UK: Jurisdiction And Applicable Law After Exit Day: If Not That Agreement, Then What?

There is just over 3 months to go until Exit Day, defined by the European Union (Withdrawal) Act 2018 as 11pm on 29 March 2019.

If no agreement can be reached between the UK and the European Union on judicial co-operation in civil and commercial matters before then, what rules will apply to jurisdiction, the recognition/enforcement of judgments and applicable law from that date?

Sections 2 to 4 of the European Union (Withdrawal) Act 2018 ("the Withdrawal Act") adopt a 'copy-paste' approach to existing EU rules and EU-derived domestic legislation, which will become "retained EU law". Section 8 of the Withdrawal Act enables secondary legislation to cure "deficiencies in retained EU law".

As Exit Day approaches, an increasing amount of secondary legislation has been passed or published in draft. The key provisions already on the statute book or recently released in draft are summarised below:

Applicable Law

Draft "Law Applicable to Contractual Obligations and Non-Contractual Obligation (Amendment etc.) (EU Exit) Regulations 2018" were published on 10 December 2018, with an Explanatory Memorandum.

Those Regulations 'tweak' the wording of the Rome I and Rome II Regulations (as copied over into domestic law) and seek to "preserve the substantive rules of the [Rome] Convention so that they will continue to apply to existing contracts entered into between 1 April 1991 ... and [the entry into force of Rome I]": Explanatory Memorandum, at [2.3].

The Brussels Scheme

The general rules relating to jurisdiction / the recognition and enforcement of judgments are largely contained within the Brussels Recast (for claims commenced on or after 10 January 2015) or Brussels I (for claims issued prior to that date).

The Government explained in its Technical Notice "Handling civil legal cases that involve EU countries if there's no Brexit deal" dated 13 September 2018 its intention in a 'no-deal' scenario that the Brussels Recast would be "repealed for all parts of the UK" and that it would "repeal most of the existing civil judicial cooperation rules and instead use the domestic rules which each UK legal system currently applies in relation to non-EU countries".

That plan is given effect by the draft Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019 published on 12 December 2018, along with an Explanatory Memorandum. Broadly, those Regulations revoke the Brussels Recast and Brussels I Regulations and extinguish the rights etc. derived from the earlier Brussels Convention. In their place, "jurisdiction and the recognition and enforcement of judgments will be determined by a combination of the existing common law and statute which currently applies to cases to which the Brussels regime does not apply": Explanatory Memorandum, at [7.2].

There are exceptions, however, for some of the specific consumer and employment rules contained within the Brussels Recast: see, in particular, the draft sections 15B and 15C of the Civil Jurisdiction and Judgments Act 1982, which would be inserted by Regulation 26 of the draft Jurisdiction Regulations. Transitional provisions would also apply: (i) with regard to jurisdiction, for proceedings commenced in the UK but not concluded before Exit Day; and (ii) regarding the recognition and enforcement of judgments given by Courts seised prior to Exit Day, provided that the English Court has not considered or concluded its consideration of the issue before that date: Regulation 92.

The Hague Convention

The UK is currently a party to the Hague Convention on Choice of Court Agreements dated 30 June 2005 ("the Hague Convention") through the ratification of that Convention by the EU on behalf of its Member States: the parties to the Convention can be found here.

The Civil Jurisdiction and Judgments (Hague Convention on Choice of Court Agreements 2005) (EU Exit) Regulations 2018 (SI 2018/1124) seek to an extent to maintain the continued application of the Hague Convention before the UK re-joins in its own right, which is the Government's stated aim: Technical Notice "Handling civil legal cases that involve EU countries if there's no Brexit deal" dated 13 September 2018.

Those Regulations will come into force on 29 March 2019: Article 1.

European Enforcement Order Regulation

The European Enforcement Order Regulation 805/2004 ("the EEO Regulation") deals with the recognition and enforcement of judgments, court settlements and authentic instruments given on "uncontested claims": Article 3(1).

Subject to some transitional provisions, the European Enforcement Order, European Order for Payment and European Small Claims Procedure (Amendment etc.) (EU Exit) Regulations 2018 (SI 2018/1311) revoke the EEO Regulation.

The EEO Regulation will, however, continue to apply if (i) the relevant Judgment, Court Settlement or Authentic Instrument has been given; approved or concluded; or drawn up or registered before Exit Day; and (ii) the application for the EEO Certificate is made before that date: Article 16(1).

Those Regulations will come into force on 29 March 2019: Article 1.

Only the political process, however, will tell us whether the rules set out above are those which we will in fact be applying after 11pm on 29 March next year.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.