Disputes: the future for cross-border disputes post Brexit

On 22 August 2017, the Department for Exiting the European Union (DExEU) provided its latest policy framework for ‘cross-border civil judicial cooperation’ in civil and family matters. The policy paper focuses on what the UK hopes to achieve post Brexit.

Up until now, in terms of judicial co-operation, the UK and other EU Member States are closely integrated and there has been a high level of co-operation. But what will happen post-Brexit? Which laws will apply to cross-border disputes? Which Courts will deal with those disputes? Can the Courts rely on previous decisions of other Member States Courts? How will farm businesses have the confidence to trade with EU Member States, after we have left the EU? How will they avoid delays and excessive costs, where rights need to be protected in cross- border situations?

Types of disputes affected  

The Government’s approach to these issues affects businesses and proprietors in a number of ways including:

• Trade – produce will be sold to and bought in from the EU and contracts will govern those transactions. If a dispute arises over these imports or exports, it will need to be decided which country’s courts have jurisdiction to hear and determine the dispute and enforce any judgment or order. It is worth mentioning that many cross-border contracts already contain dispute resolution clauses requiring disputes to be determined in accordance with English law.
• Living outside the UK – many families have relatives and/or friends who live in other EU Member States. Likewise, there are farm workers from EU Member States, who will continue to reside in the UK post-Brexit. Issues could arise where parents are separated and one lives in an EU Member State in terms of recovering child maintenance or where husband and wife are living in different countries and want to get divorced.

The policy framework

The DExEU has confirmed that “Leaving the EU will bring an end to the direct jurisdiction of the CJEU (Court of Justice of the European Union) in the UK”. That said, DExEU is seeking “a close and comprehensive cross-border civil judicial cooperation on a reciprocal basis, which reflects closely the substantive principles of cooperation under the current EU framework”.

The UK  will incorporate the existing EU regulations, which standardise the rules by which the applicable law is determined in contractual and non-contractual disputes. These regulations are known as “Rome I” and “Rome  II”. In brief, Rome I sets out which rules the Courts should apply when determining contractual disputes and Rome II addresses non-contractual disputes.

The DExEU has also said that it intends for the UK to continue to be a “leading member” of the Hague Conference on Private International Law and will continue to participate in the Lugano Convention, which deals with civil recognition with Norway, Iceland and Switzerland.

The paper annexes DExEU’s proposals to the general approach to withdrawal from the EU, which covers the following:-

• Applicable law – existing EU rules governing the applicable law for contractual and non-contractual obligations should continue to apply to all contracts concluded before the withdrawal date.
• Jurisdiction – existing EU rules governing jurisdiction to determine disputes should continue to apply to all legal proceedings issued before the withdrawal date.
• Choice of Court – if a Court has been chosen to determine a dispute before the withdrawal date that Court shall continue to decide the matter.
• Recognition/enforcement – judicial decisions given before the withdrawal date and judicial decisions given after the withdrawal date, where proceedings were issued before that date and their recognition shall be governed by EU rules.

Conclusion

The Government’s approach so far, as demonstrated in this policy framework appears to be sensible. At present it is intended that the UK will have civil judicial co-operation with the EU. As the DExEU concludes its paper; the “framework will be on a reciprocal basis, which would mirror closely the current EU system and would provide a clear legal basis to support cross- border activities, after the UK’s withdrawal.”

Whilst on first glance the Government appears to be intent on limiting change, which does provide a degree of certainty for cross-border arrangements already in place, it remains to be seen how the land will lie after March 2019 and once the whole issue of the jurisdiction of the EU Court of Justice is determined.

For more information please contact Charlotte Razay in our Agriculture team on charlotte.razay@michelmores.com or +44 (0)117 906 9314.