Retained EU law: 10 key questions

Having been a member of the EU since 1 January 1973, it's not surprising that EU law has greatly influenced the development of UK law over the past 4 decades.  If all of EU law had simply been "jettisoned" on the UK's exit from the EU, this would have left substantial gaps in the UK's legal framework, giving rise to significant uncertainty.  It would also potentially have deprived individuals and businesses of important rights derived from EU law which they reasonably expected to continue beyond Brexit.  In order to avoid this, the European Union (Withdrawal) Act 2018 created a new concept within UK law known as retained EU law. The Retained EU Law (Revocation and Reform) Act 2023 has since introduced some changes in terminology (see below) but in this briefing we continue to use the term "retained EU law".

For the purposes of this briefing, we are continuing to use "retained EU law" (and other related terms).  This is partly because it is already reasonably well known and partly because we think it is significantly easier to understand in two key respects:

• First, it makes clear the origins of the relevant law - whereas "assimilated law" fails to acknowledge the roots of the relevant law in the UK's EU membership;
  
  
• Second, it more accurately reflects what has actually happened to EU-derived law in the UK following Brexit. The vast majority of the EU-derived law that the UK retained following Brexit has not been amended in a particularly significant manner;  indeed, much of it remains exactly the same as it was before Brexit.  In our view the word "retained" reflects this state of affairs more accurately than "assimilated", which could imply that there has been a rather more significant process of transformation. 

Over time, it is likely that the term "assimilated law" will become more widely understood as referring to law which had its origins in the UK's membership of the EU.  In addition, if the UK diverges from the EU across more areas of law, the adjective "assimilated" could well become more appropriate.  However, for the time being, we think that "retained EU law" is a more accessible and straightforward way of referring to EU-derived law in the UK following Brexit.  We also note that the UK Government continues to use the term in some contexts.

Retained EU law database

The Government has set up a searchable database of retained EU law. However, bear in mind that it does not claim to be fully comprehensive and does not link directly to the full text of the relevant law, as modified by UK legislation (where applicable). If you require assistance with identifying retained EU law relevant to your business, see Section 13. 

The Northern Ireland Protocol of the Withdrawal Agreement provides that certain aspects of EU law continue to apply "to and in the United Kingdom in respect of Northern Ireland". This reflects the unusual status of Northern Ireland, which continues to benefit from free movement of goods with the EU (whereas the rest of the UK does not). 

Aside from the provisions listed in the Northern Ireland Protocol, EU law ceased to apply in the UK with effect from 11 pm U.K. time on 31 December 2020. However, as explained in Section 1 above, the concept of retained EU law means that for practical purposes, many aspects of EU law remain relevant in the UK.  Strictly speaking though, all of this retained EU law now forms part of UK law (which is now distinct from EU law and may develop in a different way in future).

The UK also remains subject to various constraints arising from its relationship with the EU by virtue of its obligations in both the Withdrawal Agreement with the EU and the UK-EU Trade and Cooperation Agreement.  However, these are derived from treaty obligations rather than UK or EU law.

Save to the limited extent provided for in the Northern Ireland Protocol (see Section 2 above), EU Directives ceased to apply in the UK with effect from 11 pm on 31 December 2020.  This in itself did not risk leaving a significant "hole" in UK law because EU Directives have to be implemented through national legislation, which meant that the UK already had measures on its own statute book in all the areas covered by EU Directives.  Furthermore, section 2 of the European Union (Withdrawal) Act 2018 expressly preserved all EU-derived domestic legislation (which includes all UK legislation implementing EU Directives). The issue for the UK Government was simply how to make the existing EU-derived domestic legislation fit for life outside the EU.  This has been achieved by using statutory instruments to make a large number of mostly technical amendments to existing legislation. Typical changes include:

• Replacing references to the European Commission with UK Ministers or UK regulators; and
  
  
• Removing reciprocity e.g. obligations that require EU or EEA persons to be treated in the same way as UK persons.

Has much UK legislation derived from Directives been repealed?

At the time of updating (March 2024), Government statistics indicated that about 450 UK measures derived from Directives had been repealed, out of over 3800 – which equates to about 12% of the total.  However, the impact of this in practice is somewhat debatable.  For example, some of the measures repealed were already effectively redundant because they had been superseded by more recent legislation (so their repeal has little or no practical consequence, other than as a legislative "tidying up" exercise).

How significant is the removal of direct effect?

At first sight, the removal of direct effect might seem quite significant (and for some specific areas, this is true).  However, the following points should be borne in mind:

• First, in some areas, such as pensions, the UK Government has legislated with a view to ensuring that, despite the removal of direct effect, UK legislation derived from certain Directives will continue to be interpreted and applied in the same way.
  
  
• Second, in relation to Directives, findings of direct effect are comparatively rare and its removal is unlikely to have an impact on the majority of UK legislation derived from Directives.
  
  

• Third, even where there was a finding of direct effect, that right was only enforceable against "emanations of the state"; it could not be relied upon in disputes between private parties.  It follows that its loss is likely to be felt primarily in scenarios where private parties would prefer Government, a public body or a regulator to act (or refrain from acting) in a particular way, based on how UK legislation implementing a Directive has been interpreted prior to 2024.

• Fourth, whilst uncertainty is rarely desirable, businesses should not assume that a change in interpretation will necessarily always be adverse to their interests; in some areas, it could result in a less stringent application of EU-derived regulation, which many businesses might welcome

That said, the REUL Act made a number of other changes which could affect the interpretation of UK legislation derived from EU Directives in more significant ways – see further the discussion of EU general principles and supremacy of EU law in section 7. 

EU Regulations include legislation such as the EU General Data Protection Regulation or GDPR, which is the key legal instrument governing the treatment of personal data in the EU (see below for more examples). As is the case with EU Directives, EU Regulations ceased to apply in the UK with effect from 11 pm on 31 December 2020, save to the limited extent provided for in the Northern Ireland Protocol (see Section 2 above). However, many EU Regulations have been brought onto the UK statute book and then amended, in much the same way as EU Directives.

In contrast to EU Directives though, EU Regulations apply automatically to all members of the EU as soon as they enter into force, without the need for transposition into national law. As a result, EU Regulations posed a bigger problem for the UK Government than Directives; for example, if the UK had done nothing, EU GDPR would have ceased to apply, leaving a significant hole in the UK's regulatory framework for personal data from the end of the Brexit transition period on 31 December 2020.

Section 3 of the European Union (Withdrawal) Act 2018 therefore brought the entire text of all relevant EU Regulations onto the UK statute book "as is". It was then a case of amending these new UK legal instruments in a manner similar to UK legislation implementing EU Directives, so as to ensure that they were fit for life outside the EU. The types of changes made are similar to those made in relation to Directives (see Section 3 above). They have largely been brought into effect using statutory instruments made before 11 pm on 31 December 2020, but which did not take effect until after that date.

Treatment of EU Regulations: further examples

Examples of other EU Regulations which have been brought across onto the UK statute book and amended in a similar way to the GDPR include:

• financial services legislation such as the Markets in Financial Instruments Regulation (MiFIR) (part of the MiFID II regime referred to above), the AIFMD Regulation (setting out so-called Level 2 measures for the purposes of the AIFMD regime referred to in Section 3 above) and a domesticated version of the European Market Infrastructure Regulation (EMIR). In addition, to support those and various other financial services measures, a raft of EU Regulations setting out detailed "technical standards" have also been incorporated into UK rules with, in some cases, amendments made by UK supervisors such as the Financial Conduct Authority, the Prudential Regulation Authority and Bank of England under powers delegated to them by HM Treasury.
  
  
• environmental legislation such as the Ozone Depleting Substances Regulation and the Persistent Organic Pollutants Regulation (POPR); both are adjusted to reference UK government bodies as regulators in place of the European Commission, and the UK version of the POPR further reflects the end of the UK's formal relationship with the European Chemicals Agency and participation in its associated fora.

However, some retained EU Regulations were repealed in full with effect from 11 pm on 31 December 2020.  Examples include:

• EU Regulations relating to membership of Euratom (from which the UK has withdrawn); and
  
  
• EU Regulations relating to the procedures to be followed by the European Commission when enforcing EU competition law (which no longer applies in the UK – for more detail on post-Brexit competition law, see this briefing).

The vast majority of EU Treaty Articles were not retained by the UK in any form, but there were two exceptions to this – one of which is no longer in place:

• Northern Ireland and EU state aid rules: First, as part of the Withdrawal Agreement, the UK accepted that the state aid rules of the EU Treaty would apply in respect of Northern Ireland (see Section 2 above). This continues to be the case.
  
  
• Directly effective rights: Secondly, where an EU Treaty Article created rights that individuals and businesses could rely on directly in courts, section 4 of the European Union (Withdrawal) Act 2018 (EUWA) preserved those rights. One example was the right contained in Article 157 relating to equal pay for equal work between men and women, which continues to be available in UK law.  However, from 2024, it is no longer possible to rely on any of these rights.

What about the period from 2021 to the end of 2023?

Where the facts of a dispute relate to the period from 2021 to the end of 2023, prior to the repeal of section 4 EUWA, it should still be possible to rely on directly effective Treaty-derived rights (on the basis that this still was the law at the time). However, it is unclear exactly which rights continued to be available in UK law during this period.  

Searches of the Government's database of retained EU law suggest that, as well as Article 157 (see above), other directly applicable nights which continued to be available included aspects of Articles 110, 111 and 113 in relation to VAT and aspects of Article 21(1) in relation to social security.  An indicative – but not definitive - list of directly effective Treaty-derived rights can also be found at pages 24-25 of the explanatory notes to the EUWA.  However, some of the most significant Articles on that list were preserved by section 4 EUWA but then immediately disapplied with effect from 11 pm on 31 December 2020 (and so could not be relied upon from 2021 onwards). Examples include Articles 101 and 102 relating to EU competition law and Articles 56 and 57 relating to free movement of services.  It is therefore important not to assume that – even during the pre-2024 period - all directly effective EU Treaty rights continued to be available in UK law.

EU case law is important because it clarifies how EU law should be interpreted and applied. Post-Brexit, the UK could in theory have adopted the position that, when considering retained EU law, UK courts should not be bound by EU case law, nor should they have any regard to it whatsoever.  However, this would have resulted in a situation where the UK courts effectively had to start from scratch in deciding how a piece of retained EU law should be interpreted or applied. Besides placing a heavy burden on UK judges, this approach would have resulted in considerable uncertainty for business over how retained EU law would operate in practice. To avoid this, section 6 of the European Union (Withdrawal) Act 2018 provides that, as a general rule:

• CJEU judgments made on or before 11 pm on 31 December 2020 are binding on UK courts (see below for exceptions to this general rule).
  
  
• CJEU judgments made after that date are not binding (again, see below for exceptions), but the UK courts are free to have regard to them, so far as they are relevant to the matter before the court.
  
  
• UK courts are also required to interpret retained EU law in accordance with previous judgments of UK courts on relevant EU law matters, so far as those decisions are binding on them based on the doctrine of precedence. 

As a result, it is likely that EU case law will continue to play a significant role in the interpretation and application of retained EU law for some time to come.  We would also expect the UK courts to continue to have regard, where relevant, to non-binding CJEU judgments - in much the same way as they are often prepared to consider non-binding case law from other countries (particularly common law jurisdictions) where there is limited UK consideration of the point at issue. It has also been suggested that when considering claims for breaches of EU law which occurred before 2021, EU case law after 31 December 2020 may still be relevant – see Section 9.

Making it easier for retained EU law matters to reach the higher courts

The Retained EU Law (Revocation and Reform) Act 2023 (REUL Act) makes it somewhat easier for cases to reach the Court of Appeal or Supreme Court so that departures from pre-2021 CJEU case law and relevant UK case law can be considered, without the need for an appeal to reach those courts.  It does this in the following ways:

• Lower courts will be able to make references to the Court of Appeal (or the Supreme Court if appropriate), asking them to reconsider a pre-2021 CJEU ruling or relevant UK judgment where they believe that a point of "general public importance" is at stake; and
  
  
• In certain fairly limited circumstances (for example where the parties to litigation relating to retained EU caselaw did not appeal), Government law officers, such as the Attorney General, will be able to seek a reference to the Court of Appeal (or the Supreme Court if appropriate).   They will also be able intervene in cases where a court is considering whether to depart from retained EU case law to argue in support of a particular outcome.

In practice, a key issue will be how much persuasion the courts will need before agreeing that a point of "general public importance" is at stake;  if the threshold is set too low, this may encourage some parties to seek references on points of EU law primarily as a tactic to increase delays and costs in litigation.  These provisions take effect from 1 October 2024.

What about case law on direct effect, EU supremacy and EU general principles?

As noted in section 3, the REUL Act removes the concept of direct effect – and in doing so, it appears to remove any obligation on the UK courts to regard retained EU case law on direct effect as binding.  It also removes the principle of EU supremacy and general principles of EU law such as proportionality. Whether this also means that retained EU case law relating to those concepts ceases to be binding on the UK courts was unclear at the time of updating (March 2024).  For an example of the possible impact, see the discussion of supremacy in section 7.  These provisions of the REUL Act took effect from 2024.

Initially, the UK Government elected to retain general principles of EU law, such as proportionality, but only as an aid to the interpretation of retained EU law;  from 2021, it ceased to be possible to bring a claim based on general principles in their own right (save as regards claims relating to matters before that date – see section 9).

Section 6 of the European Union (Withdrawal) Act 2018 therefore provided that, when considering retained EU law, UK courts were bound by these principles so far as they had effect in EU law immediately before 11 pm on 31 December 2020 (but not as developed further by the CJEU after that date). 

However, with effect from 2024, no general principle of EU law is part of UK law.  This change was made by the Retained EU Law (Revocation and Reform) Act 2023 (REUL Act).  As a result, UK courts are no longer able to apply general principles of EU law;  they will instead have to apply UK principles of interpretation.  The concern is that, unless the UK courts can find similar principles in UK law, they will feel obliged to interpret retained EU differently in future – even where it appears that no change was intended. 

• The position from 2021 to end of 2023: Initially, the principle that EU law takes precedence over national law was retained, but only in qualified form.  Section 5(2) of the European Union (Withdrawal) Act 2018 (EUWA) provided that where a conflict arose between pre-2021 domestic legislation and retained EU law, the latter would prevail.  However, any UK legislation passed after 2020 which was inconsistent with EU retained law would take precedence over the latter – so the principle ceased to have any impact on new UK legislation.
  
  
• The position from 2024: with effect from 2024, the principle of supremacy of EU law is no longer part of UK law. This change was made by the Retained EU Law (Revocation and Reform) Act 2023 (REUL Act). It applies to "any enactment or rule of law (whenever passed or made)".  As a result, there will no longer be an automatic presumption that retained EU law "trumps" any conflicting pre-2021 domestic legislation. It remains to be seen whether this will result in the courts deciding that pre-2021 domestic legislation should take precedence.  Perhaps a more significant impact of this change is that it may not be possible to rely on caselaw derived from the supremacy principle. 

EU Decisions are a form of EU legislation which may be less familiar to many businesses (as compared with say, EU Directives), but they play a significant role in some areas – and so the question of their post-Brexit status is not purely academic. EU Decisions have limited rather than general application and for this reason are always addressed to specific entities (which may be some or all EU Member States or specific legal or natural persons). Examples of their use include:

• Regulatory detail: EU Decisions are also sometimes used to set out technical detail relating to particular regulatory frameworks. For example, various EU Decisions have been issued under the EU regulatory framework for air quality setting out guidance on how it should be applied, or for pollution control, specifying the standards to be met by installations. In these cases, the EU Decisions were addressed to the Member States.
  
  
• Enforcement of EU law:  EU institutions such as the European Commission issue EU Decisions when clearing mergers under the EU Merger Regulation or imposing fines for breach of EU competition law.  In these cases, the EU Decisions are usually addressed to (and binding on) particular businesses.

To avoid the potential adverse consequences outlined above, section 3 of the European Union (Withdrawal) Act 2018 brought all relevant EU Decisions in existence as at 11 pm on 31 December 2020 onto the UK statute book, thus effectively preserving their validity in UK law. In cases where the relevant EU Decision formed part of a regulatory framework, it may then have been amended by statutory instrument to reflect the UK's departure from the EU (in a similar manner to EU Directives and EU Regulations). 

Finally, some EU Decisions continue to apply as regards Northern Ireland as a result of the Northern Ireland Protocol of the Withdrawal Agreement (see Section 2 above).

What if you have a claim for a breach of EU law which occurred before the end of the Brexit transition period at 11 pm on 31 December 2020? Does Brexit mean that you can no longer bring your claim because (as a general rule), EU law no longer applies in the UK? An example might be that you have been the victim of a price-fixing cartel (the events of which took place before 2021) and you wish to bring a claim for damages in the UK courts for breach of Article 101.

In the case of Article 101, a statutory instrument provides that the right ceases to be available in UK law – which might initially suggest that you can no longer bring any claim based on this EU law right (even one based on pre-2021 facts). However, other provisions of the same statutory instrument go on to make it clear that you can still bring claims for breaches of Article 101 that took place before the end of the transition period (see Part 6 of Schedule 4 to the Competition (Amendment etc) (EU Exit) Regulations 2019, as amended).

But what if there is no specific wording confirming that you can still bring a claim for a breach of EU law which occurred before 2021?  The Supreme Court ruling in Lipton v BA City Flyer (2024) confirms that – as a general rule and subject to any limitation periods – you should normally be able to bring a claim for such a breach.  This is so even where, had the breach occurred after 2020, you would not have a claim because the relevant EU-derived measure or right has been disapplied with effect from 2021 (as in the case of Article 101, among others).

However, there remains a degree of uncertainty because the Supreme Court disagreed on the precise legal mechanism by which this is achieved.  In many cases, this may not make much difference – but it is likely to be significant where one party wishes to argue that the UK courts are bound by relevant CJEU caselaw (see below).  Those issues did not arise in the case that came before the Supreme Court, so their comments on that aspect are not binding – and we may need another ruling before that uncertainty is finally resolved.

Pre-2021 claims: what is the position on CJEU case law?

As explained in Section 6 above, the general position as regards CJEU case law is that (i) pre-2021 CJEU rulings are binding, although the Court of Appeal and the Supreme Court can depart from them; and (ii) CJEU judgments made after 11 pm on 31 December 2020 are not binding on the UK courts.  However, it has been suggested that, when considering claims for breaches of EU law which occurred before 2021, the position may be different. Whether that is correct depends on the legal mechanism by which claims for breaches of EU law occurring before 2021 are preserved. 

In the most recent Supreme Court case to consider the matter (Lipton v BA City Flyer), the majority thought that the European Union (Withdrawal) Act 2018 functions as a "complete code" governing all aspects of the UK's separation from the EU's legal order, including the preservation of accrued rights based on breaches of law occurring before 2021. As a result, their view is that such claims are to be regarded as part of retained EU law. If this is correct, then the position on CJEU case law would be as described above. However, the Supreme Court did not need to decide this point, so the comments of the majority – whilst no doubt highly influential – are not strictly binding. This means that it would still be open to parties to argue that the approach taken by the minority was correct – which could result in a different approach being taken to CJEU caselaw.

The minority thought that pre-2021 claims are preserved by a different mechanism, namely section 16 of the Interpretation Act 1978.  That Act sets out the general principle that where laws have been repealed, this does not "affect any right, privilege, obligation or liability acquired, accrued or incurred under that enactment", unless the repealing statute demonstrates a contrary intention. If this is correct, then pre-2021 claims would not be regarded as part of retained EU law – they would instead be regarded as claims based on EU law (since this continued to apply in the UK until 2021).  As regards CJEU case law, the minority suggested that that UK courts would not be free to depart from pre-2021 CJEU rulings and would be required by the Withdrawal Agreement to have regard to post-2020 CJEU rulings.

Having left the EU, the UK is in principle free to change retained EU law as it wishes. However, there are a number of limitations on its freedom of action, including:

• Legal constraints: the UK is constrained to some extent by its commitments in various international agreements. For example, in relation to public procurement – an area the UK Government has highlighted as a leading candidate for reform in the wake of Brexit – the UK is somewhat constrained by both the WTO Government Procurement Agreement and various additional commitments made in the UK-EU Trade and Cooperation Agreement (TCA). The TCA also contains level playing field commitments in relation to areas such as tax, employment, social standards and the environment. For more information see our business-friendly guide to the TCA.
  
  
• Logistical constraints: perhaps more importantly, the sheer volume of retained EU law, competing demands on Parliamentary time and the likely need for consultation on substantive changes mean that very rapid divergence from the EU's approach is unlikely to be straightforward, particularly if the Government wish to minimise uncertainty and ensure that any reformed legislation is "fit for purpose", across a wide range of areas.
  
  
• Economic constraints: in some sectors, divergence from the EU's approach may bring additional costs for business. This is already apparent in some areas (see, for example, this discussion of chemicals regulation) and unless the benefits clearly outweigh the costs, UK businesses may be resistant to further divergence. 

Making it easier to change or repeal retained EU legislation

The Retained EU Law (Revocation and Reform) Act 2023 gives the UK Government a raft of additional powers in relation to retained EU legislation (going beyond the powers it typically has in relation to domestic legislation).  It will be able to do the following, in most cases with only limited Parliamentary scrutiny (which effectively allows the draft legislation to be fast-tracked):

• Restate: this may mean using different words or concepts from those used in the original EU-derived measure, although it should not involve any significant changes beyond wording intended to "resolve ambiguities", "remove doubts or anomalies" or improve "clarity or accessibility". The power could also be used to reproduce the measure "as is". Any restated law will no longer be regarded as retained EU law (even where no change has been made).
  
  
• Revoke or replace: this could involve significant changes, as the broadest power here allows for replacement with such alternative provision as is considered "appropriate" (which appears to give Government a broad discretion). Government must also be satisfied that any replacement does not increase any regulatory burden (so it is unlikely to be possible to use the powers to impose higher standards, for example).
  
  
• Update: there is an express power to update EU-derived measures in response to "changes in technology" or "developments in scientific understanding".
  
  
• Remove or reduce burdens: there is also an express power to make changes to retained EU legislation which involve removal or reduction of regulatory burdens (as defined in the Legislative and Regulatory Reform Act 2006). This route would most likely be used to effect changes intended purely to reduce or remove red tape (and not to achieve any of the other objectives listed above).

The timeline below illustrates some of the complexities which have arisen as a result of Brexit and its aftermath.  For example, let's say you are looking at a dispute involving EU law and retained EU law.   The fact pattern starts before 2021 and continues through to the present day 2024.  In such a case, you may well have to consider:

• The pre-2021 position, when EU law was still applicable in the UK;
  
  
• The post-2021 position when most EU law ceased to apply in the UK but the relevant EU measure may well have been retained on the UK statute book; and
  
  
• The position from 2024 onwards, since it may have been altered by the REUL Act.

This glossary sets out key terms used in legislation governing the UK's post-Brexit legal framework for EU-derived measures – namely the European Union (Withdrawal) Act 2018 and the Retained EU Law (Revocation and Reform) Act 2023.  Among other things, the latter introduced some changes in terminology with effect from 1 January 2024. These should be used to refer to EU-derived law in the UK in any formal documents such as contracts or pleadings in litigation.

Retained EU law is now a feature of the UK legal landscape and is likely to remain important for some time to come. As explained above, it is not always straightforward and further issues may emerge over time as the UK diverges from the EU in some areas. We can help you navigate those complexities to achieve your commercial objectives, with advice which is always tailored, practical and jargon-free.