knowledge | 23 January 2019 |
A No-Deal Brexit: What’s the Deal for Litigants?
The effect of a no-deal Brexit will be felt in different ways by EU litigants depending on the stage in which they find themselves in proceedings. As time ticks on and the possibility of no deal continues to increase, what questions should litigants be asking themselves?
A no-deal Brexit has the potential to have a significant effect on cross-border civil and commercial litigation in the EU as in that scenario the UK’s participation in the Brussels and Lugano regimes will cease.1 These instruments govern jurisdiction and enforcement of judgments in civil and commercial matters in the EU and certain EFTA states2 and the UK’s participation depends upon its status as an EU Member State. The UK has taken some legislative steps to address this deficit while the European Commission has published a notice outlining how it sees matters unfolding within the EU.3
Can I enforce a judgment already obtained in proceedings?
Under the draft Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019, the UK has indicated that it will continue to enforce judgments given in other EU and relevant EFTA states where the proceedings were initiated before Brexit.
For its part, the EU has stated that where the relevant instrument foresees exequatur,4 if a judgment of a UK court has been exequatured in the EU-27 before the withdrawal date but not yet enforced before that date, the judgment can still be enforced in the EU-27. The fact that it was originally a judgment handed down by the UK courts will be irrelevant.
However, unless a judgment of a UK court has been exequatured before the withdrawal date, the EU rules on recognition and enforcement of judgments will not apply to a UK judgment, even where
- the judgment was handed down before the withdrawal date; or
- the enforcement proceedings were commenced before the withdrawal date.
In such a case, unless the Hague Choice of Court Convention 20055 applies, it will be up to individual EU Member States to apply their own national rules on the enforcement of judgments.
Is there any effect on proceedings initiated on or after the withdrawal date?
After the withdrawal date, in proceedings involving the UK, the Hague Choice of Court Convention 2005 may apply to deal with issues such as the jurisdiction of a court to hear the case and the subsequent recognition and enforcement of any judgment. If it does not, these issues will be governed by the national rules of the particular state(s) involved. In this context, it is should be noted that UK rules of private international law governing the court’s jurisdiction to hear proceedings differs from say, the Brussels regime and that national rules on recognition and enforcement of foreign judgments are typically narrower than under that regime.
What should I do if proceedings are likely but are not yet in being?
Given the issues outlined above, where proceedings which may involve the UK are contemplated but are not yet in being and in particular where it is envisaged that enforcement in the UK may ultimately be necessary, you will need to consider whether to act in advance of any no-deal Brexit. If necessary, appropriate plans should be put in place. Another option may be alternative dispute resolution.
These are some of the headline issues for EU litigants faced with the prospect of a no-deal Brexit. However, it should also be remembered that the practicalities of conducting litigation involving the UK may also be complicated if this event comes to pass. EU instruments facilitating cross-border cooperation in relation to the formalities of proving public documents, the service of proceedings and the taking of evidence are also scheduled to fall away.
- There are some exceptions in relation to jurisdiction in consumer and employee matters, and the rules on domicile of corporations and associations.
- Norway, Iceland and Switzerland.
- Notice to stakeholders withdrawal of the United Kingdom and EU rules in the field of civil justice and private international law, Brussels, 18 January 2019.
- Exequatur is the process whereby intermediate measures are required (such as a declaration of enforceability) before a foreign judgment will be enforced by another state. It does not apply to judgments governed by Brussels I recast.
- On 28 December 2018, the UK deposited the instrument of ratification to this convention. This convention provides a global framework of rules governing jurisdiction agreements in civil and commercial matters, and the later recognition and enforcement of a judgment of a court of a contracting state designated in a choice of court agreement.
This briefing is for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.