Brexit: Dispute Resolution and Enforcement (European Union Committee Report) - Motion to Take Note

– in the House of Lords at 3:37 pm on 17th October 2018.

Alert me about debates like this

Moved by Baroness Kennedy of The Shaws

That this House takes note of the Report from the European Union Committee Dispute resolution and enforcement after Brexit (15th Report, HL Paper 130).

Photo of Baroness Kennedy of The Shaws Baroness Kennedy of The Shaws Chair, EU Justice Sub-Committee

My Lords, this report was prepared by the Justice Sub-Committee of the European Union Committee, which I chair. I should like to start by thanking the members of this committee, who have been conscientious at all times, the staff, who have been exceptional in their dedication to this work, and all those who gave evidence to us.

Our report was published on 3 May this year. It focused on four distinct matters: first, enforcement of any withdrawal agreement concluded under Article 50 of the Treaty on European Union; secondly, arrangements during the proposed transition period; thirdly, the dispute resolution system that will be implemented under any agreement on future relations between the European Union and the UK; and, fourthly, the related question of how to deal with justice co-operation issues in civil, family and criminal law.

The Government’s position has always been that they would seek to end the jurisdiction of the Court of Justice of the European Union. Whether this is a “blood-red line” or is cast in a rather pinker hue, the Government have been consistent in saying that in leaving the European Union we will bring about an end to the direct jurisdiction of the Court of Justice of the European Union. As we reach the sharp end of the negotiations with the European Union, the question arises as to what this means in practice for individuals, businesses and the enforcement of rights and obligations.

The potential for this issue to cause disagreement between the United Kingdom and the European Union is sometimes underestimated, particularly in the press, due to the current focus on the Irish border. However, during the European Union Committee’s most recent visit to Brussels, which took place following the publication of the Government’s Brexit White Paper in July, Michel Barnier described the question of dispute resolution as “the second most difficult point after Ireland”, so it should concern us here in this House.

We received the Government’s response to our report on 5 July 2018, and I was glad to see it describe the committee’s analysis as a “welcome contribution”. Unfortunately, it was really little more than warm words. The Government recognised that,

“there needs to be a clear mechanism for governing and enforcing our Withdrawal Agreement with the EU – as there is in any international agreement”, and that they would,

“continue to engage constructively … in the negotiations”.

Their response reiterated the fact that the UK had,

“no plans to dock to the EFTA Court”— that is, to access it by a side door, although not being part of EFTA—and that that mechanism for settling disputes would not be appropriate for us. It concluded that,

“Using the EFTA Court … for this purpose would not be a simple or straightforward solution”.

However, on the specific issues that we raised, the response contained little new information and did not address my committee’s conclusions comprehensively. The response was published before the White Paper and so much of its content has been superseded by that document. Therefore, I shall concentrate on the White Paper.

Notably, the White Paper contains a chapter on institutional arrangements. This suggests that in circumstances where a dispute could not be resolved politically by the United Kingdom and the European Union in the proposed joint committee,

“it would make sense in some cases for either party to have the option of referring the issue to an independent arbitration panel”— hold that thought—

“which would include members from both parties”.

Although this demonstrates some progress since the future partnership paper published last August, which merely set out a range of options, it still falls some way short of offering precise governance arrangements to cover both the withdrawal agreement and our future relationship.

The chapter on institutional arrangements also seeks to address how disputes over the proposed common rule book for goods might be determined. It says:

The UK recognises that only the CJEU can bind the EU on the interpretation of EU law, and therefore in these instances, there should be the option for a referral to the CJEU for an interpretation, either by mutual consent from the Joint Committee”— of the European Union and the UK—

“or from the arbitration panel”.

This concession appears to be very similar to what is called the Ukraine model. A lot of people do not view a reference to a Ukraine model as one that we would be very charmed by, but that model of dispute resolution under an association agreement is mainly an arbitration process, with a reference mechanism to the European Court of Justice to rule on technical issues of European Union law and a final determination going back to the arbitration panel.

That pragmatic model has the benefit of being supported by some precedent, as it is used not just in Ukraine but in Moldova and, I think, somewhere else, but it may be seen as further blurring the Government’s red line on the role of the European Court of Justice. We understand that such an arbitration model is also under discussion with the Swiss authorities, which are having similar discussions about the governance of their treaties with the European Union. Perhaps, going forward, it might sound more appealing if we were to refer to such a proposal as the Swiss model.

However, my first question is: will this model of arbitration, with a reference procedure, be utilised as a governance mechanism for the withdrawal agreement and for other aspects of dispute resolution after Brexit? The method at the moment is being put forward as dealing with disputes that might arise out of the common rulebook, so my question is: would it also be used for the withdrawal agreement and other aspects of dispute resolution once we have left?

In response to the committee’s recommendation that any future,

“enforcement and dispute resolution system established under the future relationship should be accessible to citizens and businesses”, the Government agreed that,

“it is in the interests of both the UK and the EU that the rights and obligations agreed between us can be relied upon and enforced by individuals and businesses”, yet the Government’s response provides no information about how this might be facilitated. Should the Government settle upon arbitration as the main mechanism for dispute resolution, we assume that this would therefore exclude participation by individual litigants and businesses—it would be Government to Government. In circumstances where there are disputes about any future common rulebook, particularly between parties based in the UK, we ask the Government to explain how individuals and businesses would be able to seek a judicial remedy in circumstances where there was no ability for the individual or the business to request a reference to the European Court of Justice. The evidence we received during the course of our inquiry was that state-to-state models of dispute resolution does not tend to favour small businesses since, as the Institute for Government has pointed out in its evidence to us,

“as far as government is concerned it is worth kicking up a fuss only when quite a lot of money is at stake”.

What will this mean for small businesses?

On the issue of participation in the European Union agencies, the White Paper acknowledges that if the United Kingdom wishes to participate, for example, in the European Medicines Agency or the aviation agency, it would,

“respect the remit of the CJEU such that if there was a challenge to a decision made by an agency that affected the UK, this could be resolved by the CJEU, noting that this would not involve giving the CJEU jurisdiction over the UK”.

In the light of this clear concession from the UK Government, I ask for an update on the negotiations with the European Union on the question of participation in the agencies: how far are we getting with that and other relevant mechanisms? As a criminal lawyer, I am particularly concerned about the European arrest warrant, which concerns criminal justice, and what happens on Brexit day in our arrangements and relationships with Interpol and Eurojust—our relationships that enable the arrest of people involved in cross-border crime using the European arrest warrant. There is a need for a court that deals with that; it is not a process that is appropriately dealt with by arbitration.

On the question of cases before the CJEU, I note that, while the Government have proposed that pending UK cases before that court at the end of the transition period should continue through to a binding judgment, the Government agree with the committee that there needs to be a “longstop”—a limitation period—for cases based on facts arising before the end of the transition period. Given that we are rapidly approaching the date by which these issues should be agreed in the withdrawal agreement, I wonder what guidance the Government can offer potential litigants on that question.

Finally, our report also touched on the significant ramifications of Brexit for the UK’s continued participation in the so-called Brussels suite of EU regulations facilitating judicial co-operation in civil and family law matters. My committee has taken a keen interest in this subject matter since the result of the referendum, and we published a report in March 2017 entitled Brexit: Justice for Families, Individuals and Businesses? Earlier this year, as promised in our dispute resolution report, we followed up that work. We did so because this is the stuff that is about the human condition—the relationships between people and how they are affected in terms of their livelihoods, relationships and children. We took evidence from highly regarded civil and family law practitioners and we also had a session with the Government. Yesterday, my committee agreed a lengthy letter to the Lord Chancellor setting out our deep concerns about the current state of the negotiations on this important aspect of Brexit and the Government’s plans for a no-deal scenario. Law is about more than mere technicalities and the black letter; it is about blood, sweat and tears and all those things that are part of our humanity. I invite interested parties to read the letter we have sent to the Lord Chancellor, a copy of which is on the sub-committee’s web page. We are looking forward to his response. I beg to move.

Photo of Lord Thomas of Gresford Lord Thomas of Gresford Liberal Democrat Shadow Attorney General 3:50 pm, 17th October 2018

My Lords, it is always a great pleasure to follow the noble Baroness, Lady Kennedy, and I congratulate her and the staff of her distinguished sub-committee for their immense labours in producing a report on this highly complex and intractable issue. I was interested to hear that it is regarded as being the second largest stumbling block to the withdrawal agreement which is in the process of being negotiated.

We are looking at a number of agreements, the first of which is the withdrawal agreement, which will cover a number of components: the question of finance—how much to pay—citizens’ rights and the protocol on Ireland and Northern Ireland. We expect future agreements to cover the relationship between the UK and the EU in a number of areas, principally trade and security, and there will be other agreements to cover ongoing participation in the EU programmes to which the noble Baroness referred. The governance of each of these agreements contains three elements or components. The first is management of the agreement, the second is dispute settlement, and the third is enforcement after dispute settlement.

The withdrawal agreement has been published in draft form with the areas of agreement coloured in green. From this it appears that agreement has been reached under draft Article 157 for the establishment of a joint committee responsible for the supervision and implementation of the agreement. That covers the first management component of the agreement. The joint committee is to be a political committee, but one of its functions under draft paragraph 4(c) is to,

“seek appropriate ways and methods of preventing problems that might arise in areas covered by this Agreement or of resolving disputes that may arise regarding the interpretation and application of this Agreement”.

That is intended to be the first stage, the political stage, in the settlement of disputes, but what about the second or appeal stage of dispute resolution? There is still substantial disagreement between the United Kingdom and the European Union over how to deal with this and how a dispute settlement should be enforced. On the one hand, the EU has proposed that the European Court of Justice should be the final arbiter because it says that the draft withdrawal agreement still embodies many provisions of EU law and the CJEU has declared itself to be the only binding interpretative authority of EU law. On the other hand, the United Kingdom has argued that it is unacceptable that the appeal body, the final resolution body, in a dispute over the withdrawal agreement or indeed any agreement it concludes with the EU, should be a court whose judges are drawn only from the continuing EU member states. That is the nub of the matter.

Of course, the issue is bedevilled by the irrational demonisation of the European Court of Justice, first by those who campaigned to leave the EU and later by the Prime Minister, who has lost no opportunity to declare that leaving the jurisdiction of the CJEU is one of her red lines. I have never understood how that court could have been painted in such scarlet colours. In the first place, its function has never been to lay down draconian law which binds us all in servitude, but to interpret law which, even if it starts with the Council of Ministers or the Commission, has been subjected to a democratic process in the European Parliament. The United Kingdom has, since joining the EU, had full representation in these three bodies.

Secondly, we have always provided a distinguished judge to sit on the court. Sir Konrad Schiemann, the former United Kingdom-nominated judge of the court between 2004 and 2012, said in evidence to the Committee that,

“in the Luxembourg court the tradition is that you lose your nationality the moment you join the court, which makes no distinction between judges of one nationality and another. … The tradition was that you were not there to plug the point of view of your national Government. That was not your job. Your job was to try to decide the law in the light of the general European interest”.

That, indeed, is the way in which the Court of Justice has operated: it is not a court of competing national judges.

Thirdly, the United Kingdom has, through the power of its legal advisers and advocates, been very successful in the European Court of Justice. The European Commission does not bring cases that it does not expect to win. Of the 63 cases the Commission brought against the United Kingdom that resulted in rulings between 2012 and 2016, the UK submitted a defence in only 30 of those 68 and conceded the rest. In the cases the United Kingdom defended, its success rate was 53%. Its overall success rate of all cases in the period 2003-16 was 25%, the highest of any of the 28 member states. Penalties have never been imposed on the United Kingdom by the Court of Justice for failing to abide by its judgments. In other words, our Governments have always accepted its judgments, even in the cases that we have lost.

The Government’s response to the Committee’s report of 5 July says that they will “respect the role” of the European Court of Justice in the interpretation of EU law in disputes between member states. They expect the EU in return to “respect the role” of our Supreme Court. That is a gnomic utterance: what does it mean? I hope the Minister will enlighten us. It certainly does not help to resolve the current dispute on the appropriate legal body or arbitration process to resolve disputes.

The Committee explored the idea of locking on to the EFTA Court as an independent judicial body, but is rightly not enthusiastic about it because it would require the agreement of Norway, Liechtenstein and Iceland radically to revise the purpose and structure of that court to accommodate a far greater caseload than it was designed to carry and to extend its jurisdiction in economic matters into areas of justice, security and family law. It is clearly not appropriate.

Is there not room for more creative thinking? The institution of the European Court of Justice exists. Its physical building and its administration exist. The United Kingdom has played its full part in its procedures, has been part of its development and has been successful both in the judicial sphere and in advocacy before it. Would it not be sensible to create a special chamber of the European Court of Justice for dealing with disputes arising out of the special circumstances of our leaving the EU? We are not leaving Europe. The judges of that special chamber could comprise an equal number of members of the continuing court and members or former members of our Supreme Court, together with an eminent president from a neutral jurisdiction. This is the important point: since it would be a part of the Court of Justice, it could meet the European Union’s requirement that only that court can interpret provisions of EU law where that this necessary. At the same time, there would be participation from the United Kingdom.

That special chamber would be of particular advantage if disputes arose in respect of the future agreements: the elusive trade deal, agreements concerning our participation in existing EU programmes, the security stuff, the European arrest warrant, Interpol, data protection, family matters and in those areas where the Government wish to continue to participate and co-operate in other fields. It could also be a forum for pursuing individual rights, those of European Union citizens in the United Kingdom and United Kingdom citizens in the European state. We would not want European citizens in the United Kingdom to have remedies solely in the courts of this country if that meant that our citizens abroad in Europe would have remedies only from a European court.

I cannot help comparing the present impasse to the successful negotiations over Hong Kong, where the innovative principle of “one nation, two systems” was developed, and the Court of Final Appeal, which replaced the Privy Council, introduced non-permanent judges to supplement its Bench—I see one of them here today. Judges from the United Kingdom, Canada, Australia and New Zealand play a part in assisting the Bench in the Hong Kong court.

Incidentally, I believe that the answer to the Northern Ireland impasse would be to declare Northern Ireland a special administrative region. With direct access to both the EU and the UK, it would be highly attractive as a centre for financial and other services—legal, accountancy and banking. I am sure that Wales would jump at the chance of becoming a second Hong Kong.

Would the Government’s aversion to the European Court of Justice, fuelled by the empty and ill-informed rhetoric of the Brexiters, stand in the way of such a solution? Surely it would be more acceptable to the public of this country to know that if enforcement proceedings in the nature of fines or the withdrawal or suspension of concessions were imposed on us, it would be as a result of an order of an established and transparent court, whose proceedings were open and readily accessible, rather than some obscure, supranational arbitration body such as that outlined in the Government’s response to this excellent report.

Photo of Lord Hope of Craighead Lord Hope of Craighead Convenor of the Crossbench Peers 4:02 pm, 17th October 2018

My Lords, it is a pleasure, as always, to follow the noble Lord, Lord Thomas of Gresford. Like him, I want to pay to tribute to the work of the sub-committee and to its thoughtful and well-researched report. I think it right to say that, when it was preparing its report, the situation it was contemplating was very troublesome; it is certainly no less troublesome now, as the noble Lord, Lord Thomas, pointed out. As the noble Baroness said, the report was published on 3 May. Here we are, some five months later, seemingly no nearer than we were then to finding solutions to the many problems that it raises. If solutions are being found, we are not being told about them. This lack of information is unsettling. It makes one doubt whether anything that will measure up to what we really need is being achieved.

The Prime Minister has made it clear from time to time that she understands very well that we must have a means of resolving disputes if our future relationship with the EU is to work. In her Florence speech in September 2017, she said that to make the principle of co-operation work we will need a strong and appropriate dispute resolution mechanism. Reporting to Parliament a few days later, in October, she said that the Government were preparing a bold, new strategic agreement to provide a comprehensive framework for future security and law enforcement. She referred to the idea of a treaty, which would exist between the UK and the EU. However, whatever was in her mind at that time does not appear to have surfaced in the form that she was describing. She came back to the subject in Munich in February 2018 and again at the Mansion House on 2 March, talking then about the arbitration mechanism that we would need to ensure that disagreements about the purpose or scope of the agreement could be resolved fairly and promptly.

I think we can all agree with these aspirations, but the real question is: how near are we to achieving them? Are they capable of being achieved at all given the red lines set at the outset of these discussions? A framework for EU-UK partnership in civil judicial co-operation was published in June, but I come immediately to the White Paper from July on legislating for the withdrawal agreement to which the noble Baroness referred. It is 38 pages long and contains 157 paragraphs, but of these only one page and only four paragraphs deal with justice, home affairs, security and defence during the implementation period. It is said that the UK and the EU have agreed distinct provisions in the withdrawal agreement, but it does not say anything about what has not yet been agreed. Surely, now that we are so close to Brexit, we need to be told where the discussions are going, where the areas of agreement are and what is yet to be agreed.

It seems inevitable that some aspects of our future relationship in these areas will have to be left over for discussion during the implementation period. But, as paragraph 122 of the report points out, if we do not “bring forward pragmatic proposals” soon,

“it will be too late”.

That is certainly the case in the sphere of judicial and security co-operation. Furthermore, as Judge Ian Forrester, our judge on the General Court of the European Court of Justice, warned us last week, there needs to be a legal framework when you talk about criminal enforcement and criminal investigation. It simply cannot be done on the basis of a cordial, friendly understanding. That is the way the EU works, and it is not alone. That is the way that any agreement between states in this area has to be. To bind them together, they require a legal framework.

The Lord Chancellor said in a Written Statement published last week that the UK values the EU’s tools for judicial co-operation in criminal justice. He highlighted,

“the importance of close operational working between member states to ensure that they function efficiently”.—[Official Report, Commons, 10/10/18; col. 17WS.]

But, unless we do something about this before exit day, these tools will not be available to us. We will fall over the cliff edge. Yet this is the position into which we seem to be drifting, with no solution in sight, and time is running out.

There is much in this report to discuss, but the future of the European arrest warrant really needs to be sorted out now, and I will say a little bit about that. The way it works illustrates Judge Forrester’s point. It was the product of an agreement reached at the Tampere European Council in 1999 that an area of freedom, security and justice should be created in the EU. Extradition between member states was to be abolished and replaced by the mechanism, established by a 2002 Council framework decision, of a system of surrender between judicial authorities. The aim was to remove the complexity and delay that extradition involves. Everything that binds the member states together has to have a treaty base, and the treaty base for the Council decision is to be found in Article 34 of the Treaty on European Union. It says that the Council’s framework decisions shall be binding on member states as to the result to be achieved, but it leaves to the national authorities the choice of form and methods. That is the system to which we are a party in our capacity as a member state.

Our choice of form and method is set out in Part 1 of the Extradition Act 2003. The result, as regards the relationship with other member states, is achieved through the legal framework which the Council decision has set out. I use the word “achieved” because we need to appreciate that to get all the members states to agree to this system was a real achievement, as several of them object to the surrender of their own citizens to other states. This is particularly so in the case of Germany, which has a firm constitutional bar on the extradition of German citizens to a foreign country. Nevertheless, Germany was willing to agree to their surrender to another member state. That system has been working to our great advantage for the past 15 years.

The potential loss of the EAW will be very damaging. It is difficult to see how we can get round constitutional objections to extradition, such as that of Germany, without it. It is one of the most serious security-related issues for Northern Ireland, as the EU Committee pointed out in paragraph 165 of its report Brexit: The Proposed UK-EU Security Treaty, which was issued in July. It has been described as a vital tool for the Police Service of Northern Ireland for the extradition of suspects from the Republic of Ireland—because it gets round the political objections which used to be voiced before the system came into place—and its loss as the “biggest practical vulnerability” in Northern Ireland arising from Brexit. So more time to work out a permanent solution is a high priority, and in the meantime we need to ensure that it or something very similar is available during the transitional period.

There is a very simple solution, if only the Government would accept it. The framework decision of 2002—the document the noble Lord, Lord Thomas, described, with its colourings of green and yellow and no colouring at all—will of course remain in place in the EU. So we should seek to participate in it for all of its purposes in the same way, during the implementation period, as if we were still a member state. You can find the precise formula needed to address this problem in paragraph 1(b) of Article 58 of the draft withdrawal agreement. It provides that the 2002 framework decision shall continue to apply between the UK and the EU,

“where the requested person was arrested before the end of the transition period”.

One could regard this as rather a generous offer, particularly as it binds other member states, including Germany, if we agree to it. But the website shows that this has still not been agreed. I wonder why. The reason, I suspect—and as the noble Lord, Lord Thomas, indicated—is that there is an elephant in the room: the European Court of Justice, which is there to resolve disputes about the meaning of the Council decision and how the result is to be achieved. So it is an essential part of the mechanism. We seem to have determined that, as we can have nothing to do with it, we cannot make use of the framework decision after exit day. But it is a very small elephant. Decisions of the CJEU in this field have been very few, and none has challenged the way we do things under Part 1 of our own Extradition Act. As the system is well settled, disputes of that kind are likely to be very few. It is not really much of an obstacle to the agreement if we are prepared to face up to it.

As the report notes and the response accepts, it has been agreed that:

“During the transition, the UK will continue to be bound by the jurisdiction of the CJEU”.

At the very least, we should be seeking to be a party to the framework decision while that period lasts. That is what we should be aiming at as a matter of urgency, if no other solution can be found in the meantime. It surely is plain that if we are to secure agreement we will have to compromise, and this ought to be within our grasp given the position we are now in concerning the role of the CJEU during the implementation period.

The Prime Minister said on Monday that “real progress” has been made in recent weeks on the withdrawal agreement. I hope that the Minister can give us an assurance that progress is being made on this issue. As for the future, overcoming Germany’s constitutional objection will be far more difficult unless we continue to be part of that system. But if we can find a way past that, I very much hope that the Government will recognise that the continued jurisdiction of the CJEU in this limited area would be a very small price to pay for all the benefits that continued participation in the framework decision will bring. There would be a bump in the arbitrary red line which totally rejects its jurisdiction, but it would be a tiny bump in comparison with the huge risks to national security if we do not take that step.

In closing, I mention one further point, on the opening paragraphs of the Government’s response. What are we to do if disputes about the withdrawal agreement cannot be sorted out by the proposed Joint Committee for its implementation and application? Various possible solutions are examined in chapter 3 of the report, none of which—including the arbitration panel—provides a complete answer to this problem. There is, therefore, more work to be done here. Can we not accept that, if disputes of this kind arise during the implementation period, they should be settled by the CJEU, as the Commission proposes? That would at least give us more time to find a solution for the future. Is that, too, not a sensible compromise?

Photo of Lord Anderson of Swansea Lord Anderson of Swansea Labour 4:15 pm, 17th October 2018

My Lords, I am the first member of the sub-committee to speak—a sub-committee very ably chaired by the noble Baroness, Lady Kennedy, who opened this debate. It is an honour to be with such congenial colleagues and very professional staff.

We began our enquiry on 21 November with a high-powered seminar—or “scoping session”—with four eminent retired judges. I recommend that all noble Lords read the transcript of that session. One of those committee members has just spoken and given us of his wisdom. The other members were the noble and learned Lord, Lord Thomas of Cwmgiedd, the noble Lord, Lord Neuberger, and Sir Konrad Schiemann, all of whom are very senior legal figures and all of whom stressed that it was difficult to see how the courts would co-operate with EU judges and legal systems after Brexit. They were concerned about government plans to give judges a wide discretion in deciding what weight to attach to decisions of the Court of Justice of the European Union. They also feared that the implications of leaving the EU had not been thought through, could overwhelm the caseload of the Supreme Court and even endanger the independence of the British judiciary. When we met the two Ministers more recently, it was clear that these basic concerns remained largely unanswered: there was much whistling in the dark and hoping that all would turn out all right in the end.

In this debate I will offer various random reflections on our work on dispute resolution. I note what the noble Baroness said about Monsieur Barnier’s comment during the EU Committee’s Brussels visit, when he described the issue of dispute resolution as “the second most difficult point after Ireland”. Yet all the attention in the current crisis—particularly of late—is on the Irish border question, an issue in respect of which many of us consider the DUP has vastly overplayed its hand and been a sort of perverse recruiting sergeant for a united Ireland.

Again, the legal implications for us and our citizens after Brexit played no—or virtually no—role in the referendum debate, save in the platform rhetoric of “taking back our laws”, in spite of being, in the words of Michel Barnier, the second most important question. However, these legal matters, which were covered by the sub-committee and were so neglected in the referendum, impact considerably on the generality of our citizens, particularly in the area of family law, as my noble friend has said. Hard questions arise as we move beyond the rhetoric. The evidence given to us by practitioners and academics revealed the complexities involved. These complexities may well deter other countries—I think of Hungary, which, however Eurosceptic it may be, is very much in favour of retaining its membership. There is, too, a list of countries queuing to join the EU, particularly in the western Balkans.

The Government therefore appear to have very limited views on the way forward and on the appropriate forum, or forums, to resolve disputes. They have ruled out certain options, such as docking with the EFTA court, but have not indicated their favoured option. Paragraph 43 and the following paragraphs of the report provide a helpful summary of the alternatives, all of which have serious drawbacks.

The problem is, in part, that the Government appear to act on the basis that the EU is leaving the UK rather than the UK leaving the EU. They fail to appreciate that when we leave our own legal clout will be reduced because of our size, compared with the United States and the European Union—a fact that appeared to be clear from the evidence given to us. It has all the elements of a Greek tragedy. Perhaps the origin of many of the problems is the Government’s initial thick red line concerning the Court of Justice of the European Union which, as the noble Lord said, has been much demonised by Brexiteers and in our press—and even, alas, by the Prime Minister. Indeed, I think it was the noble and learned Lord, Lord Kerr, who pointed out in an earlier debate that in the debate in another place, there was much confusion between the Court of Justice of the European Union and the European Court of Human Rights at Strasbourg, which was in bad odour because of the then dispute over the Hirst case.

The White Paper of August 2017 states:

“In leaving the European Union we will bring about an end to the direct jurisdiction of the Court of Justice of the European Union”.

That begs the question: how direct is direct?

Did the majority in the referendum seriously want a total and clean break with the European Union and all its works? That thick line has become thinner as the Government make concessions in areas such as our relationship with the European Union agencies—aviation, medicines, and so on. There have been more concessions on the European arrest warrant, which is so much in our interests, as the noble and learned Lord, Lord Hope, has indicated, and on security policy—a debate that has yet to come.

There will, no doubt, be artificial devices proposed to circumvent the wrath of the Brexiteers, and there will be many semantic sleights of hand. For example, I note that the Government have said in the White Paper that,

“the UK would respect the remit of the CJEU such that if there was a challenge to a decision made by an agency that affected the UK, this could be resolved by the CJEU”—

I underline this—

“noting that this would not involve giving the CJEU jurisdiction over the UK”.

Now you see it, now you don’t.

On the European arrest warrant, which is so important to us, it is unlikely that the more pragmatic current move of the Government will satisfy the European Union. Donald Tusk, giving a degree of help to us, I think said, “If you think you can eat your cake and keep it, I suggest a simple experiment: buy a cake, eat it and then see what you have left”. Overall, the impression given by the Government is that of seeking damage limitation, having impaled themselves initially on the position of the CJEU. As we saw in our report on consumer protection, even if it is not perfect, it best serves our national interests, and our citizens have learned to rely so much on the work of the court.

I end with a few questions. Of course, our common-law system is deeply entrenched and well respected globally, but do the Government accept the validity of the concern expressed by the four senior judges and the General Council of the Bar about the likely reduction of our legal standing overseas, set out in paragraphs 186 and 188 of our report? The Government’s response thus far, of noting various missionary visits to Kazakhstan and to China, is hardly convincing. How concerned are the Government about the potential loss of law firms and the movement of practitioners to the continent and to Ireland? Is there any evidence that is of concern to the Government on this? Do they accept that arbitration would not be appropriate in respect of many areas of UK-EU co-operation, including judicial and security co-operation? If so, what is their alternative?

The real nub question is: can the Government tell us today—can they make it any clearer—what their preferred model or models are for future dispute resolution after Brexit? Perhaps more importantly, what are the prospects of our partners in the European Union accepting that model?

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench 4:25 pm, 17th October 2018

My Lords, it is of course pure coincidence that we should be debating the excellent report by the sub-committee of the noble Baroness, Lady Kennedy, on the first day of what is likely to prove a complex and protracted endgame in the Brexit negotiations. But it is, I would suggest, entirely appropriate because, as other speakers have said, this is a crucial issue and is seen by all those concerned as unresolved as yet.

We have to look at both the implications of dispute settlement procedures for the transitional period, if we do leave the EU next March, and their implications for any UK-EU relationship in the longer term—a new relationship thereafter. I congratulate the noble Baroness on a report that sheds a good deal of light on this issue—which, I have to say, is more than the Government’s contributions so far have done, since they have consisted mostly of obfuscation and evasion. I congratulate her, too, on the clear and forceful way in which she introduced the report.

The Government contribution has been not only been evasive but downright misleading. As recently as a month ago, the Prime Minister was still saying flatly that the European Court of Justice’s role in the UK would cease on 29 March 2019—although she must be perfectly well aware that she has been negotiating agreements that do not bear out that statement. After all, the deal struck on withdrawal last December and what was said then about the European Court of Justice’s role in dealing with the case of European citizens, and the transitional period arrangement reached in March, both contain clear provisions for the ECJ to have a continuing role in the UK beyond exit date. I hope, therefore, that we shall have a little more candour from the Minister when he replies to the debate. I also hope that he will not retire behind a smokescreen in which the word “direct” is continually attached to jurisdiction, as if that were somehow an excuse for not saying anything about what is really going to happen.

I would like the Minister, if he can, to clear up the facts by dealing with the following three questions. First, is it not the case that the European Court of Justice will continue to have a role in this country on resolving disputes over EU citizens living and working here, beyond the exit date and beyond the date of the end of the transitional period? Eight years takes us a long way beyond that.

Secondly, is it not also the case that the European Court of Justice will continue to operate in this country, as now, on disputes right across the board for the duration of that transitional period, however long it may prove to be? That will be in a period when we no longer have any representation on any of the EU courts, but my understanding is that that point has been conceded.

Thirdly, is it not therefore inevitable that, if a deal is struck, the EU withdrawal implementation Bill will have to amend the provisions of the European Union (Withdrawal) Act 2018 terminating the ECJ’s jurisdiction on exit day? The only circumstances in which that amendment will not be needed, as far as I can see, is if there is no deal, which the Government say is not their preferred option. Have I got those three points right? It would be helpful to know.

So much for the past. As for the future relationship, no one who has mastered the complexities of the Chequers plan—not the most popular of documents, I know, but I have attempted to do so—and not just its provisions on trade but those on internal security and other matters can doubt that some elaborate and fireproof dispute settlement procedures will be required as an integral part of any such plan. No one who has anything to do with the European Union can doubt that it will insist on the European Court of Justice having a clear and important role in any such procedures.

If we accept the inevitability of those two points, I really do not see how the Government are right to avoid describing in more detail how those can be reconciled. I think I know why they do not do it, and I can answer the question—a little unfairly, perhaps—on behalf of the Minister: it is because they do not want to admit to their own supporters that the European Court of Justice will have a dispute settlement role here far into the foreseeable future. It would surely make more sense if the Government were to think a little more constructively about ways of handling this problem and the sensitive issues it raises, rather than pretending that the problem does not exist, which is very much their approach.

I regret that the Government took such a negative view about the idea of using the precedent of the EFTA court in some way or another. I notice that the noble Lord, Lord Thomas, did not much like it either. I do not think that anybody is suggesting that it should be applied precisely, but the point about the EFTA court is that it meets three criteria. One is that Britain would be represented on it. The second is that the European Court of Justice’s role is assured. The third is that its rulings are not directly applicable, although of course any party that rejected one would see serious negative consequences on the overall relationship. I think that they were a bit rapid in dismissing that. Even if it is probably unwise to talk about the EFTA court as if it itself was the answer, does it not provide a framework which is much closer to being the answer than the rather complex arbitration procedures put forward by the Government, which I frankly do not believe that the European Union will ever accept? I would like the Minister to address that, and not just in the terms in which the Government have addressed it in their response to the report.

When the history of the Brexit negotiations comes to be written, I do not believe that commentators will be particularly kind about the Prime Minister’s red line on the European Court of Justice. I think they are likely to regard it as totally unrealistic and incompatible with the wider objectives for a new relationship which the Government are in fact pursuing, a fact that I welcome. Moreover, they could well marvel at how much effort is being put into assailing the jurisdiction of a court whose rulings, over the 45 years of our membership, as the noble Lord, Lord Thomas, made clear, have far more often been beneficial to the UK than detrimental to it. However, it is not too late to change track. That red line about the European Court of Justice has been driven across multiple times, as I have tried to suggest, so why not now start to think constructively about dispute settlement, recognise a role for the ECJ in any such procedures, get to the negotiating table and get that settled?

Photo of Lord Anderson of Ipswich Lord Anderson of Ipswich Crossbench 4:35 pm, 17th October 2018

My Lords, I declare an interest. I am a member of the Bar Council Brexit working group, though I do not speak on its behalf. I have also been a barrister for 30 years, appearing regularly for individuals, businesses and the Government before the European Court of Justice in Luxembourg.

The grand chamber of the Court of Justice, with its elevated and distant bench, gold cloth hangings and majestic proportions, comes from a different forensic tradition from our own Supreme Court, where judges look advocates in the eye and engage them in dialogue at short range. However, in ways that matter, the Court of Justice has evolved—under the influence of its British and Irish members—in a direction that is both familiar and welcome to common lawyers. It treats its own judgments not as mere illustrations of principle on the continental model but as precedents, applied, distinguished and only occasionally departed from—much as we do in the common law. Though formulaic in style, those judgments are illuminated by opinions of the advocates-general, often as thoughtful and discursive as the best judgments of our own courts. Its judges have taken to questioning the advocates—or at least those who have the skills to make that exercise worthwhile—in a way that would be unusual, even improper, in some of the national courts in which they previously sat. The British Government have long been among the most influential interveners. As the noble Lord, Lord Thomas of Gresford, said, of all who come regularly before that court, they have also been the most successful in their own defence.

The relationship between national courts and the European Court, as expressed through the preliminary reference procedure, is co-operative, rather than hierarchical— based on the recognition that each court has a different function and on mutual good will and respect. Our courts have been adept in their use of that procedure, often pushing the Court of Justice to clarify the law and to define the remedies available to individuals who have suffered from administrative overreach or abusive market conduct.

What lessons for the future can we draw from that experience? I will mention first the transitional period, and then the future relationship. During the transitional period—during which we will remain subject to the full panoply of EU law—Articles 82 and 162 of the draft withdrawal agreement provide for the Court of Justice to rule on disputes arising under EU law or the withdrawal agreement itself. Perhaps that is inevitable. Can the Minister confirm whether those Articles have now been agreed? If they have, is it certain that the Court of Justice will lose its British members, familiar as they are with our legal systems, but appointed as they were by common accord of the member states? I understand that not everybody considers Article 6 of the withdrawal agreement— conclusive as it may be in relation, for example, to the Council—to be wholly clear in its application to members of the Court of Justice.

Even if the Government consider it necessary to submit during the transitional period to the authority of a Court of Justice without its British members—which seems rather a one-sided way of doing things—would they be equally sanguine if, as reported this morning, the transition period is substantially extended, say, to the end of 2021? Or might the exclusion of British members be revisited in the event of such an extension?

As for the future relationship, the plan, as I understand it from the White Paper, is to provide for a common rulebook for goods, supplemented by common rules on state aid, and a range of reciprocal commitments—from environmental requirements to labour standards, going well beyond those normally found in free trade areas. Our existing common EU rulebook is enforceable by any individual or company with an interest in doing so, before any national court and then, if necessary, before the Court of Justice. This highly developed and highly accessible system is needed, given the extensive integration required by the single market in goods. This integration is intended to continue. Yet we are proposing not a system of justice built around the individual, but one that is intergovernmental or statist in nature. As has been said, this is a joint committee of officials, backed by an independent arbitration panel which only it could invoke.

At present—I will not weary your Lordships with detailed examples, although my own case of ABNA illustrates the point—a business that falls victim to an ill-considered EU rule can go to court, whether in the UK or in another country where it does business. It can seek to have the operation of the rule suspended in those countries. Preliminary references can be made, and the Court of Justice may in the end declare the rule invalid. However, under the proposed future arrangement, it seems that it would depend on officialdom, in the UK and in the EU, to appreciate the urgent threats to its businesses and to take the necessary action. Whether UK officials would take up their cause would no doubt depend, as the noble Baroness, Lady Kennedy of The Shaws, has indicated, on many factors remote from the legal merits: its size; competing policy priorities within government; the wish not to pick too many fights in the joint committee; or the wish to avoid the public perception that the Government are relaxed about the policy that the rule is supposed to implement.

The only forum in which the validity of the rule could be challenged—assuming irreparable damage had not been done by then—would be under the Ukraine model, via the joint committee or arbitration panel to the Court of Justice. Could the companies that had brought the complaint be represented there, by the advocate of their choice, or would proceedings become a matter to be resolved on the basis of arguments between officials?

Each of the possible options looks less satisfactory than what we currently enjoy. But may I encourage the Minister to set his sights high and press for a system of remedies that fully supports the heartening emphasis of the committee on individual access to justice? Having declared my interest at the start, I hope I may count on him to make full use of the Bar Council and other sources of independent legal expertise to help design such a system.

Photo of Lord Judd Lord Judd Labour 4:42 pm, 17th October 2018

My Lords, it is a great joy to follow the noble Lord, because, as with so much of the work that the sub-committee has been doing, the input of experience and analysis from the legal profession has been consistently of the highest order. I add my thanks, as a member of the Justice Sub-Committee, to those of noble Lords who have already expressed appreciation of the firm, instructive and helpful leadership of that committee by my noble friend Lady Kennedy. It would also have been impossible for the committee to have done its work or to have produced a report of this order without the invaluable support of its staff and legal advisers—of course, in that I include all the support staff as well. Warm appreciation is due to all of them.

During the time the committee was doing its work I was constantly amazed at the extraordinary situation in which we find ourselves. I have never heard, from any of the distinguished witnesses we have been able to cross-examine, a shred of belief, conviction or evidence that there is any rational or logical reason for rejecting the European Court of Justice. In the nature of Europe as it is, the court is absolutely indispensable and has proved itself as such. All those who have been involved in its work constantly observe that the quality of law has been steadily improving all the time. The contribution by the British legal profession to this has been of a very high order indeed.

We are dealing with a situation based upon an emotional judgment when, with all the complexity and hard reality of the world that confronts us, what we need above all is rational, careful analysis and thinking. However, we are where we are, and it is a very sad situation indeed.

As the committee has done its work, I have grown increasingly concerned that we are moving into a situation with so much at stake and so many implications for the British people, without any clear indication yet of what will replace the court. Something must replace it. The life of Europe crosses frontiers, industry, commerce, security—in all these areas, the life of Europe is a European matter and not simply an insular matter. We must therefore have arrangements to adjudicate and supervise the process.

There is no indication of what we will be able to rely on for the future. This is what concerns me about the whole process of Brexit. Last week we debated the Good Friday agreement and its implications for the people of Ireland. This is a matter not of law and lawyers—I am not a lawyer—but of people, whose families, businesses and professional work are at stake. There is always a human dimension—that should be in big letters in front of everyone involved in the process. How will we sustain—let alone improve—the quality of life for ordinary people as a result of what we are doing?

I am finding a mixture of arrogance, prejudice and emotion which, at my age, seems altogether alien to the traditions of the Britain in which I have been formed, grown up and tried to live my life. Time is getting very short indeed. I hope that, in the remaining weeks that lie ahead—we can no longer really speak of months—all those involved, in the Civil Service, in government and in opposition, at every level, will keep in front of themselves a picture of ordinary people. They should consider ordinary professional and business people, people trying to get on with life with their families, and say to themselves, “Look at the immense responsibility we are now carrying”.

It is not a matter of which solutions we may find, we have to find them. I share with noble Lords a conviction that has grown within me throughout my years in politics; it is that, in principle and morality, what really matters is the ability to compromise in the interests of what we all want to achieve—a better society and the well-being of people. Morality comes into it when deciding on a good, constructive compromise that can help create a dynamic that leads things forward. A bad compromise would be to not allow that to happen.

There is a huge challenge for all involved. If our report has done anything, it has helped to underline that we must get some clear indications, very quickly, on what the Government propose to do.

Photo of Lord Bilimoria Lord Bilimoria Crossbench 4:50 pm, 17th October 2018

My Lords, I thank the noble Baroness, Lady Kennedy, for leading this debate and her committee for its excellent report. This debate is full of noble Lords and noble and learned Lords from the UK legal profession, which is respected around the world as the finest, fairest and most just. I am humbled to be in this company, having read law merely as part of my commerce degree in India, as part of my chartered accountancy qualification, and at Cambridge. In 2016, when I took part in the debate led by the noble Lord, Lord Boswell, chair of the European Committee—what was possibly the last debate in our House before the referendum—I realised, from my humble position, how complicated and almost impossible it would be to implement Brexit should the country decide to leave. How prescient that debate was.

Over the past two and a half years, we have seen that a free trade agreement with the EU is far from “the easiest in human history” to negotiate, as was claimed by our illustrious International Trade Secretary, Liam Fox. Not only was he talking nonsense—here I would add: as usual—but the negotiation has been incredibly difficult, and extricating ourselves from the EU has proved hugely complicated from a legal point of view. It has turned out to be not as simple as passing a withdrawal Bill, deciding to take on all sorts of EU law and regulations, and then changing it whenever we want to in the future. We have been legally attached to the EU in every area in which we operate, whether it is medicine, space or security.

The irony is that we are meant to be leaving the EU to free ourselves, to regain the sovereignty we have supposedly lost and to take back control. Yet at every stage we seem to be trying to get a deal that is equivalent—a word so regularly used—to what we have at the moment. As an entrepreneur and a businessman, when I want to change something, it is to improve things; I do not change things to make things equivalent and keep them the same. Why would I bother? What is the point? If we have equivalence, and have the same regulations as the EU, who will be in charge of it? Who will be in charge of the disputes? That is what the report talks about.

Most importantly, the law is not static; it is dynamic. Look at our tax laws. We have the Office of Tax Simplification—an oxymoron, because our tax system grows and becomes more complicated by the year, and the relevant legislation grows by thousands of pages. Equivalence with Europe does not mean that regulations will stand still. At the moment, the ECJ is the ultimate arbiter. As we have already heard in this debate, implementing this will involve huge complications.

The report is very clear and I commend it. It says:

“Outside the CJEU, no ‘one size fits all’ dispute resolution model could deal with these issues. The Government will have to agree multiple dispute resolution procedures post-Brexit”.

It goes on to suggest, as noble Lords have mentioned, that the EFTA Court could be applied. Although not ideal, this is a possible solution that the Government should not discount. The report then says:

“Liabilities and obligations under the Withdrawal Agreement may arise for many years after the UK has left the EU”.

The Government’s proposed solution appears to be that any disputes relating to the withdrawal agreement should be settled in the political sphere by a joint EU-UK committee. The noble Baroness, Lady Kennedy, has said very clearly that if it is a state-to-state dispute, that could apply. But what pragmatic model will exist? Of course, as the noble and learned Lord, Lord Hope, has said, during the transition period we will continue to be bound by the ECJ. The Government want to pursue a deep and special partnership, which involves participating in EU agencies; if we do that, we have to respect that the CJEU will have the final say in those areas, whether that is medicines or European arrest warrants, which the noble and learned Lord, Lord Hope, and others have mentioned. Rejecting the remit of the European Court of Justice entirely will limit our access to the agencies upon which we rely: aviation, medicine, chemicals. As the report says, any enforcement and dispute resolution established under the future relationship has to be accessible to citizens and businesses. I started as a micro-business, then a small business, then a medium business, and then a large business; SMEs are the engine of this country and they are being ignored completely.

What about the important point regarding mutual recognition of civil, family and commercial judgments? The report concludes by saying that UK lawyers and judges have played an important role in the evolution of EU law, but after Brexit the UK’s ability to affect the development of case law in the EU is likely to diminish significantly. Let us just think about that: taking back control and sovereignty is likely to diminish our ability to do that.

In the report, I saw a table of potential jurisdictional gaps post Brexit. It has been accepted that, during the transition period, it will be the CJEU. However, dispute resolution relating to the withdrawal agreement has not been agreed; trade, not agreed; regulatory agencies, not agreed; security and justice, not agreed; mutual recognition of civil, family and commercial judgments, not agreed. Could the Minister please explain all of these “not agreeds”?

Here is another factor: the UK ends up in court far less often than many other member states. If you look at a table of actions brought before the European Court of Justice against member states, the UK has 63, compared to Italy, with 191. When the UK takes matters before the ECJ, it wins more often than other member states. That is another fact. Then, on the proportion of favourable ECJ judgments by country, the UK is top of the list. We have not done so badly out of this. We talk about crashing out into WTO rules. The EU is a huge participant in the WTO and is the second most prolific initiator of WTO complaints after the United States of America. We use the WTO very effectively already.

Fear has been put into the minds of people and, I am sorry to say this, but our public have been conned left, right and centre. To be told, in the words of the former Foreign Secretary, that we are a “colony of the EU” is nonsense. To be given the impression that all our laws are controlled by the EU is nonsense. People have been so badly fooled. I have been privileged to be in this House for 12 years, and I have seen, and been privileged to take part in, the making of legislation that affects our day-to-day lives. The laws— whether they relate to our universities, our National Health Service, or our taxes—are made here, in this House, and in the other place.

There is a suggestion that, if we leave the EU, we can become like Singapore, or a low-tax economy such as Switzerland. What is stopping us doing that now? Ireland is part of the EU and has a corporation tax of 12.5%. There is nothing to stop us doing that right now; why do we have to leave the EU to do it? Comparing ourselves with Singapore? Get real. It is a city state of 5.5 million people. I am a great admirer of Singapore and its economy—it has done brilliantly—but to compare us, a country of 65 million people, with Singapore is, again, nonsense.

Here is the other fact. People are under the impression that the ECJ or the CJEU are the same as the European Court of Human Rights. They do not realise that, if we leave the European Union, we will still be subject to the ECHR and the International Criminal Court. Are we going to leave the global economy? In terms of taking back sovereignty and taking back control, we are giving up our seats in the European Parliament, our seat on the Commission and our seat on the ECJ. We are losing sovereignty and losing control. The worst part of all is that the world does not want us to leave the EU. I have hosted here in this Parliament delegation after delegation of senior Indian civil servants and I always ask: “Looking at us from India, do you think that we should leave the European Union?” One hundred per cent of them put up their hands and say, “You should be remaining in the European Union”. At one meeting, one said, “We feel sorry for you as a country”.

We are becoming a laughing stock. I did not approve of Donald Tusk posting that Instagram picture of the cake and the cherries. That was not right. I do not necessarily approve of Jean-Claude Juncker dancing and mimicking our “Dancing QueenPrime Minister—I am sorry; I shall be ticked off for dancing while making a speech. There is no question but that we have lost respect and are losing our standing in the world. London has already lost its position as the No. 1 global financial centre thanks to Brexit and nothing else. We had beaten New York but have now gone into second place. In reality, how are we going to come to a solution for Northern Ireland—the Achilles heel of Brexit? How will we get out of the backstop and then the backstop to the backstop? How will we prevent our union breaking up?

I have always maintained and been very open about the fact that I am a Eurosceptic. I do not particularly like the way that the European Parliament works, and I am delighted that we did not join the euro, which has been a disaster. It has been kept together only because it would be too difficult to break it up. From a security point of view, we are lucky not to be in Schengen, and I am not for any further unification of the European Union. Yet we have done so well out of it. We have the highest cumulative growth rate of the original EU countries since the beginning.

Therefore, this is about the law, and the law is about the scales of justice and about balance. No case is ever cut and dried; it is always a matter of weighing up the pros and cons, and about judging what, on balance, is the right decision. In spite of my Euroscepticism, on balance by far the best option for this country would be to remain in the European Union. In order to extricate ourselves, the best solution now, based on this report and everything else, would be to allow the people to have a say on “deal”, which will probably be a bad deal, “no deal” or “remain”.

Photo of The Earl of Kinnoull The Earl of Kinnoull Crossbench 5:03 pm, 17th October 2018

My Lords, it is a great pleasure to follow the noble Lord, Lord Bilimoria, who has made a typically ebullient and thought-provoking contribution. I remind the House that I am a member of the European Union Select Committee and the Justice Sub-Committee that wrote this report.

I begin by adding my tribute to our staff. The EU Committee staff have worked consistently at an increased load level for more than two years, and the staff on the Justice Sub-Committee are especially hard worked, because they are the legal resource for the main Select Committee and every other sub-committee as well. We have now published 36 unanimous Brexit reports and the very high quality has been maintained. In my view, this report is no exception.

I also add my warm congratulations to our wonderful chair, the noble Baroness, Lady Kennedy of The Shaws, on her excellent and very clear speech. It is a very wide-ranging report and it takes some skill to summarise it in a very pleasing and quite short address. I will confine myself to underlining three areas on which I would ask the Minister for an update.

My first concern, shared by other noble Lords have, is on disputes between the EU and the UK arising out of the withdrawal agreement. This was an area that took up quite a bit of time during our inquiry and we devoted the whole of chapter 3 of our report to it. Our report was published on 3 May and the British position at that stage was substantially that of the August 2017 future partnership paper Enforcement and Dispute Resolution. In paragraph 121 of the report we stated:

“We are unconvinced by the Government’s suggestion that all disputes relating to the withdrawal agreement can simply be settled politically by the joint committee”.

The Government’s response on 5 July was not that helpful and ended on this issue by saying:

“We recognise that there needs to be a clear mechanism for governing and enforcing our withdrawal agreement with the EU—as there is in any international agreement—and we will continue to engage constructively on this in the negotiations”.

On 12 July, just a week later, the Government published their White Paper, which, for the first time, saw a limited role for the CJEU, as described by noble Lords. Essentially, it was advancing the same structure that we felt in these circumstances was simply not robust enough. In any event, more than three months have gone by since the Government’s response. Accordingly, I and many other noble Lords would be very grateful if the Minister updated us on the vital issue of disputes between the EU and the UK arising out of the withdrawal agreement.

My second concern is slightly smaller; it is about the pipeline of cases and claims that arise during the intermediate period. The draft withdrawal agreement foresees, as we stated in paragraph 132 of our report that,

“the UK would continue to be subject to the jurisdiction of the CJEU for the duration of the transition period”.

We were concerned by the open-ended nature of the withdrawal agreement drafting and paragraph 147 concluded:

“It is important that this continued jurisdiction of the CJEU should only be for a reasonable, time limited, period: we urge the Government to ensure that there is a longstop for any claims that arise during the transition, so that cases relating to acts occurring during transition cannot be brought indefinitely”.

The 5 July government response on this issue ended encouragingly. It said:

“We expect to reach agreement in negotiations soon on this remaining issue”.

We are three and a half months further on, so could the Minister update us?

My final area of concern is mutual recognition of judgments and civil justice co-operation. In many ways this is the most important area; naturally, it is incredibly important for individuals and businesses throughout the European Union today. A particular issue that we looked at was family law. We have the benefit on our committee of much direct experience and expertise. I am looking at the noble Baroness, Lady Shackleton, who is extremely interesting on this point. I am sure many other noble Lords are hoping, as I am, that she might rise in the gap and talk briefly about family law provisions.

I cannot emphasise enough how strongly every member of our committee feels that this area must be addressed successfully. It would be a major failure on the part of all sides if politics got in the way of preserving things of such great value to our fellow citizens. The Government published their framework proposal on this area on 13 June and presented it to the EU negotiating team. The 19-slide pack contains just one slide summarising what the Government are seeking. It is very clear but, naturally, it is at a very high level and contains no real detail. Very slightly more detail is contained in the 12 July White Paper, which states:

The UK is therefore keen to explore a new bilateral agreement with the EU, which would cover a coherent package of rules on jurisdiction, choice of jurisdiction, applicable law, and recognition and enforcement of judgments in civil, commercial, insolvency and family matters”.

It also states:

“The UK will therefore seek to participate in the Lugano Convention after exit”.

The Lugano convention would certainly, in my view and I think in that of the whole committee, form part of the “coherent package of rules” mentioned in the White Paper, but importantly our accession to it would need the consent not just of the EU but of Switzerland, Norway and Iceland. Accordingly, making progress on acceding to it is a separate strand of work that is urgent. On 17 July, Lucy Frazer QC MP, Parliamentary Under-Secretary of State at the Ministry of Justice, told us in evidence:

“We have made it very clear in our White Paper that we want to re-join Lugano. It is no secret and we are taking steps to ensure that that happens”.

I therefore close by asking the Minister to update us on progress in the area of mutual recognition of judgments and civil justice co-operation, and in particular on what steps the Government have taken since 17 July on acceding to the Lugano convention.

Photo of Baroness Shackleton of Belgravia Baroness Shackleton of Belgravia Conservative 5:11 pm, 17th October 2018

My Lords, thank you for allowing me to add a bit about matrimonial law post Brexit. We are being deafened by the Government’s silence in relation to many areas, in particular to the area of divorce itself. At the moment, the clutch of Brussels II legislation that deals with a variety of things, including the enforcement of maintenance and children’s matters, also deals with divorce. The rules are simple: the first seized court has jurisdiction if the competing court has signed up to Brussels II. We do not know what is going to happen post Brexit.

Let us take the situation of two people living in England who are both French nationals and file for divorce. We do not know the position, if those two French nationals who have jurisdiction in France then file in France, whether we should apply for an anti-suit injunction, whether the French court will recognise the English court as the first court or whether the English court should recognise the French court because they are French nationals. This will lead to an unholy mess and, with no legal aid, the courts are not equipped to deal with it. It will affect children, individuals and the profession. Judges are not trained in this sort of jurisdiction because for the past 20-odd years we have applied under Brussels II. Foreign court venue arguments are rare and non-existent in Brussels II countries. We need certainty; there is no knowledge of what is going to happen. This is a small area of uncertainty that needs to be addressed and I hope that the Minister will look at it, because those who practise in this area, of whom I am one, are nervous and worried about what is going to happen and how we can best serve the human beings who come to us for advice.

I conclude by saying that the noble Baroness, Lady Kennedy, has done an amazing job keeping us, the evidence and all the witnesses in order, and for producing this excellent and succinct report with the aid of the committee’s staff, one of whom is in the Chamber today. We are deeply grateful to them all.

Photo of Baroness Ludford Baroness Ludford Liberal Democrat Lords Spokesperson (Exiting the European Union) 5:13 pm, 17th October 2018

My Lords, I, too, was delighted to serve under the splendid chairmanship of the noble Baroness, Lady Kennedy, who has introduced our report so comprehensively and indeed does a very good job of keeping us in order. It is also a pleasure to participate in a debate with colleagues from the sub-committee. I note that we now have two Lord Andersons. We have the noble Lord, Lord Anderson of Swansea, of that ilk, who is a valued colleague on the sub-committee, and we have the noble Lord, Lord Anderson of Ipswich. I am particularly pleased to take part for the first time in a debate with him because our paths crossed when he was the Independent Reviewer of Terrorism Legislation and I focused on EU justice and security matters as an MEP. His interest in the EU dimension set an example that was not always followed by British officials and institutions.

During the debate, we have noted various features common to Brexit negotiations as a whole that pop up in this area. I should just like to enumerate them. The first—the big elephant in the room—is, of course, the red line against the jurisdiction of the ECJ. It has bedevilled the whole of the negotiations, but particularly in this area, where its impact is greatest and most damaging. As my noble friend Lord Thomas of Gresford said, such prejudice against the court is fuelled by empty and ill-informed rhetoric of the Brexiters. The noble Lord, Lord Anderson of Swansea, rightly described it as a “thick red line”: given the Brexiter confusion between the ECJ and the ECHR, perhaps it is “thick” in more ways than one.

The noble Lord, Lord Hannay, noted that the Prime Minister still said a few weeks ago that the role of the ECJ in the UK would cease. He rightly described that as misleading. I would go further: it is totally wrong in the light of the Government’s own contributions. Again, as the noble Lord, Lord Anderson of Swansea, said, “Now you see it, now you don’t”. The second common feature of the whole sorry saga of the Brexit negotiations is dishonesty and unreliability. What can we trust that we hear from the Government? Is it still going to be true tomorrow? “Will you still love me tomorrow?”

The third feature is that all of the alternatives to EU membership are more messy, more complicated, more difficult to follow and less transparent and accessible for citizens and businesses. As the noble Lord, Lord Bilimoria, said, we will have multiple systems of dispute resolution and enforcement. Some of those are the special regime for citizens’ rights, the withdrawal agreement, the transition and the future relationship. Then we have the dispute resolution between the parties and the attempt at private enforcement by citizens and businesses.

The fourth feature is a belief that everything is political, with a disdain for a so-called legalistic approach. This apparently applies to the debate on the Irish backstop. This pejorative term—it is used pejoratively—fails to recognise that the EU has a legal and constitutional order. It cannot just throw this over. I think that many Brexiters do not like courts and judges, full stop. We are undermining our negotiating ability by failing to recognise the fundamentals about the EU legal order. Linked to that is the complacent idea that the UK can expect a bespoke arrangement just to suit us because we are big, important and we are—well, us.

The fifth feature is the failure to put forward credible and workable proposals. As the noble and learned Lord, Lord Hope of Craighead, said, they have not surfaced. As the noble Earl, Lord Kinnoull, reminded us and as my noble friend Lord Newby mentioned on Monday, proposals always seem to be happening “soon”, “in due course” or “when the time is right”. That time is now. As the noble Baroness, Lady Shackleton, just said, we are deafened by the silence. This is creating enormous uncertainty and anxiety out there in the real world because the enforcement and dispute resolution options for the future relationship will be shaped by the closeness of the partnership. We are in that cart-before-horse situation where the Government’s failure after two years to decide precisely what model they seriously want to pursue has held back sensible discussion on mechanisms.

The July White Paper clarified what the Government meant by the term the Prime Minister had used in two speeches that the UK would “respect the remit” of the CJEU when participating in agencies and programmes. The White Paper explained that this meant respecting court’s ability to adjudicate in cases of disputes about decisions made by those agencies “that affected the UK”. There was then rowing-back, a phrase used by the noble Lord, Lord Anderson of Swansea. He pointed out the words at the end of—I shall be precise—paragraph 38 in chapter 4.4.3, which added,

“noting that this would not involve giving the CJEU jurisdiction over the UK”.

We know, as the noble Lord, Lord Hannay, pointed out, that we have had lots of smoke and mirrors about direct and indirect jurisdiction, but how can the Government say that respecting the “remit” of the ECJ does not mean its jurisdiction? Please can the Minister precisely explain the distinction between those two terms?

Interestingly, the Government’s response to the report that we are now debating came just a week before the White Paper. It said that,

“if we agree the UK should continue to participate in an EU agency this would mean abiding by the rules”, including that,

“the UK would have to respect the remit of the CJEU”.

But it added another rider:

“our Parliament would remain ultimately sovereign. It could decide not to accept these rules”.

It then had the grace to acknowledge that there would be consequences for our membership of the relevant agency; that is, Europol. It seems telling that, just a few months ago, the Government should say, “We’re going to respect the remit, but of course, at any time, our Parliament might decide in its sovereignty that it’s going to throw over those rules”. What is Mr Barnier meant to work on when he has this chopping and changing all the time?

Two areas have been cited in the debate where there will in any case be an element of jurisdiction of the court, direct or indirect: obviously, on the European arrest warrant, assuming that the problems about non-surrender of nationals do not bedevil our participation—a problem solved within the context of the EAW. But if, for instance, a UK surrender request to a French court is contested by the wanted person, the French court could refer that case to Luxembourg. To use a phrase of the noble and learned Lord, Lord Hope, we could not rely just on a “cordial, friendly understanding”; there would be legal norms to be enforced. The second area is seeking a data adequacy assessment, which will be made in the light of EU law.

The noble Lord, Lord Anderson of Ipswich, said that the EU and UK legal systems would be diminished by our non-participation in the EU’s legal order. UK lawyers have made a big and positive contribution to developing EU law, and its ending is much to be regretted. It was such an element of strength for us. In the whole justice and security area, we kept wanting opt-outs and so on; we have never played to our profound strengths in the legal area. Nowhere was that more obvious than in Luxembourg.

Unfortunately, the Government do not seem terribly interested in the loss of access to justice and enforcement of rights for citizens and businesses, which will be difficult particularly for small businesses. I, too, will be interested in the answers to the questions raised in our report, and expertly put by the noble Lord, Lord Anderson of Ipswich, about how that is supposed to work for citizens and individuals. That the Government seem so uninterested in that topic tells us all we need to know about “taking back control”. It actually means robbing people of their rights.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Cabinet Office), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Exiting the European Union), Shadow Deputy Leader of the House of Lords 5:24 pm, 17th October 2018

It is always a pleasure to follow the noble Baroness, Lady Ludford. I am afraid we are becoming a bit of a double act. I am not sure it is one the Minister always appreciates, but there you are—it is his penalty in life.

I also thank my noble friend Lady Kennedy of The Shaws, and her committee, for yet another insightful, clear and informative report. Like the noble Lord, Lord Hannay, I only wish that the Government could be as clear and incisive—and also, perhaps, speedy, as the noble and learned Lord, Lord Hope, so politely put it—on how they propose to deal with the issues raised in the report.

Perhaps the most urgent issue raised in the paper—although there is competition for urgency—is the one on which the Government have said the least, which considers any disputes arising from the withdrawal agreement. Both my noble friends Lady Kennedy and Lord Anderson of Swansea have quoted Michel Barnier as calling this the second most difficult issue after Ireland.

I remind the Minister that, on Monday, the Prime Minister claimed that real progress had been made on the withdrawal agreement, with,

“the shape of the deal across the vast majority … now clear”.—[Official Report, Commons, 15/10/18; col. 409.]

Yet the response to this report from the Government states that the dispute resolution mechanism “is a matter for negotiation”.

So I ask the question, along with that posed by the noble Earl, Lord Kinnoull: if it is subject to negotiation, how is that going? Has it been negotiated and, if so, what is it? Is there to be an arbitration panel, or is the ECJ itself to do the dispute resolution during transition? As my noble friend Lord Judd said, in case anyone has forgotten, time is getting very short. We should by now have rather more detail than we have been given, both about the withdrawal Joint Committee and also about any arbitration panel being discussed. Who will be the members, particularly on the Joint Committee? What will be its terms of reference? Will it be a transparent body? Will its meetings be open? Will its decisions, and the reasoning behind them, be made public?

The Joint Committee, as we know, has the,

“power to adopt decisions and to make recommendations”, and that power is to be reached “by mutual consent”. But what if such an accord cannot be reached?

Anyway, one must assume that the committee—which, I assume, will be made up of political persons appointed by the two sides—will not actually be independent, but will be a purely political negotiating entity. The question arises: who could take issues to that Joint Committee? Given that businesses, and indeed citizens, may want to challenge both the interpretation and the implementation of the withdrawal agreement, will they have access to that Joint Committee, or to any arbitration panel that is established, should the implementation disadvantage them? If they do not have that direct access, will our Government have a mechanism for referring any business disputes to an arbitration panel, or some other way of enabling those issues to be raised? As my noble friend Lady Kennedy said, while the Government seem to accept that dispute resolution should be accessible, they have given no information on how this might be achieved.

Turning to the Joint Committee itself, which—if we have read it correctly—might only meet once a year, does the Minister actually think that this is going to be adequate to deal with all the queries that could arise? Will the Minister also say something about the enforcement mechanism for any finding from the Joint Committee or, indeed, from any arbitration panel?

The EU agencies of which we are currently members have been mentioned. When is it envisaged that we would leave these, assuming that there is a deal? Alternatively, if, in transition, we remain members and the Government accept that we would abide by the rules and “respect the remit” of the CJEU in that regard, would that also entail businesses being able to take relevant issues to the CJEU if they were party to any of the cases being held there? As with the withdrawal agreement query, would businesses and citizens have the same rights as now, not only for their disputes to be heard but to any remedy should a case be found in their favour?

The EU Committee noted that the Government seemed rather sanguine about being subject to the CJEU in certain circumstances while having no UK judges there. Whether or not the Government think it would be helpful to maintain a UK presence there, has the issue even been raised in negotiations? I have heard suggestions that this would not be completely unthinkable. As raised by the noble Lord, Lord Anderson of Ipswich, should a longer transition now be envisaged, that matter might become even more pertinent. It would therefore be helpful to know whether such discussions have taken place with the EU. Will the Minister also give some thought to the interesting proposal from the noble Lord, Lord Thomas of Gresford, for a special committee in the CJEU? It is beyond my remit to comment on the legality of such a proposal.

Turning to the civil, family and commercial issues—including insolvency, as stressed by the noble Earl, Lord Kinnoull—will the Minister update the House on negotiations relating to the recognition and enforcement of judgments across the EU after exit day, with particular reference to divorce, maintenance, adoption and child custody, in the way described by the noble Baroness, Lady Shackleton? There is real urgency in this—the committee said it had “significant concerns” in its recent letter to the Lord Chancellor—because families form or change according to timetables completely unrelated to the Government’s priorities. As we have heard, lawyers in this field worry that children will be badly affected if there is any uncertainty at the time we leave.

Regarding lawyers themselves, the Government’s response to the report states that during the transition,

“our lawyers will maintain their rights of audience”, at the CJEU. Can the Minister confirm that this has been agreed by the court and the Commission and that it applies to all cases, not just those to which the Government are a party? Will he also inform the House what discussions have taken place regarding the ability of UK lawyers to retain rights of audience at courts within member states, on the same sort of fly-in, fly-out basis as now, during the transition period, where a UK national or business is party to a case in one of those domestic tribunals?

There are big issues facing our country and our negotiators, both today, as we have heard, and in the days and weeks ahead. There are political challenges within the Prime Minister’s own party and there has been a failure—so far—to agree a deal likely to win support among the EU 27 and, indeed, in the House of Commons. It would be unpardonable to complete a deal without having in place robust, open and transparent mechanisms for ironing out future difficulties and disagreements, and even more so to leave our citizens—such as families dealing with adoption, maintenance or divorce—or businesses without clear, reciprocal, fair and transparent legal processes to replace those now in operation, as described by the noble Lord, Lord Bilimoria.

This report covers some of these issues, as have others by the same committee. Answers from the Government are needed in order to offer certainty to everyone likely to face difficulties as a result of our withdrawal, even assuming that we have a deal. Needless to say, however, the no deal scenario is even more worrying, with very little comfort coming from the Government’s technical notices—as I think they are called—on handling civil legal cases involving EU countries, in that situation. As we have heard, tried-and- tested EU rules currently determine which country’s court will hear cross-border civil, commercial or family law cases, and how judgments in one member state are recognised and enforced in another, mainly on the basis of reciprocity. Without a deal, such co-operation will fall away, possibly on 1 April.

This paper—the so-called advice from the Government—states only that any party to such a cross-border dispute would need to consider the effect of these changes on any existing or future cases, or seek professional advice. It is, however, precisely the professionals who need to hear what the Government intend, because they will be unable to advise their clients without that clarity. Family lawyers are highly alarmed about the implications of the sudden withdrawal of co-operation, recognition of judgments and lack of enforcement. We are talking about families—families who are divorcing, dividing assets or arguing over custody of their children.

Some Brexiteers may say that no deal is perfectly bearable, probably because they will not suffer the costs. It will be families that take the hit if the negotiators fail in their task, or give in to extreme Brexiteers who seem to think that no deal is acceptable to the UK. Will the Minister, therefore, take these concerns back to those of his friends who are in that group? Will he make sure that we do not face that outcome?

However, assuming for the moment that there is a deal—let us be positive—we, and indeed the businesses or individuals who may be affected by it, still need far more clarity on the issues raised today about disputes over either the interpretation or the implementation of the withdrawal deal. We look forward to the Minister’s response.

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union) 5:37 pm, 17th October 2018

My Lords, on behalf of the Government I very much welcome the EU Justice Sub-Committee’s report Dispute Resolution and Enforcement After Brexit. The detailed analysis and consideration of the areas covered by the report is a welcome contribution to the wider discussions on how disputes between the UK and EU should be resolved after we leave in March 2019. The report was ably introduced by the noble Baroness, Lady Kennedy, and we are fortunate to have the benefit of her vast experience of these matters. I also thank noble Lords from all sides of the House for their constructive and insightful speeches during the debate.

I will say as much as I can on these matters and respond to as many questions as possible, but I ask noble Lords to accept that this is a live negotiation. Many of these matters are being discussed and negotiated on at the moment. Some parts are agreed; others are not. Some parts are agreed at technical level; others are outstanding and waiting for related parts to be agreed. In some respects, therefore, it would not be helpful to go into too much detail on some aspects of the negotiations. Nevertheless, I will try to respond to as many of the points raised as possible.

Noble Lords have expressed concerns about how disputes will be resolved after the UK leaves the EU, in particular—this was referred to by many noble Lords—the proposal that the jurisdiction of the CJEU would be replaced by a judicial or quasi-judicial body to oversee disputes between the UK and EU. I assure noble Lords that, since the EU Justice Sub-Committee published its report in May, we have made significant progress in the negotiations on establishing appropriate and workable dispute resolution mechanisms. I would like to update noble Lords on these negotiations and note that the UK and the EU are close to concluding a withdrawal agreement that sets out the terms of the UK’s orderly exit from the European Union. The withdrawal agreement will provide important certainty to individuals and businesses, setting out the deal on citizens’ rights, on the financial settlement and on the implementation period. We are close to reaching agreement on a number of other separation issues, which will provide for winding-down provisions across a number of areas as we leave—for instance, cases pending at the CJEU and ongoing customs processes.

The noble Baroness, Lady Kennedy, asked specifically for an update on these ongoing judicial proceedings. I can assure her that the relevant provisions will set out the process winding down UK involvement in legal proceedings before the CJEU in an orderly manner. These will support the legitimate expectations of, and efficient access to justice for, those who have spent time and money progressing cases through the UK and the European court systems, allowing all cases in train at the end of the implementation period to continue to their natural conclusions. Once the final areas of the withdrawal agreement have been settled, we will consider the necessary legislative requirements for those areas. I realise that this will be a disappointment to the noble Lord, Lord Thomas, in particular, but it remains the Government’s position that, in leaving the European Union, we will bring about an end to the jurisdiction of the CJEU in the United Kingdom.

A number of noble Lords asked me about judicial co-operation and the European arrest warrant. We are pleased that we have reached agreement with the EU on the content of Part Three, Title V, of the withdrawal agreement on ongoing police and judicial co-operation in criminal matters. Title V provides clarity and legal certainty for individuals, for law enforcement stakeholders and the judiciary in the unlikely event that we do not reach agreement on future police and criminal justice co-operation as part of our future security partnership with the EU. We want to continue to play a leading role in Europol and Eurojust, and we will continue to do so during the implementation period.

Photo of Baroness Ludford Baroness Ludford Liberal Democrat Lords Spokesperson (Exiting the European Union)

I am sorry to interrupt the Minister—he might be going on to answer this question—but he has just repeated the mantra about ending the jurisdiction of the court, and he has cited the fact that we want to stay part of agencies such as Europol and Eurojust. How is the remit of the court, in respect of enforcing the rules regarding the UK, going to work if we do not recognise the jurisdiction of the court?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

If the noble Baroness will have a little patience, I will come on to talk about the agencies and the remit of the ECJ.

Withdrawal from the EU will mean a return to the situation where the UK and the EU have their own autonomous legal orders. The Government agree with the committee’s observation that the withdrawal agreement and the future partnership must respect the autonomy and integrity of both legal orders.

On the points made by the noble Lords, Lord Thomas and Lord Anderson, this is not about demonising the CJEU in any way. Our position has always been that we respect the role of the CJEU as the ultimate arbiter of the meaning of EU law, and we respect the autonomy of the EU legal order, as indeed we expect it to respect ours. However, it would be wholly unprecedented for a non-member state to be subject to the jurisdiction of the CJEU, and we do not believe that it would be appropriate for the court of one party to resolve disputes between the two.

There are, of course, limitations under EU law on the extent to which the EU can be bound by an international judicial body other than the CJEU. Therefore, we will also need to find a principled and pragmatic solution to respecting our unique status as a third country with our own sovereign legal order. For these reasons, the EU and the UK need to agree on how both the provisions of the withdrawal agreement and our new deep and special partnership can be monitored and implemented to the satisfaction of both sides, and how any disputes that arise can be resolved.

As the committee acknowledged in its report, there is not a one-size-fits-all solution for dispute resolution after our exit. Despite the fact that dispute resolution mechanisms are common within international agreements, the form these mechanisms take varies considerably across the spectrum of agreements, given the different areas of international co-operation, and consequently the varied nature of potential disputes that could arise. That is why we are negotiating bespoke mechanisms across the different areas where we need a dispute resolution mechanism.

The sub-committee and noble Lords have raised concerns on the rights of EU citizens. Let me assure the House that, in setting out governance principles, we will ensure that the rights of EU citizens living in the UK, and of course UK nationals living in the EU, are safeguarded. This reflects the fact that the Prime Minister made it clear that that was her first priority for negotiations. The agreement reached in December and set out in our joint report with the Commission, alongside Part Two of the withdrawal agreement, will provide these citizens with certainty about their rights going forward.

In the UK, EU citizens’ rights will be upheld by incorporating Part Two of the withdrawal agreement into our law. As the noble Lord, Lord Hannay of Chiswick, noted, there will be a time-limited period when our courts may choose to refer questions on specific points of law concerning citizens’ rights to the CJEU for a decision, having had regard to whether relevant case law exists, but it will be up to our courts to decide whether do so. Let me reassure the noble Lord that it will be for our courts to make final judgments, not the CJEU. Any continuing CJEU role in our legal system will be temporary and narrowly defined. The ability of UK courts to make voluntary references to the CJEU will, as the noble Lord is aware, be time-limited to eight years. These short-term limited arrangements have been agreed to help ensure consistency and certainty for citizens over these new rights as they are implemented.

For the implementation period to operate effectively, the UK will need to remain in step with the EU. The withdrawal agreement will be underpinned by a duty of good faith, with a joint committee in place enabling either side to raise issues or concerns. These arrangements will help ensure the implementation period works properly for both sides. We have agreed that, for the implementation period, the existing EU mechanisms for supervision and enforcement will apply, including continued CJEU jurisdiction. This is necessary so that there will be one set of changes for businesses and people. I hope that that reassures the noble and learned Lord, Lord Hope of Craighead, and the noble Lord, Lord Hannay of Chiswick, who raised their concerns about the need for certainty during the transition period. This does not change the fact that in the long term, after the end of the implementation period, the UK will no longer be under the jurisdiction of the CJEU.

Let me answer the point raised by the noble Lord, Lord Anderson of Swansea, by making it clear that the implementation period will not be extended. I thank him for the offer of co-operation from the Bar Council; we continue to have regular consultations with lawyers in practice, as well as the judiciary, on all aspects of the complicated legal mechanisms in both the withdrawal Act and the future partnership.

Photo of Lord Anderson of Swansea Lord Anderson of Swansea Labour

That is the definitive response? Have the Government told Monsieur Barnier that there will be no extension at all of the withdrawal period?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

Indeed, and it is the EU position as well that there will be no extension of the implementation period. The terms of it are agreed. That is the position of the Government, and as far as I am aware that is also the position of the EU.

The noble Lord, Lord Hannay, asked me about the forthcoming withdrawal Bill. It used to be called the withdrawal agreement and implementation Bill, but to confuse matters further it is now called the withdrawal Bill—to add on to the withdrawal Act that we already have. Yes, the noble Lord is correct in his interpretation that to legislate for the implementation period, depending on the final agreement, we will need to modify parts of the withdrawal Act.

Moving on to the longer term, our White Paper on the future partnership published a detailed vision for the future security and economic partnership—a framework which we believe will deliver the unprecedented partnership all our leaders are committed to. The proposal advanced in the White Paper builds on the vision set out by the Prime Minister at Lancaster House, in Florence, at Mansion House and in Munich. As we leave the EU, we want to build a new deep and special partnership based on mutual trust and reliability, with a transparent way of ensuring that each side is acting in accordance with the final agreement.

To ensure that that new relationship stands the test of time, we will need to have the right structures in place for co-operation, decision-making and the prevention and resolution of disputes. We are proposing a system that provides institutional governance over the future relationship, including the areas where the UK and the EU agree to apply the same rules, and over our participation in certain EU bodies. We hope to achieve an arrangement that recognises the unique starting point of having the same rules and regulations. We have set out a clear structure to underpin the deep and special relationship we are seeking. The future relationship should be based on an overarching institutional framework which will encompass most of the individual agreements that make up the partnership and set out any common governance arrangements. These should include political oversight and a joint committee.

This framework draws on precedents from other international agreements, including those that the EU has entered into, which all have some form of institutional architecture. In general, the broader and deeper the relationship, the more important it is that there is a strong institutional architecture in place to govern it. We are seeking an ambitious deal, one that recognises the deep and special partnership that we have with the EU and its member states. This institutional framework, carefully designed to respect the autonomous legal orders of the UK and the EU, has the strength and flexibility to support the depth of the relationship we wish to create. In line with that principle of respecting our autonomous legal order, we have been clear that in leaving the EU we will bring an end to the jurisdiction of the CJEU. The proposal delivers on that commitment. No longer will courts in the UK be able to refer cases to the CJEU, or the CJEU arbitrate disputes between the UK and the EU.

We are proposing that, in some areas, the UK will make a choice to retain a common rulebook with the same rules as the EU. Where we have a common rulebook, it is possible that a dispute could relate to whether these rules have been interpreted correctly. The UK recognises that only the CJEU can bind the EU on the interpretation of EU law and therefore, in these instances there should be an option for a referral to the CJEU for an interpretation, either by mutual consent from the joint committee or from an independent arbitration panel. The joint committee or arbitration panel would have to resolve the dispute in a way that is consistent with this interpretation. This would respect the principle that the court of one party cannot resolve disputes between the two. In those areas where we have a common rulebook, it will be important for businesses and citizens here and in the EU that these rules are interpreted and applied consistently.

The noble Lord, Lord Anderson of Ipswich, asked about individuals’ access to dispute resolution mechanisms such as arbitration. While they will not have access to these mechanisms as they are at present for state-to-state disputes, we are committed to ensuring the consistent interpretation and application of the rules that we agree with the EU. The UK would also, therefore, commit by treaty that its courts will pay due regard to the relevant CJEU case law, in so far as this is relevant to the matter before them. As the White Paper makes clear, UK courts will not, however, be able to make preliminary references to the CJEU. This will not affect consistent interpretation of a common rulebook, which will be delivered through the commitment to pay due regard to existing case law. In other areas there will be a recognition that rules are equivalent. We will need to agree governance arrangements that, first, oversee the application of regulatory commitments, secondly, ensure that the common rulebook is interpreted consistently and, thirdly, enable the UK to participate in EU bodies and agencies where needed for co-operation to take place.

We believe that it is in the national interest and in the interests of certain sectors of our economy to maintain a smooth trading relationship by having rules similar to the EU’s, and to continue UK involvement in certain EU bodies. This is all aimed at enhancing our wider economic and security partnership with the EU, providing effective structures to oversee the process and providing certainty to businesses and citizens, so that their rights and obligations will be applied consistently in both the UK and the EU. The noble Baroness, Lady Kennedy of The Shaws, asked whether this model, set out in the White Paper, would also serve for governing the withdrawal agreement, while the noble and learned Lord, Lord Hope of Craighead, asked for an update on progress in negotiations. I would like to acknowledge that a great deal of progress has been made over the past couple of weeks in negotiations concerning the withdrawal agreement; however, there are still a number of areas that are subject to ongoing negotiations, one of which is the governance of this agreement.

I think I answered the question of the noble Lord, Lord Anderson, about individuals. He also asked about the British judge on the Court of Justice. Of course, as he will be well aware, judges do not “represent” their member states. As Sir Konrad Schiemann said in his evidence to the committee, the UK will no longer be a member state from March 2019 and it is therefore right that we should withdraw from the institutions. While we will not have a UK judge, we will still have the right to intervene before the CJEU and our lawyers will maintain their rights of audience.

Moving on to the issue of civil judicial co-operation and the Lugano convention, mentioned by a number of noble Lords, we also recognise in the sphere of private law the important role of civil judicial co-operation for businesses, consumers, employees and families in providing clear rules to resolve disputes in sensitive matters quickly and efficiently. That is why the UK wants our future relationship with the EU to include a mutually beneficial agreement on civil judicial co-operation. This would include co-operation in civil, commercial, family and insolvency matters. The UK has presented its position to the Article 50 task force team in the Commission, and that presentation is available on the GOV.UK website. That is subject to ongoing negotiations that we are taking forward with our EU partners.

I also reassure noble Lords about our continued participation in the 2007 Lugano convention. The UK has been clear that we will seek to participate in the convention after our exit from the EU. At the March 2018 European Council, we agreed that the EU will notify other countries that the UK is to be treated as a member state—

Photo of Lord Anderson of Swansea Lord Anderson of Swansea Labour

The Minister has on many occasions used the phrase, “negotiations are continuing” over a very wide field, but the clock is ticking. Is he confident that it will have stopped ticking in time for us to be ready by the end date in March?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

The clock will not stop ticking. I hope that it will continue to tick and that negotiations will continue to advance, but of course, as he is well aware, we cannot wait until March to get agreements. Noble Lords are aware that we have to legislate for the withdrawal agreement through both Houses. We are very aware of the needs of parliamentarians; they will insist on proper parliamentary scrutiny of this important legislation, and therefore we will need to get an agreement swiftly, certainly in terms of the withdrawal agreement, in order to provide for the meaningful vote and then to provide for appropriate scrutiny of the legislation to implement it.

As I said, at the March 2018 European Council we agreed that the EU will notify other countries that the UK is to be treated as a member state for the purposes of international agreements for the duration of the implementation period. This includes the Lugano convention. We are seeking to put in place arrangements to continue our participation in that convention at the end of the implementation period. However, the exact arrangements for continuing our participation are a matter for future negotiations with our EU partners.

My time is up, but let me say a word about agency participation. We believe that it is in the mutual interests of the UK and the EU for us to continue to participate in various EU agencies and we have set those out. We are seeking to maintain co-operation on the EU’s law enforcement tools, including the European arrest warrant, although the legal form and governance of these arrangements are subject to negotiation. I say, for the benefit of the noble Baroness, Lady Ludford, that where we participate in an EU agency we will respect the remit of the CJEU, as set out in the White Paper.

I hope that I have, as far as possible, reassured the House that we are developing a robust framework that will ensure that, while we are leaving the EU, we will continue to build on our deep and special partnership for the long term. When we have finally, I hope, reached agreement, I look forward to coming back to the House and updating Members further.

Photo of Baroness Kennedy of The Shaws Baroness Kennedy of The Shaws Chair, EU Justice Sub-Committee 5:59 pm, 17th October 2018

My Lords, I thank the Minister for his response, although I find it very dispiriting. We are being told that we are replacing a court—which included a British judge and had considerable input from British lawyers— with what are being described as “bespoke mechanisms”. These many different mechanisms will fall short of giving civilians—individuals, small business people and people who would like to bring their family matters before some sort of court—the opportunity to do so. They are not going to be included. I was most disappointed to hear the Minister say that individuals will not have access to the arbitration panels or the dispute mechanism. This is a serious disappointment and will give no comfort to the family lawyers and the many different people who gave evidence before our committee.

I thank the many Members who have contributed to this debate. The quality of every contribution speaks to the great expertise of this House. I should have thought that they would have touched the Minister with the importance of what this debate is about. Law matters. At the heart of all relationships—inside nations and across borders; wherever relationships are created for trading purposes; in marriage and the ending of marriage; in making discoveries and having high standards for the medicines we share—is, inevitably, law. These are the sets of rules that we, in civilised nations, put together to regulate how we live together. At the end of this, there has to be a proper court which is respected and trusted. We are replacing a court that has had many decades of development and input of a really valuable kind from British lawyers. We are withdrawing from it and replacing it with an ad hoc set of mechanisms which I have no doubt will fall short of what the British public would expect. This is disappointing, as is hearing how little progress has been made on these issues in the course of the negotiations.

Law matters because it is the mortar that binds relationships. In creating this red line and tearing up our relationship with the European court, we are taking part in a process of destruction. We have allowed ourselves to be seduced by the popular press and hard-line Brexiteer idea that somehow all this wash of law came at us from Europe and that we were passive receivers of it. It is not true. Britain is full of great lawyers and judges who contributed collaboratively in many ways in the creation of this law. There is an idea that we have been at the mercies of it. I would ask any noble Lord in the Lobby outside and any person who wants to get themselves free of this court, which judgments do you not like? Almost invariably, the hard line Brexiteer cannot give an example of a case where they did not like the result. They give an example from a court that is not involved with the European Union but is quite separate—the European Court of Human Rights. It is that failure to understand the role played by the European Court of Justice that has been at the heart of this unsatisfactory misleading of the British public.

In thanking the Minister for answering as he has, I pay tribute to the awful school of bureaucratic obfuscation that helped to write his speech. It must pain Ministers some times to have to read what is presented to them as the answer to serious issues. I pay tribute to those on my committee. This report came out of really good advice given to us from people expert in the field. I include the noble Lord, Lord Anderson and the noble and learned Lord, Lord Hope, and those who gave evidence before us. It is sad that it is being dealt with in this cavalier way and that we are putting to one side the riches of our collaborations in trying to make good law that can help create relationships across Europe. I am sorry to hear the response we have had. I am going to keep at it, of course. I beg to move.

Motion agreed.