Civil Jurisdiction and Judgments in a No-Deal Brexit: Au revoir Brussels?

Civil Jurisdiction and Judgments in a No-Deal Brexit: Au revoir Brussels?


CategoryArticles Author Michael McParland QC Date

A No Deal Brexit & The Brussels Regime

As part of its preparations for the No Deal Brexit, the Government has published The Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019.

This draft regulation contains the changes considered necessary to UK legislation if the UK abruptly drops out of the current EU regimes for civil jurisdiction and judgments on 29 March 2019 without any form of transitional arrangement (as the current Withdrawal Agreement provides for) or without any new arrangement on civil judicial cooperation being entered into (as the Prime Minister asked for in her Mansion House speech on 2 March 2018).

1987 and all that.

On 1st of January 1987, the UK’s Civil Jurisdiction and Judgments Act 1982 came into force (the “1982 Act”). This gave effect to an amended version of the 1968 Brussels Convention that accommodated the entry of the UK, Ireland and Denmark to the EEC recorded in the 1978 Accession Convention. Since then, this “Brussels Regime”, in both its original Convention form and subsequently as EU legal instruments (in particular, The Brussels I Regulation (44/2001) and it current successor, the Brussels I Regulation (1215/2012), along with the third-country arrangements between the EU and Switzerland, Iceland and Norway (which are now found in the Lugano Convention 2007)  have formed the basis upon which UK courts have exercised jurisdiction over European defendant and given effect to European judgments. Since 1987, the 1982 Act and statutory instruments issued under it, has been the primary vehicle for accommodating this Brussels Regime within in the UK’s legal order, including making the necessary allowances for the consequence of EU Regulations having direct effect).

All change

But, of course, all of this all changes with a No-Deal Brexit. As the Explanatory Memorandum notes, the draft regulation’s proposed changes are “to ensure a functioning domestic statute book in the event the UK exist the European Union (EU) without a post-exit agreement on civil judicial cooperation…”, because the Brussels Regime operates “… in a reciprocal manner between the EU Member States, and that reciprocity will not longer apply in relations between the EU Member States and the UK after exit”. The UK is therefore leaving the Brussels Regime and “… [t]his instrument addresses changes required to retained EU law in order to avoid inappropriate or unworkable unilateral application of these rules by the UK following exit, as well as making provision for cases which are ongoing as at exit day…”.

The scale of the changes is reflected in the draft regulation’s revocation and detailed savings of EU retained legislation (including revoking the Brussels I (Recast) Regulation (1215/2012)), as well as the detailed amendments required to both primary UK legislation (particularly to the 1982 Act) as well as the various subordinate legislation issued under it.

The nature of the changes

Understanding the implications of these changes will take a careful revision to the text of the 1982 Act with the reddest of red pens and a stiff drink.

The Explanatory Memorandum appears cheerfully untroubled by the nature of the changes:

“Determination of jurisdiction and the recognition and enforcement of judgments in cross-border matters involving the EU and EFTA state parties will fall to be determined by the rules which are already applicable to non-EU, non-EFTA cases (so, those where the Brussels Regime does not currently apply), and the Hague 2005 Convention on Choice of Court Agreements, where it applies, to which, post exit, the UK is acceding as a Contracting State”.

Exceptions to the common law rules include somewhat pale facsimiles of existing EU rules relating to jurisdiction and employment derived from the Brussels I Regulation.

As for the crucially important role of choice of court agreements, the Government relies upon its intended accession to the Hague Choice of Court Convention (2005) (click here to see my earlier article) and then says:

“For cases which do not come within that Convention (because the subject matter of the case is not covered by the Convention, or the case concerns a state which does not participate in it), the domestic private international law rules of the relevant UK jurisdiction will apply. Broadly, the court will take jurisdiction whenever a valid choice of court agreement has been made selecting the courts of England and Wales, and will also readily recognize and enforce a foreign judgment from a foreign court validly selected under such an agreement. This is therefore quite similar to the position under the Brussels regime, although clearly these rules will not be applied reciprocally by the courts of EU Member States and of those states bound by the Lugano Convention following exit day”.

Differences?

The Government does recognize that “… [w]hile businesses and individuals will still be able to litigate in cross border matters with parties in an EU Member State, there are some significant differences between the Brussels regime rules and the common law and statute rules that will replace them”. These include, inter alia:

  • Under the Brussels Regime, the jurisdiction rules are designed to be uniform and mandatory in application. In general, there is no discretion for a court on which jurisdiction is conferred to decline the hear the case on the basis that it considers the court of another state is better placed to decide the matter. If court in different states commence proceedings, then the second-seized court must decline jurisdiction in favour of the court first seised (the lis alibi pendens rules), subject to an exception where the second seized court had been chosen under a choice of court agreement.
  • But under UK rules, the exercise of jurisdiction is not mandatory. The courts can decline to exercise it. Defendants will be able to challenge service out of the jurisdiction, including on a forum non conveniens There is also no formal lis albi pendens rules, and, of course, those rules will not apply to UK court proceedings in EU courts in the same way as when the UK was a Member State.
  • Anti-suit injunctions exist in UK law, while they are contrary to the operation of the Brussels Regime.
  • There will obvious differences regarding the recognition and enforcement of judgments under the Brussels Regime and the common law / statute regimes in place in the UK.

 

Differences from Day One

Already, intended post-Brexit differences of approach between the UK and the EU can be seen. For example, over the question of the recognition and enforcement of judgments. The UK is proposing to recognize and enforce civil and commercial judgments from EU Member State’s judgment under the Brussels Regime as long as the judgments were given in proceedings that commenced before Exit Day. The EU will not (click here to see my article on the EU’s current position).

An impact assessment?

An impact assessment of the effect of the changes contained in the draft regulation has been promised by the Government but has not appeared yet. If it ever does appear it should make interesting reading.

The Brussels Regime: “Farewell or Au Revoir?”

If the Brussels Regime is scrapped on 29 March 2019 in a No-Deal Brexit, will be seeing a version of it in the future? Certainly, the UK would like to see a new, but similar, regime agreed with the EU. In her Mansion House Speech, the Prime Minister said:

“We will want our agreement to cover civil judicial cooperation, where the EU has already shown that it can reach agreement with non-member states, such as through the Lugano Convention, although we would want a broader agreement that reflects our unique starting point. And our agreement will also need to cover company law and intellectual property, to provide further legal certainty and coherence”.

As part of Mrs May’s “new, deep and special partnership” with the EU, the UK government has emphasised the importance and value of international civil judicial cooperation, especially in relation to family, civil and commercial and insolvency matters (see here). AS a result, the Government said:

“… We are seeking a new bilateral agreement with the EU to cover a package of measures underpinned by robust governance arrangements.

A UK-EU agreement should recognise that the UK will be a third country but also recognise the close and continuing ties between our citizens and our businesses.

The EU has already signalled it is willing to consider a new form of relationship in respect of family law. The UK wants to see this extended across the sphere of civil judicial cooperation”.

“… A new, bespoke agreement across the full range of civil judicial cooperation should form part of wider UK-EU discussions on the framework of our future relationship”.

What has been the EU’s response to the UK’s request for such a new, bespoke agreement?

The Political Declaration of 25 November 2018, which accompanies the current Withdrawal Agreement and sets out the framework for the future relationship between the EU and the UK, says absolutely nothing on the subject.

So just how “new, deep and special” any future partnership in the field of civil justice cooperation turns out to be is currently anyone’s guess. We do live in interesting times.

 

Michael McParland QC

39 Essex Chambers

 

 


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