For many years, parties across the EU have regularly chosen the English courts to resolve international disputes. Many of the reasons for this – the reputation of the English courts for consistency, honesty, transparency and technical knowledge, coupled with England’s status as a global financial centre – are independent of the UK’s membership of the European Union and should continue after it leaves.
However, since the referendum result concern has arisen as to whether the advantages of England as a dispute resolution centre might be diminished to some extent. One perceived area of risk relates to service of process and whether it will become more difficult to serve English court proceedings on parties in EU Member States post-Brexit.
However, for properly advised commercial parties, there should from a practical perspective, be little change – at least for claims arising out of a contractual relationship between the parties.
Currently, English court proceedings may be served on defendants in other EU Member States in accordance with the Service Regulation, which can be relatively quick and cost effective. The Service Regulation permits a variety of methods of service including service between designated state central bodies (Article 4); postal service where proceedings are sent by the Member State (Article 14); and direct service where permitted under the law of the Member State (Article 15). As to the latter, it should be noted that several Member States, including Germany (for documents initiating proceedings), Spain and Poland do not permit direct service. Indeed, the UK is also opposed to direct service on parties in England and Wales under Article 15.
It may be that the UK is able to negotiate continued application of the Service Regulation or equivalent post-Brexit. However, even if no formal arrangements between the UK and the EU are put in place, claimants could instead effect service on defendants in other EU states in accordance with the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. The Hague Convention provides that each contracting state designate a Central Authority to receive and execute requests for service originating in other contracting states. In most cases this is likely to be considerably slower than service under the Service Regulation (at least under Article 14 of the Service Regulation) and at present Austria and Malta are not even parties to the Hague Convention – although the European Parliament has authorised Austria to sign and ratify, and Malta to accede to, the Hague Convention.
Although Article 10 of the Hague Convention provides that it does not interfere with the freedom to send judicial documents by postal channels, directly to persons abroad, there is no obligation on contracting parties to allow service by such methods. In this regard, several EU states, including Germany, do not permit postal service under the Hague Convention.
In any event, notwithstanding potential benefits of the Service Regulation over the Hague Convention, well-advised commercial parties would always include within agreements a contractual provision authorising service on a process agent at an address within England and Wales. Such service, in accordance with the Civil Procedure Rules (CPR 6.11), is far quicker and simpler than service under Service Regulation. Service in this way – on a process agent – will be wholly unaffected by Brexit, whatever the outcome of negotiations.
To put it another way, even if the UK ceases to be party to the Service Regulation and no equivalent is put in place, the only real change would be additional incentive to do what should already be done as a matter of course.