Does Brexit signal the beginning of a new legislative landscape?

Whilst the Environment Bill is undoubtedly important in shaping the UK’s future environmental regulation, there is another piece of legislation which has the potential to change the landscape of environmental law as we know it. The European Union (Withdrawal) Act 2018 (EUWA) will allow the UK to repeal “retained EU law” and to depart from EU case law. The ramifications of these powers are significant as their use could lead to the creation of a new regulatory framework, one which diverts from those directives and principles originating from the EU which underpin our current environmental legislation.

What we know about the Government’s plans for the environment

The explanatory notes accompanying the Environment Bill state that the Bill ‘sets out the measures needed to ensure that there is no environmental governance gap on withdrawal from the EU.’ This does not necessarily mean that continuity will be achieved through a replication of EU principles and regulations. The notes go on to explain that the measures in the Bill are designed to “allow the setting of long-term, legally binding and joined-up targets tailored to England.” The sign of imminent change was also heralded in the speech given by the Environment Secretary, George Eustace on 10th July.
Addressing the subject of environmental recovery, Mr Eustace argued that Brexit presents an opportunity to “chart a new course”. There is, he suggested “no point leaving the EU to keep everything the same. The old model has not stopped the decline in our natural world.” It is clear, then, that the Government intends to make some significant changes to existing environmental legislation in favour of a more UK centric approach. This process has already been set in motion with the passing of the EUWA 2018.

The EUWA and the power to depart from EU law

Significantly, the EUWA does not contain a non-regression provision which would have ensured that environmental controls post-Brexit are as robust as those applied in the EU. Earlier drafts of the Withdrawal Agreement did contain such a provision, but this was removed from the final legislation, which is perhaps indicative of the Government’s intention to forge a different path from that of the member states of the EU. After 1st January the UK will have the power to repeal or amend pre-exit EU environmental legislation. Additionally, the Government will not be required to transpose or adhere to any post-exit amendments to existing EU legislation or any new EU legislation. The vast majority of our environmental laws are derived from EU directives and regulations which have been transposed into domestic law. In practical terms, the EUWA 2018 means that any EU derived legislation can be amended or even repealed from 1st January, should the Government see fit to do so. Some amendments have already been made to certain environmental regulations and will come into force on exit day. For example, the Environmental Permitting (England and Wales) (Amendment) (EU Exit) Regulations 2019 inserts Schedule 1A into the Environmental Permitting (England and Wales) Regulations 2016 (EPR), modifying various directives, including the Landfill Directive.

These modifications clarify how the Directives are to be read, defining certain terms and omitting specific words to reflect the fact that the UK has left the EU. Although amendments made to EU derived regulations thus far are relatively minor, the execution of these changes is a demonstration of the new power to depart from EU law in action. Whilst it is unlikely that substantial changes will be implemented without the appropriate consultation, it should be noted that under EUWA 2018 the Government can make any changes to the legislation it wishes.

The power of the courts to depart from EU case law

The binding effect of EU case law will also change after 1st January. Section 6 of EUWA 2018 provides that a court or tribunal is not bound by “any principles laid down, or any decisions, made on or after IP Completion day” by the CJEU. It confirms that UK courts may have “regard to anything done…by the European Court”, but they do not have to follow their decision. With regards to EU case law decided prior to Brexit, the position is different. In an attempt to strike a balance between departing from case law where it is necessary and maintaining consistency and a sufficient degree of certainty, the lower courts will continue to be bound by EU case law decided prior to 1st January.

The Supreme Court will not be so bound and can choose to depart from previously decided EU case law should the test for departing be satisfied, namely that it appears right to do so, for example, where departure prevents an injustice. Arguably limiting the power to depart to the highest court is unlikely to have much of an impact. It is relatively rare for cases to end up in the Supreme Court and of those that do, it is unlikely that the circumstances of the case would be such that it would warrant the court from departing from well established, good case law. Notwithstanding this, reserving the power to depart to the Supreme Court could potentially lead to more cases being escalated to that court if the circumstances are such that an argument could be made for departure from retained EU case law.

It is evident that the Government felt that there were sufficient disadvantages to limiting the power to depart to the Supreme Court to merit an extension of the power to other courts and the EUWA 2018 was subsequently amended by Section 26 of the European Union (Withdrawal) Agreement Act 2020 which inserted a paragraph into section 6 of that Act allowing the Government to make regulations enabling other courts and tribunals to depart from existing EU case law.

Furthermore, the amendment also provides that the regulations may specify “the test which a relevant court or relevant tribunal must apply in deciding whether to depart from any retained EU case law.” The Government has since launched a consultation on the departure from retained EU case law by UK courts and tribunals and in October its response to the consultation was published. The response document confirms that in addition to the Supreme Court, the Court of Appeal will also have the power to depart from retained EU case law. The test to be employed by the Court of Appeal in deciding whether to depart will be the same as that used by the Supreme Court, a test, which according to the document “the Government is confident…is the appropriate approach, and that in setting the same test for the additional courts to apply we will promote consistency of approach between the courts to whom this power will be extended.”

What is the effect of these changes?

The ability to amend or repeal EU derived domestic law and to depart from existing EU case law is a double-edged sword. Some legal practitioners have welcomed the courts power to depart, seeing it as an opportunity to get rid of specific case law which has proved problematic and inconsistent with decisions made by the UK Courts. Conversely, the CJEU has been instrumental in establishing a solid body of good environmental case law and if UK courts decide to depart from such law, the UK could be at a disadvantage. There is a possibility that the power to depart will be extended further to lower courts. The consultation response suggests that it is appropriate that the restriction of the power to the highest appeal courts “will…minimise the risk…of adverse impacts which may arise out of any legal uncertainty…and the risk of divergence of approach between courts across the UK”. However, there is nothing in the wording of section 6 EUWA 2018 which would prevent a further extension of the power.

Whilst there may be some benefits to creating a legal framework more tailored to the environmental issues specific to the UK, there is an argument that too much change would have a negative impact. For example, the EPR 2016 in its current form works well and provides adequate regulation of permitted sites. Moreover, operators and regulators are familiar with these regulations and what is required of them. Operators have based the operations on their sites to accord with the regulations, investing in equipment and procedures which will facilitate compliance. These businesses have invested significant resources into achieving best available techniques, the standards for which derive from EU legislation.

Under the EUWA 2018, the Government could decide to amend the regulations to any extent or even repeal them entirely. Significant amendments which require a change to how sites operate or which place additional requirements on operators will have financial ramifications for businesses. The danger of “charting a new course” is that change may be made for the sake of it, rather than to create a framework which improves the environment whilst ensuring that waste sector businesses can continue to operate and thrive. In his speech, George Eustace stated that there is “no point leaving the EU to keep everything the same”, but the Government must ensure that any modifications it does make address areas of legislation which are problematic or not achieving what they set out to achieve. Fixing what does not need to be fixed in the name of creating a legal landscape different to that of the EU member states is a potentially detrimental course of action.

Concerned about how the UK’s exit from the EU may affect your business? Contact us today.