There are now two principal agreements governing the UK-EU relationship after Brexit. The Withdrawal Agreement (WA) came into force after the UK left the EU on 31 January 2020. The Trade and Cooperation Agreement (TCA) came into force following the end of the Brexit transition period on 31 December 2020.
Both agreements set out a framework to oversee their implementation and a mechanism for resolving disputes that might arise between the EU and the UK. While the governance frameworks are similar, there are some important differences between the two dispute settlement mechanisms, as this Insight explains.
The UK-EU Committees
Both agreements establish a governing committee, jointly chaired by the UK and EU, to oversee implementation.
The WA established a Joint Committee with this function. Its counterpart in the TCA is the Partnership Council. Both are supported by specialised committees (see figures 1 and 2). But the TCA’s committee structure is more complex. This reflects the broader and more complicated nature of the TCA.
Withdrawal Agreement committee structure
The Trade and Cooperation Agreement committee structure
Both the WA Joint Committee and the TCA Partnership Council (and the relevant TCA committees) can take binding decisions regarding implementation. These decisions must be agreed by both the UK and EU. The Joint Committee has already met several times to take necessary decisions ahead of the Brexit transition period ending.
The Joint Committee has, to date, been co-chaired by Cabinet Office Minister Michael Gove for the UK and European Commission President Maroš Šefčovič for the EU. Mr Šefčovič will also be the EU co-chair of the TCA Partnership Council. Michael Gove was appointed interim UK co-chair but the Government announced that Lord Frost will be taking over as UK co-chair of both bodies.
Both agreements include a dispute settlement system. These involve referral to an independent arbitration body if a dispute is not resolved between the two parties. The UK and EU have to nominate an equal number of independent arbitrators, with jointly agreed chairs.
The Joint Committee agreed a list of potential arbitrators for the WA in December. The Partnership Council has until the end of June to agree a list of arbitrators for the TCA. Interim arrangements for selecting a tribunal would apply if needed before then.
The main features of the two arbitration systems are set out in the table below. Differences between them include the longer timelines and larger panels in the WA and different remedies if a party has not complied with an arbitration ruling. But in both agreements, non-compliance can lead to suspension of treaty obligations.
Some parts of the TCA are also exempt from the main dispute settlement mechanism (notably Part Three on law enforcement and judicial cooperation) or have variations from elements of the mechanism (notably the level playing field provisions).
Role of Court of Justice of EU
An important difference between the two arbitration systems relates to the involvement of the Court of Justice of the EU (CJEU). Under the WA, if any dispute involves questions regarding interpretation of EU law, the arbitration panel must refer the interpretation to the CJEU. The CJEU’s ruling will be binding on the panel.
The EU sought a similar role for the CJEU in the TCA, but this was opposed by the UK. There is no role for the CJEU in TCA dispute settlement. TCA provisions will be interpreted in line with customary international law.
Dispute settlement in the two agreements compared
|Stage||Withdrawal Agreement||Trade and Cooperation Agreement|
|Consultations||Consultations in “good faith” in Joint Committee to reach “mutually agreed solution”.
Consultation period is for three months from when requested.
|Consultations in “good faith” between the UK and EU where one feels that the other is in breach of the Agreement. Held in the Partnership Council or appropriate committee.
Consultation period is for 30 days from when requested. Parties can agree to extend.
|Arbitration||Arbitration panel: five members.
Established within 15 days of request.
Gives binding ruling within 12 months (six months if urgent).
Questions of EU law referred to CJEU for binding interpretation.
|Arbitration panel: three members.
Established within 10 days of request.
Gives binding ruling within 130 days (160 days if extended). Interim report within 100 days (130 days if extended) which becomes ruling if neither party requests review.
If urgent proceedings are agreed, timelines are halved.
Interpretations are in line with customary international law.
|Remedies for non-compliance||Respondent party has 30 days to set out compliance measures.
If respondent doesn’t comply, complaining party can ask panel to impose lump sum or penalty payment.
If the sum or payment is not paid within one month, or if respondent has still not complied after six months, then the complainant can suspend any part of the WA temporarily, except Part Two (citizens’ rights provisions). They can also suspend provisions of other UK-EU treaties.
Respondent can ask panel to rule on whether suspension is “proportionate”. Panel can also rule on any measures taken to comply.
Suspension withdrawn if compliance is achieved.
|Respondent party has 30 days to set out compliance measures.
If the respondent doesn’t comply, the complaining party can request compensation or suspend obligations under TCA. This can involve cross-retaliation across the trade, aviation, road transport and fisheries provisions if circumstances are serious enough and suspension of provisions in the same area would not be effective.
Tribunal can rule on whether level of suspension meets criteria, and on any steps taken to compliance.
Suspension withdrawn if compliance is achieved.
Link between dispute settlement in the two agreements
There is, however, a link between the dispute settlement mechanisms of the two agreements.
The WA provides for the suspension of part of any other UK-EU agreement if a party persistently doesn’t comply with arbitration panel rulings. This would be under the conditions set out in the other agreement.
The TCA provides that some of its provisions can be suspended because of non-compliance with an arbitration ruling under “an earlier agreement” between the UK and EU.
The UK-EU Trade and Cooperation Agreement: governance and dispute settlement, House of Commons Library.
The UK-EU Withdrawal Agreement: dispute settlement and EU powers, House of Commons Library.
The UK-EU Withdrawal Agreement Joint Committee: functions and tasks), House of Commons Library.
Joint Committee decisions on the Northern Ireland Protocol, House of Commons Library.
About the author: Stefano Fella is a researcher at the House of Commons Library, specialising in Brexit.
Image: Bilateral meeting between between PM Boris Johnson and President von der Leyen by Number 10, used under CC BY-NC-ND 2.0, cropped