On 2 July 2020, the UK Ministry of Justice published a consultation on the departure from retained EU case law by UK courts and tribunals (accessible here). The consultation, which runs from 2 July 2020 to 13 August 2020, seeks views from key partners and stakeholders in the legal sector on the use of the powers in the European Union (Withdrawal) Act 2018 (as amended by the European Union (Withdrawal Agreement) Act 2020) which enables the UK Government to:

• designate additional courts with the power to depart from retained EU case law
• specify “the extent to which, or circumstances in which,” the court or tribunal “is not to be bound by retained EU case law”
• set out the test which a relevant court or tribunal “must apply” in deciding whether to depart from any retained EU case law
• specify considerations which “are to be relevant” to the court or tribunal in coming to such decisions.

Following the end of the Transition Period (11pm 31 December 2020), UK courts and tribunals shall cease to be bound by decisions from the Court of Justice of the European Union (CJEU). Retained EU law – EU-derived rights and legislation applicable to the UK before the end of the Transition Period which will be retained by statute – is to be interpreted in line with retained case law. Retained case law includes retained domestic case law (decisions of UK courts interpreting CJEU judgments) and retained EU case law (CJEU decisions and principles of law).

As the legislation currently stands, only the UK Supreme Court (or the High Court of Justiciary in Scotland in certain circumstances) has the absolute jurisdiction to depart from retained EU case law. To do so, the Supreme Court must apply the rules they currently exercise in departing from their own previous case law.

The UK Government indicates that there is a need for UK case law to develop after the UK leaves the EU, whilst maintaining legal clarity and certainty in the law. The Government considers that there is a risk that retained EU case law would become “fossilised” if only the UK Supreme Court could depart from it. If more courts have the power to depart from retained EU case law, more litigants would have the opportunity to seek to change retained EU case law where it adversely effects them. However, there is a risk that this would create legal uncertainty. Controversial areas of law covered by retained EU case law may be re-litigated, leading to a “free for all” and causing the UK legal system to become overwhelmed. Further, if more courts have the power to depart from retained EU case law, there is a concern that courts could adopt a different approach in departing from the same case law, resulting in a divergence between jurisdictions within the UK and the advent of “forum shopping” for a favourable court.

In view of the various policy factors, the Government puts forward two options:

1. Extend the ability to depart from retained EU case law to the Court of Appeal in England and Wales and equivalent courts in other UK jurisdictions
2. In addition to the Court of Appeal and equivalent courts, extend the ability to depart from retained EU case law to the High Court of Justice and equivalent courts

The Government considers that the additional courts should not be bound to the extent that the retained EU case law is unmodified by the UK Supreme Court and has asked for the views of stakeholders as to the extent to which the courts should be bound by retained domestic case law which relates to retained EU case law. The Government suggests that to ensure a consistent approach, the additional courts should rely on the test applied by the UK Supreme Court to depart from its own case law – namely “whether it appears right to do so”. Whilst there is no rigid formula to apply in order to assess whether this test is satisfied, the power has previously been exercised in circumstances where an earlier decision causes uncertainty or no longer reflects modern public policy.

The ramifications of the Government’s decision to designate additional courts with the power to depart from retained EU case law have the potential to be far reaching indeed.  In the sphere of intellectual property, the CJEU has been instrumental in shaping the law concerning trade marks, registered designs and design rights and, to some extent, copyright. Whilst patent law remains largely outside of the jurisdiction of the CJEU by virtue of the European Patent Convention, stakeholders in the pharmaceutical industry will look on with interest to see which UK courts will be able to depart from the CJEU’s approach to Supplementary Protection Certificates (SPCs). Regulation (EC) No 469/2009 (SPC Regulation) has been a source of equal parts vexation and delight for litigants and practitioners over the years, resulting in multiple referrals to the CJEU. It is particularly noteworthy that certain UK courts in recent years have expressed a divergence in opinion to the CJEU on what is the correct test for interpreting Article 3(a) of the SPC Regulation. Whether the UK courts will maintain this view, and indeed whether they would have the jurisdiction to exercise their power to depart from the CJEU’s position, remains to be seen. Overall, it is axiomatic that the greater the ability of lower courts to depart from the position of the CJEU on any particular issue, the quicker the divergence in law between the UK and the remaining states in the EU, a point which will be of relevance to clients carrying out business on both sides of the English Channel.