The UK government has set out its vision for civil judicial cooperation with the EU following the UK's withdrawal from membership of the EU, in a future partnership paper published in August 20171 (the "Future Partnership Paper"). The Future Partnership Paper sets out both the UK government's preferred framework for eventual cross-border judicial cooperation with the EU, and also responds to the European Commission's own position paper on the same subject published a few weeks before.2 To understand the current cross-border judicial cooperation framework in this area between the UK and EU please click here to read our briefing on Brexit: Cross Border Dispute Resolution implications.
When the UK withdraws from the EU it will be leaving a civil judicial cooperation system widely acknowledged to provide predictability and certainty regarding the laws which apply to cross-border relationships, the courts which are responsible for implementing those laws and the ability of citizens and businesses to rely on decisions from one country's courts in another state. In its Future Partnership Paper the UK government clearly understands that it needs a comparable system which will allow businesses to continue to trade in confidence, which will provide legal certainty and which will avoid excessive costs and delays in cross-border transactions.
With regard to the Choice of law and Applicable law in respect of contractual and non-contractual obligations, the UK government has stated an intention to incorporate the Rome I and Rome II Regulations into UK domestic law3 through the mechanism set out in the European Union Withdrawal Bill ("EUW Bill"). This makes legislative sense as Article 2 of Rome I and Article 3 of Rome II, provide that the choice of law in a contract or applicable law specified by either Rome I or Rome II shall be applied whether or not it is the law of the court of the member state in question. Therefore, following UK withdrawal from the EU, Spanish courts will still continue to uphold English governing law clauses and will continue to apply the principles in Rome I and Rome II where applicable law is not straightforward. It makes commercial sense that English courts should operate under the same principles.
However the situation is markedly different in relation to Jurisdiction, Recognition and Enforcement of Judgments, and the Service of Documents and Taking of Evidence as the Regulations which currently control these areas between EU member states rely on reciprocity. The Future Partnership Paper acknowledges that existing international conventions can provide for rules in some of these areas but these would either not cover all the areas currently dealt with or will not provide a sufficiently effective and sophisticated solution to the gaps which will appear. As a solution, the UK government is proposing an agreement:
In practice this could mean 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'.4 Unfortunately, there are no concrete proposals as to how this will be achieved and the UK government continues to maintain its position that as a non-member state, the direct jurisdiction of the CJEU over the UK will come to an end and therefore the UK courts will not implement the judgments of the CJEU post-Brexit. It is therefore hard to see how the EU will respond to this proposal.
The Future Partnership Paper does consider the international civil judicial cooperation treaties and Conventions which the UK is currently a party to and states that these will continue to apply whether the UK is currently a party in its own right (such as 1970 Hague Convention on the Taking of Evidence Abroad), or a party by virtue of its membership with the EU (such as the 2005 Hague Convention on Choice of Court Agreements). The UK government will also seek to continue to participate in the Lugano Convention 2007 so that its civil judicial cooperation will continue with Norway, Iceland and Switzerland. However it is not clear from the Future Partnership Paper if the UK government is proposing complete participation in the Lugano Convention or simply replicating what is already in place between the UK and the EFTA member states (other than Liechtenstein).5 If full participation is proposed the UK would lose some of the improvements contained in the Brussels Regulation which have not, as yet, been replicated within the Lugano Convention. It is also unclear how the EUW Bill would deal with this situation.
The proposals above are based on the assumption that the UK and the EU will be able to conclude an arrangement for future civil judicial cooperation. However both the European Commission and the UK government are pragmatic enough to prepare for the fact that an agreement may not be concluded by the date of the UK's withdrawal. The UK government's Future Partnership Paper contains a response to the EU's position paper on this topic, and is clearly stated to be without prejudice to the points made in respect of the future partnership between the EU and the UK.
Essentially both the UK government and the European Commission are proposing that the current rules should continue to apply to all matters which are on-going before the withdrawal date, and which are still on-going after it. For example, on the date of withdrawal EU rules on jurisdiction and recognition and enforcement of judgments should continue to govern any pending judicial proceedings and procedures. In addition, the relevant provisions of Rome I and Rome II should continue to apply to contracts concluded before the withdrawal date, and (regarding non-contractual liability) to events which occurred before the withdrawal date. Likewise, judicial cooperation procedures that are on-going on the withdrawal date should continue to be governed by the relevant provisions of EU law applicable on the withdrawal date. These proposals are sensible and will, if agreed, provide much needed certainty for business.Yes, although there is still much uncertainty.
There is clarity in relation to the issues surrounding governing law. It seems likely that Rome I and Rome II will be incorporated into UK domestic legislation providing continuity in the area of governing and applicable law.
The UK government and European Commission both propose and agree in essence that the current EU rules should continue to apply to all litigation that is on-going before the withdrawal date, and which is still on-going after it. These proposals will provide much needed clarity for the parties involved in such litigation if agreement can be reached with the EU member states at this stage of the negotiations.
But there is still much to agree in relation to jurisdiction, enforcement and judicial cooperation procedures and requests for information. For example, in relation to jurisdiction and enforcement, there is a very strong view that, as the UK is already a signatory to the Brussels Convention 1968, as it was never repealed in any way, and as there is wording in its Recitals to support its continued applicability post-Brexit, it could be relied upon to uphold exclusive UK jurisdiction clauses and to support an enforcement application in those member states who were signatories to it. Yet, the UK government did not refer to it in its Future Partnership Paper and therefore the government's position in relation to its future applicability is unknown at this stage.
1. Providing a cross-border civil jurisdiction cooperation framework - a furture partnership
2. Position paper transmitted to EU27 on Judicial Cooperation in Civil and Commercial Matters - 28 June 2017
3. Paragraph 19 of the Future Partnership paper
4. Paragraph 19 of the Future Partnership Paper
5. Paragraph 22 of the Future Partnership Paper
