Brexit Business Brief | What happens to EU law at the end of the transition period?

'Retained EU law': saving EU law when the transition period ends

At the moment the Brexit transition period ends, 11.00 p.m. (UK time) on 31 December 2020:

1. Existing EU law which is not already on the UK statute book will be converted into UK legislation.
2. Existing UK legislation which has been made since 1973 to implement EU obligations will be saved.
3. Some rights and powers contained in the EU Treaties will be preserved in UK law provided they are sufficiently clear, precise and unconditional to confer rights on individuals.

These three elements collectively make up a new concept in UK law: 'retained EU law'.

At the same moment, the case law of the Court of Justice of the European Union decided before the end of the transition period will acquire broadly the same status as that of the UK Supreme Court. The UK Supreme Court, and the Court of Appeal, will be able to depart from this retained EU case law when it "appears right to do so".

We're going to refer to 11.00 p.m. (UK time) on 31 December 2020 as 'IP completion day', because that is the term used by the relevant legislation. (The 'IP' refers to 'Implementation Period', which is what the UK government used to call the transition period.)

Why is retained EU law needed?

On IP completion day, the mechanism through which EU law has taken effect in the UK since 1973 - section 2 of the European Communities Act 1972 - will be repealed. This repeal would mean that, without the introduction of retained EU law:

1. EU regulations, decisions and tertiary legislation would no longer have force in the UK.
2. The authority under which UK statutory instruments have implemented EU directives would be removed.
3. Directly effective rights, powers, liabilities, restrictions, remedies and procedures contained in the EU Treaties would fall away.

Given there are several thousand EU regulations and many hundred EU directives, this would result in gaping holes in the UK statute book and in UK law. There simply wouldn't be 'the law' across many sectors.

To address this, the UK government made a policy decision early in the Brexit process to take a 'snapshot' of EU law on IP completion day and to preserve that snapshot in UK law. That snapshot, coupled with the saving of all existing UK law which implements EU obligations such as directives, is 'retained EU law'.

What is the legislation that does this?

The European Union (Withdrawal) Act 2018 (the 2018 Act), as amended by the European Union (Withdrawal Agreement) Act 2020. Both of these are complex pieces of legislation in themselves and in how they interact, and their creation of retained EU law will be a staple of law school modules for many years to come.

Is this creation of retained EU law definitely happening?

Yes. It is has no connection with the EU-UK trade negotiations. It has to happen so that the UK has a working statute book from 1 January 2021, irrespective of whether a trade deal is reached.

The correcting power

A particularly tricky aspect of retained EU law comes about as a result of the 'correcting power' contained in section 8 of the 2018 Act. This gives government ministers the power to make such regulations (i.e. statutory instruments) as they consider 'appropriate' (so a very wide power) amending any failure of retained EU law to operate effectively after IP completion day.

In one sense, this is a purely technical provision. EU regulations contain thousands of references to, for example, EU bodies and regulators, to their powers and duties, to the UK's duties to send information to EU bodies, and to required interactions between UK and EU bodies. Those references will mostly become redundant once the transition period ends, so they need to be 'corrected' to refer to, for example, 'the UK' rather than to 'the Union', or to the relevant UK regulator rather than to a EU regulator.

In short, the correcting SIs make the retained EU regulations 'work' after IP completion day.

However, as predicted when the 2018 Act was going through Parliament, it has been necessary (or the government has considered it appropriate…) for the correcting power to be used by ministers to make substantive changes to retained EU law, such as disapplying parts of some EU regulations or reflecting policy developments since the relevant regulation was passed.

These uses of the correcting power have resulted in several hundred correcting SIs being made, with many more in various stages of gestation. Some of those SIs contain hundreds of pages and amend multiple EU regulations.

The result: when looking at an EU regulation which becomes UK legislation on IP completion day, it will be essential to find the correcting SI (or SIs – there may be more than one) for that retained EU regulation.

To take an example: The EU General Data Protection Regulation (2016/679) will become UK legislation on IP completion day, and as such will become the 'UK GDPR'. It is then immediately corrected by two SIs: The Data Protection, Privacy and Electronic Communications (Amendments etc) (EU Exit) Regulations 2019 (SI 2019/419), and a 2020 SI of the same title which is not yet in force.

The status and interpretation of retained EU law – and an infographic

The creation of retained EU law throws up many questions, including its status (what 'type' of legislation is a retained EU regulation?) and its interpretation (what guide are post-IP completion day CJEU decisions to interpreting retained EU law, is pre-IP completion day CJEU case law still 'supreme'?).

The 2018 Act addresses these questions, though the interpretation of its provisions will likely provide work for the UK courts in the months and years to come. A discussion is beyond the purposes of this e-mail – the Explanatory Notes to the 2018 Act themselves run to 80 pages – but we’ve attempted a summary in our one-page infographic, ‘Retained EU law’ | What happens to EU law in the UK at the end of the Brexit transition period?'.

I’ll be talking more about retained EU law at our forthcoming In-House Lawyer Day.

The In-House Lawyer Day will cover a broad range of legal and business topics. In addition, for a regular source of Insights and Events relevant to in-house lawyers, sign up to receive our new Weekly Knowledge Collection