The transitional arrangements under the UK-EU Withdrawal Agreement deferred many of the legal effects of Brexit in UK law, preserving legal continuity and requiring the UK to continue adhering to EU law from exit day until 11pm on 31 December 2020 (IP completion day).

As these transitional arrangements come to an end, Kieran Laird discusses the key legal changes taking effect from IP completion day and the impact on UK law and the status of EU law in the UK.

This analysis was first published on Lexis®PSL on 1 December 2020.

What is the impact of IP completion day on Brexit-related legislation and retained EU law? Will this legislation be ready in time?

The broad framework that will govern the status of EU law in the UK after the end of the transition period at 11 pm on 31 December 2020 is already in place in the form of the European Union (Withdrawal) Act 2018 (EU(W)A 2018), as amended by the European Union (Withdrawal Agreement) Act 2020.

Various EU law instruments and decisions, and EU-derived domestic law, will be retained within the UK's domestic legal framework as 'retained EU law'. EU(W)A 2018 provides a power for ministers to use statutory instruments to amend retained EU law to ensure that it functions appropriately after the end of the transition period.

Many such SIs were made in 2019 before the Withdrawal Agreement was signed. These SIs are currently being amended to take account of the effect of the Northern Ireland Protocol in the Withdrawal Agreement, and the fact that retained EU law will now include EU law which came into effect during the transition period. That process will hopefully be completed by the end of the year.

However, further amendments may be needed to reflect the terms of any trade deal with the EU. As the transition period ends in several weeks with no deal yet concluded, it is difficult to see how such amendments could be made in time.

Is Brexit legislation susceptible to legal challenge - when does time start to run?

The SIs made under the EU(W)A 2018 to amend retained EU law will be susceptible to judicial review on the usual grounds, including whether they are within the powers granted by the enabling Act.

In terms of when time begins to run, the rule is that a challenge must be brought promptly and in any event within three months of the decision challenged. The government's position is likely to be that the date of decision for a statutory instrument is the date on which it is made. However, as many of the SIs will only come into force on IP completion day - with some possibly not coming into force at all - claimants could argue that time should begin to run from 1 January 2021 at which point the effect of the change in law will become clear.

No challenge can be brought on the basis that a retained EU instrument was invalid before the end of transition, except where it had already been found to be invalid, or a challenge to its validity was commenced but not concluded before that date (see: EU(W)A 2018, Sch 1, para 1, and Challenges to Validity of EU Instruments (EU Exit) Regulations 2019, SI 2019/673).

Retained direct principal EU legislation (EU Regulations which are not EU tertiary legislation) is treated as primary legislation for the purposes of challenges under the Human Rights Act 1998 (HRA 1998), meaning it can be found incompatible, but that finding does not affect continued validity of the legislation. Conversely, retained direct minor EU legislation (other direct EU legislation retained under EU(W)A 2018, s 3) is treated as subordinate legislation for HRA 1998 purposes, so it can be disapplied if found to be incompatible (see: EU(W)A 2018, Sch 8, para 30).

It remains to be seen what approach the courts will take as to whether retained direct minor EU legislation can be subject to judicial review in the same way as domestic subordinate legislation.

What is the impact of IP completion day on the status and supremacy of EU law in the UK?

The principle of supremacy of EU law will continue to apply in relation to domestic legislation made before IP completion day. Where there is a conflict between a domestic enactment made before that date and a provision of retained EU law that would have trumped that domestic legislation before the end of the transition period, the latter will take precedence (see: EU(W)A 2018, s 5).

However, domestic enactments made after IP completion day will trump retained EU law and the principle of supremacy of EU law will not apply.

What is the position regarding the continuation of relevant separation agreement law and transitional arrangements such as ongoing civil and administrative actions?

EU(W)A 2018, s 7C creates an additional new category of law, relevant separation agreement law, 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 certain parts of the Withdrawal Agreement continue in effect after IP completion day, the corresponding relevant separation agreement law will continue in effect also, unless disapplied.

An example of how that approach may be changed is contained in clause 47(2)(c) of the version of the UK Internal Market Bill introduced into the House of Lords, which states that EU(W)A 2018, s 7C ceases to have effect so far as it would require the interpretation of relevant separation agreement law which contradicts clause 44 and 45 of the Bill and regulations made under those clauses. It remains to be seen whether those clauses are retained in the final version of the legislation and, if they are, whether the powers that they give ministers will be exercised.

Under the Withdrawal Agreement, certain actions that are already in train will be allowed to complete where they have not done so by IP completion day. An example is that most goods that are already in the distribution chain at the end of the transition period will be able to continue to their end-user in either the UK or EU, and be put to use, with only limited additional requirements (Article 41(1) of the Withdrawal Agreement). Public procurement exercises commenced before IP completion day under EU procurement rules will also continue subject to the relevant rules and review procedures (Article 76 of the Withdrawal Agreement).

Likewise, where proceedings have been commenced by or against the UK before the Court of Justice prior to IP completion day, these will proceed to final determination, including any appeals (Article 86 of the Withdrawal Agreement). The Court of Justice may also continue to hear preliminary references from UK courts during the transition period. Administrative

procedures before EU bodies that were commenced, but not concluded, before the end of the transition period will also be allowed to proceed to completion (Article 92 of the Withdrawal Agreement).

What are the rules on the continued application of EU principles?

Certain principles of EU law will be retained under EU(W)A 2018, s 4 (rights in Article 6(3) of the TEU, for example) and EU(W)A 2018, s 6 (rights and principles contained in retained case law). However, there are numerous carve outs.

Under EU(W)A 2018, Sch 1, para 2, only those principles recognised by the Court of Justice in a case decided before IP completion day will be retained. The Charter of Fundamental Rights is also explicitly excluded from retained EU law. Rights in the Charter which fall under EU(W)A 2018, Sch 1, para 2 may be retained, but not those which have not been considered by the Court of Justice.

Failure to comply with retained EU principles will no longer provide a ground to challenge legislation or administrative action. However, challenges can be brought within three years from IP completion day in respect of administrative acts before that date (see: EU(W)A 2018, Sch 8, para 39(5)).

It may be that the courts will begin to base decisions on common law principles which mirror EU principles - as the Supreme Court did in R (Unison) v Lord Chancellor [2017] UKSC 51. Where a common law analogue cannot be found, EU principles could be used as an aid to interpretation and a source of inspiration for the development of the common law, as is the case with customary international law.

What are the rules on the treatment of EU case law in UK courts and tribunals?

UK courts will no longer be bound by any principles laid down, or decisions made, by the EU courts after IP completion day. However, a UK court may have regard to post-transition judgments of the EU courts after IP completion day if it considers it 'appropriate' to do so.

Retained EU law is to be interpreted in line with retained case law, which is defined in EU(W)A 2018, s 6. However, the Supreme Court and Court of Appeal (and their equivalents in the UK) may depart from pre-IP completion day decisions of the EU courts where they consider it appropriate, applying the test the Supreme Court uses in departing from its own decisions.

Tips for navigating UK law and retained EU law after IP completion day

Following the end of the transition period, the legal position will undoubtedly become more complex. Over many years, lawyers in the UK have been used to a common legal position both across the EU and within the UK itself, as well as a settled hierarchy of domestic law.

Going forward lawyers will need to get used to:

  • new categories of UK domestic law: retained EU law and relevant separation agreement law - the content and position of which is uncertain in many respects
  • uncertainties as to whether the courts will depart from retained EU case law and how they will use retained EU principles - and potential variations in different parts of the UK
  • finding a source for rights outside the Charter of Fundamental Rights by going to retained EU case law, UK common law or Strasbourg jurisprudence
  • divergence between parts of the UK, most notably between Northern Ireland and Great Britain, and in the legislation made to amend retained EU law by different jurisdictions
  • divergence over time between UK and EU law

For background reading on retained EU law, see: Retained EU law - a practical guide.