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In the Miller litigation, the UK Government placed considerable weight upon its intention to enact a “Great Repeal Bill”. As the Supreme Court understood it, such a Bill would “…repeal the 1972 Act and, wherever practical, it will convert existing EU law into domestic law at least for a transitional period” (see the majority judgment at ¶34, see also ¶¶94, 263). Now that the European Union (Withdrawal) Bill has been published, it appears that Francovich damages are an important exception to this intention.

As readers will know, the Francovich principle is a principle of EU law which requires damages to be available where a member state breaches a rule of EU law and three conditions are met, namely (1) the rule infringed was intended to confer rights on individuals; (2) the breach was sufficiently serious; and (3) there was a direct causal link between the breach of the obligation resting on the member state and the damage sustained by the injured party. The right is a very important right which has led to some very significant cases. The Factortame case is perhaps the most famous domestic example of such a claim, but there have been many others over the period since Francovich was decided in 1991.

At present, the Francovich principle takes effect in domestic law by operation of section 2(1) of the European Communities Act 1972: see PPL v DTI [2004] 1 WLR 2893 at ¶¶11-12 per Sir Andrew Morritt V-C. Section 1 of the European Union (Withdrawal) Bill, however, would repeal the ECA 1972. If that happened, the common law would regard the ECA 1972 as if it had never been, except as to matters to past and closed: Bennion (6th Edition, 2013) at p276. All Francovich claims unless already past and closed would therefore be extinguished, at common law. This rule is importantly, however, modified by section 16 of the Interpretation Act 1978, which provides in relevant part:

“…where an Act repeals an enactment, the repeal does not, unless the contrary intention appears,—

(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under that enactment;

(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment;

and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed, as if the repealing Act had not been passed.”

The mere fact that any loss or damage requires quantification will not affect the accrual of the right for the purpose of section 16: Free Lanka [1964] AC 541 at 552 per Lord Evershed. So, if a Francovich claim had accrued prior to exit day, even if unquantified, it would be saved by this section 16 unless “the contrary intention appears” from the European Union (Withdrawal) Bill. Does that intention appear? Looking at the main provisions of the Bill, one would think not. Clause 4 of the Bill would save the future effect of various types of “retained EU law” by incorporating them as domestic law, but “subject to section 5 and Schedule 1”.  Schedule 1, paragraph 4 provides:

“There is no right in domestic law on or after exit day to damages in accordance with the rule in Francovich.”

Although itself open to a number of different readings, this wording would be unlikely, taken on its own, to be treated by a Court as manifesting “the contrary intention” for the purpose of section 16 of the Interpretation Act 1978. Given the imperatives at common law and under the ECHR to avoid vested rights being taken away without very clear words, the Courts would appear likely to read the words of Schedule 1, paragraph 4 as extinguishing Francovich claims only prospectively.

The interested reader of the Bill would be well advised, however, to carry on reading to page 58.  Schedule 8, paragraph 27(1), which would be given effect by clause 17(6) of the Bill, provides that the exclusion of Francovich damages in paragraph 4 of Schedule 1 will, subject to certain exceptions:

“…apply in relation to anything occurring before exit day (as well as anything occurring on or after exit day).”

This wording appears, on its face, to manifest a clear intention to extinguish even Francovich claims which had accrued before exit day. So the “contrary intention”, for the purpose of section 16(1) IA 1978, does indeed appear. The Explanatory Notes are silent on this issue, stating only that “…the right to claim damages against the state for breaches of EU law (Francovich damages) will not be available after exit”, without making clear that the right will disappear even for accrued claims.

How can the extinguishment of an existing, accrued, Francovich claim be avoided, assuming the Bill were to be enacted as it stands? There are two ways, one simple and one rather more complicated. The first, simple way is to commence proceedings before exit day.  Paragraph 27(3) of the Bill provides that the retrospective annulment of the right to Francovich damages will not apply:

“…in relation to any proceedings begun, but not finally decided, before a court or tribunal in the United Kingdom before exit day.”

Anyone with an arguable entitlement to Francovich damages would therefore be well-advised to issue a protective claim form before exit day, lest they lose the right altogether.  Those who do not do so, or are unable to do so, will have to rely on the second, more complicated mechanism, namely a legal argument that the exclusion is in itself ineffective.  Clause 5 of the Bill provides that:

“…the principle of the supremacy of EU law continues to apply on or after exit day so far as relevant to the interpretation, disapplication or quashing of any enactment or rule of law passed or made before exit day.”

The European Union (Withdrawal) Bill will itself be an “…enactment or rule of law passed or made before exit day”.  The Explanatory Notes eschew any suggestion that the supremacy of EU law could “…be relevant to provisions made by or under this Bill or to other legislation which is made in preparation for the UKʹs exit from the EU”. There is obvious logical force in this: EU law cannot be a black hole from which there is no escape.  But given the importance of the Francovich principle in EU law, and the great importance attached by the common law and the ECHR to the protection of accrued rights, is it possible that a Court could be persuaded that Schedule 8, paragraph 27(1) of the Bill is itself contrary to the supremacy of EU law, insofar as it seeks to extinguish accrued claims?  Causes of action are, furthermore, possessions protected by A1P1 to the ECHR, and so there is the real prospect of section 3 of the Human Rights Act 1998 requiring a “read down” of the relevant provisions of the Bill.  It is difficult to think of a more politically toxic result than the Human Rights Act riding to the rescue of litigants seeking to rely on EU law rights after exit day. The argument is clearly there, however. Even if unsuccessful as a construction argument domestically, a claim for compensation for deprivation of possessions could be made to the Strasbourg Court.

The merits and demerits of these legal arguments would be for debate in an appropriate case. But if the Bill were to be enacted in its current form, then anyone who has not issued their Francovich claim form before exit day may find that such arguments are all that they have left.

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