European Commission issues pre-Brexit reminder to EU lawyers on civil justice arrangements

The European Commission has issued a short factual statement for the benefit of the EU legal profession and other stakeholders setting out the civil justice instruments that currently apply to the UK by virtue of its EU membership. The statement notes that after Brexit, many of these will be replaced by national rules or other international agreements.

The statement highlights the following areas:

• Jurisdiction: As between the UK and the EU, courts will use their own conflict of laws rules to determine whether or not they have jurisdiction over proceedings. Although the statement does not elaborate on this, the effect is that for EU courts the applicable rules will continue to be those of the Brussels Regulation. As regards UK courts, the UK Government has stated that it intends to continue to participate in the Lugano Convention, which was a predecessor to the Brussels Regulation and provides an almost identical regime in most circumstances (see link below).
• Recognition and enforcement of judgments: The statement notes that recognition and enforcement of EU judgments in the UK and of UK judgments in the EU will be governed by the law of the state where recognition and enforcement is sought or by international agreements to which both are parties. Again, no detail is given, but the UK’s intention to remain in the Lugano Convention (of which the EU is also a member) means that mutual recognition and enforcement is likely to continue on much the same terms.
• Judicial cooperation procedures and specific EU procedural mechanisms: Certain specific procedures and arrangements relating to judicial service of documents, taking of evidence, the European Payment Order procedure for enforcement of uncontested debts, and the European Procedure for Small Claims (up to EUR5,000) will no longer apply between the EU and the UK. The statement does not comment on the extent to which alternative mechanisms are available. However, the UK Government has stated that it intends to continue to participate in the Hague Conventions, to which the EU is also a party. These cover a number of the same areas, including service of documents and taking of evidence. There is at present no alternative convention covering uncontested debts and small claims, so some very low-value claims may become uneconomic to enforce between the UK and EU Member States, but there has been a relatively slow take-up of the EU mechanisms in practice. Higher-value claims will still be enforceable by means of the Lugano regime, as outlined above.

The Commission’s statement does not deal with enforcement and recognition of arbitral awards and other matters relating to arbitration, because it will be unaffected. Both EU courts (by virtue of the Brussels Regulation) and UK courts (by virtue of the Arbitration Act 1996 in England and Wales and its equivalents in Scotland and Northern Ireland) will have an ongoing obligation to stay court proceedings in favour of arbitration where there is a valid arbitration agreement. Arbitration awards are enforceable independently of the EU Treaties by virtue of the New York Convention, to which the UK and all EU countries are parties.

Conclusion

The Commission’s statement is a pithy summary of the EU instruments that, as an obvious consequence of Brexit, will cease to apply to the UK. As such, it is consistent with the negotiating statements published earlier this year both by the EU and by the UK (see link below), which provide considerably more detail on each of the above areas as regards the degree of continuity which can be expected after Brexit. For most commercial claims, in particular, the Lugano and Hague regimes should continue to provide effective cross-border mechanisms. Arbitration also provides a highly effective dispute resolution mechanism for international business.

To discuss your organisation’s dispute resolution strategy in the run-up to and after Brexit, please speak to Guy Pendell or your usual CMS contact.