The UK Government’s ‘no deal’ Brexit papers: the impact on civil litigation and the Hague Convention option
The UK Government’s second batch of papers on how businesses and individuals should prepare for a ‘no deal’ Brexit includes a note on handling civil legal disputes that involve EU countries.
As with the other publications in the ‘no-deal’ series, the note is intended “to allow businesses and citizens to understand what they would need to do in a ‘no deal’ scenario, so they can make informed plans and preparations”.
The paper notes that, currently, EU-wide regimes determine questions of applicable law (Rome I and Rome II) and jurisdiction and recognition and enforcement of judgments (the Brussels Recast Regulation).
In the event of a no deal Brexit, the Government confirms that UK would retain the Rome I and Rome II rules on applicable law in contractual and non-contractual matters.
However, the paper also notes that the Brussels Regulation (and Lugano Convention which applies to EFTA countries) concerning jurisdiction and enforcement is based on reciprocity, such that even if the UK continued to apply the rules unilaterally after Brexit, the UK’s status as a third country would mean that EU Member State courts would not consider the UK to be covered. Accordingly, in the event of a ‘no-deal’, the UK would repeal the Brussels Regulation and Lugano Convention.
Were this to happen, the UK would revert to the existing domestic common law and statutory rules, which currently apply in cross border cases concerning the rest of the world. Equally (although not mentioned in the paper), English court judgments would be enforced within EU Member States in accordance with local law rules. In many cases, although the procedural frameworks for enforcing judgments might be more cumbersome than under the Brussels Regulation, the substantive considerations will be broadly similar.
Further, the note confirms that the UK would accede to the Hague Choice of Court Convention in the event of no deal, and asserts that it would come into force on 1 April 2019. The Hague Convention is an international agreement pursuant to which the courts of contracting states agree to uphold exclusive jurisdiction agreements, provided that the nominated court is in one of the contracting states and the agreement complies with certain prescribed standards, and to recognise and enforce judgments to the extent that the parties have entered into a qualifying exclusive jurisdiction agreement.
The reference to the Hague Convention is welcome given that it was oddly absent from the Government’s recent White Paper – and the Government has since published a draft statutory instrument to provide for the UK’s future accession to the Hague Convention. Although it is more limited than the Brussels Regulation and Lugano Convention in that it would only apply to certain types of exclusive jurisdiction clauses, the advantage is that it covers all EU countries (as well as Singapore, Mexico and Montenegro). In addition, the UK can sign up to the Hague Convention unilaterally and thereby ensure that the UK is part of a multilateral regime for enforcement of qualifying judgments throughout the EU.