How will Bexit impact EU-wide litigation?
28 July 2016
The UK’s exit from the EU creates uncertainty for those involved in existing cross-border litigation or with EU-wide litigation pending. A definitive answer is unlikely to be given until the model of exit has been negotiated.
EU legislation which has been enshrined in UK law for almost thirty years is highly relevant to dispute resolution. The Recast Brussels Regulation, for example, governs jurisdiction and the mutual recognition and enforcement of EU Member State judgments will cease to have effect once the UK leaves the EU. Meanwhile the EU Service Regulation informs our domestic rules on service. Possible models for replacement of the Brussels regime include a Danish-style agreement for it to continue in force, the UK’s accession to a multilateral framework such as the Lugano Convention 2007 or Hague Convention on Choice of Court Agreements 2005, or a return to the Brussels Convention, or vagaries of English and Welsh common law. Each affects disputes to varying degrees.
For parties engaged in existing litigation or contemplating pending litigation, securing a judgment or settlement prior to the end of the negotiation period will be increasingly important. Parties may wish to take advantage of the current High Court pilot schemes for shorter and flexible trials, which are designed to expedite judgment. Alternatively parties may look at ADR as a means to bring forward the conclusion of existing disputes so that they can take advantage of the recognition and enforcement mechanism under the Brussels Regime whilst it still remains in place.
The impact on future litigation, as yet uncontemplated, is unclear. Businesses can try to protect themselves by agreeing law and jurisdiction upfront in new contracts. As mentioned in the section on Contracts and Trading Relationships, current and standard form contracts should also be kept under constant review in light of evolving policy statements as the UK negotiates its withdrawal from the EU to ensure that rights with respect to jurisdiction and enforcement are not prejudiced. This may involve the need for transitional provisions to deal with existing contractual obligations.