According to a majority of the Supreme Court, even in a claim that arose before Brexit (ie before the end of 2020), British higher courts making decisions now are not necessarily bound to follow EU court decisions made before Brexit. However, British courts are bound by the text of the legislation as it was before Brexit (normally at least), as regards the pre-Brexit claim.
[2024] UKSC 24, Supreme Court. Full decision www.bailii.org/uk/cases/UKSC/2024/24.html
Facts
In January 2018, the claimant’s flight from Milan to London City Airport was cancelled due to a pilot’s illness. The claimant sought compensation under an EU regulation, Regulation (EC) 261/2004 of 11 February 2004 (“Regulation 261”). This gave passengers a right to compensation for cancelled flights. The airline argued that compensation was not payable as the illness counted as an “extraordinary circumstance”.
Decision
The County Court held that the pilot falling ill was an extraordinary circumstance, so compensation was not payable. The Supreme Court disagreed. The illness was not an extraordinary circumstance, so the claim for compensation succeeded
That was the main issue in the case. However, the Supreme Court also discussed more generally how EU law applies in the UK after Brexit where, like here, the claim arose before Brexit. See below.
Withdrawal Act 2018 applies to claims arising before Brexit?
Although it made no difference to the decision in this case, the Supreme Court considered whether for EU law claims that arose before Brexit [ie probably before the end of the implementation period on 31st December 2020], the legal basis on which after Brexit the UK courts consider these claims is:
- the EU (Withdrawal) Act 2018, which should mean that higher courts can sometimes decide not to follow pre-2021 EU court decisions; or
- s.2(1) European Communities Act 1972, the provision which applied before Brexit, under which higher courts would be bound by pre-2021 EU court decisions.
The majority of the Supreme Court opted for no.1. The majority said that the EU (Withdrawal) Act 2018 is a complete code by which Parliament deals comprehensively with the application in the UK of EU law from the end of 2020. Even accrued claims arising from things which happened before the end of 2020 – such as the cancelled flight in 2018 – are “retained EU law” (now renamed “assimilated law” by REUL Act 2023) within the EU (Withdrawal Act) 2018. Therefore higher courts in Britain deciding pre-Brexit claims are not bound by pre-2021 EU court decisions, because s.6 EU (Withdrawal) Act 2018 says higher courts can sometimes depart from such decisions in interpreting “assimilated law”. [See Effect of EU law when interpreting Equality Act, from 2024>Higher courts can sometimes depart from pre-2021 EU case law.]
That “Complete Code analysis”, and the alternative “Interpretation Act analysis”, are summarised at §59 of the Supreme Court decision. The “Interpretation Act analysis” (option 2 above), was accepted in a dissenting judgment by Lord Lloyd-Jones, but was rejected by the majority of the Supreme Court. Under the “Interpretation Act analysis”, where a set of facts occurring before Brexit gave rise to a claim under EU law as it was at the time, the claimant’s right to pursue the cause of action under s.2(1) European Communities Act 1972 was saved after Brexit by s.16 Interpretation Act 1978, which says that the repeal of an enactment (here the 1972 Act) does not affect a right accrued under it unless the contrary intention appears. Under this analysis, after Brexit the 1972 Act rather than the EU (Withdrawal) Act 2018 remains the “conduit pipe” through which the courts apply EU law to claims which arose before Brexit. Under the 1972 Act, British courts would remain bound by pre-2021 EU court decisions.
Which version of Regulation 261 applied
As happened to many EU regulations and indeed the Equality Act 2010, the UK made amendments to Regulation 261 with effect from the end of 2020. For example, amounts in euros were changed to pounds sterling. The UK was able to do this because, broadly, the end of 2020 was when the UK was no longer bound to comply with EU law.
The Court of Appeal had held that the amended version of Regulation 261 applied to Mr & Mrs Lipton’s claim in the present case, even though the flight cancellation happened in 2018. The Supreme Court disagreed. It held that the pre-2021 version of Regulation 261 applied.
The Supreme Court said that the Court of Appeal’s approach was contrary to a basic principle of the rule of law which Parliament must be taken to respect. The principle was that the applicable law is that in place at the time the material events occur, rather than some different version introduced at a later date. The CofA’s approach would mean, for example, that the relevant law applicable to two identical cases which occurred on the same date might be different, depending on the time at which the relevant claims were brought and the vicissitudes of listing hearings in the respective courts in which the proceedings were commenced. [§66]
The Supreme Court said that if a regulation coming into force at the end of 2020 purported to make a retrospective amendment to an EU instrument, the “validity and effect of such a provision, if it indeed exists somewhere and is relevant to a cause of action accruing pre-Brexit, will need to be considered in the context in which it arises”. [§68]
UK-EU Trade and Cooperation Agreement (TCA)
The majority of the Supreme Court disapproved a wide reading by the Court of Appeal of s.29 EU (Future Relationship) Act 2020. Broadly, s.29 says that UK law existing at 1st January 2021 has effect on and after that date with such modifications as are required for the purposes of implementing the TCA in that law.
However, the Court of Appeal’s view of s.29 was inconsistent with the UK and EU having expressly agreed that nothing in the TCA permits the TCA to be directly invoked in the UK domestic legal system and that the TCA does not confer rights on individuals, and inconsistent with the aim of Brexit being to remove the influence of EU law from the UK’s domestic law. If in a future case a party wished to put forward an argument that the effect of s.29 was to modify the wording of some existing domestic law, the court or tribunal should consider submissions as to the meaning and effect of s.29 afresh, without regard to what was said by the Court of Appeal. [§69-80]
[See discussion in The TCA in domestic law (eurelationslaw.com), 17/7/24, and on the Equality Act my page UK-EU Trade and Cooperation Agreement>Equality Act as at 1st January 2021: s.29 EU (Future Relationship) Act 2020.]
My comment
Is this the last word?
The (majority of the) Supreme Court acknowledges that its decision on whether option 1 or 2 above applies – and therefore whether EU case law is binding in cases which arose pre-Brexit – is strictly obiter, ie not binding, as it did not affect the decision of this case. Even so, the Supreme Court considered the issue at great length. It was important, said the court, that courts and parties “grappling with” these issues knew the status of EU case law. [§82, 193].
However, given that the decision is not actually binding, and there was a strong dissenting judgment by Lord Lloyd-Jones, it may potentially be reconsidered, with additional arguments (cf [§227, 228]) and maybe different Supreme Court judges.
Accrued EU Law rights take off in the Supreme Court (eurelationslaw.com), 16/7/24, comments: “… It will be interesting to observe whether [points seeking to rebut the majority decision] are taken in the ongoing Interchange proceedings before the Court of Appeal, or whether the strong wind of four Justices of the Supreme Court is enough of an extraordinary circumstance to cancel that particular flight.” On the Interchange case, see The CAT goes astray on accrued EU law rights (eurelationslaw.com), 5/9/23.
Effect of the decision (if upheld)
This decision of the majority, if upheld, only applies to claims which arose before the end of 2020, eg for discrimination which happened before that time. So at least as regards the EqA, it does not apply to any claims being made now, only to claims already made for pre-2021 discrimination. But the Supreme Court majority seems to be saying that the status of EU court decisions in a British higher court making a decision after the end of 2020 is the same for a claim which arose before Brexit as it is for a claim being made now – subject to the change from October 2024, below.
So far as identified in the Supreme Court judgments, the only real difference in outcome between the analyses of the majority versus Lord Lloyd-Jones (dissenting) seems to be whether a pre-2021 EU court decision binds a British higher court deciding after Brexit (ie after the end of 2020) a claim which arose before Brexit. Lord Lloyd-Jones thought yes the higher court was bound, because the European Communities Act 1972 still applies. The majority said the pre-Brexit claim is (what is now called) “assimilated law” within s.6(3)-(5) EU (Withdrawal) Act 2018, so that a higher court can depart from the EU court decision so far as s.6 allows: Effect of EU law when interpreting Equality Act, from 2024>Higher courts can sometimes depart from pre-2021 EU case law.
At the time of the Supreme Court decision, the effect of the test in s.6 EU (Withdrawal) Act 2018 and regulations was that higher courts would treat pre-2021 EU Court decisions as “normally binding”, though higher courts could depart from them “when it appears right to do so”. The REUL Act 2023 relaxes this test to make it somewhat easier to depart from EU case law where, for example, leave to appeal was given on or after 1st October 2024. Again see Brexit: Effect of EU law when interpreting Equality Act, from 2024>Higher courts can sometimes depart from pre-2021 EU case law.
In the present case, the initial County Court decisions were in 2019, whereas the Court of Appeal decision was in 2021, and the Supreme Court decision was in July 2024. At the time of the County Court decisions, the UK was still a member of the EU. So the County Courts were bound by EU court decisions, even if the EU (Withdrawal Act) 2018 said something different from the start of 2021 (which it didn’t as regards lower courts). But by the time of the Court of Appeal and Supreme Court decisions, the EU (Withdrawal Act) 2018 governed the position, according to the majority, so those two higher courts had the option of departing from EU case law.
It will be seen that the effect of the Supreme Court majority decision is that an EU court decision which was binding when a claim arose, and when the claim was presented to the court, may have ceased to be binding by the time it gets to a higher court (Court of Appeal or Supreme Court). However, one might say that the EU court could potentially have changed the position by a fresh ruling in the meantime (cf §113), perhaps after a referral by the UK court. The change by the EU court would be retrospective in effect, as the EU court decision would declare what the position had always been. It might be said that post-Brexit, it is the British higher courts that are being allowed to do this (retrospectively in effect) if they think fit.
This approach to case law is to be contrasted with the Supreme Court’s approach to the wording of the legislation itself, where the Supreme Court said the change in wording made at the end of 2020 (ie at the time of Brexit) applies only to claims arising after the change.
Applicability to the EqA
This Supreme Court decision related to an EU regulation directly applicable in the UK. However, almost certainly (if the majority’s decision is upheld), a similar analysis will apply to the Equality Act (EqA). To be technical: Under the Supreme Court majority view it seems that “EU-derived domestic legislation” in s.2 EU (Withdrawal) Act 2018 includes accrued claims under such legislation as at the end of 2020. These claims, including accrued claims under the EqA employment provisions for discrimination which happened before the end of 2020, will therefore be “assimilated law” (cf Brexit: Effect of EU law when interpreting Equality Act, from 2024>Technical note: Why the Equality Act employment provisions are “assimilated law”). The provisions in s.6 EU (Withdrawal) Act 2018 on how far higher courts should follow EU court decisions in interpreting “assimilated law” therefore apply.
In any event, British courts are likely to choose to continue to apply EU case law where regulations have been passed to preserve the effect of EU case law on the EqA, for example retaining a wider meaning of “disability” in employment claims: Effect of EU law when interpreting Equality Act, from 2024>EqA regulations preserve parts of EU law. That is so even though the regulations probably only apply to discrimination which happens after the start of 2024, giving a theoretical gap (where British higher courts are actually not bound by EU case law) for cases decided now but where the discrimination happened at any time before 2024, including (according to the majority in this case) pre-2021.
External link
- Accrued EU Law rights take off in the Supreme Court (eurelationslaw.com), 16th July, 2024
- The TCA in domestic law (eurelationslaw.com), 17th July, 2024.
