Challenges to Validity of EU Instruments (EU Exit) Regulations 2019

Lord Beith Excerpts

Thursday 14th March 2019 Lords Chamber

I hope that noble Lords will therefore agree that these regulations are extremely important in making sure that courts in the UK can continue to deliver justice effectively once we leave the European Union and, as such, are a vital part of the Government’s preparations for leaving the EU. I beg to move.

[Lord Beith (LD)]

My Lords, I am grateful to the Minister for his careful exposition of the statutory instrument, and for the engagement of officials with the Constitution Committee and others. This is at the more microscopic end of looking at EU matters compared with what is going on at the other end of the building, but it is nevertheless important.

My concern with the SI and that of the Constitution Committee goes back to proceedings on paragraph 1 of Schedule 1 to the withdrawal Act, which prohibits challenges to the validity of retained European law on the basis that it was invalid immediately before exit day, unless the challenge was of a kind provided for in regulations to be made by a Minister of the Crown. That is what we are discussing. No draft of the regulations was made available when we were considering the Bill. The possibility arose that such a regulation might be selective and subjective in the type or subject matter of case permitted. Indeed, Ministers seem to be envisaging such selectivity, as I shall illustrate.

The background is that our constitutional system does not provide for courts to strike down laws on the basis that they are invalid. Parliament’s word, when set out in statute, is law. The Human Rights Act allows for statute law to be challenged and that challenge is posed to Parliament, but it does not strike down the law that it challenges. Neither I nor the Constitution Committee wanted to change the situation, but European law can be struck down for invalidity by the CJEU, as the Minister made clear, so what about retained European law after exit?

The Government originally took the view that they needed to retain the possibility of challenge and striking down. The noble and learned Lord, Lord Keen of Elie, the Advocate-General, said in this Chamber:

“Where we differ is that the Government recognise that, in some circumstances, individuals and businesses may be individually affected by an EU instrument … and should have a right to challenge it”.—[Official Report, 23/4/18; col. 1374.]


But in what circumstances, and how do you devise a statutory instrument that allows for some challenges but not others? Does this not set a dangerous precedent? Such an instrument might be hybrid, in which case you might think we would be protected from misuse by our special procedures for hybrid instruments, but not so, because provisions in paragraph 36 of Schedule 7 to the withdrawal Act allow hybrid instruments under that Act to proceed as if they were not hybrid.

No draft of the SI was produced, but we had discussions in this Chamber and I had an exchange of letters with the Solicitor-General, who was very helpful. A short consultation was arranged that enabled issues to be clarified. I appreciate that as well. My concern about selective and discriminatory use of the power to make such regulations was largely allayed by the very firm statement of the Government’s intent, and the statutory instrument we have before us is general in character and confined in purpose to pending cases. At one or two points where the Minister was explaining how it would work in those cases, the House perhaps needed reminding that only in pending cases would the opportunity arise to make that challenge. These are cases entered upon before exit day and not concluded.

But we now have a statutory instrument that is so limited in its scope that if the CJEU after exit day finds a pre-exit provision of EU law to have been invalid, it will cease to be EU law in the EU but it will continue to be on our statute book. It will still be in force as retained European law, despite the fact that, as explained in paragraph 2.4 of the Explanatory Memorandum accompanying the SI, if the CJEU has declared the law to be invalid,

“it is as if the law in question never existed”.

I agree with that. In my view, it therefore follows that it could not have been validly transferred into UK law on exit day. It did not exist and it could not be transferred. It was not valid and it is immaterial that we did not know that at the time. This would be an absurd situation. It could have the practical consequence that a UK business that had been penalised or disadvantaged by the application of a law that had been struck down would have no legal recourse to challenge its consequences, while EU businesses were successfully challenging it within the EU.

The Government, in correspondence with the Constitution Committee, have offered several answers to this problem. The first was that there will be very few such cases, if any, so in their view any solutions to the problem would risk being disproportionate. I do not buy that. Our job is to get the law right, not knowingly to create flaws that do not worry us because we think that not many people will be affected.

The Government’s second argument is that, in this as in other situations, if Parliament wants to change the law it of course can. It could take this course if problems arose because invalid EU law was still in force in the UK. When such a case came before the courts, it would be difficult to deal with the adverse effects experienced by an individual or business without resorting to retrospective and possibly hybrid legislation—not a course to be encouraged.

The Government’s third argument is much more complex and has been questioned by eminent public law specialists. Government lawyers believe that Section 6(3) of the EU withdrawal Act 2018 means that any post-exit CJEU ruling on the validity of EU law cannot affect its UK version in the form of retained European law because, under Section 6(3)(b) the courts must have,

“regard (among other things) to the limits, immediately before exit day, of EU competences”.

Under Section 6(3)(a) the court must decide the question in accordance with retained EU case law—that is, pre-exit case law. The court would be precluded from considering any post-exit case law and therefore, obviously, a declaration of invalidity. This seems to negate the purpose of Section 6(2), which permits the court,

“to have regard to anything done on or after exit day by the European Court … so far as it is relevant to any matter before the court or tribunal”.

I ask the Minister: what is the point of the permission in Section 6(2) to have regard to CJEU post-exit case law when it is subject to the requirement in Section 6(3)(b) that it must take account of the clear limits of EU competence after exit day? It is important because the Government’s view is that the scope of this statutory instrument cannot be widened in the way I suggest it should be because of that interpretation of Section 6.

This leads me to ask: why do the Government want to rule out the obviously desirable removal from effective UK law of retained EU law provisions whose parent provisions are found by the CJEU to have been invalid in the first place? Why would they want to keep that in UK law? A law that cannot have validly existed but remains in force is a new concept for me. Maybe it is because the Government get very hung up about the European Court of Justice and insisting that it will not have jurisdiction after exit day. What we are talking about is simply allowing UK courts to have regard to any case law subsequently developed by the European Court of Justice.

My last question has been answered, but I would like the Minister to emphasise the answer. This statutory instrument comes into force on 29 March, unless exit day is changed by another statutory instrument. However, in the event of an agreement, do the Government intend to use the withdrawal agreement Bill to suspend the operation of this statutory instrument until the end of the implementation period? I assume the answer is yes, but it would be helpful to have it on the record.