The draft withdrawal treaty and judicial co-operation
An important aspect of the Brexit negotiations is the future of judicial co-operation as between the UK and EU Member State courts.
Currently, the recast Brussels Regulation provides an EU-wide regime for determining jurisdiction and enforcement of judgments in civil and commercial matters. It is directly applicable in the UK and will therefore cease to apply following the UK’s departure from the EU absent any new agreement. It is also inherently reciprocal. Although the UK could in theory transpose the contents of the Brussels Regulation into domestic law via the EU (Withdrawal) Bill, this would have limited practical benefit if courts of EU Member States were no longer bound to respect and uphold English jurisdiction or apply the provisions of the Brussels Regulation to the enforcement of English judgments.
The EU’s draft withdrawal treaty does not deal with the question of what, if anything, will replace the Brussels Regulation – and nor would it be expected to, given that it is principally concerned with the terms of the UK’s departure. However, it does attempt to deal with transitional arrangements and in fact goes slightly further than position papers previously produced by the UK and the EU.
On the question of jurisdiction, the UK Civil Jurisdiction Paper and the EU Commission’s Position Paper on Judicial Co-operation in Civil and Commercial Matters (the EU Civil Jurisdiction Paper), both published during 2017, appeared to broadly concur as follows:
- that existing EU law as at the withdrawal date would continue to apply to a choice of forum made prior to the withdrawal date; and
- that existing EU law as at the withdrawal date would continue to apply to determine questions of jurisdiction with respect to all proceedings instituted prior to the withdrawal date.
The draft withdrawal treaty extends the cut-off date from the “withdrawal date” to “the end of the transition period” (which the EU has proposed should expire at the end of 2020).
Article 63(1) of the draft withdrawal treaty provides that the provisions of the Brussels Regulation will apply to legal proceedings instituted before the end of the transition period. This should mean in practice that to the extent proceedings have been initiated by the end of the transition period then the provisions of the Brussels Regulation would continue to apply to determine the jurisdiction of the court to hear the relevant claim.
Moreover, Article 63(2) provides that Article 25 of the recast Brussels Regulation will also apply to agreements as to jurisdiction or choice of court agreements concluded before the end of the transition period. Accordingly, where the parties have chosen in their contract that disputes should be resolved by the English court, provided the choice was made before the end of the transition period, such choice would be respected by EU Member State courts under the provisions of the Brussels Regulation, even if the dispute does not arise until several years later.
Turning to enforcement of judgments, prior to the publication of the draft withdrawal treaty, there appeared to be a difference between the UK and EU position regarding recognition and enforcement of judgments as at the date on which the UK leaves the EU. The UK Civil Jurisdiction Paper indicated that the UK Government would like the Brussels Regulation to regulate enforcement of judgments given before the withdrawal date or after the withdrawal date in proceedings commenced prior to the withdrawal date. In contrast, the EU Civil Jurisdiction Paper indicated that the EU would expect the Brussels Regulation to apply only to judgments given before the withdrawal date.
The draft withdrawal treaty, unsurprisingly, reflects the EU position, albeit again extends the cut-off date to the end of the transition period. Article 63(3) provides that the Brussels Regulation shall apply “to the recognition and enforcement of judgments given, to authentic instruments formally drawn up or registered, and to court settlements approved or concluded before the end of the transition period”.
As we have set out previously, both in relation to jurisdiction and enforcement, even if the UK and EU fail to enter into a formal agreement regarding future judicial co-operation in civil and commercial matters, this should not undermine the advantages that of litigating in the English courts. Nevertheless, if agreement can be reached this will help to provide certainty and continuity for businesses involved in cross-border disputes.