The International Perspective

Professor Trevor Hartley (London School of Economics 2020)

Brexit and Private International Law’

Scope

This presentation covers the effects of Brexit on private international law in the United Kingdom.

It covers only commercial law, not family law or succession.

The effect of Brexit

The most important effect is that EU legislation on private international law will no longer apply in the UK as EU law.

But it can continue to apply as UK law: European Union (Withdrawal) Act 2018 (“Withdrawal Act”), s. 3.

Then it can be amended by UK legislation: ibid, section 8

Reciprocal and non-reciprocal EU legislation

It makes a difference whether the EU legislation is based on reciprocity or not.

If it is not based on reciprocity, adoption as UK law works well.

But if the legislation applies under EU law in a different way to Member States and non-member States, adoption makes little sense.

Adopting the measure as UK law will not change the way it applies in the EU after Brexit: the UK will still count as a non-member State.

Part I: Choice of Law

Rome I and Rome II

Choice of law for contractual and non-contractual obligations is governed by two EU regulations, Rome I and Rome II.

These measures are not based on reciprocity.

They apply in the same way whether the law they designate is the law of a Member State or a non-member State.

They also apply in the same way whether the parties are domiciled in a Member State or a non-member State

Choice of law: Rome I and Rome II

If proceedings are brought in an EU Member State, UK law and UK parties will be treated the same as before Brexit.

If proceedings are brought in a UK court, Rome I and Rome II will apply in the same way as before,  but as UK law.

For minor amendments, see The Law Applicable to Contractual Obligations and Non-Contractual Obligations (Amendment etc.) (EU Exit) Regulations 2019 No. 834.

The only difference is that UK courts will no longer make references to the CJEU: Withdrawal Act, s. 6(1)(b).

CJEU case-law

CJEU cases decided on or after exit day will not be binding on UK courts: Withdrawal Act, s. 6(1)(a).

But UK courts may “have regard” to them: Withdrawal Act, s. 6(2).

CJEU cases decided before exit day are, generally speaking, binding on UK courts: Withdrawal Act, s. 6(3).

But the UK Supreme Court is not bound by them: ibid, s. 6(4)(a).

In Scotland, the High Court of Justiciary is not bound by them when sitting as a court of appeal: ibid, s. 6(4)(b).

In deciding whether to depart from any retained EU case law, the Supreme Court or the High Court of Justiciary must apply the same test as it would apply in deciding whether to depart from its own case law.

Part II: Litigation

The Brussels I Regulation: Main Features

The main features of the Regulation are:

Courts can take jurisdiction over defendants domiciled in a Member State only on the grounds specified in the Regulation,

Courts must respect the exclusive jurisdiction of courts in other Member States—for example regarding rights in rem in land,

Courts must give effect to choice-of-court agreements if the designated court is in a Member State,

Judgments from other Member States must be recognized and enforced (irrespective of whether or not the jurisdiction of the court of origin was based on the Regulation).

Non-member States

These benefits do not apply to non-member States:

After Brexit, jurisdiction of courts in the EU over defendants domiciled in the UK will be governed by Member-State law—for example, Art. 14 of the French Civil Code.

Courts in the EU will not be required to respect the exclusive jurisdiction of courts in the UK.

Courts in the EU will not be required to give effect to choice-of-court agreements designating courts in the UK.

Judgments of UK courts will not be entitled to recognition in the EU under the Regulation.

Making Brussels I part of UK law

Making the Brussels I Regulation part of UK law will not change this.

What can we do?

Join the Lugano Convention.

Ask the EU to let us remain under Brussels I.

Ask the EU and/or the Lugano States to agree a special deal with us.

Problem:

All these (except a special deal with the Lugano States) will depend on the good will of the EU.

Will the EU agree?

Will the CJEU have to be given a role?

If the EU does not agree

What can we do if the EU will not co-operate?

Hague Convention of 2019 on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters

A possible future Hague Convention on jurisdiction

The Hague Convention of 2005 on Choice of Court Agreements

The 2019 Hague Judgments Convention

This only covers recognition and enforcement of judgments, not the other features of Brussels—for example, jurisdiction.

Its subject-matter scope is narrower than Brussels—for example, carriage of goods, defamation and intellectual property are not covered.

It is not yet in force.

It will only help us if the EU becomes a Party.

There are more grounds for non-recognition than in Brussels.

Conclusion: we ought to become a Party but it will not solve all our problems

A possible future Hague convention on jurisdiction

Discussions are only at a very preliminary stage.

We ought to play an active role.

But it will be a long time before anything comes of it.

It will only help us if the EU becomes a Party.

The 2005 Hague Convention on Choice of Court Agreements

This is already in force. The EU is a Party.

The Member States are not Parties but are bound by it by reason of being Member States.

It already applies to the UK be reason of our being an EU Member State (until the transition period ends on 31 December 2020).

We can join as of right once the transition period ends.

The UK intends to become a Party in its own right as soon as it ceases to apply by reason of being a Member State.

Drawbacks

It only applies to choice-of-court agreements.

It only applies to exclusive agreements, not to non-exclusive ones.

It does not apply to asymmetric agreements.

It subject-matter scope is more limited than Brussels—for example, it does not apply to the carriage of passengers or goods.

The requirement that non-designated courts must decline jurisdiction is subject to rather open-ended exceptions—for example, that giving effect to the agreement would lead to a manifest injustice or would be manifestly contrary to the public policy of the State of the court seised.

The requirement  that the resulting judgment must be recognized is subject to exceptions that appear to be wider than those under Brussels.

Transitional problems

The Convention became applicable to the UK when it became applicable to the EU, on 1 October 2015, and will continue to become binding on the UK as a Member State until 31 December 2020 under the Withdrawal Agreement with the EU

If all goes according to plan, it will become binding on the UK as a Party in its own right immediately after this, on 1 January 2021.

What is the position of a choice-of-court agreement concluded when the Convention was binding on the UK as a Member State if litigation takes place after the end of 2020?

Hague Convention, Art. 16

(1)This Convention shall apply to exclusive choice of court agreements concluded after its entry into force for the State of the chosen court.

(2) This Convention shall not apply to proceedings instituted before its      entry into force for the State of the court seised.

Does this mean that the choice-of-court agreement is valid under the Convention?

First problem

Presumably the Convention must continue to apply to the State of the chosen court.

Does it matter if it applies on a different basis, first as an EU Member State and then as a Party in its own right?

Second problem

Does it matter if there is a brief interval between the two periods, when it does not apply on any basis to the UK?

Is this likely to happen?

Third problem:

Hague, Art. 26(6)(a)

(6) This Convention shall not affect the application of the rules of a Regional Economic Integration Organisation that is a Party to this Convention, whether adopted before or after this Convention–

a) where none of the parties is resident in a Contracting State that is not a Member State of the Regional Economic Integration Organisation …

“Regional Economic Integration Organisation” = EU

At present, the only Parties to the Convention that are not EU Member States are Mexico, Montenegro and Singapore; so most agreements will be covered by Art. 26(6)(a)

Does this mean that  the Convention is not “in force” with regard to that agreement when it is concluded?

It is hard to see why this should be so – But the UK  Ministry of Justice seems to think it is:

See the Explanatory Memorandum to The Civil Jurisdiction and Judgments (Hague Convention on Choice of Court Agreements 2005) (EU Exit) Regulations 2018, para. 2.17

If this is correct, agreements designating a UK court concluded before the end of 2020 will almost never be valid under the Convention after that date

Such agreements would be valid in the UK under the common law, but would they be valid in EU Member States?

This could be important if proceedings are brought in a Member State despite an exclusive UK choice-of-court agreement

It could also be important if proceedings are brought in an EU Member State to enforce the judgment of the UK court

Does the EU-UK Withdrawal Agreement help?

The Commission Position Paper on Judicial Co-operation in Civil and Commercial Matters of 12 July 2017 (published on 13 July 2017) said, in paragraph I(3), that choices of forum made prior to the withdrawal date should continue to be assessed against the provisions of Union law applicable before the withdrawal date.

But there is no such provision in the Withdrawal Agreement

EU-UK Withdrawal Agreement, Art. 67(1)

the provisions regarding jurisdiction of Regulation (EU) No 1215/2012 (Brussels I) will apply in respect of legal proceedings instituted before the end of the transition period

There appears to be nothing applying the Brussels Regulation to choice-of-court agreements concluded before the end of the transition period if they are in issue in proceedings instituted after the end of that period

The result …

Choice-of-court agreements concluded before the end of the transition period which are in issue in proceedings commenced after the end of that period will not be protected unless they are covered by Hague.

Examples of agreements not protected by Hague:

1.Asymmetric choice-of-court agreements (important in banking)

2.Choice-of-court agreements in bills of lading (carriage of goods by sea)

Conclusions

In view of these uncertainties, parties to agreements concluded while the UK was a Party to the Convention as an EU Member State should re-execute the agreement once the UK becomes a Party in its own right.

Theme by the University of Stirling

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