Getting Brexit Done? The UK Retained EU Law and what it means for UK companies

If the Retained EU Law (Revocation and Reform) Bill is passed in its current form, nearly 50 years of EU-derived rules and regulations that had become part of the fabric of UK law across a wide range of areas will disappear from the UK statute books on 31 December 2023, unless the relevant department persuades Government to keep the statute. Businesses should therefore consider whether they wish to make representations to any relevant departments to influence decision-making on the statutes they definitely want to keep, or lose.

What is the UK Retained EU Law?

Following the UK’s decision to leave the European Union (“EU”) on 23 June 2016, along with the European Union (Withdrawal) Act 2018, it was agreed that EU-derived legislation would be retained as a new category of domestic law (“Retained EU Law”). Retained EU Law was to continue to apply until Parliament had the chance to review, reform and re-enact such laws.

Retained EU Law was never intended to remain a permanent fixture of UK law and a new bill aiming to remove all Retained EU Law was announced as part of the Queen’s Speech in May 2022. This bill was introduced by the then-Business Secretary, Jacob Rees-Mogg in September 2022 as the Retained EU Law (Revocation and Reform) Bill (the “REUL Bill”).

What does the REUL Bill do?

The key component of the REUL Bill is that on 31 December 2023, a majority of Retained EU Law would be automatically repealed and discontinue to apply in the UK (also termed as “sunsetting”). The exceptions to this are primary legislation (so Acts of Parliament, like the Equality Act 2010, do not fall in the scope of the REUL Bill), nor is most of the legislation concerning financial services, tax and customs. The government has also committed to keeping legislation which is required to fulfil its international obligations.

However, the REUL Bill goes further than just sunsetting Retained EU Law and by the end of 2023, the following will happen:

• the supremacy of EU law over UK legislation will be abolished, meaning where there is a conflict with domestic law and EU law, the latter will be deemed subordinate with UK legislation taking superior status;
• the general principles of EU law will be abolished as part of UK law;
• facilitation of UK courts to depart from retained case law; and
• the status of directly effective EU law will be downgraded, and powers will be granted to modify other statutes, to facilitate their use to amend retained direct EU legislation in the same way they can be used on domestic secondary legislation.

Practical issues with the REUL bill

In June 2022, the government released a Retained EU Law Dashboard (“Dashboard”) which catalogued over 2,400 individual pieces of legislation across 300 policy areas which would fall within the scope of the REUL Bill. Following an update in January 2023, the Dashboard has identified over 3,700 pieces of legislation covering 400 unique policy areas with the Department for Environment, Food and Rural Affairs, HM Treasury and Department for Transport being the top three departments with Retained EU Law which would be impacted by the REUL Bill.

Despite the update to the Dashboard (and a commitment to continue to do so throughout 2023), there is no certainty that all pieces of Retained EU Law have been identified as there is no comprehensive list of the Retained EU Law which would be affected by the REUL Bill. This poses the dilemma that was faced in 2016 when EU law was retained in the first place – i.e., there may be a significant gap opened overnight in the UK statute book, creating unintended confusion for UK individuals and businesses. 

Secondly, it is not clear whether various departments that have been identified within the scope of the REUL Bill will have the adequate resource to examine each piece of Retained EU Law. For example, the Department for Business, Energy and Industrial Strategy (“BEIS”) confirmed in November 2022 that it had already spent approximately £600,000 on reviewing the REUL Bill only for the period 1 September to 27 October 2022. Related to this, the big question is how these departments will be able to carry out the extensive task of reviewing, revoking and/or replacing within the timeframe of the REUL Bill and whether the pressure of this timeline will cause oversight.

It has also been argued that the REUL Bill is undemocratic given that clause 16 of the Bill enables ministers or devolved authorities to revoke any secondary Retained EU Law and “replace it with such provision as the relevant national authority considers to be appropriate and to achieve the same or similar objectives”. This, in essence, diminishes the role of Parliament scrutiny, which ironically was the one of the very reasons for introducing the REUL Bill in the first place.

Next Steps

The REUL Bill has passed through the House of Commons and received its first reading and second reading in the House of Lords on 19 January 2023 and 6 February 2023, respectively. It passed through the Lords Committee on 9 March 2023 and is current at the Report stage, following which it will have a third reading in the House of Lords. Given the speed at which it is passing through both Houses, it is possible that the REUL Bill may become law in April / May 2023, leaving very little time until the sunsetting on Retained EU Law.

In the meantime, clients should contact CMS if they wish to evaluate the relevance of the 4000+ EU-derived statutes that will otherwise be impacted by the REUL Bill. With knowledge of which statutes would be impacted, businesses can then consider whether they wish to make representations to any relevant departments.