The European Parliament has supported proposals which are likely to save businesses and consumers up to 48 million Euros per year. The changes are expected to improve the resolution of cross-border disputes and minimise the obstacles of time and costs currently associated with enforcing a judgment in different EU countries.  

Under current law, a judgment given in one EU country does not automatically take effect in another. The present position requires parties to go through a costly and lengthy procedure when attempting to ensure that a judgment in civil and commercial matters is recognised in another EU country from that in which it was made. This procedure is necessary despite the fact that recognition of the judgment would only be refused in highly exceptional cases. Given the ever-increasing need for businesses to carry out dealings out with the UK, such a procedure is clearly burdensome. 

The proposals, which have been backed by the European Parliament this week, would abolish this cumbersome procedure. The result will be that judgments are automatically recognised as valid throughout the EU.

The introduction of this new system is a welcome one for businesses. It will save a significant amount of unnecessary cost, time and inconvenience. Furthermore, businesses will benefit from the existence of a transparent and consistent set of rules on jurisdiction of the courts in Europe, allowing cross-border disputes to be resolved in a more certain and expedient manner.