References to the European Court and Brexit

Posted on 01 Nov 2017 by Brick Court

Aidan Robertson QC

Has the prospect of an impending Brexit affected the approach of the UK courts to the exercise of their discretion to make references to the Court of Justice of the European Union (CJEU) under Article 267 of the Treaty of the Functioning of the European Union (TFEU)? Two judgments show that the approach may now be different, depending on the circumstances; a third judgment, in which this issue was raised by the bench, is pending.

This issue was described by Roth J as “the elephant in the room” during closing submissions in the Competition Appeal Tribunal on 29 March 2017 in Generics (UK) Ltd v Competition and Markets Authority (Paroxetine), where he pointed out that where a referable issue arose in the present situation “there is a lot to be said for making a reference sooner rather than later”. If the issue were decided without a reference and then appealed, it might be that by the time the appeal was heard, Brexit would have taken place and the opportunity to make an Article 267 reference would have gone. Judgment in this case has yet to be delivered.

In Coal Staff Superannuation Scheme Trustees Ltd v HMRC [2017] UKUT 137 (TCC) (26 April 2017), Rose J rejected an application for an early reference to enable the CJEU to consider a question of the compatibility of UK tax legislation on withholding taxes with EU law on free movement of capital. Rose J held that whatever arrangements for Brexit might be negotiated, that should not at this stage require a change in judicial practice as to the exercise of discretion whether to refer under Article 267 TFEU. She rejected a submission that the appeal tribunal in this case had effectively been turned by Brexit into a court of final instance obliged to make a reference under Article 267(3) TFEU save where the issue of EU law is acte clair.

The Divisional Court in Northern Ireland in Kociolek v The Polish Judicial Authorities [2017] NIQB 87 (12 October 2017) rejected an application for a reference of a question as to whether the UK government had failed transpose into domestic law a European Council Decision on the European arrest warrant. The Court observed that by the time any ruling was handed down by the CJEU, Brexit would have taken place and even if the CJEU held that the UK was in breach of an obligation to transpose the Decision into national law “It is, of course, most unlikely that the political will to introduce such legislation would be present in any event.” The Court therefore concluded that a reference would be academic, recalling the “dictum of Lord MacDermott in McPherson v The Department of Education, NIJB 22 June 1973, that an order of the court ‘does not usually issue if it will beat the air and confer no benefit on the person seeking it’. That is apposite here.”