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Brexit Law Blog: Archive

This blog tracked legal issues arising from Brexit. It ran from the referendum in 2016 to the last post in May of 2021.

European Union (Future Relationship) Bill

Posted on 31 Dec 2020 by Brick Court

Lord Anderson of Ipswich KBE QC @bricksilk at the Second Reading debate

My Lords,

These Agreements fairly reflect the negotiating priorities of their signatories: these included, on our side, a dogmatic and substantively empty notion of sovereignty that confounds the reputation we once enjoyed as Europe’s canny pragmatists. Having as a young man in the office of Commissioner Lord Cockfield observed the removal of precisely the red tape that now returns to constrict us, my enthusiasm for this deal has its limits. In the security field, a particular regret is the loss of access to the immensely useful SIS II database. We must hope that dogma on the European side does not defeat the data adequacy determination on which so much else will depend.

But given the dismal alternative, I greet these Agreements with relief, see much in them that is good, and focus today on the terms of the Bill itself.

I would describe it as an essay-crisis Bill.  Four increasingly expansive styles may be spotted in its hastily assembled pages.

The first style, seen in the treatment of criminal records at the start, is the careful hand-threading of these agreements into existing law. On VAT fraud and social security, a more broad-brush approach is taken: whole protocols to the Agreement are simply pasted into domestic law – whether seamlessly or not, only time will tell.

Thirdly, we have delegated powers. These clauses feature elements that your Lordships found exorbitant in the 2018 EU Withdrawal Bill, including a power to create new criminal offences punishable by up to two years in prison, and a bootstraps power to amend the Bill itself, if “appropriate”. Henry VIII has been on the steroids again.

Finally, to cover any gaps left by even these broad provisions, we have clause 29, which requires our judges to give effect to domestic law “with such modifications as are required for the purposes of implementing” the Agreements. The objective is noble: but implementation often requires choices: and to impose those choices on the courts is to push them towards the forbidden ground of policy. The existing legal doctrines of direct effect and strong interpretation have inherent limits which avoid that result. Clause 29 contains no such limits. Perhaps it is an afterthought. It certainly needs knocking into shape.

This is a rushed Bill – inevitably so – which I strongly regret that we are in no position to scrutinise or to improve. But as Baroness Taylor has said, our committees will scrutinise it after it becomes law. If necessary improvements are identified, I hope we will find a way of making them.

Henry VIII Powers in The European Union (Future Relationship) Act 2020

Posted on 31 Dec 2020 by Brick Court

Fergus Randolph QC1

The European Union (Future Relationship) Bill [“the Bill”] is about to receive Royal Assent and become The European Union (Future Relationship) Act 2020. The Bill – 80 pages – and the Explanatory Notes thereto – 77 pages – were published by the Government less than 24 hours before Parliament started to debate its contents. One of the first decisions taken by the Commons Speaker was to confirm that there would be no time to debate any amendments to the Bill. Accordingly, the only issue for Parliament was whether there should be an act or not. Given that the Bill was seeking to implement the EU-UK Trade and Cooperation Agreement [“the TCA”], finalised on Christmas Eve, which agreement was described by the Prime Minister in the Government’s summary thereof as being one which “changes the basis of our relationship with our European neighbours from EU law to free trade and friendly cooperation”, one might have thought that time would have been found to debate the Bill properly. As is well-known, the European Parliament is taking its time to do exactly that, and the TCA itself allows for its provisional application prior to ratification.

The position would be more palatable if the Bill were simply a technical instrument to implement the TCA. However, the Bill seeks to do more by enlarging once again the might of the Executive through either executive fiat or by use of the ubiquitous Henry VIII powers.

Thus, section 29 of the Bill will have the effect, without more, of blessing inter alia all future relationship agreements. Such agreements are defined as including “any supplementing agreement or any agreement under, or otherwise envisaged (whether as part of particular arrangements or otherwise) by, an agreement falling within … [inter alia] the Trade and Cooperation Agreement.”2

As Professor King of UCL has noted, the provision can be translated in the following terms: “We don’t know what changes to the law are in fact required by this EU-UK agreement, but whatever they are, Parliament by operation of this clause makes them effective from the date this law comes into force.” As Professor King further notes “this is deeply unsatisfactory, arguably worse that broad delegated powers that entail some parliamentary scrutiny.”

Which brings one neatly onto Henry VIII. Section 31(1) provides as follows:
“A relevant national authority3 may by regulations make such provision as the relevant national authority considers appropriate (a) to implement the Trade and Cooperation Agreement, the Nuclear Coooperation Agreement, the Security of Classified Information Agreement or any relevant agreement, or (b) otherwise for the purposes of dealing with matters arising out of, or related to, the Trade and Cooperation Agreement, the Nuclear Coooperation Agreement, the Security of Classified Information Agreement or any relevant agreement.”

Section 31(2) provides that “Regulations under this section may make any provision that could be made by an Act of Parliament (including modifying this Act).”

As helpfully identified in the Explanatory Notes, the scrutiny procedures for such regulations is set out in Schedule 5 to the Bill. Paragraph 6 thereof provides that regulations4 made on or after 31 December 2020 “may not be made unless a draft of the instrument has been laid before, and approved by resolution of, each House of Parliament.” – i.e. the draft affirmative resolution procedure. However, there are exceptions to this. First, those regulations not falling within the ambit of paragraph 6(2) of Schedule 5 can be made by way of a negative resolution procedure (or the equivalent thereof in the devolved administrations).5 However, where such regulations are to be made within two years of the end of the transition period (11pm GMT on 31 December 2020), then the negative resolution procedure may only be used where the relevant Minister or other relevant devolved authority has made a statement in writing to the effect that in the Minister’s opinion the instrument should be subject to such negative resolution procedure6 and that either the relevant committees of both Houses of Parliament have each made recommendations as to the appropriate procedure or that the relevant period has ended without such recommendations being made.7

Secondly, under paragraphs 14-17 of the Schedule, in so-called “urgent cases”, where a Minister of the Crown or equivalent other relevant devolved authority declares that “by reason of urgency, it is necessary to make the regulations without a draft being laid and approved”,8 then the ‘made affirmative resolution procedure’ will be applicable, whereby regulations can come into force without being debated but cannot remain in force unless approved by both Houses within 28 days.

As again noted by Professor King, section 31 of the Bill (as read with Schedule 5 thereto) “means that such powers can be used to create tertiary legislation (ie designate someone to make new legislation not subject to any parliamentary scrutiny) and permit the amendment of the Future Relationship Bill/Act itself if regarded by ministers as necessary to implement.” As he continues with some degree of understatement, both of those features were “quite controversial” when the EU (Withdrawal) Act 2018 was passed.

In conclusion, given the UK’s dualist legal system, it was always going to be necessary to incorporate the terms of the TCA into domestic law by legislation. However, what the Bill does is to go well beyond that, by giving the Executive a whole fresh suite of powers to exercise without any or any proper Parliamentary scrutiny.

1 This paper which has been prepared for BEG reflects the views of the author and any expression of opinion should not be taken to reflect the views of all BEG members.

2 ‘Supplementing agreement’ is defined as being one constituted as such by Article COMPROV.2 of the TCA, which provides as follows: “1. Where the Union and the United Kingdom conclude other bilateral agreements between them,such agreements shall constitute supplementing agreements to this Agreement, unless otherwise provided for in those agreements. Such supplementing agreements shall be an integral part of the overall bilateral relations as governed by this Agreement and shall form part of the overall framework. 2. Paragraph 1 shall also apply to agreements between the Union and its Member States, on the one part, and the United Kingdom, on the other part …”

3 Defined as comprising inter alios a Minister of the Crown.

4 Which amend, repeal or revoke primary legislation or retained direct principal EU legislation or create a power to legislate – see paragraph 6(2) of Schedule 5.

5 See paragraph 6(3) of Schedule 5.

6 See eg paragraph 8(3) of Schedule 5.

7 ‘Relevant period’ is defined in paragraph 8(10) of Schedule 5.

8 See eg paragraph 14(2) of Schedule 5.

Latest communication on Trade Remedies from the Secretary of State for International Trade.

Posted on 22 Dec 2020 by Brick Court

Fergus Randolph QC and Sarah Lee QC

On 16 December 2020 the Secretary of State for International Trade published her final list of the anti-dumping and anti-subsidy safeguarding measures previously issued by the European Union which she has decided to maintain after 31 December 2020.  This follows a process in which the Secretary of State held a Call for Evidence consultation with United Kingdom Industry.  That process has now concluded and the UK will continue to apply the previous measures at the United Kingdom border in relation to those measures that have been maintained: see here.

The Trade Remedies Investigations Directorate (TRID) is conducting transition reviews in relation to a number of maintained measures and the status of these can be seen on the TRID’s website, along with non-confidential versions of documents on the file. The list on the website itself indicates which measures are currently undergoing a transition review (namely, those marked with ***). The website also indicates those EU measures that will be terminated, and therefore not carried over, as part of the UK’s independent trade policy. Interestingly, the Secretary of State has carried over measures on bicycles and electric bicycles coming from certain producer countries, which had been contentious. The comments note that UK producers had “contacted the Secretary of State with new evidence showing changes to UK production and/or market share of products covered by the EU’s existing measures on bicycles and electric bicycles”. This appears to have led to a shift from the view originally held by the Secretary of State, which was to let the anti-dumping duties expire.

The types of issues that are considered in a transition review are whether the application of the amount concerned (in a current anti-dumping or anti-subsidy remedy) is necessary or sufficient to remedy the detriment suffered and whether the injury would continue to occur if the remedy were to be lifted. The existing measure can be varied, changed or terminated. Each initiation notice lists potentially interested parties and sets a date by which they are invited to contact the TRID in order to make their representations. Similarly, the Secretary of State has decided on tariff rate quotas which will apply in the United Kingdom to those 19 steel products measures that that it has decided to transition following 31 December 2020, in order to provide continuity. These are contained in a determination made on 30 September 2020 under regulation 46(3) of the Trade Remedies (Increase in Imports Causing Serious Injury to UK Producers) Regulations and will come into effect on 31 December.  The UK will conduct a transition review of those measures in the 19 steel products areas in order to ensure that they fully reflect the UK’s needs. The TRID has published operational guidance on this transition review on its website: see here.

Lastly, the Secretary of State’s notice contains a reminder that after 31 December 2020 the United Kingdom government will operate its own independent trade remedies system. Further, it notes that applications can be made to the Trade Remedies Service if an industry member wants TRID to investigate imports which are causing or threatening to cause injury to a United Kingdom industry.

New SI confirms binding effect of “continued competence” Commission decisions even after the end of the Brexit transition period

Posted on 01 Dec 2020 by Brick Court

Charlotte Thomas

The Government has published a new statutory instrument confirming that the European Commission will have “continued competence” in relation to competition and merger investigations begun before the end of 2020.

Decisions reached by the Commission in such “continued competence” competition infringement cases can therefore continue to found follow-on damages claims in the UK even if they are taken after 31 December 2020.

That’s the short version – the considerably longer and more convoluted version, which requires tracing through some labyrinthine SI amendments, follows.

The current position

The term “infringement decision” under Part I of the Competition Act 1998 is currently defined as including decisions of the European Commission that EU competition law has been infringed, as well as decisions of the CMA (or the Competition Appeal Tribunal on appeal from the CMA) that either EU competition law or domestic competition law has been infringed: s 47A(6).

Thus, when s 58A(2) of the Act (as amended to give effect to the Damages Directive) provides that the High Court and Competition Appeal Tribunal are “bound by the infringement decision once it has become final” where a claim is brought in respect of that infringement decision, that includes both EU competition infringement decisions of the Commission and EU and domestic competition infringement decisions of the CMA.

Decisions of the European Commission are therefore currently capable of founding so-called ‘follow-on’ damages claims in UK courts and many competition damages claims have been brought in the UK on just this basis.

Commission decisions are also of relevance where any decision in taken in relation to breaches of the domestic prohibitions contained in Part I of the Act under s 60, which requires questions under Part I to be determined “so far as possible” consistently with EU law, including having regard to “any relevant decision or statement of the Commission”.

But what will happen after Brexit takes effect at 11pm on 31 December 2020, following the end of the transition period?

The 2019 Regulations

The Government’s ‘no-deal’ competition law SI, the Competition (Amendment etc) (EU Exit) Regulations 2019 (SI 2019/93) (available here), as originally made, provided:

  • As to infringements of EU competition law, under para 14(2)(b) of Schedule 4, Part 6, after ‘exit day’ a claim relating to an infringement of EU competition law which occurred before exit day could be made as long as that claim could be made before exit day – importantly, para 14(3) specified that it does not matter whether the damage caused by the infringement occurred before or after exit day. Para 7(4)(a) of Schedule 4, Part 3, which applies to claims described in para 14(2) by virtue of para 15, specifically confirmed that references to EU competition infringement decisions of the European Commission “do not include a decision made on or after exit day”.
  • As to domestic competition infringements, under reg 30(3), a new s 60A was inserted into the Competition Act 1998 confirming that the duty of consistency with EU court decisions and the duty to have regard to relevant decisions or statements of the European Commission only apply in respect of such decisions or statements issued before exit day. Para 17 of Schedule 4, Part 6 then disapplied certain elements of reg 30(3) concerning disclosure from the investigation file in relation to domestic competition infringements that occurred before exit day.

The Withdrawal Agreement

The Withdrawal Agreement, which was agreed in October 2019 and which entered into force on 31 January 2020, provides for a different transitional rule in relation to decisions of the European Commission, by Article 92 (emphasis added):

“1. The institutions, bodies, offices and agencies of the Union shall continue to be competent for administrative procedures which were initiated before the end of the transition period concerning: (a) compliance with Union law by the United Kingdom, or by natural or legal persons residing or established in the United Kingdom; or (b) compliance with Union law relating to competition in the United Kingdom.

…

3. For the purposes of this Chapter: … (b) proceedings for the application of Article 101 or 102 TFEU conducted by the European Commission under Council Regulation (EC) No 1/2003 shall be considered as having been initiated at the moment at which the European Commission has decided to initiate proceedings in accordance with Article 2(1) of Commission Regulation (EC) No 773/2004”.

This creates a category of so-called “continued competence” cases, which secure the continued relevance of competition infringement decisions of the European Commission where two criteria apply:

  • Before the end of the transition period (i.e., before 11pm on 31 December 2020), the Commission has decided to initiate proceedings with a view to adopting a competition infringement decision under Council Regulation (EC) No 1/2003; and
  • The competition infringement has been committed by natural or legal persons residing or established in the UK, or relates to competition in the UK.

Article 95(1) of the Withdrawal Agreement further provides that decisions taken in such “continued competence” cases and addressed to the UK or to “natural and legal persons residing or established” in the UK must be treated as binding “on and in” the UK. Meanwhile, Article 95(2) confirms that the Commission continues to be competent to monitor and enforce commitments given and remedies imposed in or in relation to the UK in connection with antitrust and merger cases, unless it agrees to transfer that competence to the CMA.

The new 2020 Regulations

The Government has now published (on 26 November 2020) a statutory instrument which gives effect to Articles 92 and 95 of the Withdrawal Agreement in the UK after the end of the transition period: the Competition (Amendment etc) (EU Exit) Regulations 2020 (SI 2020/1343) (available here, with a helpful explanatory memorandum here).

The amendments made by the 2020 Regulations to the 2019 Regulations include the following points relevant to follow-on damages claims:

  • The 2020 Regulations replace all references in the 2019 Regulations to ‘exit day’ to ‘IP completion day’ – i.e., 11pm on 31 December 2020, when Brexit will actually take effect, at least as matters stand (European Union (Withdrawal Agreement) Act 2020, s 39).
  • The 2020 Regulations continue to provide in respect of EU competition infringements that Commission decisions issued before IP competition day are binding but Commission decisions after IP completion day are not, “except in relation to cases in which the European Commission has continued competence after IP completion day in accordance with Article 92 of the EU withdrawal agreement”: Part 1, reg 36(c) of the 2020 Regulations, amending para 7(3)(b) of Schedule 4, Part 6 of the 2019 Regulations (still applicable to para 14(2) by virtue of para 15). Thus, the concept of “continued competence” is defined directly by reference to Article 92 of the Withdrawal Agreement.
  • The 2020 Regulations further provide that these transitional provisions also apply where the claim is or includes a claim in respect of a domestic competition infringement which spans the end of the transition period (reg 39(5) and (8)).
  • The 2020 Regulations similarly permit competition infringement collective redress schemes to be founded on “continued competence” Commission decisions (reg 38).

The 2020 Regulations also contain important provisions allocating jurisdiction between the CMA and Commission where the Commission has “continued competence” in respect of competition investigations (regs 36-37) and merger control cases (regs 40-45, inserting a new Part 6A into the 2019 Regulations). They also require the CMA to monitor compliance in respect of transferred EU antitrust and merger commitments pursuant to Article 95(2) of the Withdrawal Act (reg 4, introducing new ss 40ZA-D to the Competition Act 1998, and reg 8, introducing new ss95A-B into the Enterprise Act 2002, respectively).

The CMA’s draft Guidance

Also worth noting in this regard is the CMA’s draft Guidance on the functions of the CMA after the end of the Transition Period (CMA125), published on 2 October 2020 (available here) and in respect of which the consultation closed on 30 October 2020 (available here).