Ben Elliott: A Revolutionary Clause? Three Schools of Thought on Clause 18

The European Union Bill commences the final stages of the Parliamentary process on 8 March 2011. It will enforce referenda for future transferrals of power to the EU and restructures the UK’s election of MEPs. However, potentially the most fundamental constitutional consequences will derive from the final and shortest part of the bill, Clause 18, the Government–designated ‘sovereignty clause’.

“It is only by virtue of an Act of Parliament that directly applicable or directly effective EU law (that is, the rights, powers, liabilities, obligations, restrictions, remedies and procedures referred to in section 2(1) of the European Communities Act 1972) falls to be recognised and available in law in the United Kingdom.”

There are three major interpretations and predictions which have been imposed on this section concerning its constitutional and legal consequences:

(1) Belief that the clause merely reaffirms the existing balance of constitutional authority between Parliament, the EU and the Judiciary.

(2) The possibility that Clause 18 may impose a statutory restraint on the Judiciary’s authority to implement and enforce EU law before the UK courts.

(3) Concerns over the autonomy the clause may confer upon the Judiciary as the authorised arbiters of the UK’s Constitution.

1. Reaffirming the Constitutional Balance

The Government stance on Clause 18 is that it is merely declaratory and recognises the legal relationship between the UK Parliament and EU institutions. The Sovereignty of Parliament is a, if not the, central principle in the UK’s uncodified constitution. In its classic Diceyan definition “no person or body is recognised by the law of England as having a right to override or set aside the legislation of Parliament”. Such bodies include not only UK institutions but also international organisations, such as the EU. Therefore, the UK courts have consistently assumed a ‘dualist’ approach to international law: “A treaty”, Lord Griffiths explained in Rayner v Department of Trade and Industry “is not part of English law unless and until it has been incorporated into the law by legislation”. Therefore, “until they are embodied in laws enacted by Parliament” Lord Denning stated in Blackburn v Attorney–general the UK courts “take no notice of treaties.” On this basis, the EU Treaties, originally the Treaty of Rome but later the Treaties of Maastricht and Lisbon, require a medium of incorporation before their provisions can enter UK law and be applied by the national courts.

Such an outlook contrasts with a number of other EU Member States and happens to be directly contradictory to the perspective of the European institutions themselves. ‘Monist’ states, such as the Netherlands, have constitutions with provision that international law is automatically incorporated into that country’s legal system without any necessary action by the national legislature. Therefore, the signing of a treaty is the act which allows its provisions to be applied by national courts.

European institutions have adopted the same outlook since the earliest days of the Community. In the one of its formative cases, Costa v ENEL, the Court of Justice of the European Union (ECJ) held that when Member States signed the treaties, European law “became an integral part of the legal systems of the member states which their courts are bound to apply.” This occurs irrespective of each Member State’s constitution because, as the ECJ declared in the case of Van Gend en Loos, those treaties created a “new legal order of international law” which achieved paramountcy “independently of the legislation of Member States.” Therefore, the view in Strasbourg is that EU law supersedes national provisions because of the inherent nature of that legislation, and does so without any enactment by Member States.

Such irreconcilable contradictions in legal theory were tacitly ignored by all parties when the UK joined the European Community. The Treaty of Rome was initially processed identical to any other international agreement which establishes regulations and obligations, such as NATO or the European Convention on Human Rights (the rights of which, due to the UK’s ‘dualist’ constitution, were not enforceable before national courts until the enactment of the Human Rights Act 1998). They were signed by the government of the day exercising its royal prerogative to make international agreements. However, the laws, rights and provisions contained in the Treaty of Rome were rendered judicially enforceable by the European Communities Act 1972; section 2(1) declares that all Treaty provisions are “without further enactment to be given legal effect or used in the United Kingdom shall be recognised and available in law, and be enforced, allowed and followed accordingly” and section 2(4) states that all UK law “shall be construed and have effect” subject to directly effective EU law.

The UK courts have consistently stated that, through this statute, Parliament voluntarily chose to limit its own ability and, therefore, sovereignty to legislate authoritatively in spheres of EU jurisdiction. In the famous case of Factortame, the House of Lords understood that the Merchant Shipping Act 1988 potentially contradicted provisions of EU law and that European law therefore demanded that theMerchant Shipping Act be suspended. However, the Diceyan articulation of the doctrine of Parliamentary supremacy does not allow any person or body to override Parliamentary legislation, even the highest court in the land. Lord Bridge’s solution was to explain that section 2(4) of the European Communities Act had the same effect as if a section were incorporated into every statute passed after 1972 stating that such legislation was to be without prejudice to directly enforceable European law. Consequently, it was possible to derogate from the traditional doctrine of sovereignty because Parliament itself had legislated to limit the application of the doctrine in practice. In theory, therefore, although the courts were not enforcing Parliamentary legislation which contradicted EU law, they were upholding the doctrine of Parliamentary Sovereignty because they were enforcing Parliament’s intention regarding the supremacy if EU law as stated in European Communities Act 1972. “The fundamental legal basis of the United Kingdom’s relationship with the EU”, LJ Laws concluded in Thoburn v Sunderland City Council, “rests with the domestic, not the European, legal powers”.

Clause 18 of the present bill is effectively paraphrasing the Judiciary’s assertions in cases such as Factortame and Thoburn by stating that it is only through the medium of an act of Parliament, the European Communities Act 1972, that EU law is recognised and available in the UK. It continues to deny the legal theory applied by ‘monist’ states and the EU itself and reaffirms the sovereignty of Parliament in relation to EU law. This has been the interpretation of Clause 18 as asserted by many academics providing evidence to the European Scrutiny Committee, by commentators and by the Government itself. As the Bill’s Explanatory Notes describe, Clause 18 is only a “declaratory provision” and “does not alter the existing relationship between EU law and UK domestic law”.

2. Restraining the Judiciary’s Application of European Legislation

However, such an interpretation is based on two assumptions. Firstly, a view that this ‘sovereignty clause’ reaffirms the relationship between the EU and UK legal systems assumes that the intended audience of the clause lie across the English Channel. If European judges were meant to react to the clause, such a blatant assault on the ‘monist’ European view would only antagonise that audience and would certainly be unlikely to undermine or encourage an alteration of that legal theory. In reality Clause 18 is intended to shape the decisions of those much closer to home, in fact those on the other side of Parliament Square.

The second assumption is that, if the clause is reaffirming an existing relationship between UK and EU law, the legal relationship articulated is that which currently exists in practice. In other words, for Clause 18 to reaffirm that EU law is enforceable due to the European Communities Act, the Judiciary must presently be enforcing EU law only to the extent that the Act sanctions.

The will of Parliament and its legislation may not be overridden or set aside, Dicey asserted, by any institution, including the UK courts themselves. In other jurisdictions courts, such as the Supreme Court in the USA, have the authority to ‘strike down’ legislation, but in the UK the Judiciary’s role, in theory, is to declare and clarify legislation which constitutes the will of the people’s democratically elected representatives. The Explanatory Notes to the bill state that Clause 18 seeks to “address concerns that the doctrine of Parliamentary sovereignty may in the future be eroded by decisions of the courts”. However, in practice that erosion has already occurred and the courts have already exceeded the authority granted them by the European Communities Act.

The clearest example of this process is the UK courts’ application of the doctrine of indirect effect. The European Communities Act and Clause 18 specifically state that only “directly applicable or directly effective EU law” is to be enforced by the courts. Directly applicable and effective legislations include treaty articles themselves, Regulations and, if the defendant is an “emanation of the state”, Directives. Directives are not however directly effective or applicable against other defendants.

However, the ECJ decided in the case of Von Colson that Directives might be ‘indirectly effective’ if there exists relevant national legislation which might be interpreted in light of a Directive. Initially the UK courts were sceptical of such an approach since such an interpretation exceeded and, therefore, contradicted the literal wording of a Parliamentary Statute. In the case of Duke v G.E.C. Reliance Ltd the House of Lords declared that they were unwilling to “distort the meaning of a British statute”, in this case the Sex Discrimination Act 1975, in order to implement the 1976 Equal Treatment Directive which was not directly effective and therefore could not be legitimately enforced through the European Communities Act.

The only justification for applying the meaning of a Directive by indirect effect would be if Parliament had actually intended to implement the Directive in question. This would include instances in which Parliament had failed to fully implement the wording or meaning of a Directive (or its interpretation by the ECJ) into a statute or regulations which had specifically been intended to implement that Directive. Thus in the case of Pickstone v Freemans the House of Lords were prepared to interpret the Equal Pay (Amendment) Regulations 1983 because Parliament had intended them to implement the judgement of Commission v UK and Ireland. Furthermore, in the case of Litster v Forth Dry Dock the House of Lords were similarly willing to interpret the Transfer of Undertakings (Protection of Employment) Regulations 1981 in the light of a Directive which those Regulations had been intended to implement because in doing so the court was enforcing the “intention of Parliament”.

The courts were therefore acting in accordance with the doctrine of Parliamentary Sovereignty and in so doing were in practice, if not in legal theory, following the jurisprudence of the ECJ concerning the doctrine indirect effect. This precarious stance was demonstrated in the case of Finnegan v Clowney Youth Training Programme. The House of Lords were not willing to interpret the Sex Discrimination (Northern Ireland) Order 1976 in light of a 1976 Directive enacted prior to the order because there was no relationship between Parliamentary intention in passing the order and the relevant Directive: the order was worded identically to the Sex Discrimination Act 1975 and therefore the order should be interpreted according to Parliament’s intention when passing that act which could not have been to implement the 1976 Directive. Therefore, throughout the 1980s the courts were still only enforcing directly effective EU legislation, as authorised by the 1972 Act, and interpreting national legislation which had been specifically intended by Parliament to implement EU law.

However, in the 1990 case of Marleasing the ECJ asserted that indirect effect could also be applied if the national legislation had been enacted prior to the enactment of the Directive itself. This decision completely undermined the relationship between Parliamentary intention and the relevant Directive which the Judiciary had attempted to safeguard in the previous decade. Parliamentary sovereignty and EU law were in direct contention as neither the European Communities Act nor any other Parliamentary legislation had intended to implement EU legislation which did not have direct effect and which Parliament had not attempted to implement. The courts were soon called upon to determine such a case. In Webb v EMO Air Cargo the circumstances were identical to those in Duke v Reliance with the Claimant seeking to use the 1976 Equal treatment Directive to interpret the Sex Discrimination Act 1975. The courts had to decide whether to apply the strict doctrine of Parliamentary Supremacy and not enforce the meaning of the Directive, or to apply the European doctrine of indirect effect despite the fact that the Directive’s meaning had clearly not been intended by Parliament.

The Court of Appeal stood its ground and refused to “distort” the meaning of a Parliamentary statute. However, the House of Lords examined Marleasing and, following a reference to ECJ on the interpretation of the Directive, reversed the Court of Appeal’s decision and interpreted the 1975 Parliamentary legislation using the 1976 Directive. The House of Lords’ justification for their decision is unclear but they could not rely on Parliamentary sovereignty manifested in either the Sex Discrimination Act 1975 or the European Communities Act 1972.

The House of Lords, therefore, implemented EU legislation without Parliamentary authority. Consequently, Clause 18 of the EU Bill cannot merely be reaffirming the relationship between EU and UK legislation. The emphasis on the 1972 Act as the justification for enforcing EU law clearly cannot extend to the enforcement of non–directly effective and applicable legislation. If Parliamentary Supremacy in relation to European legislation is asserted in the clause, then this is an amendment to current judicial practice. Since the UK is a common law jurisdiction in which case law can determine legal theory, the clause is therefore also a modification of current legal theory which, for two decades, has allowed the application of indirect effect. Could it not, therefore, be only a matter of time before this application is challenged using the doctrine of Parliamentary Sovereignty stated in Clause 18? The clause, therefore, has the potential to restrain the Judiciary’s implementation and enforcement of EU law and force the courts to return to the strict legal authority granted by Parliament in the European Communities Act 1972.

3. The Battle for Constitutional Sovereignty

The third interpretation of Clause 18 is that its provisions will not strengthen Parliamentary Sovereignty but rather undermine it. We live in an age in which the UK’s unwritten constitution appears to be evolving at an unprecedented rate. In addition to political changes, such as devolution and the proposed reform of the electoral system, the UK Judiciary has been granted enhanced status and autonomy over the past two decades. The introduction of the Supreme Court has emphasised and enshrined the Judiciary’s independence from Parliament and even the courts new name suggests an institution with jurisdiction and powers which might begin to resemble those of its American counterpart. The Human Rights Act 1998 enhanced the Judiciary’s power to scrutinise and criticise Parliamentary legislation and granted judges remarkable discretion in the manner in which Human Rights may manifest and be determined to have been infringed by Parliamentary legislation. The powers granted to the courts by section 2 of the European Communities Act have enabled the courts to suspend Parliamentary legislation, in the case of Factortame, and also to make declarations of incompatibility with EU law, in Regina v Secretary of State for Employment Ex parte Equal Opportunities Commission, which in effect renders the relevant Parliamentary legislation inapplicable.

Meanwhile, judicial comments have grown increasingly disparaging regarding Parliament’s unlimited legislative supremacy. In Jackson Lord Steyn stated that any attempt by Parliament to abolish judicial review might be struck down by the courts. Indeed, a Parliamentary attempt to limit judicial review was effectively struck down by the Judiciary in Anisminic. Moreover, Lord Steyn also stated that Parliamentary Supremacy is “a construct of the common law. The judges created this principle. If that is so, it is not unthinkable that circumstances could arise where the courts may have to qualify a principle established on a different hypothesis of constitutionalism”. In essence, Parliament is sovereign because the courts have decided that it is, and they therefore retain the authority to undermine that supremacy. Furthermore, in the same case, Lord Hope, presently Deputy President of the Supreme Court, that “the rule of law enforced by the courts is the ultimate controlling factor on which our constitution is based” and that “the courts have a part to play in defining the limits of Parliament’s legislative sovereignty”. “Parliamentary sovereignty” he described “is no longer, if it ever was, absolute.” Lord Steyn later expanded in the European Human Rights Law Review

“For my part the dicta in Jackson are likely to prevail if the government tried to tamper with the fundamental principles of our constitutional democracy, such as five–year Parliaments, the role of the ordinary courts, the rule of law, and other such fundamentals. In such exceptional cases the rule of law may trump parliamentary supremacy.”

It is therefore not surprising that Members of Parliament such asWilliam Cash anxiously believe that “the sovereignty of Parliament is not much loved in legal circles”.

With the Judiciary apparently increasingly willing to articulate and develop concepts of Judicial Supremacy, Clause 18 could potentially be deployed to the detriment of Parliament. Firstly, the Clause only enshrines the sovereignty of Parliament in relation to EU law. The entrenchment of Parliamentary Supremacy in other areas of law has not been specified and, by this omission, has not been safeguarded but rather rendered vulnerable.

Secondly, the Explanatory Notes assert that the Clause is “placing on a statutory footing the common law principle”. David Cameron, in his letter to William Cash, stated that the term ‘common law’ was only used to distinguish it from statutory doctrines. However, this designation of the doctrine of Parliamentary Supremacy as common law doctrine effectively reasserts Lord Steyn’s declarations in Jackson and implies that the doctrine only subsists at the discretion of the Judiciary.

William Cash’s attempts to amend Clause 18 to include “The Sovereignty of the United Kingdom Parliament is hereby reaffirmed” were defeated and the Explanatory Notes remain in the Bill as it approaches the final stages of enactment. Though perhaps Clause 18 is a ‘sovereignty clause’ in relation to EU law, it will effectively enshrine in statute the Judiciary’s right to challenge Parliamentary Sovereignty and render Parliament subject to the “judicial activism” which Cash and his partisans fear.

The Impending Constitutional Conflict

Therefore, it is very possible that, rather than enshrining a static state of affairs, Clause 18 of the EU Bill has the potential to be deployed on two significant constitutional battlefields. The flow of indirectly effective legislation from Brussels may be stemmed in due course by a party who dares to question the statutory basis by which a Directive may be used to interpret statutes contrary to their literal meaning. This would create a stand–off between EU legal theory which asserts that its legislation requires no incorporation to be applied by national courts, and Parliament who have enshrined ‘dualist’ UK constitutional principles in Clause 18. The arbiters will naturally be the Judiciary who may have to question their erstwhile uninhibited implementation of EU law without Parliament’s sanction.

Alternatively, when next the Judiciary feel it is their duty to not apply Parliamentary legislation, for instance if it severely breached the Rule of Law or even an article of the Human Rights Act, they will be armed with the knowledge that Parliament itself has classified its own sovereignty as a common law principle. Since Clause 18 has failed to enshrine Parliamentary Sovereignty in statute, the judges will have the discretion as to whether they qualify that sovereignty, or make it conditional of Parliament’s commitment to other constitutional principles, such as the Rule of Law.

These two debates, which may never see the light of the courtroom, are not mutually exclusive. Clause 18 simultaneously re-establishes Parliamentary Supremacy in relation to EU law, whilst undermining that sovereignty in the application of statute generally and in relation to the right of the Judiciary to interpret Parliamentary legislation – interpretation which need not be congruent to Parliament’s actual intention. Certainly, Clause 18 has the potential to be deployed in the redefinition our constitution.

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