On 22 September 2022, the UK government introduced the Retained EU Law (Revocation and Reform) Bill 2022 (the ‘Bill’) to Parliament. The Bill provides a mechanism to remove EU law currently on the national statute book and transition towards only domestically enacted legislation. A revised Bill was published on 29 November 2022 following its first debate in parliament and scrutiny by the Public Bar Committee. If current timelines are maintained, it is anticipated that the Bill would be passed in April or May 2023.
In order to maintain legal certainty following the UK’s decision to leave the EU, at the end of the Transition Period, the European Union (Withdrawal) Act 2018 (‘EUWA’) incorporated most EU law that was applicable in the UK on 31 December 2020 into the UK’s legal system. This created a new category of domestic law, retained EU law (‘REUL’), that has a unique status in UK law and possesses many of the special features of EU law, such as supremacy over domestic legislation.
REUL consists of:
i. EU-derived domestic legislation (typically primary or secondary (subordinate) UK legislation that implemented EU law, such as directives);
ii. Retained direct EU legislation (EU regulations, decisions and tertiary legislation that had direct application in UK law without the need for a UK implementing instrument); and
iii. directly effective rights, powers, liabilities, obligations, restrictions, remedies and procedures.
Retained general principles of EU law and retained EU and UK case law apply to the interpretation of REUL.
According to the Explanatory Notes to the Bill, the REUL framework was not intended to last indefinitely and the Bill is the government’s long-term solution.
So why has it been coined a “Brexit Bonfire” by some in the media? The Bill proposes to allow all REUL to expire on 31 December 2023 unless it is deliberately assimilated into UK law or extended by ministerial exception. And there is plenty of fuel for the fire! On the government’s count there are at least 2,400 pieces of REUL (across 300 policy areas and 21 sectors) but other sources report it to be closer to 4,000.
- Sunsetting – The Bill’s key proposal is that the majority of REUL (EU-derived subordinate legislation and retained direct EU legislation) will be revoked (i.e., ‘sunset’) on 31 December 2023 unless action is taken otherwise. Such action includes that:
i. ministers can protect a measure from sunsetting if regulations are made to that effect;
ii. ministers can restate REUL and they may do so in order to resolve ambiguities or remove doubt around its meaning; and
iii. ministers can delay the sunset until 23 June 2026.
All retained EU rights will also be revoked at the end of 2023 with no possibility of extending this deadline.
- Assimilated Law – Any REUL which is kept on the UK statute book (i.e., not sunset) will be renamed ‘assimilated law’. This is intended to reflect that special features of EU law, including that EU law has supremacy over domestic law, and general principles of EU law, such as the principle of consistent interpretation, will not apply to assimilated law. Again, there are exceptions to the default position. A minister would have the power to make a regulation to restate the supremacy of a specified piece or provision of assimilated law and general EU principles can be reinstated.
- Replace, Revoke, Restate, Update – UK ministers and the devolved administrations may replace, revoke or restate retained subordinate legislation and retained primary legislation the text of which was inserted by subordinate legislation until 23 June 2026, including legislation assimilated at the end of 2023. This power would be used to preserve the effect of the current law but remove legislation from the category of REUL. This does mean that, for example, a Scottish minister could decide to replace or restate a provision of EU law that their counterpart in Westminster has decided to revoke, subject to the constraints in the UK Internal Market Act 2020, which requires mutual recognition throughout the UK of goods and services placed on the market in the UK. It is a condition of the power that the replacement law may not increase regulatory burdens. In addition, UK ministers and the devolved administrations may later amend ‘secondary REUL’ and regulations made under the powers to replace, revoke or restate on account of changes in technology or developments in scientific understanding. The Bill proposes powers to modify RDEUL in the same way that domestic secondary legislation can be amended, i.e., without full parliamentary scrutiny.
- The Role of Courts – Presently, courts in the UK are bound to apply CJEU case law that was handed down on or before 31 December 2020. The Bill would revoke that position allowing domestic courts to depart from EU case law (although judges will be free to regard EU case law as persuasive or instructive). In addition, the Bill gives lower courts and law officers in England and the devolved administrations the power to refer cases to higher courts so as to invite them to depart from retained EU case law. The court must accept the reference if it considers the point of law referred to be of general public importance. The Bill also allows law officers to intervene in court proceedings where retained EU law is at issue. There are concerns that this could increase costs and uncertainty, especially as references can be made up to six months after the proceedings ending in the case.
- Compatibility/Supremacy – The Bill allows for the re-organisation of hierarchies. Following the repeal of the principle of supremacy of EU law, retained direct EU legislation (‘RDEUL’) will be interpreted subject to domestic legislation (subject to specific provisions regarding data protection legislation). However, until 23 June 2026, ministers may arrange the hierarchy of specific pieces of domestic legislation and RDEUL (including RDEUL assimilated after 2023). In addition, the Bill requires a court to make an incompatibility order where it considers there to be a conflict between assimilated law and domestic law.
How has the Bill fared in Parliament?
The Bill was debated at its second reading on 25 October 2022 after which it was sent to a Public Bill Committee, where each clause was scrutinised. The committee stage ended on 29 November when an amended version of the Bill was published. However, the amended Bill is not substantively different to the original version, except it clarifies that, inter alia:
- while restatements of REUL are not covered by the principle of supremacy, or other EU general principles, restatements may, if considered appropriate, produce an equivalent effect; and
- the power to restate or reproduce REUL does not permit a minister to codify or reproduce the principle of supremacy itself, or any other EU general principle.
The Bill’s impact assessment was unfavourably received by the Regulatory Policy Committee (‘RPC’). In its opinion, the RPC found that the impact assessment is not fit for purpose (i.e., ‘red-rated’) because the quality of its different analytical areas were all either weak or very weak, meaning they provide inadequate support for decision-making. The RPC also red-rated the assessment of the impact of the Bill on small and micro businesses. Notably, the opinion points out that no impacts for changes to individual pieces of REUL have been assessed. It asked the Department for Business, Energy & Industrial Strategy to commit to assessing the impact of changed and sunset legislation so that it can be properly scrutinised.
Given the extent to which the life sciences sector, and many critical sectors in the UK, are regulated by REUL, it goes without saying that any divergence between UK and EU law will cause concern over costs and cross-border supply chains.
The Bill anticipates and encourages divergence. However, this is a green light for divergence rather than an order to diverge. In an ideal word each piece of REUL would be carefully considered by the relevant government department and revoked or amended in line with the UK’s best interests. However, that is not the principle that has been applied – any REUL not specifically addressed before 31 December 2023 will automatically fall away – and the critical issue is time. There are significant concerns that government departments simply do not have the time or resources to consider the implication of the Bill on their sector appropriately, or indeed to liaise with other government departments or agencies in areas where there may be overlap.
Several government departments demanded a three-year delay to the “bonfire”. However, on 30 November the Prime Minister strongly rebutted any suggestion of a delay to the 31 December 2023 sunset clause. This means ministers only have until the end of next year to complete their review of all REUL. A rushed exercise risks losing pieces of legislation or principles that have been ingrained in UK law for over 40 years, which could result in lacunas in the law and unanticipated and unintended consequences.
What comes next?
The Bill is due to have its report stage and third reading on a date to be announced. At that point, the amended Bill will be debated and further amendments can be proposed.
Should you wish to follow its progress, the Cabinet Office has established a Retained EU Law – Public Dashboard which provides a comprehensive catalogue of remaining REUL. The government says the dashboard will be updated on a quarterly basis as REUL is repealed or replaced, and the purpose of the dashboard purportedly being to empower the public to scrutinise EU-derived law that remains on the UK statute book and hold the government to account.