Brexit. Here’s the new deal – same as the old deal?

 

Mr Johnson yesterday concluded a new withdrawal agreement with the EU which will be put before Parliament on Saturday, after the rugby.

 

The main changes from Mrs May’s withdrawal agreement are that under the new backstop, that would come into effect on 1.1.2021 if a new agreement with the EU has not been concluded by then, there would be customs border between Eire and Northern Ireland but in practice customs checks on goods going into the island of Ireland, would take place on the UK mainland – not, as has been suggested, in the Irish Sea. Northern Ireland would also be subject to the rules of the internal market as regards goods and agriculture. Stormont will be able to vote on the continuance of this backstop four years after the end of the transition period and should it vote against them these provisions would lose force two years later during which time the “joint committee” would make recommendations to the UK and EU on “necessary measures”. In the absence of a sitting Northern Ireland Assembly at that time the UK would make alternative arrangements to provide for the necessary vote.

If the Northern Irish Assembly votes against the provisions, they would lose force two years later during which time the “joint committee” would make recommendations to the UK and EU on “necessary measures”.

 

There are changes to the political declaration, too. The parties are committed to concluding a free trade agreement which provides for regulatory autonomy in para 18 as follows.

“The Parties will retain their autonomy and the ability to regulate economic activity according to the levels of protection each deems appropriate in order to achieve legitimate public policy objectives such as public health, animal health and welfare, social services, public education, safety, the environment including climate change, public morals, social or consumer protection, privacy and data protection, and promotion and protection of cultural diversity. The economic partnership will recognise that sustainable development is an overarching objective of the Parties. The economic partnership will also provide for appropriate general exceptions, including in relation to security.”

Para 21 contemplates “free trade area, combining deep regulatory and customs cooperation, underpinned by provisions ensuring a level playing field for open and fair competition, as set out in Section XIV of this Part.”

Shortly afterwards there follows one of those exceptions.

 

  1. While preserving regulatory autonomy, the Parties will put in place provisions to promote regulatory approaches that are transparent, efficient, promote avoidance of unnecessary barriers to trade in goods and are compatible to the extent possible. Disciplines on technical barriers to trade (TBT) and sanitary and phytosanitary measures (SPS) should build on and go beyond the respective WTO agreements. Specifically, the TBT disciplines should set out common principles in the fields of standardisation, technical regulations, conformity assessment, accreditation, market surveillance, metrology and labelling. The Parties should treat one another as single entities as regards SPS measures, including for certification purposes, and recognise regionalisation on the basis of appropriate epidemiological information provided by the exporting party.

And another is to be found in section XIV

“To that end, the Parties should uphold the common high standards applicable in the Union and the United Kingdom at the end of the transition period in the areas of state aid, competition, social and employment standards, environment, climate change, and relevant tax matters….”

The parties commit to “maintain environmental, social and employment standards at the current high levels provided by the existing common standards…. [and] should rely on appropriate and relevant Union and international standards, and include appropriate mechanisms to ensure effective implementation domestically, enforcement and dispute settlement. The future relationship should also promote adherence to and effective implementation of relevant internationally agreed principles and rules in these domains, including the Paris Agreement.”

 

But it is not all about goods. Paragraph 25 provides “The Parties should conclude ambitious, comprehensive and balanced arrangements on trade in services and investment in services and non-services sectors, respecting each Party’s right to regulate. The Parties should aim to deliver a level of liberalisation in trade in services well beyond the Parties’ World Trade Organization (WTO) commitments and building on recent Union Free Trade Agreements (FTAs).” This will aim for substantial sectoral coverage in line with GATT article 5.

Maritime transport is mentioned at para which provides “The future relationship should facilitate cooperation on maritime safety and security, including exchange of information between the European Maritime Safety Agency (EMSA) and the United Kingdom Maritime and Coastguard Agency (MCA), consistent with the United Kingdom’s status as a third country.” There is no mention of the Rotterdam Rules.

There would be an independent arbitration process to deal with disputes under the new agreement but: “[131] The Parties indicate that should a dispute raise a question of interpretation of provisions or concepts of Union law, which may also be indicated by either Party, the arbitration panel should refer the question to the Court of Justice of the European Union (CJEU) as the sole arbiter of Union law, for a binding ruling as regards the interpretation of Union law. Conversely, there should be no reference to the CJEU where a dispute does not raise such a question.”

The new WA will have to obtain the approval of Parliament on Saturday, otherwise Mr Johnson will be required by law to seek an extension to 31 January under art.50.  If the necessary letter is not sent, the Scottish Court of Session will reconvene on October 21 to decide whether it will sign a letter to the EU on Mr Johnson’s behalf.

In the meantime, expect a lot of phone calls by Mr Johnson to ‘our friends in the North’. Labour votes, or abstentions, are likely to be critical to getting the new deal through.

 

Parliament has not been prorogued. Supreme Court rules prorogation unlawful and of no effect.

 

Today the Supreme Court has unanimously ruled that Mr Johnson’s advice to the Queen to prorogue Parliament was unlawful and the subsequent Order in Council giving effect to it was unlawful, void and of no effect and should be quashed.

The Supreme Court  found that the lawfulness of the Prime Minister’s advice to Her Majesty is justiciable, both as regards the existence and limits of a prerogative power. A decision to advise prorogation would be unlawful if the prorogation has the effect of frustrating or preventing, without reasonable justification, the ability of Parliament to carry out its constitutional functions as a legislature and as the body responsible for the supervision of the executive. This was the case here. This prolonged suspension of Parliamentary democracy took place in quite exceptional circumstances in the light of the fundamental change which was due to take place in the Constitution of the United Kingdom on 31st October.

Parliament reconvenes today, Wed 25 September.

Former Justice of the Supreme Court, Jonathan Sumption, today expressed the view, on the ‘Today’ programme, that enforcement of the Benn Act would be through proceedings being taken in the Courts and the Court appointing an individual to write the letter requesting an extension under article 50 on behalf of the Prime Minister.

 

 

England 1 Scotland 1. Brexit prorogation in the courts. Extra time now being played in the Supreme Court.

Last week in Cherry v Lord Advocate the First Division, Inner House, Court of Session [2019] CSIH 49 P680/19 held that Mr Johnson’s decision to advise the Queen to prorogue Parliament for five weeks was justiciable. The key part of the decision is quoted below.

“[91] I can see that just because a government has resorted to a procedural manoeuvre in order to achieve its purpose does not mean that there is necessarily scope for judicial review. Procedural manoeuvres are the stuff of politics, whether conducted in Parliament or in lesser bodies. However, when the manoeuvre is quite so blatantly designed “to frustrate Parliament” at such a critical juncture in the history of the United Kingdom I consider that the court may legitimately find it to be unlawful.

There are undoubted difficulties in the courts applying its supervisory jurisdiction to an exercise of the royal prerogative within the political sphere, but Mr Johnston for the respondent did not go the distance of saying that there could never be a case which would justify intervention. He accepted that a two year prorogation of Parliament might be amenable to review. Here, the prorogation is only five weeks (and it is to be borne in mind that in practice the reduction of sitting days will be less because of the traditional adjournment of Parliament during the political party conference 49 season). However, it is a lengthy prorogation at a particularly sensitive moment when time would seem to be of the essence. In my opinion Mr Mure QC for the Lord Advocate (whose analysis I accept) was right to point to the dictum of Lord Sumption in Pham v Secretary of State [2015] UKSC 19 at paras 105-106: “in reality [there is] a sliding scale, in which the cogency of the justification required for interfering with a right will be proportionate to its perceived importance and the extent of the interference”.

Here there has been interference with Parliament’s right to sit, should it wish to. The petitioners want to protect that right. If Parliament does not wish to be so protected it can decide accordingly but the petitioners want to give it the opportunity to determine whether and when it is to sit between now and 31 October. The petitioners submit that as yet Parliament has not had that opportunity, notwithstanding the legislative activity that was going on during the hearing of the reclaiming motion.

What has led me to conclude that the court is entitled to find the making of the Order unlawful is the extreme nature of the case. A formulation to which I have been attracted is found in chapter 14, Crown Powers, the Royal Prerogative and Fundamental Rights, in Wilberg & Elliott, The Scope and Intensity of Substantive Review (Hart, 2015) at p 374 where the author of the chapter, Sales LJ, as he then was, refers to a group of authorities where the courts had been prepared to review exercises of the Crown’s common law and prerogative powers. The formulation is: “these are egregious cases where there is a clear failure to comply with generally accepted standards of behaviour of public authorities”. I see this as an egregious case. Mr O’Neill came to submit that the essence of the illegality here was irrationality (as had been the cases with the cases referred to by Sales LJ). Mr O’Neill may be right about that, although I would see it as having to do with improper purpose. At all events, I consider the Order to be unlawful and that making it was contrary to the rule of law.”

 

A contrario, the English High Court has found that the matter is one of high politics and is not justiciable.

The case is currently being heard on appeal in the Supreme Court. Eleven of the Twelve Justices of the Supreme Court are hearing the case.

Brexit in the courts. Miller loses, but Supreme Court to hear on 17 Sept.

Gina Miller’s challenge to prorogation was unsuccessful but an appeal to the Supreme Court has been scheduled for 17 Sept. The court’s reasons are to be released shortly.

With the possibility of a new PM early next week this may all become somewhat academic.

Today the House of Lords has passed the Benn bill to prevent a no-deal Brexit and it will receive the Royal Assent on Monday.

It has been revealed that a former Prime Minister has been referred to by Mr Johnson in a leaked memo as ‘a girly swot’.

A Brexit Dictionary (2). Pro rogue, or anti rogue?

 

Constitutional crisis. What would happen if Mr Johnson advised the Queen to refuse the Royal Assent to an Act of Parliament requiring he seek an extension under article 50.

Contempt of Parliament. Mr Johnson’s possible situation if he refused to abide by any Act of Parliament requiring he seek an extension under article 50. Michael Gove has refused to say whether the government would abide by legislation against no-deal Brexit, if it were passed by Parliament. A case of ‘Who GOVErns Britain’ then (c. Heath, E 1974).

Cummings. ee, American poet (1894-1962) who broke the rules of punctuation. Dominic, chief adviser and major domo to Mr Johnson.

General Election. Cannot be called until 2022 under the Fixed Term Parliament Act 2011 unless either the Government or the Opposition put forward a motion of no confidence in the government. If this is passed there are then fourteen days for an alternative government to be formed and if this is not possible Parliament will be dissolved and there will be a general election at a time specified by the Prime Minister. Alternatively, as in 2017, Parliament may be dissolved before the expiry of five years from the previous general election if there is a two thirds majority for this in the House of Commons. The opposition may not necessarily cooperate in which case there could be no ‘snap election’ for Mr Johnson, but Mr Corbyn might have to accept the soubriquet ‘frit’ (c Thatcher, M).

GNU. A Wildebeest, celebrated in song by Flanders and Swann.  Alternatively, a Government of National Unity.

Interdict. Scottish for ‘injunction’. This was refused on Friday in the current proceedings in Scotland challenging the legality of the prorogation of Parliament by Mr Johnson, but the hearing of the proceedings has been advanced to this Tuesday. Gina Miller has launched a separate application for judicial review of Mr Johnson’s prorogation of Parliament to be heard on Thursday. Today’s ‘Times’ reports that space has been made for the Supreme Court to hear the inevitable appeal this coming Friday. A further application is before the court in Northern Ireland. A busy week for the judiciary.

Labour votes. What Mr Johnson may need to get a new withdrawal agreement through Parliament (see ‘Spartans’ below).

No deal Brexit, ways of stopping.

  1. Mr Johnson renegotiates a withdrawal agreement and seeks an extension from the EU under article 50 to get Parliament’s approval.
  2. Article 50 is revoked. Must be done by a PM so need a new PM via Vote of No Confidence (VONC).
  3. An extension to article 50 is sought. Must be done by a PM so need a new PM via VONC.
  4. Act of Parliament requiring PM to seek further specified extension under article 50 and to revoke article 50 if the EU had not given the extension sought by 30 October. See, too, contempt of parliament, constitutional crisis.

Making your mind up. Rare Eurovision win for UK in 1981. Alternatively, something Parliament was incapable of doing in the indicative votes in the Spring.

Rebel Alliance. Han Solo, Luke Skywalker, Princess Leia (still fighting the same enemy thirty odd years after their decisive victory).  Alternatively, Oliver Letwin, Dominic Grieve, Anna Soubry etc

Spartans.  Members of the European Reform Group who are likely to vote against any new withdrawal agreement negotiated with the EU by Mr Johnson.

Standing Order 24

From Parliament’s website

“An MP may apply to the Speaker for an emergency debate on Mondays to Thursdays during sitting time under the rules of Standing Order No. 24.

If the Speaker has given the MP leave they will have three minutes to make a speech after question time and any urgent questions or ministerial statements. The Speaker then decides whether to submit the application to the House.

The House will have to agree that the debate takes place. If the House agrees to the application the emergency debate will take place on a future day, usually the next sitting day. The motion to be debated will be “That the House has considered the matter of [Topic]”.

Expect Speaker Bercow to allow an emergency debate on a bill requiring the PM to apply to the EU for an extension under art.50.

TBP. The Brexit Party.  Hovering in the wings.

 

 

The Brexit dictionary.

 

P is for prorogue.

This is the action of discontinuing a session of a parliament or other legislative assembly without dissolving it. The Prime Minister, Mr Johnson, has today announced his intention to ask the Queen to prorogue Parliament in the second week of September ahead of a Queen’s Speech on 14 October.

Other notable proroguers have been Charles I, James II, Clement Attlee, and John Major.

Last month Lord Doherty in the Scottish Court of Session fast-tracked a legal challenge backed by 75 MPs and peers to prevent the Prime Minister Mr Johnson proroguing parliament to force through a no-deal Brexit. A hearing is scheduled for the end of the next week and in the meantime Jolyon Maugham QC who is representing the challengers has stated that he will be seeking an order that the prospective prorogation of Parliament for four and a half weeks from 11 September announced today be put on hold until after the result of that hearing.

S is for Supreme Court

Which is where this will probably end up.

Brussels I Recast — not as long-arm as you feared

It’s not often that what is essentially a family law case causes commercial lawyers to sigh with relief, but one suspects this may be true of yesterday’s decision of Lavender J in Gray v Hurley [2019] EWHC 1972 (QB).

Under Art.4 of Brussels I Recast, readers will recall that a UK-domiciled defendant has a prima facie right not to be sued anywhere in the EU except in the UK, unless one of the exceptions in the Regulation applies. But what if he finds himself sued in some court outside the EU? Does Art.4 extend to give him a further right not to be sued anywhere in the world except here, and thereby justify the issue by the English courts of an anti-suit injunction to stop the foreign proceedings in their tracks?

In Gray, a supposedly beautiful extra-marital relationship broke up in tears, as is so often the way with such things. There was a good deal of wealth in a number of places to argue about. She being domiciled in England and he resident here, she sued him in the English courts. Meanwhile he sued her in New Zealand, where he had close connections. Having finally established the jurisdiction of the English courts to hear her case, she asked for an anti-suit injunction to stop the New Zealand proceedings, arguing that this was necessary to vindicate her Art.4 right to be sued here, and only here — and for good measure that her human right (to protection of her possessions) would be infringed unless the order went.

Lavender J was having none of it. Art.4 of Brussels I gave her no right analogous to that derived from an exclusive English jurisdiction clause that entitled her to the courts’ intervention in the absence of strong reasons to the contrary; and being sued abroad in respect of one’s assets in an action that had no guarantee of success could not be said to be an attack on one’s possessions sufficient to engage the pretensions of A1P1 of the European Convention on Human Rights. It followed that, like any other litigant, if she wanted an anti-suit injunction she had to show that England was clearly most appropriate forum and that there was no countervailing justification for him suing in New Zealand — which she could not.

With respect this seems absolutely right. For one thing there is something odd about the idea of EU law justifying the granting of a peculiarly common-law remedy that fills most EU private international lawyers with horror, and indeed is banned entirely by EU law in the case of EU courts. Admittedly this has not stopped the English courts so holding in respect of the exclusive jurisdiction over employment contracts in what is now Art.22.1 (see Petter v EMC Europe [2015] EWCA Civ 828); but that case is itself controversial, and it is good to see its spread curbed.

More to the point, however, if this claim had succeeded, the effects on comity would have been considerable. Courts in countries outside the EU would not have been gratified to see the English courts issuing anti-suit injunctions almost as a matter of course telling litigants not to proceed there in commercial claims against English-based defendants for no better reason than that the EU, an organisation they were not a member of and owed no allegiance to , disapproved of the proceedings being brought there.

As we said before, we suspect much gentle relief in the commercial legal community, which can now be allowed to get on with business as usual.

EU takes action against cyber-enabled ‘IP theft’ perpetrated from outside the EU

In the first EU measure of its type, Council Regulation (EU) 2019/796 concerning restrictive measures against cyberattacks threatening the Union or its Member States [17th May 2019] contains targeted sanctions against online “external threats” to IP. This Regulation is aimed at threats which originate from outside the EU, use infrastructure from outside the EU, or otherwise the person(s) instrumental in such a cyberattack are established abroad (Article 1).

Amongst other criteria, Article 2 of the Regulation targets an actual or attempted cyberattack on IP which has a, potentially, “significant effect”, on the “loss of commercially sensitive data”. Such commercially sensitive data will fall within the definition of a ‘trade secret’ under Council Directive (EU) 2016/943 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure [8 June 2016] if that data: 1. is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; 2. has commercial value because it is secret; 3. has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

Article 3 of this new Regulation imposes an asset freeze on natural or legal persons, entities or bodies who are responsible for the actual or attempted cyberattack; provide financial, technical or material support for or are otherwise involved in the cyberattack; or are associated with the natural or legal person, or bodies involved. As a result of such an asset freeze, all funds and economic resources belonging to, or controlled by, such listed persons and that fall under EU jurisdiction (e.g. held by EU banks) will be frozen. In addition, no funds or economic resources may be made available to or for the benefit of the said listed person by parties falling under EU jurisdiction.

This latest EU Regulation should serve to remind us that the “big international question” of cyberspace governance still remains to be resolved, albeit Sir Mark Sedwill (Cabinet Secretary, Head of the UK Civil Service and UK National Security Advisor) would note that the major private sector providers are more receptive than ever to its resolution (see Public Accounts Committee Oral evidence: Cyber Security in the UK, HC 1745 [1st April 2019] Q93).

In his article Jurisdiction In Cyberspace: A Theory of International Spaces Darrel Menthe asserts that, “unless it is conceived of as an international space, cyberspace takes all of the traditional principles of conflicts-of-law and reduces them to absurdity.” Akin to the “law of the flag” on the high seas, nationality of a vessel (manned or unmanned) in outer space or the nationality of the base in Antarctica, Menthe advocates, even in the absence of such a sui generis treaty regime as regulates the other three international spaces, that jurisdictional analysis requires cyberspace should be treated as a fourth international space governed by a comparable set of default legal rules (see Darrel Menthe, Jurisdiction In Cyberspace: A Theory of International Spaces 4 MICH.TELECOMM.TECH.L.REV 69 (1998)).

Brexit. UK to exit with no deal on 31 October unless Parliament passes vote of no confidence in the government.

With the resignation of Mrs May and the end of any prospect of Parliament passing the withdrawal agreement reached with the EU last November, it is looking very likely that the UK will leave the EU with no deal on 31 October. This is the default position under the EU Withdrawal Act 2018. Analysis by Maddy Thimont of the Institute of Government shows that the only way a no-deal exit could be stopped would be by Parliament passing a vote of no-confidence in the government. https://www.instituteforgovernment.org.uk/blog/new-prime-minister-intent-no-deal-brexit-cant-be-stopped-mps-0

The ‘Cooper’ clause added to the 2018 Act would only have effect in relation to any proposed ratification of the proposed withdrawal agreement with the EU. The clause in the 2018 Act requiring required the Government to hold a vote in the Commons if no agreement had been reached with the EU by 21 January is somewhat time expired now.

Who’d want to be PM now?

Shipping casualties and clearing-up

After a casualty the clear priority for shipowning, P&I and insurance interests alike is to clear up the mess as soon as possible and start trading again. The last thing they want is a run-in with well-meaning administrators saying that nothing can be done until form after form has been filled in, checked, rubber-stamped and filed, and permission to act obtained from Old Uncle Tom Cobleigh and all. Yet this was exactly what happened in 2012 to the owners of the 86,000 dwt container vessel MSC Flaminia. A fire broke out on a voyage from Charleston to Antwerp, forcing the crew to abandon ship and resulting in the vessel being towed dead to Wilhelmshaven in Germany. The owners wanted to send her directly to an entirely reputable ship-repairer in Romania for cleanup and repair, but the German environmental authorities were having none of it. The vessel was full of filth, sludge, metal debris and the dirty water used to extinguish the fire. This was, they said, waste and subject to the Waste Directive 2008 and Regulation 1013/2006, requiring extensive documentation, planning and administrative oversight before any transfer could take place. Owners argued in vain that Art.1.3(b) specifically excepted waste produced on board ships, trains, etc and later discharged for treatment: debris from a casualty, said the bureaucrats, was not within the exception. The result was that the ship remained marooned in Wilhelmshaven for seven months before it was finally allowed to go to Romania. The German courts, in proceedings to recover the resulting losses from the state, initially supported the Teutonic bureaucracy, but the Munich Landgericht then sent the question off to the ECJ: was waste resulting from a marine casualty within the exception?

The ECJ, much to everyone’s relief, today said that it was. The Directive had to be interpreted purposively and there was no reason to give special treatment to waste resulting from a casualty, especially as the terms of Art.1.3(b) were unqualified. Within the EU this now means that vessels can get out of ports of refuge quickly and be sent with due expedition to wherever they can be cleaned up and repaired most efficiently. And a good thing too.

The decision, under the name of Conti II v Land Niedersachsen (Case C‑689/17) [2019] EUECJ C-689/17, is here (unfortunately only in French).