Retained EU law (or "assimilated law"): New rules on interpretation and new reference procedures from 1 October

The remaining provisions of the Retained EU Law (Revocation and Reform) Act 2023 ("REUL Act") will be brought into force on 1 October 2024 and will transform the tests the higher courts apply when considering whether to depart from CJEU case law pre-dating the end of the Brexit transition period on 31 December 2020 (so-called "assimilated EU case law"), or their own domestic case law relating to questions of EU law from the same period ("assimilated domestic case law").

There will also be new procedures allowing points of law arising from assimilated case law to be referred to the higher courts for a decision, and new powers for the Attorney General to intervene in proceedings where the court is considering whether to depart from assimilated case law.

The explanatory notes to the REUL Act made it clear that the intention behind these provisions was to provide the courts with greater freedom to develop case law "in ways that are not unduly constrained by the continuing influence of previous EU case law", and to facilitate domestic courts departing from such case law.

We will need to wait until the new provisions come into force to see exactly how they affect the higher courts' willingness to depart from assimilated case law. However, the new provisions are likely to lead to an increase in legal challenges against previously accepted interpretations and, given the continued influence of EU-derived law on various aspects of UK law, may cause significant uncertainty.

As the new provisions take effect, businesses may wish to consider how they continue to be affected by EU-derived law and whether there may be new scope to challenge unfavourable interpretations, as well as keeping an eye out for developments in interpretation that may affect them.

Background

At the end of the Brexit transition period, to avoid a cliff edge in terms of legal certainty, the vast majority of EU law which had applied in the UK was imported into domestic law as "retained EU law" under the European Union (Withdrawal) Act 2018 (the "Withdrawal Act"). The effect was that, although the UK was technically and formally no longer part of the EU or subject to EU law, large swathes of EU law continued to apply to the UK, subject to amendments made to facilitate the operation of such law in a purely domestic context.

In interpreting retained EU law, the Withdrawal Act provided that CJEU decisions post-dating the end of the transition period were not binding on UK courts. CJEU decisions pre-dating the end of the transition period (then known as "retained EU case law") were binding, save that the higher courts (principally the Supreme Court and Court of Appeal) were given express powers to depart from them.

In deciding whether to depart from retained EU case law, the higher courts were to apply the same test that the Supreme Court uses when considering whether to depart from its own previous case law, namely “whether it appears right to do so”. Although this appears very wide, in practice the Supreme Court has exercised the power only sparingly, and to date the higher courts have generally also shown restraint in deciding whether to depart from retained EU case law.

Most of the provisions of the REUL Act came into force on 1 January 2024. These made various changes to the treatment of retained EU law in domestic law, including a change of terminology so that "retained EU law" became known as "assimilated law", "retained EU case law" became "assimilated EU case law", and so forth. More substantively, the REUL Act revoked the principle of the supremacy of EU law and the general principles of EU law, which had previously continued to apply in interpreting retained EU law under the Withdrawal Act. But the main provisions relating to the interpretation of retained EU law and the new reference procedures will only apply from 1 October.

The provisions coming into force on 1 October

Departing from retained case law

The REUL Act amends the Withdrawal Act to set out a new test for the higher courts to apply in deciding whether or not to depart from retained EU case law (or assimilated EU case law). From 1 October, the higher court must (among other things) have regard to:

• the fact that decisions of a foreign court are not (unless otherwise provided) binding;
• any changes of circumstances which are relevant to the assimilated EU case law;
• the extent to which the assimilated EU case law restricts the proper development of domestic law.

A similar test is introduced for a higher court considering whether to depart from its own assimilated domestic case law. Instead of the first factor listed above, the court must have regard to the extent to which the case law is "determined or influenced by assimilated EU case law from which the court has departed or would depart". The second and third factors are identical.

New reference procedures and interventions

The REUL Act also introduces various new provisions into the Withdrawal Act which allow points of law arising from assimilated case law to be referred to the higher courts, or for law officers to intervene in proceedings where a higher court is considering whether to depart from assimilated case law.

First, a lower court will be able to refer a point of law to a higher court if the lower court is bound by retained case law and it considers that the point of law is of general public importance. The reference can be made of the court's own motion or on an application by a party to the proceedings. The higher court will then decide the point of law, and the lower court must apply the decision to the proceedings.

Second, if no reference is made during proceedings, and there has been no appeal to a higher court, a law officer (including the Attorney General) will be able to make a reference within six months. A decision made on such a reference would not affect the outcome of the proceedings, but would be binding in future cases in the same way as any other higher court decision.

Third, there will be a new right for law officers to intervene in proceedings where a higher court is considering any argument that it should depart from assimilated case law.

Note: The government has now revoked the commencement regulations that would have brought these provisions into force, which means that they will no longer come into force on 1 October 2024. It is not clear whether the government intends to bring these provisions into force at some point in future. (The recovation regulations, SI 2024/976, were made on 17 September 2024, but appear only to have been published on legislation.gov.uk on 26 September.)