Examination of Witnesses

Retained EU Law (Revocation and Reform) Bill – in a Public Bill Committee am ar 8 Tachwedd 2022.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Barney Reynolds, Sir Richard Aikens and Jack Williams gave evidence.

Photo of Gary Streeter Gary Streeter Ceidwadwyr, South West Devon 2:00, 8 Tachwedd 2022

Colleagues, this is just a reminder: we are sitting in public and the proceedings are being broadcast, so best behaviour is required at all times. We will now hear oral evidence from Barney Reynolds, of Shearman & Sterling; Sir Richard Aikens, of Brick Court Chambers; and Jack Williams, of Monckton Chambers. We are delighted to see that all of them are with us in person, and we have until 2.35 pm for this part of the sitting. Could our witnesses begin by introducing themselves for the record, starting with Sir Richard?

Sir Richard Aikens:

Good afternoon. My name is Richard Aikens. I started my professional career as a barrister in commercial chambers. After 25 years, I became a judge of the High Court, where I sat, among other places, in the commercial court. I then went to the Court of Appeal. I gave that up in 2015. I now work as an arbitrator in international arbitrations. I teach law at King’s College London and Queen Mary University of London. I am also involved in writing and editing textbooks, most recently the latest edition of “Dicey, Morris & Collins on the Conflict of Laws”, where of course issues concerning EU law and the subsequent part it might play are important.

Barney Reynolds:

Hello. I am Barney Reynolds, partner at the international law firm Shearman & Sterling, where I am head of financial institutions—about half the firm’s business—and the financial regulatory group. I practise in UK and EU regulation and associated areas. I led a team, of about 50 people, that drafted the laws and regulations for Abu Dhabi Global Market, which is a new financial centre in Abu Dhabi. It is now in operation, with about 20,000 people and 4,000 companies, and is based entirely on the English law, UK regulatory model. I have been helping other Governments look at adopting our model—in fact, without the EU bits—as well.

Jack Williams:

Good afternoon. I am Jack Williams. I am a barrister at Monckton Chambers. Prior to entering practice, I taught constitutional law at Brasenose College, Oxford University. I have written and spoken a lot about the legal implications of Brexit as a matter of domestic law.

Photo of Gary Streeter Gary Streeter Ceidwadwyr, South West Devon

Thank you very much. The first question will be asked by Justin Madders.

Photo of Justin Madders Justin Madders Shadow Minister (Future of Work), Shadow Minister (Business and Industrial Strategy)

Good afternoon, Sir Gary, and good afternoon, gentlemen. You all have a great deal of experience in advising people. You will be familiar with clause 7 in particular and the impact on domestic law. Could you say a little about how significant or insignificant you feel that is going to be in terms of creating certainty, and what the impact will be on the legal systemQ67 ?

Jack Williams:

I am happy to begin if that is okay with the other panel members. Clause 7 obviously has a number of different aspects to it. If I may, I will start with the departing from retained EU and domestic case law aspects, before turning to the domestic reference procedure, because I think the implications of both are significant.

The first is essentially a nudge to the courts—a gentle nudge but a nudge none the less—in order to encourage greater departure from retained case law. It achieves that by essentially modifying the test for when certain courts—the Court of Appeal upwards, generally speaking —may depart from retained case law, and it does so by listing three particular factors. As a normal matter of statutory interpretation, when certain factors are listed, they are to be given greater significance and weight. Each of those factors in its own terms is encouraging departure. What you do not see there, for example, which was very clear in the House of Lords practice direction, which this is moving away from, is whether it is right to depart from case law, based on legal certainty grounds and taking into account that change in case law by judges necessarily is different from changes that the politicians and Parliament bring into force prospectively. That has implications for certainty, because one does not know what cases the judges may or may not apply, but also for something that has not been discussed this morning: the separation of powers. This puts an awful lot of policy decisions in the hands of judges.

Photo of Justin Madders Justin Madders Shadow Minister (Future of Work), Shadow Minister (Business and Industrial Strategy)

Q Does that mean that, in essence, developments will be dictated by what case law comes before the courts?

Jack Williams:

It does dictate what matters are litigated and which arguments parties run, particularly because litigators and our clients will have a number of different options going forward. Does one wait and see how the first-tier judge deploys the retained case law and whether one can convince them to depart from it directly by distinguishing it, so that one is not actually changing the law but departing from the EU principle? Or does one ask now for a reference at first instance stage, which would add in delay and costs, and go off the Court of Appeal, for example, to argue whether that case should remain the law or not? This raises a number of strategic questions that I am sure we will debate in this session.

Sir Richard Aikens:

I agree with everything that Jack Williams has said, but, in my experience at least, it is likely that judges will take a very conservative view on the question of deciding whether to depart from retained EU case law, and an even more conservative view about departing from retained domestic case law, which is itself based on what was European case law as applied by judges in the United Kingdom. That is just the nature of the judicial animal: he or she is very conservative and, as Jack Williams said, they will be very reluctant to tread into areas that might be seen as policy or more political. Such departures would obviously have to take account of the statutory considerations that are set out in clause 7(3) and (4), but even when taking them into account, I suspect that judges will be very reluctant to change things—we will see.

On the other aspect, I wonder whether getting a reference to a higher court will be of any practical use at all because of the delay and expense. Unless you have two parties for whom money is no object, money is a very big consideration, especially in civil matters—these are all civil matters—in which, in the vast majority of cases, you do not have anything such as legal aid. The prospect of something going to a higher court and then perhaps coming back again is not something that parties will consider lightly. I really wonder whether it is a practical proposition.

Photo of Gary Streeter Gary Streeter Ceidwadwyr, South West Devon

Do you want to come in on that question, Mr Reynolds?

Barney Reynolds:

The provision is drafted in a very limiting and narrow way. It gives three examples of things that the court should have regard to when considering whether to depart from EU case law, and those three are pretty extreme instances. The first is that you are not banned. The second is a change in circumstances, but it is possible to make a departure under our system anyway if there is a change in circumstances. And the third is if we think that the retention of the EU case law decisions begin to affect adversely the development of our law. Again, that is pretty narrow. I do not think that the Bill as drafted is going to have a dramatic effect. In fact, I would even consider going further in the text by adding to those examples.

It seems to me that—this is true of the Bill as a whole—there is a tension here between lawyers wanting legal certainty, continuity and so on, which is all perfectly justifiable, and the fact that we are going through a constitutional change and need to effect that change. India has taken until only recently to get rid of its version of the Companies Act 1948, but that is a fellow common law country. We are moving from an alien legal system to our own, and our methods are different. The sooner we get on with it, the better.

That transition—this is just in the context of case law, and the same goes with the provisions—inevitably involves some element of change and some element of legal uncertainty. But I think our lawyers will coalesce with the judges around revised interpretations of provisions very quickly. I observe that, in terms of expanding the provision in clause 7(3), for instance, one of the key methods of interpretation that the EU adopts is its own version of the purposive method of interpretation, which of course—

Photo of Stella Creasy Stella Creasy Labour/Co-operative, Walthamstow

It is hard to hear you. I wonder whether it is because you are between two microphones. I am sorry.

Barney Reynolds:

One of the EU’s methods of interpretation is its version of the purposive method of interpretation, which we also have—we look at Hansard and so on when things are not entirely clear—but it is very limited in its use here. We basically go on the meanings of the words on the page, whereas in the EU, the purposive method, which they leap to pretty quickly in the courts, involves trying to work out the intentions of the legislators behind provisions. In the EU context, that includes ever closer union and various other purposes that are alien to our country and our system—as it now is, at the very least.

As I say, it seems to me that the sooner we get on with it, the better. Clause 7(3) is pretty anodyne. I would consider expanding it, and I would not get too troubled by the fact that moving from A to B—that is, where we are now to where we want to get to—potentially involves some element of legal uncertainty that would not otherwise arise. If we wanted perfect legal certainty, we would do nothing.

Photo of Justin Madders Justin Madders Shadow Minister (Future of Work), Shadow Minister (Business and Industrial Strategy)

Q As an aside, when I quoted Hansard when I was in practice, I usually felt that that was because I did not have much else to go on. I go back to what Sir Richard said about the cost to parties of litigating these references. A lot of the EU regulations are consumer or employment rights-based. Unless you are a member of a trade union or have legal expenses insurance, you are not likely to have the resources to litigate cases upwards. Will that create an issue regarding access to justice if some of these issues get taken up?

Sir Richard Aikens:

It is difficult to say. I cannot give you express examples, of course, and I am concerned only with the process, rather than any particular provisions that might be tested. Here, after all, we are looking at the issue of what the case law says, and how the case law has interpreted any particular EU regulation, directive and so on. It may be rather more limited, but as soon as you get into litigation, there are costs. We cannot get away from that.

Photo of Nusrat Ghani Nusrat Ghani The Minister of State, Department for Business, Energy and Industrial Strategy

Q I apologise for my phone ringing; I have switched it off. Mr Reynolds, the evidence in front of me suggests that you know a lot about business, and you have commented on the issue for a while. As someone who works with business all the time on regulatory affairs, do you think the Bill will add unnecessary additional costs and uncertainty, as others have claimed, or do you consider any such risks to be manageable or even beneficial?

Barney Reynolds:

I think it will be beneficial as soon as we get through the process. Our system delivers greater legal certainty, which business craves, than the code-based method that we are coming out of, which has swept through our law in a number of areas, including my practice area, financial services law, which is almost all from the EU. I see it day to day. When we come out the other side—how quickly we get through is up to us—I think we will get those benefits.

The transition will probably involve some element of uncertainty arising from that, inasmuch as reinterpreting provisions interpreted using these EU techniques under our system, or wondering whether a judge is going to retain some of that element of interpretation or move completely to our own method, is unclear at the very beginning. I think that very quickly, after a few early court cases, we will get certainty on that. In fact—it is very interesting to hear Sir Richard talk—I think that the judges themselves will do their absolute utmost to make sure that legal certainty is there through the transition, and I would trust that process to work well. I have no real concerns even about the transition. Yes, there could be things that go wrong. If we try to craft it so that there is no conceivable possibility of something turning out in an unexpected way, we will deny ourselves the benefits that I have mentioned.

Photo of Nusrat Ghani Nusrat Ghani The Minister of State, Department for Business, Energy and Industrial Strategy

Q Thank you. I have a question for Sir Richard Aikens. The Government have made it clear—although I do not think it helps when the Government “make it clear”, because everyone assumes we are doing the opposite—that the intention of the Bill is not to remove rights and protections but to safeguard them by assimilating them into UK law and to sunset the laws that are unnecessary. Does the Bill deliver in that aim?

Sir Richard Aikens:

May I start a bit further back? We are now in a situation where there is no EU law as such that affects this state, the UK. Everything we have here is, by definition, UK law. The question that has to be addressed is how you deal with that UK law, given its origin and the way it was treated and the way it was interpreted by the EU court, in particular. The whole of this Bill is an attempt to produce a process that enables what is now UK law to be dealt with, as I understand it, in a manner that is consistent with all other aspects of UK law.

Having set that as the objective, it is inevitable that you are going to have some problems on the way. The way in which this has been done means that the timescale is very short. To my mind, it is an almost impossible task to have the whole process done by the end of 2023. Frankly—you will say that I am pessimistic, perhaps too much so—I doubt whether it could be done by the end of 2026.

Given all that, it is inevitable that, because the process is almost entirely by secondary legislation, you are going to get challenges because people will think, rightly or wrongly, “That is a political matter, not a legal one”, or that the changes are not in accordance with the law or not in accordance with due process. I think that the way this has been fashioned is actually an invitation to litigation and an invitation to controversy. It may well mean that there are going to be challenges, because people feel that they have lost rights and that they are disadvantaged, and the manner in which it will have been done is through a short form of secondary legislation, which is not what you might imagine is the normal way of dealing with some of the big issues that have to be dealt with, such as workers’ rights, environmental issues and so on. This is a very difficult process.

Jack Williams:

In response to that question, may I add that the outcome of the Bill may well be to preserve rights, but it is an absolute “may” and is entirely in the gift of Ministers. The Bill does not preserve rights or give any safeguards for that outcome to be achieved. That may be the outcome, but that is in the gift of Ministers. That is because the Bill sets one on an irreversible train track that leads to a cliff edge, and Parliament has not built in any breaks or stops on the train track to save or preserve those rights.

I have full faith in Ministers. I am sure that they want to do good for their constituents and to maintain rights. I love the fact that they are coming out and saying those words, but they are only words—it is not in the legislation. There is no legal protection for those rights in the Bill.

Barney Reynolds:

I am not sure what the alternative would be. The Bill gives the system as a whole, as it were, the opportunity to execute on a shift that cannot be prescribed in advance, given the unprecedented volume and complexity. I have some limited relevant experience—I mentioned creating a system in Abu Dhabi—but one can go quickly. The main work there took 18 months, and I think that with the right size team we could go even quicker.

I note that in the Bill, the deadline is not in truth the end of 2023, because there are various ways under the switching back on powers in clause 13(6), (7) and (8), to allow even sunsetted provisions to be reinstated before mid-2026. In effect, there is a quick rush to do the main job, and an ability to tidy up things before mid-2026, which seems to be sensible.

You can choose different deadlines; you can debate all of these things. My basic point is that I am not sure quite how else one could do it if you actually want to get it done in any realistic timetable. Obviously, behind and above all that, Parliament will itself need to decide how, through a joint Committee, your Committee, or some other Committee, it wishes to oversee the process. That is a completely separate matter from the Bill.

Photo of Stella Creasy Stella Creasy Labour/Co-operative, Walthamstow

Thank you, Sir Gary. It is a pleasure to serve under your chairmanship this afternoon as much as it was this morning. This is a very interesting discussion about how we make law. You are talking about how case law then informs outcomes for our constituents. I am struck by the picture that you paint of the powers that might then fall to judges by default, without clear ministerial or parliamentary direction.Q

Perhaps Abu Dhabi, as part of an authoritarian state, is not the best example for us democrats of how we might wish to proceed. I wonder if you could talk a little bit more about some of the barriers created in the Bill for judges because of the lack of parliamentary scrutiny, and if there are other examples of legislation that you have seen that may offer us a way forward. Perhaps we start with Jack, as you look most interested by the question, then go across the panel.

Jack Williams:

It is extraordinarily difficult to think of ways that the Bill tells judges exactly how and how not to do things. Ironically, one of the ways that the Brexit legislation is going is to codify almost into a civil system exactly how judges should interpret certain matters. The roles of the court are only in clause 7 provisions, which say in their own terms that they may have regard to certain things, but do not give a definitive list. Those that are listed are nudging towards departure, as I said earlier.

I do not think there is anything in the Bill that gives judges the power to preserve or save certain rights. What I would say is that it puts them in a very tricky political position because they will be asked to depart from case law and make all sorts of policy decisions. That is slightly ironic when a lot of the political discussions over the past few years have been to save judges from stepping into the political arena.

I very much agree with Sir Richard that the outcome of the Bill is to generate litigation, because the vast majority of the laws that come out of it will be secondary laws, which are susceptible to challenge. One will be arguing, for example in relation to clause 15, whether the similar objectives were being met by regulations that replaced the earlier retained EU law, and whether that has been met by the new rules. That is an incredibly difficult task, and one that could end up in lots of litigation. I think that we will end up with a lot more cases on those sorts of issues.

Sir Richard Aikens:

I agree with what Jack said. As I read clause 7(7), the factors that the court must have regard to are not exclusive. In other words, they can have regard to other factors as well, which Parliament has not identified and has left to the judges to decide whether they might be relevant. So I would like to make two points. First, this is not exclusive, and it may well be that, in future cases, appeal courts will introduce other factors, maybe on a case-by-case basis, which are only relevant to that particular case, but there may be a development of more general factors, which, once you get that at a Court of Appeal or above level, will then tend to be repeated thereafter.

The second point, as has been made by both my colleagues already, is that EU case law necessarily involves a consideration of the way that the Court of Justice of the European Union looks at regulations and its previous case law. In my view, the CJEU is a much more active court in terms of both interpretation of EU instruments, to use the phrase that is in the Bill, and its previous case law. It tends to develop principles derived from both instruments and case law in a rather more positive way than the UK courts do. I can only speak for the English courts, of course.

The problem, therefore, that the judges are going to have to deal with is: do they carry on with that approach, as in the case law of the EU, or do they somehow retreat from that? Although they have got these factors here that are laid out, they do not really deal with that aspect at all. That, again, puts the judges in a difficult position, because they have not got the guidance from Parliament. They have got this body of law—the acquis of the retained EU case law—but do not really know quite how to push it on, or not push it on. I think it will make life quite difficult for the judges.

Jack Williams:

As a footnote to that, on the Court of Appeal for the reference procedure, the Court will not even have decided facts, so it is quite ironic that what is being imported with the national reference procedure is like the preliminary reference procedure under EU law at the moment where you ask a court a legal question—an abstract legal question here—on whether to depart from retained case law. And yet, very unlike common law reasoning, one would not actually have a judgment from below with a factual position working out how the case law is applying to a certain set of facts, so it is even harder for the judges, because you are asking them a pure abstract question: should we depart as a matter of law from that EU case law without understanding the full factual matrix? That is very unlike common law reasoning where you incrementally grow and apply to the facts.

Photo of Gary Streeter Gary Streeter Ceidwadwyr, South West Devon

Order. I have three colleagues bursting to get in and we have only about seven minutes left, so short answers to short questions, please.

Barney Reynolds:

In short, I am not suggesting we follow another country. The court interpretation provision is unprecedented. Abu Dhabi created something from scratch. It was not a transition from what they have got, which was based on the French-Egyptian model, to the common law model. We should do our own thing that works for the UK, and using our methods. I agree with that.

I agree with my colleagues on the uncertainties that can potentially arise. As a lawyer, I think we need to be very careful about those. I am concerned with them. My solution is to expand clause 7 and the list of things that should be borne in mind in order to execute an adroit shift to our common law method in a way that does not involve interpretation too much. I do not think you can remove the necessity for judges to exercise interpretative powers to execute the shift. Ultimately, this shift involves trusting the judiciary, which I do. I am fine doing that, and I do not think that there is a shortcut or a way in which we can box people in so they cannot use any discretion and nevertheless get to the same place. We have to trust people to do it.

Photo of David Jones David Jones Ceidwadwyr, Gorllewin Clwyd

I will ask you about the principle of the supremacy of EU retained law, on which we had some conflicting evidence this morning. As you know, the Bill abolishes that principle. Do you think that it is a good thing that it does so, or are there any dangers inherent in thatQ ?

Sir Richard Aikens:

You start from the fact that supremacy no longer exists unless it is retained by UK law. Half speaking as a lawyer, but I suppose half speaking as a commentator, I do not myself see why there should be any part of our UK law that is regarded as more supreme than another, unless specifically identified by Parliament as being necessary for some reason. In many other countries, there is the principle of the constitution, which is inevitably supreme and cannot be crossed; we do not have that and have never had that in our law, except perhaps in very specific circumstances.

In general, therefore, I would say that the whole idea of supremacy should be done away with, unless there is some specific reason in specific areas of law why it is necessary to retain it. For my part, I cannot think of anything that immediately comes to mind that is not already dealt with in our law—I am thinking in particular of human rights.

Photo of Alex Sobel Alex Sobel Shadow Minister (Environment, Food and Rural Affairs)

My question follows on from what Jack was talking about earlier: the lack of parliamentary scrutiny and how it will be up to Ministers to make decisions on what we now understand might be as many as 3,500 individual pieces of EU legislation. Jack, what would you deem to be an appropriate level of scrutiny? The negative procedure for statutory instruments really means no parliamentary scrutiny at all—I think Stella mentioned that 1979 was the last time we managed to overturn one of those in the House. What would be an appropriate way, considering the number and importance of some of the regulationsQ ?

Jack Williams:

I would start by not necessarily having what George Peretz KC calls the gun to your head, so that by the end you do not have time to scrutinise, because if you did take the time to scrutinise it, you might be left with the choice on the last day of what is there or nothing at all. That is obviously a difficult position for Parliament to be put into, having to save its own law somehow without a set procedure.

A direct answer to your question, however, is more scrutiny from Committees. One can imagine, for example, a Committee that was set up specifically to analyse all the changes that are coming to certain practice areas, with consultation and independent experts assisting—much like this Committee format. There is also the legislative reform order super-affirmative procedure, which builds and bakes in consultation and I think extra time in the process—the downside is exactly that last point, which is that it leads to delay. If you have a cliff edge of 2023, it is not particularly suitable, but it might give some ideas for inspiration. It is under a 2006 Act, but I think it has been used fewer than 50 times, precisely because it takes so much time and involves so much scrutiny—but if you are looking for an example.

Photo of Marcus Fysh Marcus Fysh Ceidwadwyr, Yeovil

Quickly, I wondered whether there were any alternatives in legislation—through evolution of the Interpretation Act 1978, for example—that could be used in addition to or other than reworking clause 7(3) to achieve more certaintyQ .

Barney Reynolds:

Yes, I think we should look at reinstating the Interpretation Act 1978, which spells out the UK method of interpretation. That would mean all lawyers could understand what existing EU provisions will mean on the basis of the words on the page, with very limited delving beyond that, and would probably lead to greater certainty than trying to move slowly from one to the other, case by case.

Photo of Gary Streeter Gary Streeter Ceidwadwyr, South West Devon

Thank you. I am afraid our time has run out, and we are under strict time limits. I thank all three of you for your expert evidence. It has been very helpful for the Committee.