The Role of the CJEU in the (November) Withdrawal Agreement: Thoughts
Yesterday, I attempted to tweet something pretty complex in a minimal word count; it was very off-the-cuff and lacked in references, and echoed a very informal opinion I had for a whole five minutes before I put it up on the internet. … and then many people read it, and various of them told me that I’d missed some of/all of point.
It’s a professional hallmark to never forego an opportunity to waffle on about technical legal detail, and for the purposes of making sure I actually caught ‘the detail’ this time, I thought I’d best go back to long form. Twitter is fun! But it’s not ideal for my discipline, or maybe just not for me.
So. 14 November saw the publication of the long-awaited ‘final’ draft Withdrawal Agreement between the UK and the EU. It’s 585 pages long and, like all legal documents of that length, contains references to related topics in very different places. It’s why immediate burst commentary frequently misses the detail and ends up inaccurate.
One of my projects at the moment is examining the governance setup of this Withdrawal Agreement. What I mean by that is looking at the different institutions that are in charge of ‘running’ the Withdrawal Agreement in a variety of circumstances: the ‘day to day’ operation; amendments to the Agreements, where needed; and any enforcement and dispute settlement provisions. The majority of the material that I’m interested in is found in Part 6 of the Withdrawal Agreement… but some of it is elsewhere. Let’s dive in.
Part 6 of the WA
Part 6 establishes a Joint Committee in Article 164 WA, manned by UK and EU representatives, who will manage all the ‘day to day’; who will be in charge of (by mutual consent) amending the Withdrawal Agreement where provision for that is made and/or it is found to be necessary because it is in parts incomplete/needs clarification (Art 164(4) and (5) WA); and who are the first stage of dispute settlement between the UK and the EU as to the meaning/application of the Withdrawal Agreement (Art 169 WA).
That last part is key. We may see a wide variety of different types of disputes spring up out of the Withdrawal Agreement. Disagreements between the UK and the EU as to what they actually meant to commit to in [hypothetical] Article X of the Agreement will in the first instance be settled by consultation in the Joint Committee.
Where that variety of dispute fails to be settled via consultations in the Joint Committee, the second stage of the settlement of this type of dispute is now down to be arbitration. The March draft WA, in its Article 162, instead proposed that where the Joint Committee failed to sort out a problem by agreement, that problem would be referred to the CJEU. In other words, this would make the CJEU the ultimate arbiter of all disputes between the UK and the EU about the commitments they had made to each other in the Withdrawal Agreement. This would have been unprecedented. The CJEU is not the ‘dispute settler’ in any other EU external agreement; eg, its trade agreement with Canada, CETA, does not say “and when we disagree, it goes to the CJEU”. Many of my peers looked at this request and went, “EU’ve got to be kidding me” at it. Most did not think the EU was particularly attached to what was seen as a surreal demand. But that was the opening gambit by the EU: we’ll try negotiating out of a disagreement about the WA’s commitments, and if we cannot, then over to the CJEU.
The EU did back down on this. I cannot begin to speculate why: if it’s because it was mostly just seeing what it could get away with in the negotiations, if it wanted to give the UK an ‘easy win’, or if the UK actually just made a persuasive case for its preferred dispute settlement option, which was arbitration.
Either way: what we have set out, beginning in Article 170 WA, is a neutral arbitral dispute settlement system. Both the UK and the EU are permitted to nominate 10 potential (independent, neutral, unbiased, expert) panellists themselves, and they then jointly nominate 5 ‘chair’ panellists. When a dispute doesn’t get resolved in consultation and makes it to one of these panels, the EU and the UK will each nominate 2 panellists and agree on their ‘chair’, and then the panel will ‘arbitrate’ — meaning, it will offer a binding decision on whatever disagreement the UK and the EU have about the meaning/application/implementation of the WA.
There are many more details here; for instance, another particularly contentious aspect of the March draft WA was that it permitted unilateral ‘punishment’ by the EU if the EU believed the UK was not abiding by its commitments. This is now also gone; instead, either party can apply ‘temporary remedies’ (penalty charges, basically) if the other party does not comply with an arbitral decision in a reasonable amount of time (Article 178(1) WA). Compliance itself can also be reexamined by an arbitration panel if the parties disagree on it (Article 179 WA), and if the ‘temporary remedies’ also get ignored by the ‘losing’ party, the other party can actually start ‘suspending obligations’ under the WA (except Part 2) so as to neutralise the effect of non-compliance (Article 178(2) WA).
In sum, what we have here is effectively what the UK has been asking for regarding the settling of disputes about the Withdrawal Agreement as a framework of commitments: consultations (political problem-solving) first, and where that fails, arbitration by a neutral panel that does not advantage either party.
How did the EU end up conceding to this? By the one caveat that we find to the ‘neutral’ arbitration provisions: under Article 174 WA, where a dispute raised between the parties regarding the meaning/application of the WA brings up questions about the meaning of a concept or provision of EU law, the arbitration panel is to refer that question to the CJEU and get a binding CJEU opinion on the meaning of the concept/provision of EU law.
This is in effect how the preliminary rulings procedure under Article 267 TFEU works for EU Member States. And, yes, it is entirely possible to argue about what the effects of such a ruling are: depending on the nature of the CJEU’s response to a question about the meaning of EU law, it may or may not come close to already deciding the dispute. If you subscribe to the view that a binding interpretation of EU law basically will hamstring the arbitration panel, then the UK remains under the thumb of the CJEU for as long as parts of the WA remain in force and may result in these references.
There are three reasons why I am personally reluctant to think of this as a significant ‘surrender’ on the part of the UK, however. The first of these is a pragmatic awareness of the CJEU’s own attitude towards its jurisdiction. It once upon a time almost precluded the creation of the EEA because the then-intended “EEA Court” was a separate international body that was permitted to interpret EU law in a binding manner, and the CJEU had none of that. A second court could result in conflicting interpretations of the meaning of EU law, and under the Treaties, the CJEU alone has the power to authoritatively interpret what EU law is — so there could be no EEA Court with such powers (Opinion 1/91). The “EEA Court” plan was abandoned, and in the area of EEA ‘law’, instead the EEA’s Joint Committee would resolve disputes while paying heed to and potentially referring questions to the CJEU, reserving its ultimate authority over the meaning of EU law (Opinion 1/92). If this sounds very similar to what is in the Withdrawal Agreement… that’s because it is. Many other ‘agreements’ the EU operates with close partners (for instance, the EU-Ukraine partnership) have a similar setup, whereby arbitration decides disputes but interpretations of EU law are made by the CJEU. The CJEU will not accept dispute settlement systems where there is interpretation of EU law happening that has binding consequences, but it plays no role in. There are currently no signs that it will be asked for an opinion on the legality of the Withdrawal Agreement by any of the EU institutions or the Member States — but that doesn’t mean that it can’t be, and it behoves both parties to not let this lengthy negotiation come to nothing on an issue that is entirely foreseeable.
The second reason I do not think that the UK ‘surrendered’ much here is another pragmatic consideration: the nature of the Withdrawal Agreement and its other dispute settlement processes. As we will see below, because ‘transition’ means effectively signing up to the whole of the EU acquis for another few years, the ‘ordinary’ jurisdiction of the CJEU will continue to apply to the UK. Where it fails to comply with the EU laws it promised to comply with under the Withdrawal Agreement, it can be taken to the CJEU by the Commission, just as any other ‘misbehaving’ Member State can. Continued CJEU jurisdiction is as such a logical consequence of what is not a future relationship agreement between the UK and the EU, but rather an organised ‘slow’ separation. This slow separation, at its base, involves swathes of EU law. The future relationship may or may not. It would be much more contentious to accept the CJEU playing a role in a relationship that isn’t about the ‘conscious uncoupling’ but rather about the ‘next stage’ in the relationship.
The third reason that I think that this is a fairly good ‘deal’ for the UK, as far as ‘WA specific dispute settlement’ goes, is that I do not envisage there being an awful lot of it. The WA is for the most part short in nature; and where there are concrete disagreements, I would genuinely be surprised if they regularly made it past the consultation phase.
So: on the basis of the above three points, and considering what the EU’s first ‘offer’ on ‘WA specific dispute settlement’ was, I described this yesterday as a ‘spectacular win’ and a ‘massive win’. It was 5pm, I was hungry, and I have a tendency towards hyperbole — I apologise. The reality is that this is a solid turn to what the UK was looking for, in the Withdrawal Agreement but more to the point in the future relationship. This starts a process of CJEU disentanglement that will, depending on the content of the future relationship agreements, become more or less complete after 2021. It can be described as a seeming end of ‘direct’ jurisdiction of the CJEU: it no longer gets to comment on the compatibility of domestic UK law with EU law under this process. So, I called it a ‘win’.
Other Parts of the WA
My comments did not take into account the plethora of other provisions in other parts of the Withdrawal Agreement that suggest a significantly more expansive role for the CJEU in other types of dispute settlement. In summary, these are as follows:
- Article 4 WA makes clear that for the purposes of the Withdrawal Agreement, EU law works in the UK as it does in any of the Member States. This means binding jurisdiction of the CJEU, as exists in all the Member States, for the duration of the transition.
This should not be surprising. It is what we agreed on. It means CJEU rulings handed down must be respected by both Parliament and the UK courts; it means infringement proceedings against the UK for violations of EU law during the transition period; it means the ability for UK courts to send preliminary references to the CJEU about the meaning of EU law over the course of transition. The ‘end’ of the jurisdiction of the CJEU in the UK cannot by any stretch of the imagination be perceived as preceding 2021. Any statements to that effect are incomplete or inaccurate. The transition is by its very nature a continuation of the status quo — that means CJEU jurisdiction!
- Elsewhere in Part 6, Article 158 WA sets out a process whereby domestic courts can ask the CJEU questions about Part 2 of the Withdrawal Agreement for a period of 8 years following the end of transition.
This is more ‘preliminary referencing’. And it is second-stage enforcement once more, with the overarching determination of UK compliance with Part 2 of the Withdrawal Agreement falling to a domestic authority instead of to the Commission all over again. What this does is ensure that where parts of Part 2 are not clear to UK courts (who can hear any cases involving parts of Part 2 that are clear, precise and unconditional), they are made to ensure that they are not interpreting them fundamentally differently from their EU-based counterparts. This ensures equal treatment of Brits in Europe and Europeans in the UK. It’s a very typical ‘EU law’ thing, and the entirety of Part 2 is essentially ‘EU law’. It is wholly unsurprising there is a role for the CJEU in ensuring consistent interpretation of Part 2 for some time: not all ‘issues’ stemming from Part 2 will be immediately obvious, and so time needs to be given for those affected by Part 2 rights to actually experience the full scope of them. Eight years seems not-excessive when Part 2 covers EU nationals who move to the UK about 1 week before the end of the transition period and who will not have ‘full’ Part 2 rights until five years later.
Pragmatically, I’m very zen about this inclusion of CJEU jurisdiction as well. Part 2 promises a bunch of people who currently benefit from EU law rights that they will continue to benefit from those rights. If that’s a meaningful commitment, the meaning of those rights should remain consistent to what it is now, and what it is for concurrent other beneficiaries of EU law rights. CJEU ‘oversight’ via preliminary references is the most indirect way this can be provided.
- Part 3 covers the so-called ‘Separation Provisions’ of the Withdrawal Agreement. Title X sets out how the ‘separation’ of the UK from EU judicial/administrative procedures is intended to work. As such, Article 86 WA discusses pending cases at the end of transition and gives the CJEU jurisdiction to decide those. Article 87 WA does something different: it gives the Commission the power to start infringement proceedings against the UK for up to four years after the end of the transition, for infringements of EU law or of the provisions relating to ‘transition’ in Part 4 of the Withdrawal Agreement.
Article 86 WA, I don’t think is controversial. Any concept of the rule of law builds in legitimate expectations and the ability to seek remedies, and these are all cases that commenced when the EU’s legal rules continued to apply to the UK. Ending those cases before a resolution would seem unjust, and even where it’s possible (which it by and large won’t be), refiling in a different jurisdiction/court will just be needlessly costly.
I do think some were shocked by Article 87 WA, however, because it suggests that the UK can continue to be taken to the CJEU for failing to comply with EU law for up to six years after it has technically left the EU. I again take a very pragmatic view of this and do not think that the EU is being excessive by asking for this four year ‘tail’ period for Commission investigations to be taken to the CJEU in. A look at a random CJEU ‘infringement proceedings’ case under Article 258 TFEU suggests that it was started in 2011 with the CJEU ruling in 2016. A different random example shows the Commission’s first letter arriving in 2007 and a CJEU judgment in 2012. I do not doubt some are settled 3 years after the first Commission letter — but by any measure, four years seems like an ‘average’ amount of time for an infringement investigation to proceed from ‘Commission observation’ to ‘CJEU ruling’, if not one that disadvantages the EU a little bit.
- Finally, Article 14 of the Protocol on Ireland/Northern Ireland makes it clear that the CJEU has jurisdiction over all the areas of EU law to which Northern Ireland will be ‘regulatorily aligned’ if the ‘backstop’ activates, and Article 15(3) of the Protocol makes clear that provisions of the Protocol have to be interpreted in line with CJEU case law where appropriate.
The Commission, in its Q&A on the Protocol, summarises the NI situation (if ‘backstopped’) as such:
The Withdrawal Agreement will have direct effect. This means that UK courts will, in practice, apply this agreement, in the same way as they apply EU law today. The European Court of Justice is the ultimate arbiter of EU law. For issues related to EU law concepts outlined in the Withdrawal Agreement, including aspects of the Protocol, the ECJ will remain the ultimate arbiter. For all other areas of the Protocol, the enforcement and dispute resolution arrangements provided in the Withdrawal Agreement will apply’.
In other words, while Great Britain will only be ‘in transition’ until 2021 (assuming no extensions, of course), under the backstop, Northern Ireland will remain in a sort of perpetual ‘transition’ whereby those portions of Single Market law that prevent a ‘hard border’ between Ireland and Northern Ireland (see the many Annexes) apply to it in the same way that they do to the Member States. The ‘backstop’ is, again, by design not a matter of ‘leaving’ the EU and ‘ending’ the jurisdiction for the CJEU; it is staying in the EU just enough to avoid that hard border. And in staying in the EU just enough, the CJEU will also have just enough jurisdiction in Northern Ireland.
Where, however, there are disagreements about what was agreed in the Protocol itself, those will be subject to consultation and/or arbitration with an option to refer, much as the Withdrawal Agreement is (per Article 15(1) of the Protocol).
So: what’s the deal with CJEU jurisdiction?
A summary of the above:
- During transition and the ‘backstop’, the CJEU has ‘direct’ jurisdiction over the UK and Northern Ireland respectively. This is not ‘ending’ CJEU jurisdiction. That does not properly commence until EU law no longer applies directly to the UK, eg, 2021 (and, in the case of the ‘backstop’, when a future relationship agreement exists.)
- Procedures (whether infringement by the Commission or before the CJEU) that commenced before the end of transition can make it to the CJEU or continue at the CJEU after transition. This, too, is ‘direct’ jurisdiction, of the ‘winding up’ variety.
- Where there is a dispute about the content/meaning of the Withdrawal Agreement or the Protocol, this is settled via arbitration with an obligation to refer questions about the meaning of EU law to the CJEU. The ultimate decision-maker in this scenario is the arbitral panel, which has to apply the CJEU’s definition of EU law but determines everything else in the case. I respect opinions differ on how much the CJEU predetermines case outcomes via the Art 267 TFEU procedures, but would all the same summarise this as ‘indirect’ jurisdiction as best — it influences outcomes, but does not determine them.
- Where there is a dispute in a domestic court about Part 2 of the WA, the domestic court can refer a question to the CJEU about the meaning of EU law in Part 2 for a period of 8 years — but ultimately still decides the case. This is also a form of ‘indirect’ jurisdiction, by the above definition.
We thus can see from this that continued full CJEU jurisdiction is time-limited for Great Britain; and where the dispute is not about the UK’s compliance with a bit of EU law, but rather either party’s compliance with the Withdrawal Agreement, the CJEU’s role is that of a legal dictionary that passes down ‘meaning’ rather than the body that issues rulings. Unsurprisingly, Northern Ireland finds itself in the same position initially, but may then retain full CJEU jurisdiction for a longer time on account of the ‘backstop’.
From the status quo, this is indeed a gradual disentanglement from CJEU jurisdiction, and one that carves out as much ‘freedom’ from the CJEU as seems possible to me given that the whole purpose of the Withdrawal Agreement is to continue treating the UK as a Member State for a few years. The shift away from CJEU jurisdiction over disputes relating to the non-EU-law-concept content of the Withdrawal Agreement and the Protocol is in line with what the UK was looking for here, and what it will look for in the future relationship. That is why I chalk this down as a UK ‘win’. Ending CJEU jurisdiction immediately while still practically being a Member State was never going to happen; but this is a genuine series of first steps away from the CJEU.
(Questions, comments: @sylviademars on Twitter.)