European Union (Withdrawal) Bill

Debate between Lord Carlile of Berriew and Lord Taylor of Holbeach

Committee: 4th sitting (Hansard - continued): House of Lords
Monday 5th March 2018 Lords Chamber

[Lord Carlile of Berriew (CB)]

My Lords, for those of us who have real enjoyment in the law, a nice bit of law at three minutes past midnight is rather like a comforting, calm, creamy cup of cocoa, but I recognise that not everybody is of the same view. With that in mind, I propose to elide in the remarks I am going to make comments on Amendment 45, which appears in my name and that of the noble Lord, Lord Lucas, and on Amendments 48 and 50, which appear with the same names. That should save time in a few minutes because I understand that we intend to complete that group as well.

These amendments are designed to retain the so-called Francovich principle. I congratulate the noble Lord who has just spoken on summarising it very well. I will add a little bit of flesh on it because I wish to try to tease out of the Minister a welcome response to those of us who seek to preserve at least part of the Francovich principle, although I would happily pass to him the burden of perfected drafting.

In the Gina Miller litigation, in which the noble and learned Lord and my noble friend Lord Pannick played starring parts, the Government in their submissions place considerable weight on their intention to enact what was then called a “great repeal Bill”. As the Supreme Court understood it, that Bill would—and this is a quotation from the majority judgment at paragraph 34,

“repeal the 1972 Act and, wherever practical … convert existing EU law into domestic law at least for a transitional period”.

Surprisingly, in relation to the Francovich principle, there has been no conversion and no transition. I ask the Minister to explain whether that really is the position that the Government wish to maintain.

The Francovich principle is a principle of existing EU law which requires damages to be available where three conditions are met: first, that the rule infringed was intended to confer rights on individuals—I am sure that we would all applaud that; secondly, that the breach was sufficiently serious to give rise to a legal action, which I am sure we would also applaud; and, thirdly, that there was a direct causal link between the breach of the obligation resting on the defendant and the damage sustained by the injured party, and I am sure that we would all applaud that, too. Perhaps the Minister would explain why he wants to get rid of that principle.

To provide a little more explanation for the fascinated non-lawyers here, who may just about be in a majority—

[Lord Taylor of Holbeach (Con)]

Hear, hear!

[Lord Carlile of Berriew]

I always listen with great respect to the Government Chief Whip, especially when he sympathetically allows us to debate these issues after midnight.

In Francovich, workers who suffered damage when their employer became insolvent were entitled to compensation under an EU directive which required member states to secure their protection. Since Italy had failed to implement the directive, the individual workers brought a claim before their national courts for compensation from the state for the damage they had suffered due to this failure, and I think that we would all applaud that, too.

State liability is enforced not through the European courts but through national courts, thus the ECJ stipulated that national procedures should determine how state liability is enforced. The procedures for claiming damages from the state before national courts must comply with the principles of equivalence—that is, with the procedures available for comparable claims for damages—and effectiveness, to secure that EU law as well as national law is respected. As long as it respects these two principles, the member state can prescribe its own procedures for claims as regards, for example, proof and time limits —so it is hardly imposing wicked European ideas on the national courts, since they are left to enforce the principles concerned.

The Francovich principle has led to some significant legal actions; perhaps the best known in the UK is the Factortame litigation, which contained five cases concerning fishing rights.

What is the problem with the Bill? It is confusing. I quote from the summarised views of commentators more expert than me on this subject. It is said that Clause 6(1) removes the right to rely on EU law and obtain a reference to the ECJ after the date of exit. Paragraphs 3 and 4 of Schedule 1 plainly remove the ability to rely on EU law or utilise the Francovich principle after the date of exit. Or do they? I ask that because paragraph 27(3) of Schedule 8, which all noble Lords will have been reading carefully in preparation for this short debate, makes it clear that cases begun prior to the exit date are not subject to the restriction that I have described and therefore can continue to rely on Francovich.

As was pointed out by Dame Cheryl Gillan in another place on 14 November last, the Bill is contradictory, in that it both allows continued reliance on Francovich in cases commenced before the date of exit but also removes that right. That appears to mean that a litigant in a case started before the date of exit, and who has a legitimate expectation that the law will not change retrospectively and that he or she will be able to rely on Francovich, will lose that expectation. If I am wrong in that, I am not the only one and I would like a correction, please. All litigants have a legitimate expectation to have their cases heard under the rules applicable not at an arbitrary time, such as the date of exit, but at the time of the breach of the law concerned. This includes EU law at that time, if it was applicable, and on the face of it, the right of a reference to the ECJ if they are dissatisfied. The purpose of the two groups of amendments is to achieve something much simpler, clearer and more just than the conclusion if the complaints I have described are correct.

I respectfully suggest that if a relevant cause of action accrues before the date of exit, the claimant should be able to pursue that cause of action. That would be their normal litigation right, and exit should not retrospectively remove that normal litigation right. As the Bill stands, because of ambiguity there is a risk that some or all Francovich claims, unless they have already been completed, will be extinguished. Surely, that would be an incorrect and unintended consequence. Plainly—and I will deal with this in a moment—there are some concerns about the potential role of the ECJ.