The Government has published draft legislation extending the ability to diverge from retained EU case law to the Court of Appeal and other courts at the same level (in addition to the Supreme Court). It had also been considering allowing the High Court and other courts at the same level to diverge, but this option is not being pursued. How significant is this change likely to be in practice?
What is the current position?
As things stand at present, retained EU case law (i.e. EU case law which predates the end of the transition period) will have the same status as a judgment of the Supreme Court. Had the Government made no changes, divergence from retained EU case law would have been a relatively slow process, since only the Supreme Court could have decided to diverge where there was already a judgment of the Court of Justice of the European Union (CJEU) on the same matter.
This is not to say that no divergence at all would have been possible – indeed, in relation to issues where the CJEU had not issued a ruling prior to the end of the transition period, UK courts at any level would be free to reach their own conclusions on the correct interpretation of retained EU legislation from next year. However, as regards issues on which the CJEU had already expressed a view, change could only have come from the Supreme Court.
What will be the impact of allowing the Court of Appeal to diverge?
Allowing the Court of Appeal to diverge may result in change occurring somewhat more quickly in certain areas – although that change will normally still require at least one appeal beyond courts at the level of the High Court (which inevitably slows the process). For certain businesses, the potential to use litigation to achieve a shift away from the approach set out in certain CJEU case law may prove valuable. However, as we said in our earlier briefing on the Government's consultation on this matter, the courts' readiness to decide in favour of divergence may be constrained by a number of factors, including concerns that:
- in some cases, divergence will raise issues which are more appropriate for Parliament to decide (which would also allow for a process of wider public consultation and debate); and
- some parties may raise arguments relating to divergence for essentially tactical reasons, which may prompt the courts to set the bar for raising such arguments in the first place at a relatively high level.
These factors may mean that the impact of the change in driving divergence could prove to be more limited than the Government appears to be hoping for. Indeed, as regards the first bullet, it is worth noting that elsewhere the Government has expressed concern that courts are involving themselves to an excessive degree in matters which in its view are for politicians to decide, prompting it to initiate an inquiry into the use of judicial review. That said, more generally, the change will add to the degree of uncertainty currently facing businesses – which is already well above normal levels because of both Brexit and the COVID-19 crisis.
What will be the test for divergence?
The test that the Court of Appeal will be expected to apply is the same as that applied by the Supreme Court when deciding whether to depart from its own case law, namely "whether it appears right to do so." No further criteria or guidance are proposed.
Why isn't the Government proposing to allow the High Court to diverge?
The Government decided against extending the right to diverge to the High Court (and courts at the same level) because it accepted the views of the majority of consultees that such a move would have undermined legal certainty to a far greater extent. The Government did not, however, accept consultees' views on the Court of Appeal option, where the majority also took the view that the adverse impact on legal certainty outweighed any of the suggested advantages of allowing greater scope for divergence. Read the Government's full response to the consultation.
What happens next?
The draft legislation (in the form of a statutory instrument) will need to be approved by both Houses of Parliament. However, given the Government's significant majority, it is expected to become law and come into effect at the end of the transition period.
