At the core of the Chequers White Paper is a so-called “common rulebook for goods including agri-food”, plus additional areas of “common rulebook” to cover state aid and customs rules. The use of the word “common” is misleading. In these areas, the UK will follow the EU’s rules and their interpretation slavishly, while having no vote on those rules and no means of changing them.
In a later post in this series, I shall explain the scope of what will be covered by these “common rulebooks”, as well as what will be covered by the White Paper’s proposal to agree by treaty that the UK’s rules will not “regress” in environment and employment law etc.
The area covered by the “common” rulebook on goods is very much wider than just boring widget regulations as the White Paper tries to imply. At minimum, the UK will have to follow all the EU’s laws and rules which govern goods placed onto the market in the EU. It will have to apply those rules to all goods placed in free circulation on the market inside the UK, which means that those rules will bind UK domestic manufacturers and also will have to be applied to goods imported into the UK from non-EU countries. The latter factor will severely damage the UK’s ability to forge future trade agreements.
Independent sovereign states simply do not agree that their rights and obligations under a treaty shall be decided by the courts of the other treaty party. Exceptions to this are so rare that they positively stand out in history: for example, the ‘unequal’ treaties in the 19th Century between China and the Western powers allowing them to operate extra-territorial courts in China.
So independent states take care, if they agree to submit disputes under treaties to binding adjudication mechanisms, that the adjudication is independent of the other treaty party and is balanced. A common way to do this is by an arbitration panel or court on which each party nominates one member, with a neutral chairman. Not only is this common in many international treaties, it is also used in almost all of the EU’s trade and other agreements with non-member states, from the CETA trade agreement with Canada down to the EU’s customs and association agreements with the tiny states of Andorra and San Marino which are surrounded by EU territory.
At present, the ECJ is a multi-national court in which the UK participates as a member and nominates a Judge and an Advocate-General. When we leave the EU, it will become an entirely foreign court. It will be incompatible with the UK’s status as a supposedly independent country for us to submit in a treaty with the EU to the UK’s rights being decided by the in-house court of the EU.
Instead of adopting a treaty adjudication mechanism in line with standard international practice and in line with almost all the EU’s other agreements with non-member states, the Chequers White Paper proposes that the UK should adopt a mechanism which the EU has so far imposed only on the former Soviet republics of Ukraine, Moldova and Georgia. These impoverished states, under threat from Russia and desperate for free trade agreements with the EU and eventual membership, have agreed to progressively harmonise large areas of their laws with EU law.
They have also agreed that their courts shall take “due account” of ECJ case law, and have submitted to a backstop mechanism under which the Commission on behalf of the EU can take a dispute to an international arbitration panel if the Commission thinks that they have not correctly followed EU law. But unlike a normal international arbitration panel which takes an independent view of the issues before it, this panel is required to refer to the ECJ any question of the correct interpretation of EU rules which arises in the dispute, and is then bound by the answer given by the ECJ.
Under this system, where the dispute is about the interpretation of the EU rules which Ukraine/Moldova/Georgia have to follow, the supposedly independent arbitration panel will simply act as a postbox for sending the question off to the ECJ in Luxembourg and then must issue a rubber stamp formal judgment in line with the decision of the ECJ. The White Paper makes the quite bizarre and unsustainable claim that this system “would respect the principle that the court of one party cannot resolve disputes between the two.”
The White Paper proposes that the present system of UK courts sending preliminary references direct to Luxembourg shall cease. However, the courts of the United Kingdom will be required to “pay due regard” to rulings of the ECJ. This is quite different from the normal principle of international judicial comity, under which courts of treaty parties will look at each others’ judgments with mutual respect. The obligation is not mutual, but is in one direction only, making the UK courts explicitly subservient to the ECJ. There is no suggestion that EU courts should pay “due regard”, or any regard at all, to UK courts, immediately unbalancing the relationship and placing UK courts in an inferior position.
More importantly, the phrase “due regard” will be coloured by the ECJ joint reference procedure modelled on the Ukraine/Moldova/Georgia agreements. UK courts will reason that there is no point in them departing from EU case law, even if they disagree with it, since it will just end up in an arbitration in which the issue will be sent to the ECJ whose ruling will then be binding on the UK. The courts adopted very similar reasoning in interpreting the obligation in section 2 of the Human Rights Act 1998 that they must “take into account” relevant Strasbourg Court rulings. Since the Strasbourg human rights court could over-rule the UK at the international level, the House of Lords decided that UK courts should treat consistent Strasbourg case law as effectively binding on them.
An example of how this would work can be seen from the latest judgment about Dyson’s complaints about unfair EU rules on energy labelling for vacuum cleaners: Case C 632/16 Dyson Ltd v. BSH Home Appliances (25th July 2018). The official EU energy tests require vacuum cleaners to be tested only when they are empty of dust; this puts Dyson’s vacuum cleaners which have no bags with pores which clog up with dust at a disadvantage. The ECJ ruled that the EU regulation on energy labelling of vacuum cleaners is “to be interpreted as meaning that no information as to the conditions under which the energy efficiency of vacuum cleaners was measured may be added to the energy label.”
Suppose that after we leave the EU, the UK chooses to allow such information to be given. Under the Chequers White Paper system, our courts would be required to interpret the relevant UK law with “due regard” to the ECJ’s rulings. And even if UK courts were to adopt a more permissive interpretation than the ECJ, the Commission would invoke the disputes procedure, and the arbitration panel would be required to submit the matter to the ECJ who would inevitably reiterate their ruling.
The Conservative 2017 general election manifesto, echoing a passage in the Prime Minister’s Lancaster House speech, promised that:
“Our laws will be made in London, Edinburgh, Cardiff and Belfast, and interpreted by judges across the United Kingdom, not in Luxembourg.”
Within the ‘common’ rulebook areas, it is quite clear that the interpretation of the laws applying within the United Kingdom will continue to be carried out by the judges in Luxembourg, with judges in the UK having only a subservient role.
By putting forward the Chequers White Paper, the Prime Minister has now plainly broken the pledges she made in her manifesto and in the Lancaster House speech. What is even more alarming than the Prime Minister’s wholesale abandonment of her promises on this subject is her repeated insistence in the face of reality that she has not abandoned them.
To read Martin Howe QC’s piece in full, click here.