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Saturday, 9 April 2016

Of Brexit, Red Tape and Light At The End Of The Eurotunnel

A pragmatic approach to the Brexit debate is to ask whether withdrawal from the European Union would solve enough root causes of Britain's problems to make up for the inevitable disruption.

But we are yet to see that level of analysis, and I doubt we ever will.  

That, and the fact that opportunists like Boris Johnson are able to swing their booms from one side of the debate to the other in the hope of catching any old puff of political wind, tells me the UK's membership of the EU is just a political issue, unconnected to anything 'real'.

One thing that is clear, however, is that cutting the ties with Brussels will not automatically cut the UK's source of red tape: Britain is expert at producing its own. You only need to look at the NHS, the social welfare 'system', the Home Office or education to see how much of a mess the UK is capable of making on its own turf; and its approach to implementing EU law is similarly self-defeating...

Generally speaking, you might say that 'an Englishman's red tape is a Frenchman's business plan'. The English common law principle is that 'the law follows commerce' and we should be able to get on with something until the law forbids or restricts it; while civil law dictates that an activity is not lawful until the state says so. Another difference, somewhat surprising in light of the first, is that the common law system is based on literal interpretation; while civil law is interpreted on the basis of its purpose - the spirit rather than just the letter - and this is how EU law is interpreted by the European Court of Justice.

While the EU's civil law countries rely on EU regulation to tell them more or less how to act, the UK has not coped with this distinction very well. Firstly, the UK's attitude to EU membership means that it misses opportunities to influence the favourable development of EU law in the first place - the UK always seems to be on the back foot. Then, once EU laws are passed, the UK suffers from a policy of 'gold-plating' directives by simply copying them word-for-word into its own national laws which are interpreted literally under common law principles rather than reflecting the purposive interpretation that civil law member states adopt. So the UK creates several rods for its own back.

While it is said that the English courts do (or should) adopt a purposive approach when interpreting national legislation in areas covered by EU law, in practice this opportunity is not widely embraced either by officials or the legal and regulatory community. Once any awkward or confusing EU requirements are transposed into national law, everyone in the UK seems doomed to take them literally.

The result is a system that pushes the burden of resolving any EU regulatory awkwardness or confusion off the public sector's plate and onto the private sector (and, ultimately, the consumer or citizen). A recent case in point include the UK's approach to implementing the Payment Accounts Directive. There are others too numerous to mention.

I do have a little sympathy with the UK's approach to the EU legislative process. It is outnumbered by civil law countries who may not appreciate or respect the more reactive common law approach.  It is also tempting to avoid the expense in time and resources required to continually debate with EC officials whether UK regulation reflects the purpose of EU directives, rather than the letter. But this doesn't bother Italy, Germany, France or the other countries higher on the league table of those failing to implement European laws.

Maybe you could say this failure to navigate the EU legislative process is a reason to leave the EU, but it seems pretty feeble for the UK to lose the benefits of membership due to a political problem of its own making. At any rate, if UK ministers and officials would only take full advantage of the opportunity to resolve any problems in the formation of EU laws in Brussels and take a purposive approach to enacting them nationally, they would surely reduce any adverse impact on the wider UK community from laws that might be unduly restrictive.

Meanwhile, ironically, the EU authorities are beginning to take a more common law wait-and-see approach to regulation, having realised that regulation won't catalyse cross-border markets that don't already exist. Contrast the futile approach to consumer credit with the more cautious approach to regulating crowdfunding and virtual currencies/distributed ledger technology.  

In other words, the UK seems keen to leave when there may be light at the end of the Eurotunnel.


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