The implications for judicial / legal co-operation of a crash-out / No-deal Brexit

28 Jan 2019

The Brexit clock is ticking. In two calendar months’ time, the Brexit clock reaches midnight.  The default position if an exit deal cannot be agreed is the so-called WTO position.

Whether we relish the prospect of a clean break or crashing out (your language may depend on your political perspective), Judicial cooperation between the UK and EU will end.

The regimes and structures which have been built up over 40 years’ of membership, will change.

Civil and commercial law

EU law will cease to have effect.

It follows that national law rules will apply to this area of the law in the UK. All mutual recognition and reciprocal elements of EU law will be no more. In the UK, EU mutual recognition will be repealed by the UK government.

In certain areas, where multi-lateral or bilateral International Instruments exist, these may continue. To establish whether a bilateral treaty exists in your area of interest, you will need to consult a lawyer area of national law concerned. She/ he or you may also need to contact a local lawyer in that country.

Often well drafted contracts will have a clause setting out where the case is to be tried and which legal system is to govern the interpretation of the contract. Where this is the case, it is anticipated that the UK will become party to the 2005 Hague Convention. In this way, choice of law clauses are likely to be upheld in the UK and EU/EU EFTA Member States.

In the event of no deal, UK and EU rules governing the enforceability of EU judgments in the UK and UK judgments in EU will cease.

So if you have a contract that is in dispute and judgment given, and enforcement is not complete by 29 March 2019, then UK contracts in the EU will not have an applicable underlying legal provision dealing with EU enforcement after that date. HMG UK has stated it will continue to enforce judgments given in other EU/EEA Member States where enforcement forms have been issued in the UK courts before the 29 March.

Brussels I Regulation will cease to apply between the UK and EEA/ EU27. So what we will be left with is the set of rules that have developed in the UK Common Law system over the last two centuries to deal with what we call ‘the conflict of laws’ or ‘Private International Law’.  In the same way the national law of each EU/EEA state will determine whether a foreign UK judgment can be recognised and enforced in that jurisdiction.

So what we will be left with is a conflicting (potentially at least) set of rules applicable to multi-jurisdictional disputes with each country developing and applying its own rules. If nothing else, lawyers are going to have a lot of fun.

Finally, of course, of our three chosen Instruments above, the Insolvency Regulation will cease to be applicable between the UK/ REU (Rest of the EU). It follows that an insolvency practitioner or officeholder appointed in the UK will cease to have automatic recognition in the REU.

Looking now at sector specific Instruments, EU regulations concerning looking at/ dealing with specific fields (eg the Motor Insurance Directive) will cease to apply. So EU rules protecting victims of car crashes will no longer apply in the UK.

For more information, please find Jonathan Compton's contact details below.

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