No-deal Brexit guidance: Civil and commercial cooperation
The Law Society has published guidance for solicitors that highlights the changes in civil and commercial cooperation that will occur should the UK leave the EU on 29 March 2019 without having reached an agreement with the EU.
In this scenario, the EU and UK will have failed to sign a withdrawal agreement (governing the terms of the UK’s departure from the EU) and an agreement governing the future relationship between the two parties.
The UK will immediately leave the EU’s institutional structures without a transition period. In many areas, cooperation between the UK and EU will cease, and the applicable legal regime in many practice areas will change.
In this article we consider the loss of several civil judicial co-operation mechanisms such as Brussels I Regulation, the Lugano Convention, Insolvency Regulation and other civil co-operation mechanisms including the Motor Insurance Directive.
Key points to consider in relation to civil justice:
- National law rules will apply to this area of the law in the UK and in EU/EEA member states (unless otherwise stated in the guidance), as all reciprocal elements of EU law will cease to have effect. In the UK, they will be repealed by the UK government.
- In some cases, bilateral treaties and conventions pre-dating EU membership may exist between the UK and EU member states. To find out whether this is the case, you will need to consult the national law of the state concerned. You may also need to contact a local lawyer in that country.
- Where the parties have an exclusive choice of court agreement, the UK will accede to the 2005 Hague Convention. This will be applied between the UK and EU/EEA states, and other states party to that convention.
- In relation to Service of Documents and Taking of Evidence, the Hague Conventions will continue to apply.
- In the event of a no-deal Brexit, EU rules governing the enforceability of UK judgments in EU will cease to have effect after the withdrawal date. This will apply to all UK judgments that have not been enforced before that date. However, the UK has indicated that it will continue to enforce judgments given in other EU/EEA states where the proceedings were initiated before that date.
- The Brussels I Regulation will no longer apply between the UK and EU27. It is likely that England and Wales will fall back on pre-existing common law rules for the recognition and enforcement of foreign judgments.
- The government has signalled its intention to adopt the 2005 Hague Convention on choice-of-court agreements in the event of a no-deal Brexit. This convention provides only for the recognition and enforcement of judgments where the parties have concluded an exclusive choice-of-court agreement.
- The national law of each EU/EEA state will determine whether a foreign UK judgment can be recognised and enforced in that jurisdiction.
- The Insolvency Regulation will no longer be applicable between the UK and EU27 member states. An insolvency officeholder appointed in the UK will have difficulty obtaining recognition in the EU.
- Other EU regulations concerning the creation of special instruments in specific fields (eg the Motor Insurance Directive) will no longer apply. EU rules protecting the weaker party, for example victims of motor accidents, will no longer apply in the UK.
- The Service Regulation and the Evidence Regulation will no longer apply, although in most cases it will be possible to rely on the Hague Service Convention and the Hague Evidence Convention.