A new era for cross border disputes? Government confirms post-Brexit civil judicial cooperation will form part of withdrawal negotiations with the EU

• United Kingdom

• Brexit

23-08-2017

The UK Government has this week published its position paper concerning civil judicial cooperation once the UK leaves the EU. Under the current EU legislative framework, civil judgments given in one EU member state are automatically recognised and enforceable in any other EU member state. The existing framework comes from a series of EU Regulations which will cease to automatically apply to the UK after Brexit. The UK Government has previously indicated its intention to unilaterally adopt these regulations into UK law on and after exit day. However, there has been some concern that the UK cannot simply adopt EU legislation back into UK law in its current form. Some of these concerns can be alleviated by rewriting or amending legislation once it is on the UK’s statute book. But other concerns, for example where legislation is not designed to be used or enforced by a non-EU member state, have left EU lawyers dealing with cross-border EU disputes with a large question mark hanging over the efficacy of post-Brexit reciprocal recognition and enforcement arrangements. Whilst the UK can agree to recognise and enforce judgments from other EU member states after Brexit, absent any agreement to the contrary, it cannot be assured that UK judgments will receive like treatment in the remaining EU27.

Aiming to address these issues, the Government’s position paper “Providing a cross-border civil judicial co-operation framework” sets out the UK’s vision for a “close cooperative relationship between the legal systems of the UK and the EU” which will be based on the “unprecedented position of close integration” already enjoyed by the parties. The UK will “seek an agreement with the EU that allows for close and comprehensive cross-border civil judicial cooperation on a reciprocal basis, which reflects closely the substantive principles of cooperation under the current EU Framework”.

In respect of governing law, the UK intends to adopt into English law the existing Rome I and Rome II Regulations. In respect of choice of court, the UK will seek a new agreement which deals with jurisdiction and the enforcement of judgments in relation to disputes after withdrawal date. But, if this is not possible, in an annexe to the paper, it proposes that the current arrangements in these two areas will be operated for judgments given and claims commenced prior to the withdrawal date. The jurisdiction and enforcement regimes for future cases if there is no agreement are not addressed.

Whilst commentators have suggested that the EU27 have as much to gain as the UK from agreeing an ongoing arrangement for reciprocity in respect of civil judgments, the EU’s position paper dated 28 June 2017, provides for similar restrictions on the extent of cooperation to be agreed in exit negotiations. The EU will seek to ensure that the Withdrawal Agreement deals with the application of relevant provisions of EU law will continue to apply after exit day, only in respect of events that occurred, legal proceedings instituted, and judicial decisions given before the withdrawal date, and judicial cooperation procedures pending as at withdrawal date. The EU paper does not provide any insight into the EU’s likely position relating to ongoing and future judicial reciprocity and cooperation after Brexit. This remains an important area of concern for those engaged in cross border litigation or drafting contracts dealing with choice of law, jurisdiction and applicable laws, which will continue after exit day.

So what can the UK do regarding future reciprocity and judicial cooperation? One possible option lies in the multi-lateral treaties to which the UK is currently a signatory (by virtue of its membership of the EU). These treaties, including several Hague Conventions and the Lugano convention provide for judicial cooperation on a wider scale than just within the EU. The UK’s position paper makes a public commitment to continuing to be an active and supportive members of the Hague Conference which applies to 82 countries worldwide (including all EU member states) and to continue to participate in the Lugano Convention which forms the basis for judicial cooperation between the EU and EFTA countries (Norway, Switzerland and Iceland). The position paper suggests that the UK will “continue to be an active and supportive member” of the Hague Conference – although this ignores the fact that it is only a signatory by virtue of its membership of the EU. To continue to participate in the Hague Conventions or the Lugano Convention, the UK would need to seek independent membership - which the position paper stops short of stating explicitly, but must be what is intended. It is worth noting that the EU would need to agree to the UK’s accession in its own right to the Lugano Convention. It is questionable whether the EU would give this consent if it is not prepared to agree these same principles within the Withdrawal Agreement itself.

Independent accession to the Hague and Lugano conventions would enable cross-border litigators to breathe a collective sigh of relief, providing much needed certainty as to how international reciprocity and judicial cooperation would operate post-Brexit. The various conventions would provide a framework for, amongst other things, service of documents abroad, taking of evidence, choice of court agreements and recognition and enforcement of judgments. It is encouraging to see the Government responding to heavy lobbying from the Law Society and other branches of the legal profession to make these issues a priority in exit negotiations, but we are still very far from being on the home run in terms of post-Brexit judicial cooperation. Much is inevitably dependent on the progress of the current negotiations.