Dispute Resolution under the Withdrawal Agreement

 

Jane Lambert

Art 167 of the agreement by which the UK withdrew from the European Union which was signed in January of this year ("the Withdrawal Agreement") requires the EU and UK at all times to endeavour to agree on the interpretation and application of that agreement and to make every attempt, through cooperation and consultations, to arrive at a mutually satisfactory resolution of any matter that might affect its operation.

Art 169 (1) of the Withdrawal Agreement further requires them to "endeavour to resolve any dispute regarding the interpretation and application of the provisions of this Agreement by entering into consultations in the Joint Committee in good faith, with the aim of reaching a mutually agreed solution." The Joint Committee consists of representatives of the EU and UK under art 164 (1) of the Withdrawal Agreement and is responsible for the implementation and application of that agreement.  If no mutually agreed solution has been reached within 3 months after written notice has been provided to the Joint Committee in accordance with art 169 (1), the EU or the UK may request the establishment of an arbitration panel to resolve the dispute.

Art 171 (1) of the Withdrawal Agreement requires the Joint Committee to establish a list of 25 persons who are willing and able to serve as members of an arbitration panel before 31 Dec 2020.  Art 171 (2) provides:

"The list established pursuant to paragraph 1 shall only comprise persons whose independence is beyond doubt, who possess the qualifications required for appointment to the highest judicial office in their respective countries or who are jurisconsults of recognised competence, and who possess specialised knowledge or experience of Union law and public international law. That list shall not comprise persons who are members, officials or other servants of the Union institutions, of the government of a Member State, or of the government of the United Kingdom,"

By a decision dated 17 Dec 2020, the Joint Committee has appointed the following persons to serve as chairpersons of any arbitration panel that may be set up under these provisions: Corinna Wissels, Angelika Helene Anna Nussberger, Jan Klucka, Sir Daniel Bethlehem and Gabrielle Kaufmann-Kohler.  The EU has nominated the following ordinary members of such panel: Hubert Legal, Helena Jäderblom, Ursula Kriebaum, Jan Wouters, Christoph Walter Hermann, Javier Diez-Hochleitner, Alice Guimaraes-Purokoski, Barry Doherty, Tamara Capeta and Nico Schrijver.   The British government has nominated Sir Gerald Barling, Sir Christopher Bellamy, Zachary Douglas, Sir Patrick Elias, Dame Elizabeth Gloster, Sir Peter Gross, Toby Landau QC, Dan Sarooshi QC, Jemima Stratford QC and Sir Michael Wood.

An arbitration panel must consist of 5 members (art 171 (3)).  The EU and UK shall each nominate 2 members from among the persons on the list established under art 171 (1). The chairperson shall be selected by consensus by the members of the panel from the persons jointly nominated by the EU and UK to serve as chairperson.

The parties have agreed to be bound by any ruling of the arbitration pane pursuant to art 175 and shall take steps to comply with the ruling within a reasonable time.

Anyone wishing to discuss this article or the Withdrawal or Trade and Cooperation Agreement generally may call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

Future Relationship Negotiations: The EU sets out its Stall

Standard YouTube Licence

Jane Lambert

The United Kingdom left the European Union on 31 Jan 2020 pursuant to the Agreement on the withdrawal of theUnited Kingdom of Great Britain and Nothern Ireland from the EuropeanUnion and the European AtomicEnergy Community ("the Withdrawal Agreement"). The Withdrawal Agreement provides for an implementation period during which EU law will continue to apply to the UK until 31 Dec 2020. One of the reasons for the implementation period is to enable the parties to negotiate a new relationship to take effect from 1 Jan 2021.

The parties have already agreed a framework for such a relationship in the Political Declaration setting out the framework for the future relationship between the European Union and the theUnited Kingdom ("the Political Declaration").  The European Council has now authorized the opening of negotiations with the UK for a new partnership agreement in the terms of the draft decision of 13 Feb 2020 and an addendum to the decision setting out directives for those negotiations.

The decision consists of 8 recitals and 3 articles.  The recitals refer to the Withdrawal Agreement and the Political Declaration as well as Council guidelines of 30 March 2018 restating the Council's determination to have as close as possible a partnership with the UK covering trade and economic cooperation and also other areas including, in particular the fight against terrorism and international crime, as well as security, defence and foreign policy. Art 1 of the decision authorizes the European Commission to open negotiations for a new partnership agreement.  Art 2 nominates the Commission as the EU's negotiator.  Art 3 requires the negotiations to be conducted in consultation with the Working Party on the United Kingdom and in accordance with the directives contained in the addendum, subject to any directives which the Council may subsequently issue to the Commission.

The addendum is a much larger document consisting of 46 pages containing 172 paragraphs divided into an introduction and four Parts.  Paragraph 5 of the introduction reminds readers that:

"The negotiations of the envisaged partnership should be premised on the effective implementation of the Withdrawal Agreement and of its three Protocols. In this context, the envisaged partnership should continue to protect the Good Friday or Belfast Agreement reached on 10 April 1998 by the United Kingdom Government, the Government of Ireland and the other participants in the multiparty negotiations in all its parts, in recognition of the fact that the peace process in Northern Ireland will remain of paramount importance to the peace, stability and reconciliation on the island of Ireland. While preserving the integrity of the Single Market, the envisaged partnership should ensure that issues arising from Ireland's unique geographic situation are addressed."

Paragraph 9 acknowledges the very short duration of the implementation period. The Commission is urged to achieve as much as possible during that time and to be ready to continue negotiations after its expiry.

Part I of the addendum concerns "Initial Provisions".  Paragraph 12 recites the parties' core values and rights including a shared commitment to combat climate change which may or may not be reflected in this country's negotiations for a trade agreement with the USA.  Another shared commitment is maintaining a high level of data protection. The proposed partnership envisages future UK participation in some EU and Euratom programmes in cultural, scientific and other matters.

Part II concerns economics.  It should conform to the Agreement to establish the World Trade Organization and its policies for trade.  There should be free trade in goods, customs cooperation, trade facilitation and a measure of regulatory alignment.  Trade in services and the free flow of investment should be prioritized.  Intellectual property is mentioned specifically.  There are sections on financial services, competition, mobility of labour, transport cooperation and fisheries the last of which is likely to be particularly sensitive politically.

Part III covers security and addresses law enforcement and judicial cooperation, intelligence sharing, foreign policy coordination including sanctions, defence procurement, space, international development, refugees and infection control.

Part IV deals with institutional matters. Paragraph 155 proposes "a governing body responsible for managing and supervising the implementation and operation of the envisaged partnership, facilitating the resolution of disputes" Disputes that cannot be resolved through consultation should be referred to arbitration with provision for the referral of points of EU law to be referred to the Court of Justice of the European Union. That provision has been criticized by some but it is hard to see an objection. It merely provides machinery to access the Court where none exists right now.   The tribunal will have its seat in a national jurisdiction with direct access to national courts on issues of national law.

Anyone wishing to discuss this article or the new relationship negotiations generally should call me on +44 (0)20 7404 5252 during normal office hours or send me a message through my contact page.

Some Proposals for Dispute Resolution from the Institute for Government

Jane Lambert

Last week I reported that the German equivalent of the CBI had warned its members with business or investments in the United Kingdom to prepare for a very hard Brexit (see German Industry Federation advises its Members to prepare for a Hard Brexit 6 Oct 2017). As I have said before, the problem is how to guarantee British performance of the UK's obligations under any withdrawal treaty (see Dispute Resolution: A Potential Deal Breaker? 8 Aug 2017, Has Mrs May done enough to break the Logjam? 24 Sep 2017, Fourth Round of Brexit Talks: Still a Logjam 28 Sep 2017 and Brexit Briefing - September 2017 3 Oct 2017).

The performance of the other member states would be policed by the Court of Justice of the European Union. We are not prepared to accept that while the governments of the remaining member states cannot be expected to accept anything less. Until we have resolved that question there really is very little point in discussing anything else. Thus, a "good deal" or indeed any kind of deal with Europe other than those that exist under multilateral agreements just cannot happen. That is why the BDI is warning its members to prepare for a hard Brexit and indeed why my professional body is advising me to do the same (see German Industry Federation advises its Members to prepare for a Hard Brexit supra).

There does not need to be a breakdown of talks. I am sure that the present and any successor government would honour its obligations to its neighbours. It would be politically unthinkable to do otherwise. As I said in Fourth Round of Brexit Talks: Still a Logjam:

We may not have a written constitution but we do have rules that known as conventions that are at least as robust as those of other countries' constitutions. For instance, any Parliament could extend the 5-year limit to the duration of a Parliament originally contained in the Parliament Act 1911 and now re-stated in the Fixed Term Parliaments Act of 2011 but it would never do so. Would not an agreement between the main political parties not to repeal a withdrawal agreement statute be enough? The political reality for those who understand our constitution is that it probably would ....."

However, I added: "that may not be how they see things from across the Channel."

So are there any other solutions?  The Institute of Government, which describes itself as  "the leading think tank working to make government more effective" has considered a number of options in Dispute Resolution after Brexit  2 Oct 2017 which can be downloaded from that link plus this useful little video The UK position on dispute resolution after Brexit 2 Oct 2017. Re-joining EFTA and relying on the EFTA Court seems to tick more boxes than any of the others according to the Institute's infographic, but it would not be very popular with hardline Brexiteers.

Should anyone wish to discuss this article, call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

Further Reading

Date	Author	Title	Source
12.10.2017	Raphael Hogarth	Giving Effect to “Direct Effect” in Brexit Negotiations	Institute for Government

New Position Papers from DxEU

Jane Lambert

Mr David Davis and his civil servants have been busy. While everyone else in England and Wales has been looking forward to the late summer bank holiday they have been preparing for the third round of talks with the Commission's Art 50 Task Force on 28 Aug 2017 (the programme for which is here). They have also produced a number of position papers and future partnership papers on data protection, enforcement and dispute resolution, cross-border civil judicial cooperation and future customs arrangements even though none of those "future partnership issues" is yet on the table.

The most interesting of the "future partnership" position papers is the enforcement and dispute resolution position paper which I discussed in HMG's Enforcement and Dispute Resolution Position Paper 23 Aug 2017 and the data protection paper which I discussed in HMG's Exchange and Protection of Personal Data Position Paper in my Data Protection blog today.

The enforcement and dispute resolution position paper has given rise to a lot of comment much of it uninformed because of the inclusion of the adjective direct in the first line of the paper.  The sentence reads:

"In leaving the European Union, we will bring about an end to the direct jurisdiction of the Court of Justice of the European Union (CJEU)."

The Court of Justice determines disputes that arise under the EU treaties which cease to apply to automatically under art 50 (3) of the Treaty of European Union or the coming into force of a withdrawal agreement whichever happens first. In that sense, the jurisdiction of the Court of Justice will end. It will no longer be possible for the Commission to take infringement proceedings against our government for failing to implement a directive or for an English court to refer an issue of Union law that arises in English litigation to the Court under art 267 of the Treaty on the Functioning of the European Union.  But the Court will continue to influence our law for many years to come and perhaps indefinitely by virtue of the incorporation of EU legislation and case law into our national law under the provisions of the European Union (Withdrawal) Bill. Moreover, as clause 6 (2)  of the Bill permits courts in the UK to have regard to decisions of the Court of Justice after we leave the Union its decisions will continue to have considerable persuasive authority indefinitely.

I criticized the position paper but on the grounds that it guarantees no rights for citizens including those of our own country to take proceedings against our government if they suffer loss or damage by reason of its failure to implement an obligation under any withdrawal agreement that we may make with the remaining member states or of any derogation that it may make from such agreement. To my mind, that is much more fundamental.

The data protection paper is much more sensible. We need to ensure the unrestricted flow of personal data between Britain and the UK if our service industries are to continue to do business in Europe. The same is, of course, true of the service industries of the remaining member states. The difference is that they could survive disruption much better than us because they could still do business freely with each other.  The financial services industries in say Frankfurt, Paris, Amsterdam, Dublin and Madrid might even do well if it became more difficult to exchange data with London. The European negotiators almost certainly know that and will be no hurry to do any favours for us unless and until they see some concessions on the issues that matter to them.

Should anyone wish to discuss this article or Brexit in general, call my chambers on +44 (0)20 7404 5252 during normal office hours or send me a message on my contact form.

Dispute Resolution: A Potential Deal Breaker?

Author Cédric Puisney 

Licence Creative Commons Attribution 2.0 Generic  

Jane Lambert

On 20 July 2017 negotiators for the British government and the Commission published a joint technical note on the comparison between the British and EU positions on citizens' rights.  It is drawn up rather like a Scott schedule with 5 columns:

• Topic
• Detail
• EU Position
• UK Position
• Issue.

The "Issue" column is colour coded, green indicating convergence, red divergence and yellow where further discussion is required to deepen understanding.

There is an encouraging amount of green in the right-hand column but the red reveals fundamental differences of approach between the two sides.  Take "Individual enforcement of rights" on page 4, for example.  The EU position is that the provisions of any agreement for the withdrawal of the UK from the EU ("the withdrawal agreement") that give rights to citizens of the remaining EU member states shall be directly enforceable by those citizens without regard to any statute that may implement the withdrawal agreement. The British position, on the other hand, is that any rights that may be granted to those citizens will depend on a British statute though a court in the UK may have regard to the withdrawal agreement to determine legislative intent.  

The problem for the 27 remaining member states is that governments do not always perform their treaty obligations. That may be because of a genuine difference of view on the interpretation of the treaty or it may be because domestic political pressures make it impossible for a government to honour its international obligations. Her Majesty's Government may be no worse in that regard than the governments of most other countries.  Indeed, we like to think that ours is somewhat better but we have been called "Perfidious Albion" in the past and possibly for a reason.

The difficulty can best be appreciated by an example. Suppose a Polish worker in Lincolnshire is denied a benefit to which he or she believes he or she is entitled.  Right now, he or she can appeal to an administrative tribunal which has to apply the law as set out in the EU legislation in accordance with the judgments of the Court of Justice of the European Union ("the CJEU"). Should a point of law arise upon which there is no guidance from the CJEU the tribunal of last resort has a duty to refer the issue to the CJEU for a preliminary ruling under art 267 of the Treaty on the Functioning of the European Union. The EU negotiators want something like that to continue after Brexit but the British contend that the worker's rights have to depend entirely on the wording of the statute possibly as interpreted by previous judgments of the English courts. If the worker believes that the Act fails to implement the terms of the withdrawal agreement, the most he or she could do would be to ask his or her government to intercede with the British government diplomatically. The Polish foreign ministry might or might not accept its citizen's request but, even if it did, it could take years to persuade the British government to change the law, Moreover, any such change would be of no immediate, practical use to the unfortunate Polish worker.

As the Commission's negotiators will have anticipated that sort of difficulty, they are unlikely to recommend a withdrawal agreement that leaves EU citizens in the UK without an effective remedy. It follows that unless the two sides can agree what that remedy should be before 29 March 2019, there can be no withdrawal agreement when the treaties cease to apply to us pursuant to art 50 (3) of the Treaty of European Union. That is no doubt why the Bar Council's Working Group on Brexit described dispute resolution as a "potential deal breaker" at para 4 of Paper 10 of the 3rd edition of The Brexit Papers. When the treaties fall away all sorts of commercial and administrative arrangements that we have made with our largest and closest trading partner over most of the last half century fall away with them with alarming consequences for us, the rest of Europe and, indeed, the rest of the world. 

The problem arises because our government announced at para 2 of its white paper, The United Kingdom’s exit from, and new partnership with, the European Union:

"We will take control of our own affairs, as those who voted in their millions to leave the EU demanded we must, and bring an end to the jurisdiction in the UK of the Court of Justice of the European Union (CJEU)."

It added at 2.3:

"The Court of Justice of the European Union (CJEU) is the EU’s ultimate arbiter on matters of EU law. As a supranational court, it aims to provide both consistent interpretation and enforcement of EU law across all 28 Member States and a clear process for dispute resolution when disagreements arise. The CJEU is amongst the most powerful of supranational courts due to the principles of primacy and direct effect in EU law. We will bring an end to the jurisdiction of the CJEU in the UK. We will of course continue to honour our international commitments and follow international law"

To its credit, the government did acknowledge at 2.4 that "ensuring a fair and equitable implementation of our future relationship with the EU requires provision for dispute resolution" and suggested several dispute resolution models between paras 2.5 and 2.8 and Annex A.  The Bar Council Working Group has considered and commented on those models between paras 20 and 27 of Paper 10. Those models were also discussed at the Institute for Government seminar, Brexit, dispute resolution and the European Court of Justice on 24 July 2017. I would urge all my readers to watch Raphael Hogarth's presentation and the video of the discussion, both of which are available on YouTube.

At paragraph 2.9 of its white paper, our government says "the UK will seek to agree a new approach to interpretation and dispute resolution with the EU" and adds at 2.10:

"The actual form of dispute resolution in a future relationship with the EU will be a matter for negotiations between the UK and the EU, and we should not be constrained by precedent. Different dispute resolution mechanisms could apply to different agreements, depending on how the new relationship with the EU is structured. Any arrangements must be ones that respect UK sovereignty, protect the role of our courts and maximise legal certainty, including for businesses, consumers, workers and other citizens."

The problem with that from the European point of view is that treaties are part of the remaining states' legal order.  Any withdrawal agreement that the remaining member states make with us will be just as much part of EU law as any other.  As the white paper, acknowledges, the CJEU is "the EU’s ultimate arbiter on matters of EU law." Prof. Catherine Barnard says in Issues concerning the Court of Justice that workarounds such as hybrid courts consisting of judges from the CJEU and other states have been considered before and have had to be abandoned as incompatible with EU law.

Looking at the other matters being discussed by the negotiating teams, the sort of problems that I have envisaged for the Polish worker could apply to a resident of Dundalk who wants to keep his or her job in Newry or the computation of the amounts that the British government may agree to pay under any withdrawal agreement. Similar problems will occur if we want to continue to participate in Euratom, the European Medicines Agency or indeed the Unified Patent Agreement as art 20 obliges the Unified Patent Court to apply EU law in its entirety and to respect its primacy.

It seems to me that the positions of the British and EU negotiators are incompatible and irreconcilable. If I understand their arguments correctly it would seem that the Bar Council's Brexit Working Party and Prof. Barnard would agree with me. It is very depressing - rather like watching two crowded passenger trains steaming towards each other at full speed on the same stretch of track. A crash can be averted only if one side or the other gives way.  Since it would be impossible for the EU to give way without dismantling a legal order that has subsisted in one form or another since the establishment of the European Coal and Steel Community in 1952 I can't see how any concessions can possibly come from them.

Should any of my readers wish to discuss this article or the legal consequences of Brexit generally, they should call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.