31 March 2017

On the brink of Brexit

In our last newsletter, we highlighted some of the family law issues which will be most affected by the UK's departure from the EU and concluded that it was largely business as usual for family law practitioners. Only one thing could be predicted with any certainty, and that was the legal uncertainties brought about by the EU Referendum result.

There have been some significant developments since then. The EU (Notification of Withdrawal) Bill, 'the Brexit Bill', has received Royal Assent. The First Minister for Scotland, Nicola Sturgeon has announced her wish to hold a second referendum on Scottish independence ahead of the two-year deadline for the UK to leave the EU. However, the Prime Minister's initial response has been to refuse to allow the Scots another referendum prior to Brexit. On 29 March PM May triggered Article 50 (this, notwithstanding the failed attempts by the House of Lords to pass amendments guaranteeing the rights of EU citizens living in the UK and a meaningful vote on the ultimate pact) and on 30 March, the White Paper for the Great Repeal Bill was published. All of this has resulted in the UK's departure feeling more imminent and real, which has clarified minds and mobilised the legal profession.

The two main EU Regulations which are pivotal to family law in England and Wales are the Brussels IIa Regulation (which regulates divorce jurisdiction and parental responsibility regarding children matters) and the EU Maintenance Regulation (which regulates the jurisdiction for and enforcement of maintenance agreements and court decisions between the UK and the EU). We have mentioned previously, the Government's intention to transform the vast majority of EU law into new (perhaps reformed and amended) domestic law and the White Paper has confirmed that this is, indeed, the intention. However, it is important to remain focused upon some of the problems inherent in such a process. EU law operates on a reciprocal basis. In the absence of replacement legislation with the EU, post Brexit, the courts in England and Wales may find themselves bound to recognise and enforce decisions of EU Member States, but courts in the latter will not be bound to recognise and enforce UK orders. There is also valid concern that, if decisions of the Court of Justice of the European Union (CJEU) will no longer be binding on the UK, this will result in the loss of the unified approach to implementation of valuable European regulations and decisions.

On 20 March, the House of Lords EU Committee published its report: 'Brexit: Justice for families, individuals and businesses?' in which it calls the Government to account for failing (so far) to provide a coherent plan for addressing the post-Brexit application of these important EU Regulations. The myriad of problems that these laws seek to address will not cease when we leave the EU, and the Lords warned that it is still not clear how the Great Repeal Bill could possibly deliver the reciprocity that is necessary for the functioning of these Regulations. The White Paper proposes that the Bill: will convert directly-applicable EU Law (EU Regulations) into UK law; will preserve all the laws we have made in the UK to implement our EU obligations; and will provide that historic CJEU case law will be given the same binding or precedent status as decisions of our Supreme Court. However, the reciprocity point remains dependent upon the outcome of the negotiations of the UK's departure and the point made by the Lords remains unanswered.

As we highlighted in our last newsletter, it is prudent for those planning pre- or post-nuptial agreements to give careful consideration to the potential 'Brexit effect' on jurisdiction and applicable law clauses. It is perfectly conceivable that jurisdiction clauses may not be honoured by courts in EU member states in the post-Brexit landscape.

On a more positive note, it is possible to discern some potential benefits which could result from the exit process. It may provide an opportunity for the UK (certainly England and Wales) to apply more widely the principle of forum conveniens in divorce cases, which many practitioners consider to be fairer than the 'first in time' system imposed by Brussels IIa. It may also be an opportunity to address one of the controversial effects of the EU Maintenance Regulation, which is that spouses currently relying on their sole domicile for divorce jurisdiction are generally unable to make claims for maintenance in England and Wales.

However, the benefits to be gained from retaining full reciprocity in relation to both Regulations arguably outweigh such opportunities and this is amply demonstrated by two recent family CJEU decisions which are of direct and real benefit to clients (both covered in more detail in Vanessa Mitchell's article in this edition). The first is MS v PS [2016] in which the European Court of Justice simplified the mechanism by which maintenance orders can be enforced. This means, for example, that a parent living in Germany, who needs to enforce a German child maintenance order against the other parent who lives in England, can now apply direct to the English family court rather than first having to go through a central authority. The second case, W v X [2017] clarified the situation as to when a court retains jurisdiction over decisions in relation to a child when that child is living in another Member State. If, following Brexit, the benefits of reciprocity are lost, then the effect for some international clients and their children could be undesirable.

Category: Article