Source: https://policyexchange.org.uk/news/policy-exchanges-judicial-power-project-responds-to-government-paper-on-european-court-of-justice-post-brexit/
Timestamp: 2019-04-23 17:00:56+00:00

Document:
The European Commission has been demanding that the European Court of Justice (ECJ) at Luxembourg should continue to operate as the final arbiter settling any disputes involving the rights of EU citizens in the UK or other issues under a future EU-UK exit and trade deal. In its position paper on dispute resolution after Brexit, the Government firmly rules out such “direct” jurisdiction on the grounds that it would be contrary to international practice The Government’s position on this issue is both principled and entirely correct in international law.
The Government is right to reject direct continued ECJ jurisdiction not only because it would be anomalous but also because the ECJ is a fundamentally political court. The famous maxim that “The law is what the judge says it is” has nowhere been better understood than in Luxembourg. The ECJ is not, and never has been, an impartial arbiter in disputes affecting the respective powers of the EU and its member states. Nor is it a conventional court: it adopts an ultra-flexible and purposive approach which allows the ECJ to reach almost any conclusion it desires.
Since the early 1960s the ECJ has established key principles of EU law (e.g. the principles of supremacy, of useful effect, or of the uniform application of EU law) which have influenced the direction of its case law over the past fifty years. As a result, the ECJ’s judicial activism has driven EU integration well beyond the natural meaning of EU Treaty provisions. In the 2016 Brexit referendum, the British public rejected this anti-democratic vision of EU integration through the judicial backdoor.
The Government’s firm rejection of direct ECJ jurisdiction poses the question of whether indirect ECJ jurisdiction would be any better. The Government paper is not entirely clear on this position but sets out a range of options which effectively fall into three categories.
First, non-judicial dispute settlement mechanisms which rely on diplomatic and political negotiation rather than legal enforcement. Such mechanisms should be part of any Brexit deal but will likely need to be combined with arbitration or a judicial mechanism to provide certainty to businesses and individuals.
Arbitration is widely used in many international trade and other treaties, and involves decision-making by a panel of one arbitrator appointed by each side and a neutral chairman. Arbitration is neutral and balanced between the parties. It could and should be combined with a system whereby litigants first seek redress in the domestic courts and resort to the EU-UK arbitration body only on an appeal or reference basis. Arbitration should clearly be the UK’s preferred option. It is impartial, flexible and independent.
The final option, reliance on the existing structures of the so-called Efta court, is less straightforward and potentially dangerous. The Efta court settles disputes which arise under the EEA (European Economic Area) Agreement which extends EU single market access to Liechtenstein, Norway and Iceland (though not Switzerland) which are not EU members.
The Efta court is formally separate from and its judges are not drawn from the ECJ. However, the Efta court is not independent. The three non-EU members of the EEA have to apply the rules of the EU internal market and the EEA Agreement commits the EFTA court to extend and enforce relevant EU rules and their interpretation by the ECJ to the non-EU part of the EEA. It is not objectionable because it makes law, but because it takes it from the ECJ.
EEA and Efta court membership would lock the UK into continued albeit indirect ECJ jurisdiction which would be materially very similar to direct ECJ jurisdiction. Fortunately, this does not quite appear to be what the Government has in mind. The position paper talks about the need for a custom-made solution and the need for flexibility.
In relation to the Efta court the Government appears to suggest that the UK could join the Efta court but not the EEA. In this case the Efta court would be asked to enforce the provisions of the EU-UK agreement(s). Impractical as this proposition might seem for various reasons, it is not per se objectionable. However, the Government would have to ensure that any particular formation of the Efta court dealing with the Brexit arrangements would be balanced in composition and independent. The court should be free to look at ECJ case law relevant to the EU-UK agreement but it must not be obliged slavishly to follow it. The Efta court in its current format does not meet that test – it would require substantial modifications and categorical safeguards concerning judicial independence.
Finally, the Government paper talks about the possibility of post-Brexit voluntary references to the ECJ. This would be a dangerous route to take, just as any suggestion that the UK would or could be bound by post-Brexit ECJ case law on a mandatory basis.
The Government has categorically rejected post-Brexit direct submission to the ECJ. The paper goes some way to accepting that indirect ECJ jurisdiction would be equally unacceptable if, in its results, it would still lock the UK into the self-propelling automatism of ever closer EU integration through the judicial backdoor.
Any option the Government might put on the table during the Brexit negotiations should be evaluated strictly against the standard of judicial independence. Arbitration would meet the standard; the Efta court would have to undergo important modifications before it too could be called truly independent.
A key question in the Brexit talks is how any deal between the EU and UK will be upheld. The government has begun to address this today, publishing a paper on enforcement and dispute resolution. One thing is clear: ministers are committed to extricating the UK from the jurisdiction of the European Court of Justice (ECJ). In fact, the main point of the paper could be summed up as spelling out why Britain cannot agree to the ECJ being the arbiter of any Brexit deal.
The government is entirely right about this. Sovereign states do not and should not enter into agreements in which the meaning and effect of the agreement is settled by the courts of the other party. The reason is obvious: one party would be at the mercy of the other. What’s more, the ECJ is no neutral arbiter, and its record is hardly one of dispassionate law application. The court has a political agenda and has demonstrated a systematic bias in favour of deeper European integration. For the UK to agree to be bound by the ECJ’s interpretation of the terms it agrees with the EU would be madness.
Understandably, given that the UK is seeking a ‘deep and special’ partnership with the EU, the paper published today is too polite to dwell on the court’s peculiarities. However, it does note that when the EU reaches agreements with other non-member states, disputes about those agreements are not settled by the ECJ.
Instead a range of enforcement and adjudication options are available. The paper outlines these – drawing from past EU agreements with other non-member states and from international agreements (especially free trade deals). The point here seems to be to persuade Brussels that the EU’s own practice is more open and flexible than it first appears.
If the UK’s eventual agreement with the EU is intended to give rise to rights and obligations for individuals and businesses in the UK then it will need to be implemented by domestic legislation. The agreement will bind the UK and EU in international law, but under our constitution it will not change domestic law until Parliament enacts legislation to this effect. Parliament would be very likely to enact this legislation and it would be faithfully interpreted and applied by UK courts. This should assure individuals and businesses that their rights under any Brexit agreement will be upheld.
In the event of subsequent disputes between the UK and EU about how the agreement is interpreted or applied, the paper considers a range of options. One is political or diplomatic dialogue, mediated by a joint committee. This is an option often adopted in relation to justice and security matters. Another is arbitration: a common feature of many free trade arrangements. And there are various options also put forward for monitoring, reporting and supervision.
Another option – widely discussed in the press – is a possible role for the EFTA court. Today’s paper does touch on the EFTA court but does not discuss it in great detail and certainly does not propose it as the obvious solution. This is perhaps no surprise given the practical difficulties with relying on the EFTA court, which is formally independent of the ECJ but largely follows that court’s case law. The suitability of the EFTA court might turn on what the UK-EU agreement ends up involving. If the agreement replicates concepts in EU law then there would be a strong risk that the court would simply track the ECJ’s rulings. But if the agreement made clear that it was free-standing, and was not simply an agreement to follow future EU law as it developed over time, then the EFTA court might prove an honest broker, fairly upholding the agreement.
The paper clearly leaves many questions unanswered. But by outlining this range of alternatives, it begins to sketch a relationship between the UK and EU similar in kind to other international agreements between sovereign states rather than the subjection of one state to another legal order.
The UK cannot reasonably agree to the ECJ interpreting and enforcing the agreement and today’s paper is right to reject the court’s continuing jurisdiction in Britain. The government has not ruled out agreeing to follow EU law in part. But the clear implication is that in the government’s view the implementation of any agreement will be a matter first and foremost for the UK authorities, subject to familiar remedies in international law – but not to the authority of the EU’s own courts, from whose jurisdiction the UK will have departed.
The Brexit papers published by the government this week have produced a predictable flurry in the press. But the headline point is that it is too early for the most purist Brexiteers to cry betrayal. On the contrary, the papers show the government engaging well with rather technical legal issues. Almost everything now depends on what can now be agreed between the UK and the EU27.
Yesterday’s paper, “Enforcement and dispute resolution”, is primarily concerned with disputes that might arise over the interpretation and implementation of the “Withdrawal Agreement”. This agreement, which still seems a long way off, is likely, for instance, to impose many obligations – including, perhaps, financial – upon the UK and also to oblige the UK to extend rights to certain EU citizens to remain in the UK after exit day. Obviously disputes could arise – in fact they are likely to arise – between the UK and the EU27 over the interpretation and implementation of the agreement. How are such disputes to be resolved?
The sticking point is whether the Court of Justice of the EU (CJEU) is to have any role. The UK’s view is that the Withdrawal Agreement is an international instrument binding in international law and the CJEU should have nothing to do with disputes over it.
As the government paper explains, the EU takes the view “there are limitations, under EU law, as to the extent to which the EU can be bound by an international judicial body other than the CJEU. Where an international agreement concluded by the EU contains provisions which are in substance identical to EU law, the CJEU has taken the view that no separate body should be given jurisdiction to give definitive interpretations of those provisions.” And since the Withdrawal Agreement is likely to contain provisions identical to EU law (for instance, in securing the rights of EU citizens) the CJEU should have jurisdiction over such matters.
The EU stance is surely overly bold. Even if the CJEU was not prone to pursue a political agenda in support of European integration, it could hardly be expected that a party to an international agreement would accept the court of one of the other parties as the arbiter of any disputes that might arise.
So the government paper addresses a range of alternative means of dispute resolution. And this is the paper’s chief virtue; it sets out the alternatives with clarity and with useful analysis of precedents (giving examples where the EU seems to have departed from the stance set out above). Some of these alternatives (such as the use of joint committees) – used to resolve disputes in international law – are relatively informal and non-judicial. It is unlikely that a non-judicial approach would be used for the Withdrawal Agreement when the rights of individual would be at stake.
Other approaches are somewhat controversial, for instance, the making of a voluntary reference of a disputed point of law to the CJEU for decision. Although only a voluntary reference – so there is no question of the ruling taking effect in the UK without the consent in advance of the UK. This will doubtless prove too much for the more ardent Brexiteer.
What could be an attractive solution would be arbitration in which arbitrators are appointed by each side and with an impartial chair. Though eminently fair to both sides, this might still involve the EU accepting that a question of EU law was being decided by anyone other than the CJEU.
If diplomacy is the art of building golden bridges over which your adversary may retreat, this paper sets out several bridges over which the EU may retreat to escape from its excessively bullish attitude towards the supremacy of the CJEU.
Whether the EU will take one of these bridges remains to be seen. But this paper simply lists and describes options; there is neither betrayal of Brexit nor surrender to the CJEU here.
The government’s other legal position paper published this week, “Providing a cross-border civil judicial cooperation framework”, deals with a different issue: the private international law consequences of Brexit.
Cross-border movement of persons and goods and capital will obviously continue after Brexit and will continue to generate cross border disputes. Suppose A, an English resident, buys a magnum of champagne from B, a French wine merchant. The wine turns out to be sour. Does French or English law govern their contract? Can A sue B in England? If A obtains a judgement against B in England can he enforce it against B in France?
Today these questions are in large measure (but not exclusively) governed by a range of EU regulations (subject to interpretation by the CJEU). How will these questions be answered in the future? In this paper, the UK states that it will “need to negotiate and agree a new civil judicial cooperation framework”.
But, significantly, the UK sets out in Annex A to the paper what its position would be in the event of no agreement on the new framework being reached. Broadly speaking, the UK plans to preserve the content of the existing EU regulations up to and including the withdrawal date. It is in the common interest of both the UK and the EU that the new framework agreement be agreed. But there can be no question of the CJEU exercising jurisdiction.
Discussions of both the papers are infused with a certain arrogance in the EU’s stance, which amounts to insisting that the CJEU should determine all questions of EU law. If negotiations on these issues are to make progress, the EU must accept that while EU citizens resident in the UK may have rights against the UK similar to EU rights, these are in fact rights in UK law enforceable before UK courts.
When the EU treaties expire, the UK will no longer be subject to EU law or to the continuing jurisdiction of the European Court of Justice (ECJ).
However, the UK is negotiating a “new, deep and special partnership with the EU” and some, including the European Commission, have proposed that the ECJ should enforce the terms of any future UK-EU agreement.
Yesterday’s position paper on enforcement and dispute resolution makes clear that the Government will not accept this proposal or any other arrangement that sees the UK remain subject to ECJ jurisdiction. For some commentators, this is the height of folly. Not so.
The Government is entirely right to refuse to accept the ECJ settling the meaning and application of any post-Brexit agreement. The ECJ is the EU’s court. In disputes between EU and UK it would obviously be biased in favour of the EU.
As the Government notes, for an agreement to be authoritatively interpreted by the courts of one party only would be contrary to almost universal international practice.
The ECJ’s performance in adjudicating disputes involving conflicts of interest between member states and EU is not an encouraging precedent. It is not an impartial arbiter but aims to promote European integration and, while often politically astute, it is not disciplined by legal materials in the way that a court ought to be.
This means that member states are vulnerable to having legal obligations foisted on them by judicial lawmaking, obligations that they did not agree to adopt and which are enforced, by the ECJ and Commission, in a manner that is difficult to resist.
Many of the key elements of the European legal order have been invented in this way. British lawyers and judges, amongst others, have long expressed dissatisfaction with the ECJ’s fast and loose legal technique, including in cases relating to free movement rights, migration, asylum and deportation, and citizenship.
There are very good reasons for the UK to wish to escape from the ECJ’s continuing jurisdiction, and to look askance at claims that the ECJ can be relied upon to fairly uphold any future UK-EU agreement.
What are the alternatives? Yesterday’s paper does not set out a definitive proposal for how the agreement should be upheld, save to rule out ECJ involvement, but does sketch a set of principles that should govern this question and outline a range of possible options.
The Government says that its concern is to maximise certainty, to help individuals and businesses enforce their rights, to respect the autonomy of the UK and EU legal orders, and to respect its international legal obligations. It also takes pains to distinguish the question of how the agreement is enforced from resolution of disputes about its meaning or implementation.
Rights under the agreement will come into force in UK law, the Government says, by way of domestic legislation, which will be interpreted and applied by the UK courts – no need for the ECJ here.
All this implies an intelligent underlying vision: the legal dimension of the relationship between UK and EU should more closely resemble that which holds between equal parties to other international agreements, rather than that which characterises the member states subsidiary standing in the European legal order.
It is in part this difference in perspective which makes the ECJ unsuitable in relation to for any future deal. The ECJ sees and always has seen itself as the supreme court of the European legal order (and agent of integration), not as a fair arbiter between sovereign states and the EU.
The shape that the Government’s proposals may later take is suggested by the paper’s concern to distinguish enforcement from dispute resolution, leaving enforcement largely to domestic legislation and litigation and imagining various modes of dispute resolution, including political dialogue, mediated by a joint commission, or arbitration, as well as monitoring, supervision and reporting.
The sheer variety of possibilities is itself significant. It makes clear that an agreement may be enforced in a range of different ways, with, say, arbitration making more sense for free trade terms, whereas political dialogue being a better fit for security or justice arrangements.
Arbitration may take many forms, and the Government’s paper does consider briefly whether the EFTA court might have a role in resolving disputes about the agreement. This is an underdeveloped proposal, which has attractions but real downsides too. The EFTA court is not an independent court, and is charged with extending relevant parts of EU law to members of the EEA agreement.
The court could perhaps be invited and authorised to enforce the terms of a post-Brexit deal, but unless the UK was very careful and clear its terms might be interpreted in lockstep with the ECJ.
This gives rise to a tricky question, which the Government has yet to answer: how far, if at all, will the UK agree to be bound by EU law in the future? The UK may agree to this, in relation say to financial services or some other particular domain, without agreeing to be subject to the jurisdiction of the ECJ.
Britain might commit itself to follow whatever the EU legal rules on point are, as understood by the ECJ, or the UK and EU might agree to strive for convergence, which is a two-way street and would entitle the UK to resist or protest misinterpretation.
The Government’s decision to resist continuing ECJ jurisdiction is welcome and right. Its vision for the legal shape of the UK-EU agreement is at an early stage but looks promising. There is good reason for the UK to seek a stable agreement, which the parties commit to implementing and which is supported by a range of monitoring and dispute resolution mechanisms, none of which need to amount to anything like the radical vulnerability that subjection to the ECJ involves.

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