European Union (Withdrawal) Bill

Lord Keen of Elie Excerpts

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

[Lord Goldsmith]

I am grateful for the question, because it enables me to clarify that point. There are two sorts of principles. I was talking in answer to the noble Lord’s question last week about the principles which are contained in the charter itself. The charter says that it is a charter of rights and principles, and the principles there—it is not that easy to identify which are principles and which are not—are not actionable in themselves. They may become actionable, because as they are aspirational tools, they are then implemented into law and are actionable at that stage. The principles we are talking about here are different. These are the general principles of EU law, which are, for example, the principle of legal certainty, the principle of proportionality, and the principle of non-discrimination. These are different in that sense; they are general rather than specific principles, and they are actionable at the moment. That is why the Walker case I mentioned gives rise to a remedy, as did the other cases where the Supreme Court struck down tribunal fees as being disproportionately high for particular categories of workers.

That is why we believe it is important to keep this. It is one element of the architecture to retain rights. I remind noble Lords that the Prime Minister made it clear that the intention was that rights would continue the same the day after exit as the day before. To remove general principles in this way, and the ability to rely upon them, will fail to keep that promise. This amendment also—it has been referred to already—specifically proposes that the general principles of EU law should include those which are contained in Article 191 of the Treaty on the Functioning of the European Union. Those are environmental principles of huge importance: the precautionary principle, the principle of polluter pays and the principle for preventive action. Those principles and the others I referred to need to continue to operate to keep in place the rights that people enjoy at the moment.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, I thank noble Lords for their brevity.

Amendment 40ZA, in the name of the noble Baroness, Lady Bowles, seeks to ensure that challenges to validity could continue on general principles of EU law grounds. I will address concerns raised on general principles in more detail later. First, Schedule 1 generally ends the ability to bring challenges on validity grounds to what will become retained EU law after we leave the EU. We recognise, however, that in some circumstances, individuals and businesses may be individually affected by an EU instrument. For example, a decision of an EU institution or body may be addressed directly to an individual or business. After exit, they would continue to be able to challenge such decisions—in so far as they apply in the EU—before the CJEU, and to have them annulled. Of course, the converted form of the decision would however remain in force within the UK as retained EU law.

The noble Lord, Lord Pannick, asked whether paragraph 1 of Schedule 1 would, after exit day, prevent a challenge to a provision of retained EU law by reference to common-law principles. I understand that the answer is no, it would not, and it is not intended to do so. I hope that that meets the position that he raised with me a moment ago.

Domestic courts currently have no jurisdiction to annul an EU measure or declare it invalid, and we do not believe it would be right to hand them a new jurisdiction which asks them effectively to assume the role of the CJEU in this context. This amendment would effectively ask our courts to consider whether the EU acted incompatibly with the general principles when it made an EU instrument. Generally speaking, this is a function that we do not consider it appropriate to confer on domestic courts.

Therefore, although I appreciate the points raised by the noble Baroness, the amendment would undermine the Government’s stated policy of a clear exclusion of both validity challenges and general principle challenges provided for within Schedule 1. However, we recognise that there might be some limited circumstances in which it would be sensible to maintain the ability to challenge retained EU law on validity grounds. The Bill therefore contains a power set out in paragraph 1(2)(b) of Schedule 1, to which the noble Baroness alluded, which would enable the Minister to make regulations providing for a right of challenge in domestic law to the validity of retained EU law in specified circumstances.

Sub-paragraph (3) sets out that those regulations may provide that a challenge which would previously have proceeded against an EU institution may, after exit, proceed against a UK public authority, because of course there would be no EU institution against which it could be directed. I seek to reassure the noble Baroness that the word “may” is there as a precautionary term lest, in the context of trying to make such a regulatory power, it be perceived that there is no easily identifiable body against which the matter can be directed. However, the intent is that it should be possible to proceed against a public body in those circumstances.

[Lord Beith (LD)]

Can the noble and learned Lord envisage the circumstances in which such regulations would be made? Will Ministers have to decide between now and exit day a category of matters for which such regulation is to be provided, or are we to await a case coming up which ought to have been the subject of regulations which are then made? That surely cannot be possible.

[Lord Keen of Elie]

With respect, it is a precautionary power and it is intended that, where the circumstances arise, the Minister will address himself to those circumstances and contemplate the making of appropriate regulations.

[Lord Pannick]

Perhaps I may suggest to the Minister a circumstance in which this might arise. The day after exit day the Court of Justice gives a judgment saying that a provision of EU law is invalid. Nevertheless, that provision will be part of retained EU law—it will be part of our law even though it has been abolished in the EU. That might be a circumstance in which the Minister wishes to act.

[Lord Keen of Elie]

I fully acknowledge that that is most certainly a circumstance that could arise. Of course, one might address that circumstance by Parliament legislating to reflect the outcome of that post-Brexit decision. However, I fully acknowledge that, depending on the way in which one constructs the departure on exit day, one might find that what one has retained as EU law ceases to be EU law almost immediately after one has left the EU. I believe that that has been acknowledged on a number of occasions. Indeed, it could lead to the development of two parallel jurisprudences—one for retained EU law and one for EU law. That is an inevitable outcome of our decision to leave the EU but to retain in our domestic law that which was EU law at the point of our departure. I fully acknowledge that, but it might also be a circumstance in which potentially one would seek to exercise the exceptional regulatory power that is referred to.

Reference was made to Amendments 41 and 42, tabled by the noble and learned Lord, Lord Goldsmith, and the noble Lord, Lord Foulkes, which seek to retain indefinitely in domestic law rights of challenge based on the general principles of EU law. If agreed to, these amendments would empower domestic courts to quash administrative actions or secondary legislation or, indeed, even go as far as disapplying an Act of Parliament on the ground that it breaches one or more of the retained general principles of EU law—that could take place long after we have left the EU. That is why we have to have a point in time at which we have certainty as to the scope for such challenges, and that is reflected in the schedule.

As the noble and learned Lord, Lord Goldsmith, acknowledged, Amendment 41 would go even further. It seeks to set out an ostensibly broader definition of which general principles are to be retained under the Bill. In that context, he alluded to Article 191 of the TFEU, which deals with environmental issues. I take issue with him as to whether the polluter pays principle and the precautionary principle are both now accepted as general principles of EU law. I would suggest that there is considerable doubt as to whether the former, in particular, constitutes what is recognised in EU law as a general principle, so I have some difficulty with that amendment.

I come now to Amendment 63, also tabled by the noble Baroness, Lady Bowles. It is, I apprehend, intended to retain this right of challenge but solely for the principle of proportionality, as she indicated, and specifically including where retained EU law is to be treated as primary legislation. It would also appear to permit the possibility of a challenge on the basis of invalidity of EU law, as well as judicial review of such legislation. It is our position that the general principles of EU law, such as proportionality, non-retroactivity and fundamental rights, will be kept in our domestic law, but in order to assist in interpreting retained EU law and not to give rise to additional stand-alone rights. Whereas some general principles are now set out expressly in EU treaties, the general principles were those that were first recognised by the European Court of Justice. They are essentially judge-made and determined as principles on the basis of case law. It is those principles that we are dealing with.

I come back for a moment to Amendment 41, which goes beyond just the issue of proportionality. It would undermine the approach that we are seeking to take if we were to pursue it. In particular the inclusion of Article 191 in the amendment risks going further than the existing principles that are, as I say, set out in EU law and consequently in UK law today.

[Lord Goldsmith]

Leaving aside Article 191—we can argue about that and there is a decision that appears to demonstrate the point: the case of Artegodan, where the court appeared to be willing to extrapolate from the precautionary principle a general principle of EU law—does the Minister accept that, so far as the other general principles of EU law are concerned, to exclude them from the ability to found a cause of action and not just be an interpretative tool would be a diminution of the rights that people currently have and would include a diminution of many of the rights that the Government are saying are already protected under English law?

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[Lord Keen of Elie]

The noble Baroness is confusing two distinct issues. The Bill is about the retention in domestic law of EU retained law at the point of Brexit. The Prime Minister was addressing our future relationship with the other 27 members of the EU in the context of our seeking to align in some areas and not align in others. This will be the subject of negotiation which is about to commence and will apply in agreeing a transitional period, and then our post-transitional period relationship with the other EU 27. They are two distinct issues.

On the noble and learned Lord’s observation about the general principles, these are retained as an interpretive tool. It may impact upon the matter of remedies but not on the issue of rights. One has to bear in mind that distinction.

Reference was made by the noble and learned Lord, Lord Wallace, to the case of Benkharbouche, which was a classic example of where the issue of rights had to be distinguished from the issue of remedies. There were rights arising under Article 6 of the convention but there was an also an issue as to whether or not certain principles arising by reference to the charter were also in play. I believe it was Article 46 of the charter that was referred to by Lord Sumption, who delivered the opinion of the court. The point was that while the rights could be identified by reference to the convention or the charter, the particular remedy there arose by reference to the charter. I acknowledge that that is the case.

[Lord Wallace of Tankerness]

Is that not part of the point? An expectation has been built up by what has been said—that, on Brexit date plus one, people will be in the same position. The noble and learned Lord is admitting that they will not be in the same position because they may have rights but they will no longer necessarily have remedies.

[Lord Keen of Elie]

They will have rights but they may not have the same remedy, but that is quite distinct. We are talking about maintaining rights at the point when we leave.

[Lord Goldsmith (Lab)]

Does the noble and learned Lord accept that Mr Walker would not have the same rights? Those are rights purely based upon EU general principles and nothing else. Does he not accept that in that case, at least, the rights would not be there?

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[Lord Keen of Elie]

No, I do not accept that. I certainly do not accept that that is the position under reference to the Walker case. However, I am content to come back to the noble and learned Lord on that question on the Walker case but I do not accept that it falls in the way he indicates.

Perhaps I can make some progress. We remain of the view that after we cease to be a member of the EU there is a real risk of allowing general principle challenges to continue indefinitely, which is what these amendments would allow. Simply put, this would not be in keeping with our undertaking—our promise—to return sovereignty to this Parliament.

Of course we are aware of the concerns that have been raised, particularly about the impact on those whose cause of action precedes exit but who are unable, for whatever reason, to issue proceedings before some change takes effect. That is why we brought forward amendments on Report in the other place to provide reassurance that where a breach of the general principles occurred or gave rise to a potential claim before exit day—that is the important point—individuals and businesses will still have the opportunity to make certain claims based on the breach of the general principles of EU law for a period of three months after exit date. That period of three months after exit date is taken to mirror the period normally allowed in the context of applications for judicial review. That strikes a balance between ensuring that, on the one hand, individuals and businesses will still have the opportunity to bring these challenges and, on the other hand, delivering the result of the referendum and maintaining our parliamentary sovereignty.

While we believe that the compromises we have already made on the general principles of EU law have improved the Bill, the Government are looking again at these issues to see whether this part of the Bill can be improved in keeping with some of the concerns that have been expressed. That is because we understand the complexities of the issues that arise in the context of Schedule 1 and we are looking at those at present.

With that, I hope that the noble Baroness will see fit to withdraw her amendment.

[Lord Wallace of Tankerness]

My Lords—

[Lord Keen of Elie]

As the noble and learned Lord rises to his feet I am reminded of his reference to whether paragraph 3 includes Acts of the Scottish Parliament passed before Brexit day and not within competence. If they are not within competence, they are not law.

[Lord Wallace of Tankerness]

Perhaps I may explore that with the noble and learned Lord. The point I was making was that if the Acts were passed before Brexit day and they were challenged on the basis that the alleged incompetence was that they were not consistent with the general principles of EU law, would that challenge fail on Brexit day plus one, because it would mean that the court could no longer determine it?

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[Lord Keen of Elie]

In the event that an Act of the Scottish Parliament was enacted beyond the competence of the Parliament, it would not and would never have been law. That is the position pursuant to Sections 28 and 29 of the Scotland Act 1998. I hope that that clarifies the point, but if I have misunderstood the noble and learned Lord—

[Lord Wallace of Tankerness]

Let me see if I can make it a bit clearer.

[Lord Keen of Elie]

I am quite prepared to discuss the point with the noble and learned Lord because it may be that we will look more closely at those provisions in the Scotland Act in the very near future.

[Baroness Bowles of Berkhamsted]

I thank the noble and learned Lord for his response and all noble and noble and learned Lords who have spoken in this debate. I think that it has been confirmed that it is every bit as bad as I thought it was, and in fact I am not even sure that it is not worse. We now seem to have some kind of parallel jurisprudence which appears not to be actionable either under general principles or under common law, so we have created a kind of lacuna that cannot be approached. I also reject the fact that we would not be going on indefinitely applying general principles because the whole point is that we have the law as it is in the snapshot until such time as we change it. While I understand that one would not necessarily want to go in for a sudden wholesale redrafting of things, as amendments are necessary—especially if we avail ourselves of some of the mechanisms we have talked about where an Act of Parliament is going to be needed either because it is primary legislation or because we have put that on as a safeguard—these things are going to be revised and updated. I am still concerned and it is something that along with others we might want to return to on Report. However, for now, with the leave of the Committee I shall withdraw the amendment.

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[Lord Keen of Elie]

My Lords, I am obliged. Reference has been made to the Francovich principle. I am not sure there is such a principle, although there is the issue of Francovich damages, which arises from the case that was referred to in 1991. In order to put that into context, since 1991, and in the 20 years following, there have been 22—possibly up to 25—claims for Francovich damages in the UK courts. This is not some wide-ranging citizen or business right for the recovery of damages. There have been very few actual Francovich damages claims. I see the noble and learned Lord, Lord Goldsmith, shaking his head, but I invite him to study the case law.

[Lord Goldsmith]

I have no doubt about what the noble and learned Lord says. So why are they so worried about keeping it?

[Lord Keen of Elie]

I am just about to come on to that. I am obliged to the noble and learned Lord for his patience in that respect, and will endeavour to deal with matters as swiftly as I can, given the hour. The noble Lord, Lord Carlile, very correctly, pointed out the criteria that apply in determining whether or not there is a claim for Francovich damages: first, that the relevant provision of European Union law was intended to confer rights; secondly, that there has been a serious failure to implement European Union law; and thirdly, that there is a direct causal link between that failure and the loss complained of. I would not go so far as to suggest that Francovich damages are in some sense more generous than those available otherwise under the common law in this country, particularly those available in the context of judicial review. I have to point out to the noble Lord, Lord Davies, that damages are potentially available in a claim for judicial review.

[Lord Davies of Stamford]

The noble Lord, Lord Pannick, dealt with that point. In practice, damages are not usually available under judicial review. The general view of the public is that there is a very small chance of getting damages that way. That is the difference between that and Francovich, and it is very important.

[Lord Keen of Elie]

With respect, it is not. I have to say to the noble Lord that Francovich damages are a rare remedy, as I have already indicated. Damages in the context of judicial review are not so uncommon as the noble Lord was suggesting. They are available as a remedy, albeit in limited circumstances.

[Lord Pannick]

My Lords—

[Lord Keen of Elie]

Perhaps I can continue just for a moment. I would begin by looking at the Bill against that background. Paragraph 4 of Schedule 1 is perfectly clear in saying the right to Francovich damages is removed, because of course it is related to a breach of European Union law, and it would not be appropriate to continue—in accordance with Amendment 43—after we have left the European Union. The Bill is quite clear in saying that there is,

“no right in domestic law on or after exit day to damages in accordance with the rule in Francovich”.

To that extent, it does deal with the issue raised in the context of Section 16 of the Interpretation Act 1978.

[Lord Carlile of Berriew]

I take it from what the noble and learned Lord is saying that he accepts that there are existing rights to recover damages available in the British courts which the Government wish to remove. That is a breach of promise, is it not?

[Lord Keen of Elie]

I wonder whether the noble Lord could exercise a small degree of patience while I just complete what I have to say on this topic. But we can take as long as it takes. As I was saying, in terms of paragraph 4 of Schedule 1, the right in domestic law to damages in accordance with the rule in Francovich is removed as at exit date. There is of course a proviso in paragraph 27 of Schedule 8 in respect of claims for Francovich damages which have already been raised prior to exit date—the point that the noble and learned Lord, Lord Goldsmith, made. The potential lacuna is this: there may be accrued rights as at exit date where no claim has been made. We recognise that and it was noted in the other place. We are open to addressing that issue in order to ensure that those accrued rights are not removed by the application of paragraph 4 of Schedule 1. That is something that we are prepared to look at, as I have indicated, because we are aware of the criticism that has been made about the potential removal of rights that have already accrued as at the exit date.

[Lord Goldsmith]

Do I take it from that that the Minister will be bringing forward an amendment to correct this?

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[Lord Keen of Elie]

I am obliged to the noble and learned Lord. As I say, we are addressing that issue, which we recognise, and therefore in time for Report we will be determining what our position is. I cannot go further at this stage and I am not going to commit to an amendment, but I make it perfectly clear that we recognise that there is a potential lacuna arising from the fact that while, where a claim has been made before Brexit date it is continued, where the claim has accrued but no claim has actually been made it would be lost by this process. We recognise that there is room for criticism of the legislation on that basis; I am absolutely clear about that.

In these circumstances, I recognise the force of the amendment proposed by the noble and learned Lord, Lord Goldsmith, and that proposed by the noble Lord, Lord Carlile, in order to address that issue. I would take issue with the scope of the amendment proposed by the noble Lord, Lord Davies, which goes well beyond that and would maintain some sort of claim for Francovich damages in a context quite unrelated to our departure from the EU. I underline that this would not be appropriate.

I mentioned earlier the limited number of cases in which Francovich damages have arisen. That in itself suggests that it might be a proportionate response to the amendments made by the noble and learned Lord and the noble Lord, Lord Carlile, to allow for claims that have accrued because they are potentially very few indeed. I recognise that entirely. I am not committing to an amendment at this stage but I will make the position clear by the time we reach Report. In the circumstances, I invite the noble Lord to withdraw his amendment.

[Lord Pannick]

Before the Minister sits down and we all go to bed, I am very puzzled by his suggestion that there is currently a right to damages in judicial review such that Francovich damages do not add anything. In what circumstances is the Minister suggesting there is a right to damages in judicial review, other than in the very rare cases where you can prove misfeasance in public office?

[Lord Keen of Elie]

That is one example of where a claim for damages would arise in the context of a judicial review. There are distinct circumstances in which Francovich damages will arise. The noble Lord will himself recognise that the circumstances in which you can actually establish a basis of claim for Francovich damages are even rarer than those instances in which you can establish one in domestic judicial review.

[Lord Pannick]

I do not accept that. It is quite clear, I suggest, that damages under Francovich are provided in circumstances where you would not otherwise get damages because you cannot prove misfeasance but you can prove that the breach is sufficiently serious and that the law was intended to confer a right to damages. That is why I suggest to the Minister that paragraph 4 is taking away something of value.

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[Lord Keen of Elie]

In response to the noble Lord’s observations, we are dealing in the context of Francovich with the court having to find that there has been a serious failure with regard to an EU obligation, and I suggest that that is not very far from the test of misfeasance in the context of judicial review.

[Lord Davies of Stamford]

My Lords, I am grateful to everybody who has taken part in this interesting debate. I think that anybody listening in from outside will be impressed that we are working hard on a very serious matter at quarter to one in the morning.