Guest blog: Prime Minister’s Brexit Speech: Analysis by the Bar

8 March 2018

In her wide-ranging Mansion House speech last week, the Prime Minister said she wanted to see a comprehensive system of mutual recognition that would enable self-employed legal professionals to continue to travel to the EU to provide services to clients in person.

That would be good news for justice and the legal services sector, but as Brexit Working Group Members Philip Moser QC and Evanna Fruithof explain, such an offer may look like a bid to have a deal more favourable than existing Member States.

Prime Minister's Brexit Speech: Analysis

In her Mansion House speech last week the Prime Minister touched on the continuing jurisdiction of the European Court of Justice (ECJ) after Brexit as well as on civil justice cooperation, recognition of qualifications and, briefly, the Rule of Law.

There was express recognition of the "hard fact" that even after the UK has left the territorial jurisdiction of the ECJ, "EU law and the decisions of the ECJ will continue to affect us". The Prime Minister cited Case C-362/14 Schrems v Data Protection Commissioner for the unarguably correct proposition that the ECJ will be the ultimate arbiter of whether any UK-EU agreement conforms with EU law. This is indeed the proper starting point for consideration of the UK's proposals. UK negotiation success and UK and EU Parliamentary approval are not the only hurdles facing the Prime Minister. The text of any agreement will be subject to scrutiny and approval by the ECJ and it will be liable to be struck down if it is found to be incompatible with EU law. This week's judgment in Case C-284/16 Slovakiak v Achmea, striking down a provision for an arbitral tribunal between Slovakia and the Netherlands is a timely reminder of this fact.

On the likely internal impact of ECJ judgments post-Brexit, the Prime Minister reiterated the position as already set out in the EU Withdrawal Bill, namely that UK courts will continue to look at the ECJ's judgments where they concern similar, EU-derived UK laws. In addition, we were told that where the UK continues to participate in an EU agency "the UK would have to respect the remit of the ECJ in that regard", which raises interesting questions about whether the possibility of references from UK courts to the ECJ might also be required in such cases.

On the identity of the ultimate arbiter of disputes arising under a future partnership agreement (as opposed to the initial lawfulness of such an agreement itself under EU law), the UK intends that this "cannot be the court of either party", i.e. not the ECJ. TheAchmeajudgment (see above) sounds a warning in that regard. Insofar as any independent EU-UK arbitral tribunal would also be interpreting EU law, the ECJ (which jealously guards its autonomy) would likely see this as having an adverse effect on the autonomy of EU law, and therefore as being incompatible with the Treaties.

Important passages for the legal profession included the references to state aid and competition rules remaining "in step" with EU law. In addition, there was the welcome statement that the UK would like to see the continued mutual recognition of qualifications. The latter would be part of a "comprehensive system of mutual recognition" that would, for instance, enable self-employed legal professionals to continue to travel to the EU to provide services to clients in person as well as over the 'phone or the Internet'. HMG is sending a clear message that mutual recognition in a defined number of areas is the UK's preferred direction of travel.  However, whilst from a UK point of view this may appear to be a reasonable proposal, mutual recognition as a principle of EU law is carefully circumscribed and operates against the backdrop of the rules and obligations of the Single Market.  Thus, from an EU law point of view, the UK's present offer is likely to look like a bid to have a deal more favourable than existing Member States.

Another important announcement concerned judicial cooperation. The Prime Minister expressly referred to the Lugano Convention and by implication to wanting a "Lugano plus", given that the existing Brussels Regulation already provides an improved version of that regime. This is a key area for both the UK and the EU, as set out in the Bar Council's Brexit Paper 4, Civil Jurisdiction and Judgments.

The Prime Minister's speech is to be welcomed as providing some further clarity and impetus, though many both here and across the Channel are calling for detailed proposals rather than statements of principle and intent at this stage.  Indeed, there exists an urgent need for the UK to produce drafting suggestions to spell out its offer as the Commission has done at each stage. Both the content and ultimate legality of any agreement call for clear and robust drafting and, as lawyers know, whoever holds the pen holds the advantage.

But a note of caution; statements emanating from Brussels since the speech indicate that much of its content, whilst a step in the right direction, is seen as unrealistic.  This week, the European Parliament released its draft resolution on the Future Relationship, referring to the Prime Minister's Brexit speeches - including this one - and poured cold water on several of the above propositions.  For example, the role of the ECJ as sole and binding interpreter of EU law is underlined and third country participation in EU agencies excluded.   This resolution is expected to be adopted next week, just ahead of the Council adoption of its guidelines on the Future Relationship, a draft of which has also emerged this week.  These too emphasiseinter aliathe need for legal certainty and the autonomy of the EU legal order.

Given the complexity of the Brexit negotiations and the gaps between the parties, the Bar is concerned about the risk that justice issues may be side-lined. Issues of justice and the Rule of Law are too important to be used as bargaining chips.  The Bar is calling for a separate track for justice matters in the negotiations, leading to a stand-alone solution that would survive even a hard Brexit.

Philip Moser QC & Evanna Fruithof are members of the Bar Council Brexit Working Group