New REUL? How will the Retained EU Law (Revocation and Reform) affect UK businesses?

What is happening?

When the Brexit transition period ended, so did the alignment of EU law with UK domestic law. New EU laws being made were no longer applicable to the UK and a category of legislation called Retained EU Law (REUL) remained. REUL includes directly applicable EU law, EU-derived legislation and directly effective provisions of EU law which were in effect before the end of the transition period.

The Retained EU Law (Revocation and Reform) Bill (REUL Bill) was subsequently introduced to Parliament on 22 September 2022 to allow the government to amend, repeal and replace EU laws easily. The REUL Bill contains a sunset clause which means that the majority of REUL could be (unless alternative arrangements for their preservation, restatement or replacement are adopted) repealed automatically on 31 December 2023. Government ministers can preserve laws by exempting them from the sunset clause or can extend the sunset to 23 June 2026.

Why does it matter?

The Bill is set to impact at least 2400 pieces of legislation across 21 Government departments (although there have been reports that ministers with National Archives may have found an additional 1400 laws that could be affected) and will potentially have a significant impact on UK businesses operating in the retail industry as key protections for consumers and businesses could be removed. Although the UK’s Consumer Rights Act 2015 will be unaffected, notable pieces of retained EU law that could be at risk of lapsing under the REUL Bill include the following:

• Consumer Protection from Unfair Trading Regulations 2008 (CPRs)
• Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs)
• Business Protection from Misleading Marketing 2008
• Weights and Measures (Packaged Goods) Regulations 2006
• Commercial Agents (Council Directive) Regulations 1993

The CPRs and the CCRS particularly contribute significantly to the UK’s current consumer protection framework. It is currently unclear as to whether the government will restate these rights through domestic law.

Given the timeline of the Bill, it is highly unlikely that it will result in greater consumer regulation and the Government’s aim will likely be to maintain the effect of the current framework. Business may experience greater flexibility when working with suppliers but a lack of consistency in approach could also come with a cost implication. If consumer protections do become less onerous, businesses may still wish to continue to take the same approach when protecting consumers to remain competitive. Where the same goods are being sold within the EU as well as domestically, continued compliance with EU laws and UK laws deriving from EU laws may be the best option for those businesses.

Employment laws, and, therefore, labour rights might also be affected. The more obvious statutory protections that may be changed are those deriving from secondary legislation adopted from EU legislation. By way of example, these include the Working Time Regulations, the Transfer of Undertakings (Protection of Employment) Regulations and Agency Workers Regulations. There are others, but this list highlights three EU derived statutory protections that had, during their passage into our legislation and afterwards, garnered political criticism. This is not to say that these laws will be amended or repealed – indeed, there are good reasons why they should not face wholesale or significant change – but that possible outcome remains open to Parliament.

What action should you consider?

It’s safe to say the Bill has not been universally popular. Earlier this year, a number of ministers formed a cross-party revolt against the Bill, which also attracted the support of some Conservative peers. In addition, the Government pushed the Report Stage of the Bill back, hint at a potential delay in the Bill coming into force – unsurprising given the controversy surrounding it. There are also suggestions that the Government could potentially repeal the Bill altogether.

If the Bill passes, it will cause great uncertainty for consumers, businesses and regulatory authorities. Until the legislative landscape is clearer, the lack of clarity may also affect the appetite of international investors looking to the UK. Also, whilst the Bill is subject to parliamentary scrutiny,  UK businesses will approach operational decisions connected with any future change with caution. Indeed, the absence of current clarity is hugely unsettling for long-term strategic decision making and investment.

Businesses should also continue to monitor the progress of the Bill for further indications from the government (see the government’s REUL Dashboard, which contains a list of REUL and their current status).