
“The UK is the largest legal services market in Europe (valued at £41 billion in 2021) and is second only to the US globally.”
Unpredictability and uncertainty in the law and dispute resolution put this pre-eminence at risk. As a country, we cannot afford to allow that to happen.
In large international cases, the claimants usually have a choice of places in which to litigate. The idea that existing law can be departed from because of any changes in circumstances which the court may consider relevant—which could include, for example, the political manifesto or aspirations of the Government of the day or some new government policy—would greatly undermine the attractiveness of this jurisdiction.
I will illustrate this briefly by reference to what, in the case of many major businesses, is one of their most important assets: their intellectual property. Our trademark law is derived entirely from EU law. Our Trade Marks Act 1994 gives effect to an EU directive. Since its enactment, the case law has been determined partly by EU case law, especially where there has been a preliminary reference to the Court of Justice of the European Union or an appeal to the Court of Justice of the European Union from the EU Intellectual Property Office, and partly by our domestic law in interpreting and applying the 1994 Act. In fact, there is a huge body of EU law relevant to trademarks; it therefore falls squarely within Clause 7 of the Bill and the amendments to the 2018 Act introducing the “any change of circumstances” test.
Large international companies, such as Sony, Nokia, Eli Lilly or Pfizer, to name but a few, which conduct their business in many countries across the world, generally have a choice as to the country in which they wish to bring their proceedings. Although, strictly speaking, each country can only make decisions limited to its territorial boundaries, a decision in any one of the major IP litigation centres, such as France, Germany, the Netherlands or the United Kingdom, will be accepted as determinative everywhere. The fact is that, if there is a broad, unlimited “change of circumstances” principle for departing from the existing law, one of the parties to the litigation will almost always invoke it. If they do so, and do so successfully, there is absolutely no certainty as to what would replace the existing law. All this would fatally undermine the certainty of our law and be a huge disincentive to litigating in this country when another is available.
The same is equally true of design law and registered designs. In this country, that law, set out in the Registered Designs Act 1949, has been substantially rewritten, particularly in relation to what is a registrable design, to give effect to an EU directive. This is also true of large parts of our law relating to copyright. The word “influenced” in the proposed new Section 6(5ZA)(a)—see Amendment 87—has been referred to earlier in today’s debates. It would, in some trademark, design and
copyright cases, be difficult now to disentangle which parts of the law have been influenced by EU law and which are purely domestic in origin.
In the area of patent law, the same position applies in relation to supplementary protection certificates, which operate to extend the patent in certain circumstances. Litigation in these areas of the law can be of huge value and economic significance.
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Finally, on this group of amendments, I refer to the statement in paragraph 114 of the Explanatory Notes that the new test for departing from retained EU case law mentioned in Clause 7(3) reflects
“some of the factors which the Court of Appeal in England and Wales took into account in deciding whether to depart from retained EU case law in the case of TuneIn Inc v Warner Music UK Ltd & Anor [2021] EWCA Civ 441.”
That is, at best, a rather misleading comment. That case concerned a breach of copyright, which turned on the meaning and application of the restriction on a person under Section 20 of the Copyright, Designs and Patents Act 1988 regarding “communication to the public” of such things as a musical work, sound recording or broadcast in which the copyright, or an exclusive licence to the copyright, was held by another person. The expression “communication to the public” derived from an EU directive. The issue arose as to whether the court should depart from retained EU law on that restriction. Contrary to the impression given by the Explanatory Notes, there was no statement in any of the three judgments of the Court of Appeal to suggest a broad and unlimited “change of circumstances test” as is now proposed. In fact, the argument for departing from the existing case law was almost summarily dismissed, with all three judges agreeing that to depart from retained EU law would create legal uncertainty for no good reason.
I turn to the second group of amendments, which concern references on retained law by the lower courts or tribunals. Clause 7(8) specifies two situations in which the Supreme Court or some other appropriate appellate court must accept the reference—I emphasise “must”. I am afraid that these provisions were not drafted by a person with any litigation, let alone judicial, experience. The courts have always had the ability to manage cases and try a preliminary point of law. No court, however, has ever been compelled to do so. Compulsion on an appeal court to hear part of a case, whether it be a preliminary point of law or some other issue in trial, is fraught with danger. There may be all kinds of matters which make it unsuitable for the Appeal Court to hear that issue at that time. Experience shows that where the point is not dispositive of the whole case, an appeal on a preliminary issue—a point of law—can simply prolong a case and increase expense.
By way of further illustration, a higher appeal court may be about to consider a similar issue. There is no good reason to treat a preliminary point of law relating to retained case law differently from any other. The overriding objective under the court rules requires courts to manage cases efficiently and justly. The appeal courts can do so only if they have a discretion
as to how to deal with matters such as applications for references of points of law arising on retained case law.
As I have said, I hope the Minister will agree to a meeting in which these and other related points can be further explained and explored.