The UK Government aims for civil judicial cooperation with the EU after Brexit to continue on a similar basis as the current regime, according to a position paper released on Tuesday. In the paper, the Government outlines the principles it believes should apply to future litigation between UK and EU parties. Those relevant to business are:
- Business certainty: Businesses must have clarity on which courts will hear their disputes, which laws will apply, where judgments can be enforced, and how cross-border insolvencies will be managed.
- Consumer confidence: UK and EU consumers who make cross-border purchases must be confident that they can bring claims in their own country and obtain an enforceable judgment.
As regards which laws will apply, the paper states that the Government intends to incorporate into domestic law the existing Rome I and Rome II Regulations. For businesses, the main implication is that the UK will continue to recognise choice of law clauses in both contract and tort disputes. The EU is already committed to continuing to recognise a choice of UK law, since the Regulations do not require reciprocity.
The paper is less clear on which courts will hear disputes and how judgments will be enforced. Within the EU, these matters are currently governed by the Brussels Recast Regulation. The paper suggests that the UK will seek to replace this with an EU-UK agreement that “closely reflects” the same principles, but gives no detail. It is also vague as to the extent of any future role of the Court of Justice of the European Union. The paper does clarify that the UK intends to remain a member of the Lugano Convention, which sets out similar principles between the EU and non-EU members of EFTA (Norway, Iceland and Switzerland), but does not include some recent advantageous reforms. The UK’s continuing membership is likely to require the agreement of all EFTA countries, which is not guaranteed.
The paper does not make clear whether the Government will also seek to reproduce the current arrangements for cross-border insolvency, although this does seem to be the natural implication of the principles set out above.
Businesses will be reassured that the UK apparently intends no fundamental change to commercial dispute resolution arrangements after Brexit. However, the extent to which that intention can be realised remains to emerge from the ongoing negotiations.