European Union (Withdrawal) Bill

Lord Carlile of Berriew Excerpts

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

[The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)]

My Lords, I must advise the Committee that if this amendment were agreed to, I would be unable to call Amendments 44 or 45 for reasons of pre-emption.

[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.

[Lord Faulks]

One of the points I was going to make concerned the continued role of the ECJ, but while I am on my feet, I entirely understand the noble Lord’s points about transitional provisions, but will he clarify to the House whether his support would go as far as the noble Lord, Lord Davies, in having a continuing Francovich?

[Lord Carlile of Berriew]

No, I would not go so far as the latter part of the speech of the noble Lord, Lord Davies. I recognise that if we leave the European Union, as we are doing, we have to have the transitional arrangements that were promised and that were referred to by the learned judges in the Supreme Court, on the basis of submissions that may well have been made by the noble Lord himself.

What I suggest to deal with the ECJ problem is one of two alternatives. One is to allow the ECJ jurisdiction to continue for the very small number of cases likely to arise. I recognise, of course, that that will attract political problems that might better be overcome by a more pragmatic solution. The pragmatic solution is to recognise and clarify that the United Kingdom courts, in dealing with such cases, should apply normal, comparative law principles; the sort of thing that we lawyers are accustomed to when we cite, for example, Australian or Canadian cases before the senior courts. This would mean that the courts of the United Kingdom, in dealing with such cases, should have due regard to ECJ decisions on similar and analogous matters. This would fall, as I say, within the ordinary principles of comparative law, whereby the United Kingdom courts give due weight to useful and relevant decisions in other jurisdictions. Thus we would have at least analogous law applied to the residual Francovich cases. We would have a right to make a claim on the basis of the date when the claim accrued, even if it is not yet quantified and not yet pursued, and the unintended consequences of retrospectivity would be avoided. In my view this would accord with sound legal principle.

I urge the Minister, even at this late hour, to say that he will return to the House with suitable and welcome government amendments for the clarification and preservation of what are proper bases for action.

--- Later in debate ---

[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.

--- Later in debate ---

Moved by

[Lord Carlile of Berriew]

48: Clause 6, page 3, line 32, after “Court” insert “except in relation to anything that happened before that day”

[Lord Carlile of Berriew]

I am grateful to the noble and learned Lord for what he said earlier. It was well worth waiting up for and rather more stimulating than the cup of cocoa that I referred to earlier. Having said that, I can see no point in prolonging the debate on this amendment. If it is appropriate, therefore, I seek leave to withdraw it.

[The Deputy Chairman of Committees]

The noble Lord must move the amendment before he can withdraw it.

[Lord Carlile of Berriew]

I beg to move. Can I withdraw it now?

[The Deputy Chairman of Committees]

It is the property of the Committee until the noble Lord obtains its permission to do so.