British companies operating in the EU will be “begging on their knees” for the jurisdiction of the European Court of Justice (ECJ) after Brexit, the Court’s president has warned.
The primacy of the ECJ – the EU’s highest court – has been one of the principal bugbears of British eurosceptics, and its removal a chief negotiating demand of the UK government.
But, speaking to EURACTIV.com at the ECJ headquarters in Luxembourg, Koen Lenaerts said British companies would still insist on the jurisdiction and protection of the court in order to have their commercial rights upheld.
Lenaerts – who is a professor of comparative constitutional Law at Leuven University as well as president of the ECJ – also pointed out that the UK government would still be bound by the ECJ if it manages to negotiate a full Free Trade Agreement with the EU27 after departure.
That is because the ECJ would uphold the rights of EU companies under their half of any deal negotiated as part of the Brexit deal.
Asked precisely which agreements the ECJ would have jurisdiction over after Brexit, Lenaerts said: “After Brexit, there will be British firms begging our court to get ‘locus standi’ [the right to hear a case].
“Of course they will.
“If they create a subsidiary on the European continent, or a company on the European continent – just like we have Chinese companies which are incorporated and having their seat of operation, that is, all Chinese capital, here in the European Union.
“This is a company of the relevant member state, although all the interests might be Chinese, American, Australian, British etc, and I can tell you that if the company for one reason or another, like any company in the internal market, feels breached in its rights, it will be asking, begging on its knees, that this court exercises its jurisdiction to protect it.
“So British capital and British business will of course remain, on their own request, as a beggingly demanding party, right, willingly subject to the jurisdiction of this court, to see their rights enforced.”
Lenaerts remarks are bound to infuriate the Conservative London government, which has made freeing the UK from the “foreign judges” of the Luxembourg-based supreme court one of the main planks of its Brexit negotiations.
That has been aided by a press campaign against the ECJ, largely spearheaded by the Daily Mail.
In fact, the court has judges from all member states, including Britain, and John Mackenzie-Stuart, a British judge, was the ECJ president for four years at the height of the Thatcher government.
Lenaerts went on to suggest that a future free trade agreement between the UK and the remaining bloc – if one can be achieved within the two-year Brexit talks, or following a transition period afterwards – would also be policed by the court.
He said: “It’s not totally unrealistic that there is a bilateral trade agreement and you have goods coming in from the UK in[to] the EU.
“But the EU is now a third country, just like South Korea, Japan, Thailand, whatever.
“And the EU says ‘yes but actually you are giving subsidies by way of excessive tax breaks, or you’re not enforcing…the UK is no longer bound by the state aid rules in that hypothesis – and the EU says we are now going to tax, in order to have the compensatory level (this is under the WTO rules, the countervailing measures, anti-dumping measures, anti-subsidy measures like this..)
“When the EU imposes such measures, of course the UK government will run to this court to ask for judicial review. So that this court says, ‘no, no no, this was only an appearance of a subsidy, it was not a subsidy, the anti-subsidy measures are lawful and a matter of EU law.
“So they [the UK] will be in exactly the same position as China, Australia, etc. So there will of course be a whole range of EU-law relevant subjects which will continue to come up for businesses, for governing authorities, for national courts, in both the UK and here.”
David Davis, the British minister negotiating Brexit with the European Commission, has made it clear he wants no role for the ECJ after Brexit – even on adjudicating the rights of EU citizens in the UK, and UK citizens living in the EU.
Instead, he wants some unspecified form of new international arbitration body, even if that includes EU officials.