Risk & Economy » Brexit » Diverging legal interpretation has potential for ‘unwelcome uncertainty’ post-Brexit

The UK government’s position paper on enforcement and dispute resolution, released earlier this week, sets out a proposal for the future partnership between the UK courts and the Court of Justice of the European Union (CJEU).

The UK has committed to ending the “direct jurisdiction” of the CJEU, fuelling suggestions that the government has had to roll back on previous assertions that post-Brexit the UK would be outside of CJEU authority, both directly and indirectly.

In the proposal, the government said that ending the CJEU’s direct jurisdiction would “not weaken the rights of individuals, nor call into question the UK’s commitment to complying with its obligations under international agreements”. With regard to dispute resolution, the paper outlined that under international agreements, one party could not have direct jurisdiction over the other in order to resolve disputes, as having such an arrangement would be “incompatible with the principle of having a fair and neutral means of resolving disputes”.

Therefore, the government proposed a number of approaches to resolve any disputes that may arise.

One approach would involve the establishment of a joint committee, the function of which can be extended to monitoring “proper functioning” of an agreement as well as overseeing dispute matters. The committee would be comprised of representatives from both parties. In addition to the joint committee, arbitration models could be implemented. The government said that the use of arbitration panels to resolve trade disputes showed that “such a model can provide important reassurance to businesses and industry”.

The proposal also set out options for provisions relating to reporting and monitoring requirements, and the interpretation of pre and post-CJEU decisions.

The government stressed that in order to avoid a cliff edge scenario, “both the UK and EU would benefit from an interim period”, which would be “necessary for the smooth and orderly implementation of new arrangement”. There has been no indication yet of for how long this interim period would last.

But, what does this mean for the future influence of the CJEU on UK law?

Stuart Pickford, partner at Mayer Brown, said: “The question of what influence the Court of Justice of the European Union will have in relation to the UK post-Brexit comes in many guises.

“The government paper published on 23 August 2017 sets out various approaches that might be taken to the enforcement of any future international agreements between the UK and the EU. But away from the lofty heights of international law, there is also the practical matter of what influence the Court of Justice will have over questions before English courts post-Brexit.

“To avoid an immediate cliff edge impact on our legal landscape, the government’s plan is that EU law which currently has direct effect in the UK will be reproduced into our domestic law.  Existing EU case law, as it stands immediately before Brexit, will also continue to be followed in the UK where relevant.

“But what will be the impact of future Court of Justice decisions? The government’s answer is that judges are not required to have regard to its future decisions but they may do so if they consider it appropriate.”

He added: “If EU law is interpreted in a particular way in Luxembourg post-Brexit, we do not know whether the same view will be taken when the equivalent domestic law comes to be interpreted by our courts.  Although there are likely to be good arguments for consistency, the potential for diverging interpretations creates unwelcome uncertainty for clients and professional advisers alike.  The judiciary has called for guidance on the approach it should take. It is hoped that the government will answer that call.”

 

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