Court of Appeal Considers Retained EU Law in Lipton v BA City Flyer

The judgment in Lipton v BA City Flyer provides a useful insight into the application of retained EU laws in the UK and how this is likely to change over the coming months and years.

The case was concerned with flight delay claims and by its decision the Court of Appeal has paved the way for a large number of such claims, after determining that compensation could not be refused to passengers on the basis of a pilot being taken sick just before a take-off. What is of wider interest, however, is the Court's consideration of applying EU law after the end of the Brexit transition period. 

European Regulation (EC) 261/2004 is an EU regulation which establishes common rules on compensation and assistance to passengers, in the event of denied boarding, flight cancellations, or long flight delays and was used in this case to determine the outcome. The applicability of this regulation is likely to change in the months and years to come, and while this had no impact on the outcome of this case on the facts, the Court of Appeal noted that "As time moves on, and the case law of the [Court of Justice of the European Union ("CJEU")] CJEU evolves, then the differences between the current state of EU law and that which the Court is to take account of might become more accentuated. At that stage the analysis might become more complex."

Applying Retained EU law

The judgment in Lipton sets out a number of important principles with respect to the applicability of retained EU law and how it may change going forwards, considering this in the context of the Regulation in question. The judgment states:

1. Regulation 261/04 is direct EU legislation.

2. It takes effect in domestic law as amended by the Air Passenger Regulations 2019.

3. It should be given a purposive construction which takes into account its recital and other principles referred to in the body of the regulation and in the recitals.

4. To the extent necessary, this process of interpretation would include any provision of international law that has been incorporated into the Regulation by reference.

5. The meaning and effect of the measure should be determined by reference to case law of the CJEU made prior to 11 pm 31 December 2020.

6. General principles of EU Law from case law and as derived from the Charter of Fundamental Rights and the Treaty on the Functioning of the European Union ("TFEU"), are relevant to interpretation.

7. In construing and applying such a Regulation the Court of Appeal (but not the High Court) can depart from any retained CJEU case law or any retained general principles. The Court of Appeal is not bound by such principles and may depart from them if it considers it right to do so. It has not been necessary to do so in this case.

8. The provisions of the Trade and Cooperation Agreement ("TCA") and the European Union (Future Relationship) Act 2020 ("EU(FR)A 2020") may be relevant to the effect of domestic law insofar as the subject matter of the domestic law in issue overlaps with the subject matter of the TCA and/or EU(FR)A 2020 and in so far as domestic law does not already cover the subject matter of the TCA.

9. If domestic law does not already reflect the substance of the TCA then domestic law takes effect in the terms of the TCA. In this case, domestic law already implements the relevant provisions of the TCA and there is no need for any further transposition in order to achieve the requisite effect.

Read the full judgment here. 

What this means for you

The key takeaways that we think you should be aware of are:

1. EU law will change, while EU law retained as part of UK law will (subject to new judicial interpretation as per (2)) remain static, frozen as it was on 31 December 2020; and

2. The application in the UK of EU laws with which we have all become familiar will gradually change over time as the UK's courts are freed to re-interpret them.

In terms of immediate actions to consider, you should identify those EU laws that most often impact upon your business and be alert to both: (i) changes in Europe that create a different position there to that within the UK; and (ii) judgments of the English courts that shift the application of retained EU law.

If you have any questions, or would like to discuss anything in relation to the above, please do reach out to your usual Simmons & Simmons contact.