Retained EU case law – Early indicators from the Court of Appeal

A year has passed since the end of the Brexit Transition Period and the UK Government has perhaps had rather more pressing matters to deal with than its desire to deviate from EU law. However, the new opportunity to push for changes in interpretation of existing EU laws has been taken by a number of parties in the English courts in 2021. As a result, some early indications of the courts’ approach have become apparent.

Retained EU Law and Retained EU case law

To provide continuity, almost all existing EU law was brought onto the UK statute book as at 31 December 2020, with changes made by regulations to make sense of clauses referring to EU institutions and the like. Under the European Union (Withdrawal) Act 2018, this body of law became “Retained EU law”. In order to ensure continuity and consistency of interpretation, the Act also introduced the concept of “Retained EU case law”, so that previous interpretation of EU law by the European Court of Justice would continue to bind UK courts.

However, retaining the status quo was obviously never the intention of those who campaigned for the UK to leave the EU. So courts in the UK at or above the level of the Court of Appeal in England and Wales were given the power to deviate from Retained EU case law in the same way, and applying the same test, as the Supreme Court can deviate from its previous decisions. The test for when it is appropriate to deviate from Retained EU case law is whether the court considers it right to do so. The inherent vagueness of this test meant that there was little indication of how frequently the courts might use this power.

Early case law

The area in which some of the first challenges to Retained EU case law have been seen is the field of air-passenger compensation under European Regulation (EC) 261/2004, but this should not obscure the potentially wide-ranging impact of the courts’ approach.

On 21 December 2021, the Court of Appeal gave judgment in the case of Chelluri v Air India Ltd. A key issue was whether it should depart from a 2018 CJEU authority, Case-537/17 Wegener v Royal Air Maroc SA which interpreted the relevant Regulation on passenger compensation.

The Court made a number of observations:

• It has been consistently held that the Supreme Court’s power to deviate from its own previous authority must "be exercised with great caution" and the same applies to the power to deviate from Retained EU case law;
• The fact that Wegener had been repeatedly followed and referred to in the CJEU's subsequent cases was cause for further caution in interfering with it;
• The interpretation of the Regulation argued for “could not be said to be fanciful” absent the CJEU case law, but the consequences of overturning that case law could be far-reaching;
• To introduce such a change in the law without express consideration of the point by the legislature was “both unnecessary and undesirable”.

What next?

It is still early days, but the indicators so far are that the courts will be slow to deviate from Retained EU case law, particularly where that case law is well established and overturning it could have wide-ranging consequences.

Despite the departure of Lord Frost, the Government’s review of Retained EU law continues. Judging from comments made in the House of Lords in November 2021, this appears to be driven by a desire to accelerate divergence from EU law. Changes to Retained EU law therefore appear far more likely to come from the legislature, rather than through re-interpretation by the judiciary, which many will view as the way it should be.