Retained EU law a practical guide

23 December 2020

Retained EU law is a legal term introduced into UK law under the European Union (Withdrawal) Act 2018. It is a bespoke legal concept capturing EU-derived laws, rights and principles retained and preserved in UK law for legal continuity after the transitional arrangements under the Withdrawal Agreement end (IP completion day). There is no specific list of retained EU law for lawyers to refer to. It is a matter of statutory interpretation.

Kieran Laird examines its meaning, scope and status, and provides essential tips for navigating and interpreting retained EU law.

This analysis was first published on Lexis®PSL on 16 December 2020.



What is retained EU law?

Prior to Brexit, EU law took effect in the UK through the European Communities Act 1972 (ECA 1972). The ECA 1972 was repealed by section 1 of the European Union (Withdrawal) Act 2018 (EU(W)A 2018) at 11pm on 31 January 2020 (exit day). However, in order to ensure that the UK complied with the requirement in the Withdrawal Agreement to apply EU law for the duration of the Brexit transition or implementation period, the effect of the ECA 1972 was preserved, with some modifications, until the end of that period at 11pm on 31 December 2020 (referred to in the EU(W)A 2018 and associated legislation as IP completion day).

Whereas the transition period written into the Withdrawal Agreement provided for legal continuity until IP completion day, the government put in place plans to maintain that continuity after IP completion day, by preserving in domestic law, as far as possible, the legal position applicable immediately before IP completion day. This is achieved by taking a snapshot of EU law in force and applicable in the UK at that point, and capturing it within the UK’s domestic legal framework as a new category of law—retained EU law.

The EU(W)A 2018 also provides powers for the government and devolved legislatures to amend retained EU law through statutory instruments (SIs), to ensure that retained EU law operates effectively after IP completion day. These powers were extended so that amending legislation may continue to be introduced for a period of up to two years after IP completion day.

In addition to retained EU law, relevant separation agreement law is an additional new category of law created under the EU(W)A 2018 (as amended), which includes the rights and obligations created by or arising under the Withdrawal Agreement, as well as domestic legislation giving effect to other elements of the Withdrawal Agreement. To the extent that parts of the Withdrawal Agreement continue in effect after IP completion day (to allow for the winding-down of the transitional arrangements and conclusion of transitional matters), the corresponding relevant separation agreement law also continues, unless disapplied (EU(W)A 2018, s 7C).

When is the snapshot of retained EU law taken?

The intention in the EU(W)A 2018, as originally enacted, was to repeal the ECA 1972 on exit day and for the snapshot to be taken just before that point.

However, the situation was complicated by the Withdrawal Agreement agreed between the UK and the EU27 in 2019. The Withdrawal Agreement made provision for a transition period until 11pm on 31 December 2020, during which all EU law would continue to apply in the UK as it did before exit day (and any amended UK version would be delayed until after transition). The EU(W)A 2018 was not drafted to accommodate this.

Rather than change the definition of exit day to align with the end of the transition period (referred to in UK law as the implementation period) and defer the repeal of ECA 1972, the European Union (Withdrawal Agreement) Act 2020 (EU(WA)A 2020) amended the EU(W)A 2018 by inserting provisions to save certain parts of the repealed ECA 1972 during the transition period so that EU law would continue to flow through ECA 1972 into UK law until IP completion day.

The EU(WA)A 2020 also amended the EU(W)A 2018 to postpone the point at which retained EU law would be created as a new category of domestic law, until IP completion day.

What does the snapshot capture?

Retained EU law is made up of the four following components:

  • EU-derived domestic legislation
  • direct EU legislation
  • remaining ‘rights, powers, liabilities, obligations, restrictions, remedies and procedures’ which are available in domestic law through ECA 1972, s 2(1)
  • retained case law and retained general principles of EU law

EU-derived domestic legislation

Preserved in UK law under EU(W)A 2018, s 2, EU-derived domestic legislation includes secondary legislation made under ECA 1972, s 2(2), and other domestic legislation which implements EU obligations, made prior to IP completion day.

A key example of EU-derived domestic legislation saved under this category is domestic regulations introduced to implement EU directives, such as the Working Time Regulations 1998, SI 1998/1833, the Civil Jurisdiction and Judgments Regulations 2009, SI 2009/3131 and the Public Contracts Regulations 2015, SI 2015/102.

This category also includes provisions in UK primary legislation, and secondary legislation made under other enabling legislation to implement or comply with EU obligations, such as measures made under the Health and Safety at Work etc. Act 1974, or the Equality Acts.

Direct EU legislation

Incorporated into UK law under EU(W)A 2018, s 3, direct EU legislation includes EU law that has direct effect in the UK prior to IP completion day, such as EU regulations and decisions.

The retained provisions include those that are in force and apply before IP completion day, the effect of which will crystallise later. The explanatory notes to the EU(W)A 2018 give the example of Regulation (EU) 517/2014 on fluorinated greenhouse gases. This Regulation has been in force and applicable since 2015 and prohibits the supply of equipment containing certain substances from specified dates, some of which fall after IP completion day. Because the latter prohibitions are in force they will be retained, even though they do not apply until after IP completion day.

Contrast Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector, which has staggered application, with the majority of provisions applicable after IP completion day. Only those provisions applicable before IP completion day (by way of derogation) are in scope of retained EU law (and domestic legislation has been introduced to repeal those specific provisions, with the result that the regulation as a whole is not retained).

Where direct EU legislation is retained, it is the English language text of such legislation that will be authoritative. The recitals may also be used in the interpretation of direct retained EU legislation, particularly where that legislation has not been modified.

Note: the EU(W)A 2018 carves out ‘exempt EU instruments’ (EU(W)A 2018, s 20(1) and Sch 6)―this excludes certain decisions and legislation made under those decisions from the scope.

Any remaining ‘rights, powers, liabilities, obligations, restrictions, remedies and procedures’ which are available in domestic law through ECA 1972, s 2(1) prior to IP completion day

Saved in UK law under EU(W)A 2018, s 4, retained rights etc. include rights under EU Treaties and directly effective provisions of EU directives which confer rights without the need for domestic implementation. Rights under EU directives will only be retained where they are ‘of a kind’ recognised by the Court of Justice of the European Union or ‘any court or tribunal’ in the UK in a case decided before IP completion day (EU(W)A 2018, s 4(2)(b))―what this means in practice is open to debate and is sure to be tested in the courts.

Even where rights are known to be retained, they may be subject to repeal, as is the case for retained rights on freedom of movement and freedom of establishment for instance.

Retained case law and retained general principles of EU law

Defined in EU(W)A 2018, s 6(7), this includes principles laid down by, and decisions of, the Court of Justice of the European Union in relation to the above three categories which have effect in EU law before IP completion day, except where excluded by other parts of the EU(W)A 2018. Retained case law also includes principles and decisions of domestic courts and tribunals relating to the above three categories.

Points to note

Among the specified exclusions, the Charter of Fundamental Rights of the EU does not form part of retained EU law after IP completion day (EU(W)A 2018, s 5).

In addition, no general principle of EU law is retained unless it was recognised as such by EU case law before IP completion day and, even where it is retained, from three years from IP completion day, failure to comply with it cannot give rise to a right of action (EU(W)A 2018, Sch 1, paras 2–3).

How are existing ambulatory references to EU law treated?

An ambulatory reference is a reference in a provision which cross-refers a provision in EU law as it is amended from time to time. It therefore tracks the provision referred to as it changes over time. The ambulatory references which are dealt with in the EU(W)A 2018 are those in which immediately before IP completion day:

  • exist in any enactment
  • exist in any EU regulation, EU decision, EU tertiary legislation or provision of the EEA agreement which forms part of retained EU law by virtue of EU(W)A 2018, s 3
  • exist in any document relating to anything falling into the above two categories
  • is a reference to any of the EU Treaties, any EU instrument or any other document of an EU entity as it has effect from time to time

Where the reference is to a provision or part of direct EU legislation which becomes retained EU law under EU(W)A 2018, s 3 (ie retained EU regulations, decisions, tertiary legislation or provisions of the EEA agreement) the reference tracks the retained version as it is amended by UK law from time to time (EU(W)A 2018, Sch 8, para 1).

Where the reference is to a provision in any other type of EU law, such as an EU directive which is not retained, it is read as a reference to the provision as it had effect immediately before IP completion day (EU(W)A 2018, Sch 8, para 2), save where an SI made under the EU(W)A 2018 provides that the provision should be read in a particular way.

An example is the Electricity and Gas etc (Amendment etc) (EU Exit) Regulations 2019, SI 2019/530, which made specific provision for the way in which references in the Gas Act 1986 to certain provisions in Directive 2009/73/EC (the EU Gas Directive) are to be read (see: LNB News 31/01/2019 95). These provisions were further amended during transition by the Electricity and Gas etc. (Amendment) (EU Exit) Regulations 2020, SI 2020/1016, so that references to the EU Gas Directive would incorporate subsequent EU amendments to that legislation.

Note: Provision is also made for the interpretation of ambulatory references to EU instruments that have effect as relevant separation agreement law under EU(W)A 2018, ss 7A or 7B. If the treaty, instrument or document in question has effect on or after IP completion day by virtue of EU(W)A 2018, ss 7A or 7B, then to the extent required (to give effect to relevant separation agreement law), the reference is to be read as a reference to (or as including a reference to) the treaty, instrument or document as it has effect under relevant separation agreement law (including, so far as so required, as it has effect from time to time) (EU(W)A 2018, Sch 8, para 1A).

How far do the provisions on interpretation of ambulatory references stretch?

The ambulatory references caught by the EU(W)A 2018 are only those in particular types of legislation, legal instrument, or document. Ambulatory references in standard commercial contracts will not be caught and, depending on the drafting, it may be that these continue to track the subject provision as it exists and develops in EU law.

In addition, ambulatory references will not be caught where they are contained in powers in retained EU-derived domestic legislation caught under EU(W)A 2018, s 2 (ie domestic law which currently implements EU law) to make, confirm or approve subordinate legislation which is subject to a procedure before Parliament or the devolved legislatures.

How are non-ambulatory references dealt with?

A non-ambulatory reference is a reference in a provision which cross-refers a provision in EU law in the form it was in when the reference was made (regardless of whether the EU law has since been amended). The European Union Withdrawal (Consequential Modifications) (EU Exit) Regulations 2020, SI 2020/1147, introduced revised provisions within EU(W)A 2018, Sch 8, para 2A to deal with non-ambulatory references to various EU instruments that immediately before IP completion day:

  • exist in any domestic enactment
  • exist in any EU regulation, EU decision, EU tertiary legislation or provision of the EEA agreement which forms part of retained EU law by virtue of EU(W)A 2018, s 3
  • refer to any of the EU Treaties, any EU instrument or any other document of an EU entity as it has effect at a particular time before IP completion day

EU(W)A 2018, Sch 8, para 2A(1) provides multiple interpretive rules for non-ambulatory references to allow for instances where references to EU instruments have more than one meaning eg referring to an EU instrument as it has effect as relevant separation agreement law for some purposes, and for others referring to the EU instrument as incorporated into retained EU law.

Where the reference is to a provision or part of direct EU legislation which becomes retained EU law under EU(W)A 2018, s 3 (ie retained EU regulations, decisions, tertiary legislation or provisions of the EEA agreement), and the provision or part in question has not been modified before IP completion day, then the reference is to the provision as retained.

Similar rules apply for references to such legislation which forms part of domestic law by virtue of section 1 of the Direct Payments to Farmers (Legislative Continuity) Act 2020, subject to specific rules on the interpretation of modifications within that category (EU(W)A 2018, Sch 8, para 2A(3)).

In all other cases, including where the direct EU legislation referred to has been modified, the reference is to be read as a reference to the relevant provision as it existed at the time that the provision containing the reference was made.

Again, provision is also made for the interpretation of non-ambulatory references to EU instruments that have effect as relevant separation agreement law under EU(W)A 2018, ss 7A or 7B. If the treaty, instrument or document in question has effect on or after IP completion day by virtue of EU(W)A 2018, ss 7A or 7B, then to the extent required for the purpose of relevant separation agreement law, the reference is to be read as a reference to (or as including a reference to) the treaty, instrument or document as it has effect under relevant separation agreement law (including, so far as so required, as it has effect from time to time) (EU(W)A 2018, Sch 8, para 2A).

Note: The European Union Withdrawal (Consequential Modifications) (EU Exit) Regulations 2020 revoked and replaced previous rules on non-ambulatory references dealt with in regulation 2 of the European Union (Withdrawal) Act 2018 (Consequential Modifications and Repeals and Revocations) (EU Exit) Regulations 2019, SI 2019/628.

What are the key rules for the application/interpretation of EU-derived laws in the UK post-IP completion day?

Under the principle of supremacy of EU law, where there is a conflict between EU law and domestic law, the latter is disapplied. Indeed, a conflict with EU law is the only basis on which a UK judge could disapply an Act of Parliament.

This hierarchy is retained in relation to domestic laws passed before IP completion day (EU(W)A 2018, s 5(2)). So, for example, where an Act of Parliament passed before IP completion day conflicts with a regulation of EU origin retained under EU(W)A 2018, s 3, the retained regulation will prevail.

However, from IP completion day, the principle of supremacy of EU law does not apply to any domestic law passed after IP completion day (EU(W)A 2018, s 5(1)). So domestic law passed after IP completion day will trump provisions in retained EU law that are of EU origin and which would have benefitted from the principle of supremacy before IP completion day.

Any question as to the meaning of a provision of retained EU law which has not been modified by UK law is to be decided by reference to relevant domestic case law and pre-IP completion day EU case law (where retained) and the general principles of EU law insofar as these have been retained (EU(W)A 2018, s 6(3)).

So, a UK court will follow the case law of the EU courts before IP completion day when interpreting unmodified retained EU law (even if the approach in EU case law subsequently diverges).

However, a court or tribunal in the UK will not be bound by any decisions of the EU courts which are handed down after IP completion day (EU(W)A 2018 s 6(1)). It can, however, have ‘regard’ to any decision of the Court of Justice of the European Union, or any other EU entity, made after IP completion day where this is relevant to the matter before it (EU(W)A 2018, s 6(2)).

The Supreme Court is not bound by retained EU case law and neither is the High Court of Justiciary when sitting in relation to certain matters of Scottish law (EU(W)A 2018, s 6(4)). The same also applies to the UK Courts of Appeal under legislation introduced under EU(W)A 2018, s 6(5A) (European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020, SI 2020/1525). These so-called ‘relevant courts’ may depart from retained EU case law where they consider it appropriate to do so (ie using the test applied by the Supreme Court when considering departing from its own case law).

Can retained EU law be challenged? If so, how? Are there any particular areas where a challenge is likely?

Domestic law which becomes retained EU law by virtue of EU(W)A 2018, s 2 continues to be classed as primary or secondary legislation as relevant (EU(W)A 2018, s 7(1)).

The primary legislation which falls within EU(W)A 2018, s 2 will be capable of challenge only on the basis that it contravenes another provision of retained EU law which would have benefitted from the principle of supremacy. The secondary legislation which falls within EU(W)A 2018, s 2 can be challenged on the same basis, as well as on the same general public law grounds as any other secondary legislation.

Under EU(W)A 2018, Sch 1, para 1, no provision of retained EU law can be challenged on or after IP completion day on the basis that an EU instrument, such as an EU regulation or decision, was invalid. However, this preclusion does not apply where the Court of Justice has found the EU instrument to be invalid prior to IP completion day, or where a challenge to its validity was commenced but not concluded (EU(W)A 2018, Sch 1, para 1, and Challenges to Validity of EU Instruments (EU Exit) Regulations 2019, SI 2019/673).

The EU(W)A 2018 draws a distinction between:

  • retained direct principal EU legislation―EU regulations which are not tertiary legislation, and annexes to the EEA agreement, retained under EU(W)A 2018, s 3, and
  • retained direct minor legislation―all other EU law retained under EU(W)A 2018, s 3 (mainly tertiary legislation and decisions of EU bodies)

Retained direct principal EU legislation is treated as primary legislation for the purposes of challenges under the Human Rights Act 1998 (HRA 1998), ie it can be found incompatible, but that finding does not affect continued validity. Conversely, retained direct minor EU legislation is treated as subordinate legislation for HRA 1998 purposes, so it can be disapplied if found to be incompatible (EU(W)A 2018, Sch 8, para 30).

The majority of challenges are likely to be in relation to modifications made to retained EU law by Ministers using the powers conferred by the EU(W)A 2018. EU(W)A 2018, s 8 confers broad powers to amend retained EU law to ensure that it operates effectively or to remedy any other deficiency within it. Deficiencies are defined widely in EU(W)A 2018, s 8(2).

These powers caused a great deal of debate during the passage of the EU(W)A 2018 and have continued to be controversial. The Secondary Legislation Scrutiny Committee for instance has queried the use of these powers to introduce substantive policy changes in some cases. In other cases the powers appear to have been used to introduce modifications to provisions of EU directives which are known to be outside the scope of retained EU law.

Practitioners will be scrutinising carefully whether any amendments made to retained EU law are within the powers conferred by EU(W)A 2018, s 8, and it is almost certain that some will be challenged.

What are your top tips for navigating retained EU law?

Firstly, be clear on what applies when. Retained EU law exists as a new category of domestic law from IP completion day. Up to that point, EU law applies in the UK by virtue of the domestic implementation of the Withdrawal Agreement and should be read accordingly. Relevant separation agreement law should also be taken into account (EU(W)A 2018, s 7C).

Secondly, be absolutely clear about what is retained after IP completion day and what is not. A big issue here will be around rights in EU directives which, unlike directly applicable EU legislation, will not automatically be retained. Be prepared to do some digging in the case law to establish whether or not a particular right is retained, and be prepared to argue your position.

Thirdly, be aware of the form in which a particular piece of legislation is retained. Hundreds of statutory instruments amending retained EU law have been passed, with some pieces of legislation amended by several different Brexit SIs, as well as various rules of interpretation meaning that different provisions or references to legislation may be read in different ways for different purposes. Some of those SIs have since been amended to take account of the requirements of the Northern Ireland Protocol, and to reflect the fact that some additional EU law came into force and became applicable during the transition period (and is therefore also encompassed within retained EU law).

Fourthly, keep an eye on the courts as the application of the EU(W)A 2018 and the validity of the SIs made under it, will be the subject of much judicial consideration over the next few years. Remember that decisions of the Court of Justice of the European Union made before IP completion day will be binding on lower UK courts and tribunals (with exemptions for relevant courts under EU(W)A 2018, s 6), but not those made after IP completion day―although the latter should be referenced where relevant, as a domestic court or tribunal may take account of them where appropriate.

Finally, be alert to situations in which advice is required on both retained EU law (in the UK) and EU law (in the EU27). There are times when clients operating in both jurisdictions will need to know the differences between the two bodies of law and the effect that such differences may have on the client’s operations.  


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