The Price is Not Right: Italian Troubles with Road Haulage and Tobacco Pricing

Angus MacCulloch, Lancaster University Law School

Two recent judgments handed down by the CJEU show how difficult it can be for a Member State to involve itself in fixing minimum prices for products. Given the ongoing challenge to minimum alcohol pricing in Scotland it is interesting that in both these cases the Court ruled against the fixing of prices, but for very different reasons. Neither case is directly analogous to the Scots alcohol MUP referred to the Court in Case C-333/14, but there are perhaps lessons that can be learnt.

Road Haulage

The first of the Italian cases is the least similar to the ongoing UK dispute, but it does indicate an important aspect of the wider problem with Member States interfering in markets. Cases C-184, 187, 194, 195 & 208/13 API and Others (ECLI:EU:C:2014:2147) concern a request for a preliminary ruling regarding the Italian Ministry for Infrastructure and Transport’s measures which fix minimum operating costs for carriage of goods by road. Charges payable by road haulage customers in Italy could not be lower than the minimum operating costs, and they therefore operated as a minimum price for services. The legislative provisions delegated the setting of the minimum operating costs to the Osservatorio; a group drawn from State, industry and stakeholder representatives. Its role was to ‘ensure the protection of road safety and the proper functioning of the market in the road haulage of goods’. The question the Court addressed was whether the fixing of prices by the Osservatorio could be compatible with EU law on the ground that it ensured road safety standards.

The Court first considered the nature of the measure itself – was it a public law measure, or a private arrangement? This is central to the applicability of EU competition law to the measure in question. Art 101 TFEU, when read in conjunction with Art 4(3) TFEU, applies where a Member State ‘requires or encourages’ anti-competitive agreements, or where it ‘divests its own rules of the character of legislation by delegating to private operators responsibility for taking decisions affecting the economic sphere’ [29]. Competition law does not apply to the legislative action of a Member State, as the Court makes clear in para [30]:

“where legislation of a Member State provides for road-haulage tariffs to be approved and brought into force by the State on the basis of proposals submitted by a committee, where that committee is composed of a majority of representatives of the public authorities and a minority of representatives of the economic operators concerned and in its proposals must observe certain public interest criteria, the fixing of those tariffs cannot be regarded as an agreement, decision or concerted practice between private economic operators”.

Even if the private parties were a majority on such a committee it would not affect the public nature of a measure ‘provided that the tariffs are fixed with due regard or the public-interest criteria defined by law’ [31]. However, on the evidence, it was clear that the Osservatorio was, in effect, a type of trade association. Eight of the ten members were industry representatives taking decisions by majority of its members; the State having no right of veto or casting vote [32-33]. The criteria upon which the Osservatorio operated were also problematic; its ‘guiding principles’ didn’t feature ‘any provision such as to prevent the representatives of the professional organisations from acting in the exclusive interest of the profession’ [35]. As to the road safety justification, the Court noted the legislation, ‘makes vague reference to the protection of road safety and, moreover, leaves a very large margin of discretion and independence to the members of the Osservatorio’ [37]. It therefore concluded, at para [38], that:

“In those circumstances, the national legislation at issue in the main proceedings does not contain either procedural arrangements or substantive requirements capable of ensuring, that, when establishing minimum operating costs, the Osservatorio conducts itself like an arm of the State working in the public interest”.

Having established that Art 101 TFEU applied to the measure, the Court turned to its potential for justification under Art 101(3). It rejected application of the Art 101(3) exception on the basis that while road safety may be a legitimate objective the fixing of costs was not ‘appropriate, either directly or indirectly, for ensuring that the objective is attained’ [51]. The measures also went beyond what was necessary as they did not allow carriers to prove that, although they charged lower prices, they fully complied with safety provisions [55]. The fixing of minimum costs could therefore not be justified.

Tobacco

The second case turns away from direct price fixing to a more indirect route: the taxation of tobacco products. In Case C-428/13 Yesmoke Tobacco (ECLI:EU:C:2014:2263) the Court considered the compatibility of the Italian rules setting excise duty on cigarettes. Those cigarettes with a lower retail price lower than brands in the most popular price category were charged a duty at 115% of the basic amount. This meant that the cheapest cigarettes, when compared with the most popular brands, were charged a slightly higher level of excise duty. With this higher level of duty their comparative price advantage was, at least partially, removed. It will not be a surprise to anyone that tobacco products are highly regulated in the EU, and that the protection of public health plays a significant role in that regulation. The relevant EU law is found in Directive 2011/64/EU which governs excise duty on tobacco products. The purpose of that Directive is to ensure the proper functioning of the internal market and neutral conditions of competition [23]. This reference to ensuring ‘neutral competition’ on the tobacco market became crucial to the rest of the judgment. The Directive draws a distinction between different types of tobacco product, for instance cigars and cigarettes, but treats all cigarettes as a single category without distinction. The Court made it clear, at para [31], that Member States, when imposing an excise duty, should not act in way which ran ‘counter to the objectives of that directive’:

“The establishment of different minimum tax thresholds according to the characteristics or price of cigarettes would lead to distortions of competition as between different cigarettes and would therefore be contrary to the objective pursued by Directive 2011/64 of ensuring the proper functioning of the internal market and neutral conditions of competition”.

Italy tried to rely on the public health objective to justify the imposition of the duty. The Court noted that the Directive already takes into account public health, at recitals 2, 14, and 16, and that the framework put in place by the Directive ‘does not prevent the Member States from taking measures to combat smoking and to ensure a high level of protection for public health by levying excise duties’ [36]. In that light the Court therefore ruled that the Directive precluded the setting of a differential rate of excise for a class of cigarettes based on their retail price.

It was clear in this case that the EU legislation took into account the health concerns in relation to tobacco and allowed the imposition of excise duty likely to discourage the consumption of tobacco; the Directive therefore did ‘not prevent’ health protection. But the Directive was also designed to ensure ‘neutral competition’ within the remaining market for tobacco products. The differential tax rate, which attempted to subvert normal price competition, was clearly then contrary to the purpose of the Directive.

Lessons for Minimum Alcohol Pricing

It is clear that the Scots MUP measure is not a disguised cartel, where the drinks industry’s attempts to set prices is given the protection by the State through legislation. But that does not mean that the API & Others is irrelevant to the ongoing SWA case. There is a clear connection between all three cases.

One of the questions raised in SWA regards the compatibility of MUP with Regulation 1308/2013 which governs, inter alia, the common market in wines. Art 167(1)(b) of the Regulation is particularly relevant as it prohibits Member States from laying down market rules which ‘allow for price-fixing’. On the face it of this could mean that the Scottish Parliament are constrained from introducing a minimum price for wine, in the same way as the Italian State was in relation to the imposition of a differential excise duty in Yesmoke. But if one considers Art 167 in context there is an argument that the apparently stark prohibition is more nuanced. The Regulations recitals make it clear that Producers Organisations and Interbranch Organisations (made up of producers and other industry stakeholders), as recognised in the Regulation, are to play a role in the organisation of the market; much as the Osservatorio did in Italian road haulage. It is not a surprise that the Regulation is clear that the rules in the common market, perhaps promulgated by way of a decision taken by an interbranch organisation (see Art 167(1)), should not relate to pricing. When read in this context it is not clear that the Regulation intends a bar on Member States adopting pricing controls unrelated to the common market organisation rules; i.e. where they are put in place for an entirely separate purpose.

Another interesting distinction between the Yesmoke and the SWA case is the fact that the tobacco Directive clearly has public health concerns at its forefront, and as the Directive had taken those concerns into account Italy was required to stay clearly within the terms of Directive. That is not the case in relation to the common market in wines. Health is mentioned in the Regulation, but only in relation of the production of foodstuffs, not in the wider public health concern that stems from the ‘hazardous and harmful’ consumption of alcohol. It would appear therefore that the Scottish Government may be able to argue that their separate concern for public health is outwith the terms of the Regulation and should be handled under the free movement provisions of the TFEU.

Events round-up

Over the past few weeks we have spotted a few interesting up-coming conferences, seminars and lectures, which we thought we would share with our readers.

On Monday 13th October, IALS are putting on what is bound to be an excellent seminar entitled “The Court of Justice of the European Union”.  The speaker is none other than Eleanor Sharpston, QC, Advocate General at the Court of Justice. See here for more details.

With the possibility of an in/out referendum if the Conservative party form the next Government, now seems like an opportune moment to consider the legal implications of ‘no’ prevailing.  Handily, the UK Association for European Law have had the same thought.  On 28 October, Professor Sir Alan Dashwood QC, Martin Howe QC, and our very own Rhodri Thompson QC will be speaking at a seminar entitled ‘Untying the knot with Europe: The legal implications of UK withdrawal from the EU’, chaired by Professor Philippa Watson.   More details here.

 On the  EU competition law front, the Franco-British Lawyers Society is holding a colloquium this Friday, 10 October, at the Competition Appeal Tribunal to discuss developments in competition and regulatory law in the UK, France, the EU and the USA, and in particular the soon to be adopted EU Directive on antitrust damages actions.  See here for more details.

And in the field of EU economic law, Professor Sue Arrowsmith will be delivering one of UCL’s Current Legal Problems lectures on 4 December entitled “Rethinking ‘economic’ derogations and justifications under the EU’s free movement rules: Proposals for a new approach and a taxonomy”.  Details here.

On really responsive rule-making? The EU-US Transatlantic Trade and Investment Partnership (TTIP) negotiations

Dr. Elaine Fahey

Senior Lecturer, The City Law School, City University London

The script

The EU and US have now completed six rounds of negotiations on the Transatlantic Trade and Investment Agreement (TTIP), the trade agreement under negotiation between the EU and US to cut trade barriers and ‘behind the borders’ barriers (technical regulations, standards, approvals) in a wide variety of sectors. It is touted as having the potential to become the global trade standard. Already, the epitaph is alleged to have been written on the Agreement. Yet while this misses the mark as to the theatre of global rule-making, on the other hand, scepticism is not unwarranted. It has at times appeared as an extraordinary experiment in rule-making1. TTIP harbours ambitions to grow as a living regulatory entity. It has become rife with controversy, for its secrecy, for its possible inclusion of the Investor Settlement Dispute Mechanism (ISDM) and its impact on EU regulatory standards. Some have even tried to stop the negotiations using EU law itself, in the form of a failed European Citizens Initiative.

The history of transatlantic relations is littered with many failed attempts to integrate EU and US legal order through mutual recognition, even in very limited fields. TTIP had been poised to shake up this dynamic. It has become an exercise in ‘really responsive rule-making’. However, many questions remain about international negotiations and the standard of what is and should be ‘really responsive EU rule-making’:- I reflect on its script, production process and the cast of actors.

The production process

Most EU-US rule-making processes in the past has been conducted firmly behind closed doors, in inscrutable so-called ‘Dialogues’, in a range of fields that many will never have heard of. They traditionally privileged industry. The TTIP negotiations have marked an enormous shift in EU-US rule-making. Continue reading

Event: The EU Air Passenger Rights Regulation 261/2004: Ten Years On

College of Europe, Bruges, 26-27 September 2014.

Organised jointly with the IECL, Oxford, with the kind support of the Söderberg Foundation.

This workshop will be the second in a recently established EU Law in the Member States series (Hart Publishing), dedicated to exploring the impact of landmark CJEU judgments and secondary legislation in legal systems across the European Union.  J Malenovský of the Court of Justice will give a keynote address, and the meeting will bring together generalist EU lawyers and experts in the field, combining perspectives from a wide range of different member states in order to compare and analyse the effect of EU law on domestic legal systems and practice.

A programme is already online; to register, please go here.

For further information, please contact jeremias.prassl@law.ox.ac.uk or michal.bobek@coleurope.be.

Cartel Damage Claims and the so-Called “Umbrella Pricing” Under EU Competition Law: The Kone Ruling of the CJEU

Jens-Olrik Murach and Pablo Figueroa

On June 5, 2014, the Court of Justice of the European Union (respectively, the “EU” and the “CJEU”) issued a Ruling in relation to so-called “umbrella pricing” cartel damage actions.  These claims refer to damages allegedly suffered due to the surcharge applied by non-cartelists who, independently and rationally, adapted to a price increase resulting from a cartel by increasing their own prices.

Pursuant to the Ruling of the CJEU in Case C-557/12 Kone (“Kone”), the Treaty on the Functioning of the European Union (“TFEU”) preempts the EU Member States from having in place domestic regulations which “categorically exclude” umbrella pricing claims deriving from breaches of EU Competition law.

I.   Background

In February 2007, the European Commission issued a Decision imposing fines on the members of an alleged cartel in the markets for lifts and escalators.  The members of the alleged cartel included the Finnish company Kone AG.

Relying on the “umbrella effect” of the cartel, ÖBB-Infrastruktur AG (“ÖBB”), a subsidiary of the Austrian Federal Railway, brought an action before the Austrian courts against the members of the alleged cartel, including Kone AG, claiming damages.  These damages would result from ÖBB buying from third party suppliers which were not a member of the cartel at a higher price than ÖBB would have paid but for the existence of that cartel, on the ground that those third undertakings benefited from the existence of the cartel in adapting their prices to the higher level (see Kone, at § 10).

ÖBB’s action was rejected by an Austrian Court of First Instance but it was upheld by the appellate Court.  The Austrian Supreme Court (“Oberster Gerichtshof“) asked the CJEU for a preliminary ruling on the issue of whether Article 101 TFEU (namely, the provision of EU law which prohibits anti-competitive agreements, the EU equivalent to § 1 Sherman Act) requires the recognition of “umbrella claims”.  This recognition would apparently be contrary to the requirements, applicable to damages claims under Austrian torts law, of “adequate causal link” between the conduct of the infringing entity and the injury and “unlawfulness”, that is, whether the provision infringed had as its object the protection of the interests of the injured person (see Kone, at § 13 to 15). Continue reading

Matteo Renzi, between the quest for “Europe’s soul” and the “assault of technocracy”

lindsethProf. Peter Lindseth

Two recent pieces in the FT (here and here) brought home the magnitude of the task currently confronting Italian Prime Minister Matteo Renzi as he seeks to reform a sclerotic domestic system and yet ward off complaints from supranational technocrats unsatisfied with the pace of change. The Renzi challenge can be seen as a case study in whether and to what extent charismatic political leadership in a national democracy can successfully achieve its goals in the face entrenched bureaucratic power both national and supranational. In that regard, readers may find of interest remarks I delivered last month at the Summer School on “Parliamentary Democracy in Europe” at the LUISS Guido Carli School of Government in Rome. My focus was Renzi’s recent speech before the European Parliament on 2 July 2014, viewed in relation to statements made before the Italian Chamber of Deputies and elsewhere around the same time. Renzi’s line of rhetoric on Europe—notably his quest for Europe’s “soul” and “the meaning of [its] life together”—provided a point of entry into a broader set of reflections on the current state of the integration process, its socio-political / socio-cultural underpinnings, as well as the challenge of reconciling (national) democracy and (largely but not exclusively supranational) technocracy. The full remarks can be found here (including citations), while below is an excerpt.

Renzi began [his speech of July 2d in Strasbourg] by offering congratulations to the members of the EP for their recent election. He spoke of the “great responsibility” of the EP to bring “trust and hope” (fiducia e speranza) to European institutions. But note what he did not say: He did not say that EP brought “democratic legitimacy” to European policy-making. He did say that it was “only right and politically just” for the European Council to respect “the results of the recent electoral campaign” and hence the EP’s “prerogatives” in the choice of the new Commission president. But he avoided using the language of EU “democracy” to describe this step.

Of course, I have no special access to the workings of Renzi’s mind. Nevertheless, I think it is fair to say that he deliberately avoided the language of democratic legitimation with regard to the EP. The prior week, in a speech before the Italian Chamber of Deputies, Renzi stated: “Those who imagine that the democratic ‘gap’ in Europe will be overcome simply by the appointment of Juncker as President of the European Commission are living on Mars.” In that earlier speech he went on to describe not only the low turnout in the European elections but also the significant percentage of the vote that went to parties hostile to the European project. From there he segued to a theme that would be central to his speech in Strasbourg the following week: “It is not enough to have a currency in common, or a President in common, or a source of funding in common.” Rather, what is needed is for Europe to “accept the idea that we have a destiny in common and values in common.” In his speech the following week before the EP, Renzi elaborated: “The real challenge confronting our continent is to find the soul of Europe, to find the profound meaning of our being together” (my emphasis).

Now I know as scholars we are not supposed to pay much attention to these sorts of rhetorical flourishes by politicians. Nevertheless, I found this entire line of discussion fascinating. Perhaps Renzi did not intend it but his reference to finding Europe’s “soul” and “the meaning of our being together” brought to mind a similar line of thinking in Ernest Renan’s famous 1882 lecture, “Qu’est-ce qu’une nation?” (“What is a Nation?”). According to Renan: “A nation is a soul, a spiritual principle…. [It is] the possession in common of a rich legacy of memories [but also] present-day consent, the desire to live together … [It is] a daily plebiscite ….” In speaking of the current ills afflicting the EU, did Renzi intentionally mean to invoke this paean to liberal nationalism of the nineteenth century? After all, isn’t European integration supposed to be a “post-national” project, something designed to transcend the legacy and evils of nationalism?

Perhaps Renzi was not invoking Renan specifically, but there is much in the speech to suggest that Renzi would like nothing less than for the integration project to emulate at least some aspects of nationalism. Most importantly, Renan associated nationalism with a “large-scale solidarity”—something that Renzi might love to see replicated on a European scale in response to the Eurozone crisis.

The clearest indication was Renzi’s invocation of the famously dismissive observation of Metternich to describe Italy in 1847, in which Metternich asserted that Italy was nothing more than “a geographical expression.” For Renzi, today’s Europeans must demonstrate that that Europe is something more than a “geographical expression.” According to Renzi: “There will be no space for Europe if we remain only a dot on Google Maps. We are a community, a people, we are not a geographical expression—to use the phrase applied to Italy by a great Austrian statesman of the nineteenth century” (Metternich was not specifically named). Continue reading

Case Comment: Opinion of Advocate General Cruz Villalon in International Stem Cell Corporation (C-364/13)

Prof. Aurora Plomer

Three years after the landmark Brustle ruling, the CJEU is poised to revisit the scope of exclusion on industrial and commercial uses of “human embryos” in Article 6(2) (c) of the EU Directive on Biotechnological Inventions. This time, the referral is from a national court of first instance, the Chancery Division (Patents Court) of the UK High Court of Justice Court. In the Opinion of Advocate General Cruz Villalon, whilst the question raised by the UK court is “virtually identical” to the questions raised in the Brustle reference of the German Federal Court of Justice (BGH), the answer should be different.

One of the questions raised by the BGH in Brustle was whether the term ‘human embryo’ encompassed ‘unfertilised human ova whose division and further development have been stimulated by parthenogenesis’ (parthenotes). In Brustle, the Grand Chamber of the CJEU held that parthenotes fell within the scope of exclusion of Article 6(2) (c) because the term ‘human embryo’ had to be given an autonomous meaning in EU law and should be “be understood in a wide sense” to include any human ovum, as soon as fertilised “… since that fertilisation is such as to commence the process of development of a human being.” The criterion of whether an organism is “capable of commencing the process of development” (the ‘commencement’ test) was relied upon by the UK intellectual Property Office to reject two patent applications by International Stem Cell Corporation (ISC) relating to human embryonic stem cell lines produced by parthenogenesis activation of ova. In its appeal, ISC argued that the Brustle exclusion should not extend to parthenotes because such organisms are incapable of developing into human beings. In this light, the UK High Court raised the following question for a preliminary ruling: “Are unfertilised human ova whose division and further development has been stimulated by parthenogenesis, and which, in contrast to fertilised ova, contain only pluripotent cells and are incapable of developing into human beings, included in the term ‘human embryos’ in Article 6(2)(c) of Directive 98/44 on the Legal Protection of Biotechnological Inventions?”.

France, Sweden and the Commission submitted that, in the current state of science, parthenotes cannot be considered identical to embryos at any stage of their development and parthenogenesis cannot be regarded as a technique capable of commencing the process of development. Portugal expressed concern about the risks of further genetic manipulation and would have left the decision to national courts. The UK submitted that the critical factor was the capacity of the cell itself and not its capacities after genetic manipulation (para. 60). By contrast, Poland submitted that, even though parthenotes cannot develop into human beings according to current scientific understanding, nonetheless respect for human dignity requires that they should be treated as human embryos as they “initially undergo the same stages of development as a fertilised ovum (para. 60).

The analysis of Advocate General Cruz Villalon proposes to read into the Grand Chamber’s ‘commencement’ rule in Brustle a functional equivalence test, so that the decisive criterion which should be taken into account for determining whether an unfertilised ovum is a human embryo is “whether that unfertilised ovum has the inherent capacity of developing into a human being, i.e. whether it really constitutes the functional equivalent of a fertilised ovum.” (at para. 73). On this basis, the mere possibility that a parthenote could be genetically manipulated so that it can develop to term and into a human being does not change the fundamental character of the parthenote before manipulation. According to current scientific knowledge parthenotes do not have the capacity to develop into human beings but “where the parthenote is manipulated in such way that it actually obtains the respective capacity, it can no longer be considered a parthenote and it cannot be, consequently patented.” (at para. 77). Continue reading

Review: Of Courts and Constitutions: Liber Amicorum in Honour of Nial Fennelly

Joelle Grogan, University of Oxford

Of Courts and Constitutions, K Bradley, N Travers, and A Whelan (Hart Publishing 2014)

Of Courts and Constitutions is a collection of essays written to honour the retirement of the Hon Mr Justice Nial Fennelly, Judge of the Supreme Court of Ireland, and former Advocate General of the European Court of Justice. Over his long and distinguished career on the bench, he has had a marked influence on the development of the law in both Irish and European law. It is clear from the contributions and dedications within the volume, that he is held in high regard in both academic and legal circles throughout Ireland and across Europe.

Thematically, the volume considers the relationship between Union law and national law. The title ‘Of Courts and Constitutions’ is apt more for directing the reader as to the great diversity of the contributions, than clarifying the nature of the work. The topics of the essays are highly varied, ranging from the interpretation by the European Court of procedural law and precedent, to the Financial Crisis and the rule of law, to concepts of national identity, and the treatment of child citizens. Helpfully for the enquiring reader, the volume is divided into four sections, broadly concerning (1) the structure and functioning of the European Court; (2) issues of EU Law; (3) aspects of Irish law; and (4) transversal issues of national and European law.

One contributor rather self-consciously notes that a Liber Amicorum is often an occasion for contributors to find a place for work gathering dust on the shelf, rather than an occasion for producing an original piece written for purpose. Dedications at the beginning of the work, though evidently sincere, can sometimes have a jarring effect on the narrative of the piece, underlining a disjuncture between the aim of the contribution and the relevance to the work of the eminent judge. Despite this, there are many interesting contributions in the volume, and the standard of the contributions is overall of a very high quality.

Some of the essays stand out for their particular excellence, for example Catherine Donnelly’s topical discussion of transparency in EU public law; and Diarmuid Rossa Phelan’s analysis of the allegiance of judges to their state and to the EU, which should be read with Wolfgang Heusel’s excellent examination of national constitutional identity. For those jurists (understandably) confused by the Kadi Saga, Professor Sir David Edward, former Judge of the European Court of Justice, provides excellent insight and commentary on the series of cases which shed light (or cast shadows) on due process and judicial review in the EU courts. Continue reading

Not waving, but drowning ? : European law in the UK courts

Aidan O’Neill QC

The relationship between EU law and the municipal law of the United Kingdom seems to lend itself to allusions to water.   In Bulmer v. Bollinger [1974] Ch. 401 Lord Denning famously referred (at 418F) to the incoming tide of EU law, observing that “it flows into the estuaries and up the rivers. It cannot be held back, Parliament has decreed that the Treaty is henceforward to be part of our law. It is equal in force to any statute.”   And the Factortame litigation, too, was all about water, and the right to fish in it – specifically the Treaty based rights of Spanish fishermen not to be subject to discrimination on grounds of nationality when seeking to exercise their free movement rights to trawl for fish in UK waters.

The long decade of Factortame litigation – which unequivocally established that national courts in the UK should treat EU law based rights as being of a higher normative level than Acts of Parliament and that the UK could be found liable by UK courts to pay damages to those who suffered loss from Parliament’s enactment of an EU law incompatible statute – might now be seen to represent the high-water mark of the influence of EU law on domestic law.   For tides ebb, as well as flow.   The complaints of those of a Eurosceptic ilk of the Member States being “swamped” by a tsunami of EU regulation, of business drowning in EU rules have been increasingly dominant in our political discourse.   Eurocracy is associated with ever growing popular distrust.   The binding of Europe into monetary union is now seen as an act of hubris (the Greeks always have a word for it).     Even among the Europhiles, ideals and ideas seem to have drained from their grand post-War European project.   Scripture says: “without vision the people perish; but he that keepeth the law, happy is he”.   Yet what law is to kept, as the happy certainties of post-sovereign supra-nationalism embodied in une certaine idée de l’Europe no longer command common assent and have become unhappy uncertainties ?

Our courts are, of course, not insensible to this shift, this seeming turning of the political tide.   Recent judgments of the UK Supreme Court, in particular, have marked an increasing turn inward, as the continental is abandoned for the insular and the primacy of national constitutional fundamentals are re-emphasised over the provisions of international Treaties. But what “constitutional fundamentals”, you might well ask ? Classically, the only constitutional fundamental which existed in the UK under the Diceyan analysis of the constitution was the sovereignty of Parliament – and that has been considered and dealt with in Factortame.   What, then, is left within the UK constitution after Factortame ?  The judicial and extra-judicial writings of Sir John Laws seem to provide the beginnings of an answer. In R v Lord Chancellor Ex p Witham [1998] QB 575 he noted (at 581) that “in the unwritten legal order of the British state” it is “the common law [which] continues to accord a legislative supremacy to Parliament”. He also observed that the courts should recognise certain fundamental rights at common law whose “existence would not be the consequence of the democratic political process but would be logically prior to it”. In Thoburn v. Sunderland Council [2003] QB 151 he noted (at 185) that “the traditional doctrine [of Parliamentary sovereignty] has in my judgment been modified. It has been done by the common law, wholly consistently with constitutional principle” by the recognition of certain statutes as “constitutional” in the sense that, while not being entrenched, their provisions were not subject to implied repeal by later “ordinary” Acts of Parliament.   Parliament could modify their terms, but only expressly.   In Jackson v. Attorney General [2006] 1 AC 262Lord Steyn went further, suggesting (at § 102), that there might be some constitutional fundamentals “which even a sovereign Parliament acting at the behest of a complaisant House of Commons cannot abolish”.   Despite some initial scepticism about the need or utility for reliance upon notions of common law constitutionalism in a post HRA/post EU Charter era (see for example Watkins v. Home Office[2006] UKHL 17 [2006] 2 AC 395 per Lord Bingham at § 29 and per Lord Rodger at §§ 59, 61) the ideas of Sir John Laws appear now to have triumphed into the new constitutional orthodoxy.     They were certainly central to the finding of the UKSC in Axa General Insurance Company Ltd v Lord Advocate [2011] UKSC 46 [2012] AC 868 that statutes of the devolved legislatures were subject to a form of common law review (for breach of the rule of law and/or fundamental common law rights).   In Kennedy v Charity Commission [2014] UKSC 20 [2014] 2 WLR 808 Lord Toulson at § 133 regretted what he saw as “a baleful and unnecessary tendency to overlook the common law. It needs to be emphasised that it was not the purpose of the Human Rights Act that the common law should become an ossuary.”   In R (Buckinghamshire County Council) v Transport Secretary [2014] UKSC 3 [2014] 1 WLR 342 Lord Neuberger and Lord Mance – in rejecting what looked like a fairly clear line of CJEU case law on the issue of what might properly be expected in and of a Strategic Environmental Assessment for large infrastructure projects (such as HS2) – suggested that there may be constitutional fundamentals which even EU law could not overcome.   As they noted (at § 207) that

“the United Kingdom has no written constitution, but we have a number of constitutional instruments. They include Magna Carta, the Petition of Right 1628, the Bill of Rights and (in Scotland) the Claim of Right Act 1689, the Act of Settlement 1701 and the Act of Union 1707. The European Communities Act 1972, the Human Rights Act 1998 and the Constitutional Reform Act 2005 may now be added to this list. The common law itself also recognises certain principles as fundamental to the rule of law.”

And in R (Osborn) v Parole Board [2013] UKSC 61 [2013] 3 WLR 1020 the UKSC emphasised (in Lord Reed’s judgment at § 62) that the starting point in fundamental rights cases should be “our own legal principles rather than the judgments of the international court”. Thus is the common law is resurrected, statutes and ancient charters deemed “constitutional”, old legal rules become fundamental principles, and rights discourse is de-Europeanised, re-patriated and re-branded as embodying the une certaine idée de l’Angleterre (or sometimes, even, de l’Ecosse). Continue reading