The laws of the EU have been incorporated into UK law since the enactment of the European Communities Act 1972. After over 40 years of EU membership, those European laws touch upon many aspects of business life and operations in the UK.
In this update, we take a look at the main types of EU law, their key characteristics and the basic principles that will determine how such laws will be affected by Brexit.
The main types of EU laws are:
- Treaties: These are basic principles of EU law set out in the Treaty on the Functioning of the European Union (often referred to as “TFEU”) and the Treaty on European Union. They provide the foundation for any laws developed by the EU, guide the interpretation of those laws and directly apply to all Member States.
- Regulations: These are EU laws that automatically apply in Member States (i.e. no national legislation needs to be passed for such laws to take effect). The General Data Protection Regulation 2016 (not yet in force) is an example of an EU Regulation.
- Directives: These are EU laws that require implementation at national level by Member States (i.e. each Member State is required to implement its own national legislation to achieve the objectives set out in a Directive). The Commercial Agents Regulations 1993 is an example of a piece of UK legislation that implemented an EU Directive.
- Case law: These are decisions of the Court of Justice of the European Union (“CJEU”). CJEU has the final say over disputes relating to the interpretation of EU laws. Also, decisions of the UK national courts are often influenced by decisions of CJEU.
As we explained in our introductory article, we don't yet know exactly how Brexit will impact upon our legal landscape. However, what we do know is:
- The vote to leave the EU has no legal impact on the application of EU law in the UK. No such impact will be felt until the date of: (i) entry into force of any withdrawal agreement; or (ii) the two year anniversary of the UK’s service of formal notice to leave the EU, whichever occurs first. We will refer to this date as the “Leave Date” in the remainder of this article.
Up until the Leave Date, the UK remains bound by EU law in the same way that it has done over the past 40 years.
- With effect from the Leave Date, the Treaty Principles and EU Regulations will automatically cease to apply to the UK, unless the UK government legislates to the contrary;
- National legislation which has implemented EU Directives will remain in force following the Leave Date, unless the UK Government decides to replace, amend or repeal any such legislation;
- Following the Leave Date, there may be gaps in UK law which were previously filled by the Treaty Principles and EU Regulations, unless the UK government passes legislation to fill those gaps. There may also be gaps in UK legislation as a result of references to EU legislation, regulatory frameworks and/or bodies that no longer apply to the UK.
- Following the Leave Date, the CJEU will cease to have a direct impact on UK law. However, depending on the form Brexit takes, the UK courts may still be required to follow the lead of the CJEU in many instances. Whatever form Brexit takes, the influence that the decisions of the CJEU have had on UK case law over the past four decades will mean that EU laws will indirectly affect the decisions of our national courts for some time to come.
- A sizeable chunk of UK legislation will be completely unaffected by Brexit, because it is not derived from EU law. The Sale of Goods Act 1979 is an example of a purely domestic piece of UK legislation.