This is the second in our 'Brexit-Litigation' update series covering jurisdiction, recognition and enforcement.
The UK government has released a number of Brexit position papers for the Brexit talks in Brussels, aimed at setting out its proposals for leaving the EU on 29 March 2019.
In its paper dated 22 August 2017 – 'Providing a cross-border civil judicial cooperation framework – A future partnership paper', the UK government has suggested how potential cross border legal disputes might be dealt with, post Brexit.
The current system
Currently, a comprehensive body of EU Regulations set out detailed provisions determining which courts have jurisdiction to hear a case (whether a civil, commercial, or family law); what the governing law to a contract should be; the procedure for serving judicial (and extra judicial documents) between member states; and ensuring that judgments made by one EU member state are recognised and easily enforceable in another member state. In our experience, the introduction of these Regulations has successfully achieved certainty and efficiency when it comes to cross-border litigation.
This legislation will no longer apply to the UK when it leaves the EU on 29 March 2019.
However, the UK government has stated that it understands 'citizens, consumers, families and businesses involved in a dispute must continue to have a predictable, clear framework for the resolution of that dispute'. It has also stated that it will seek a 'deep and special partnership with the EU, such that all cross border commerce, trade, and relationships can continue post Brexit'.
Judicial cooperation going forward
What this means in practice and how the UK will go about achieving this 'deep and special' partnership with the EU is not clear. However, according to the 22 August paper, the UK government clearly recognises the importance of consumers 'bringing a claim in their own country's courts regardless of where the supplier is based', and of the resulting judgment being enforceable.
There is mention of 'mutually beneficial rules' and an agreement with the EU which 'reflects closely the substantive principles of cooperation under the current EU framework'. The UK government therefore appears to be saying that the best way of achieving certainty for businesses and consumers is to agree an arrangement which replicates the current body of existing EU laws. In the meantime, the current EU laws in relation to applicable law, jurisdiction and enforcement should continue governing all contracts concluded before the withdrawal date. Time will tell whether the EU will accept these proposals and an agreement can be reached before the 29 March 2019.
How the UK's departure from the EU will affect the issue of applicable law in any given contract, jurisdiction and a claimant's ability to enforce a UK judgment in the EU or vice versa is still, unfortunately, far from certain.
Should the UK fail to negotiate an agreement reflecting the current framework, as set out in our first publication in this series, the Foreign Judgments (Reciprocal Enforcement Act) 1933 may be an appropriate fall-back position for signatories such as Italy, Austria, Belgium, France, Germany, Norway, the Netherlands, Canada, Jersey, and India.
In light of the above, if you are considering entering into a new agreement with a company incorporated in a EU member state that is different to your own you may wish to consider a fall back jurisdiction and enforcement provision which gives the parties certainty whatever the outcome of these negotiations. Similarly, if you are considering bringing proceedings in relation to an existing agreement, or if you already have a judgment you wish to enforce within the EU, you should seek advice and take steps to do so as soon as possible and in any event, before the withdrawal date.