This post, written by Ben Rayment of Monckton Chambers, assesses the ongoing uncertainties for the future of civil judicial cooperation with the EU after the end of the transition period, including whether the UK will be able to accede to the Lugano Convention and some of the preparations in this area for the end of the transition period.
The future of Civil Judicial Cooperation between the EU-27 and the UK after Brexit is an important issue with real practical consequences for the ability of consumers and businesses to establish and enforce their rights in disputes with a foreign element. Once the UK ceases to be subject to common EU rules in the sphere of Civil Judicial Cooperation such as the Re-Cast Brussels Regulation, it will lose the benefits of those rules, which provide certainty on which country’s courts may hear a civil or commercial cross-border disputes and ensure that the resulting judgment can be recognised and enforced across borders. The rules also help to prevent multiple court cases taking place on the same subject matter in different countries and reduce the costs and expenses for the parties involved. The rules in the area of Civil Judicial Cooperation are significant for UK businesses, the legal services sector, individuals and families (in relation to family maintenance arrangements).
After the transition period the UK Government’s intention is to accede to the Lugano Convention 2007, although it has given some consideration to a bespoke bi-lateral agreement: see the White Paper to Parliament on 12 July 2018 setting out its proposals to develop and agree the framework for the future relationship with the EU. The proposals in the White Paper on civil judicial cooperation built on the Framework for the UK-EU Partnership: Civil Judicial Co-operation published by the UK government in June 2018. Moreover, the recent UK Government paper on its approach to the negotiations state:
“64. The UK proposes continuing to work together with the EU in the area of civil judicial cooperation through multilateral precedents set by the Hague Conference on Private International Law and through the UK’s accession as an independent contracting party to the Lugano Convention 2007.”
The Lugano Convention provides a regime that is largely equivalent to the EU rules as between the EU, Denmark, Iceland, Norway and Switzerland. Attention has been re-focussed on the potential accession by the UK to Lugano because of the recent statements of support from Norway, Iceland and Switzerland for the UK’s intent to accede to the Lugano Convention.
Common rules generally pre-suppose that a common interpretation and a mechanism for resolving disputes is desirable. The EU Court of Justice performs this role for the EU-27 in relation to the EU rules in this sphere, including in relation to the interpretation of the Lugano Convention. Any continuing role for the EU Court of Justice so far as the UK is concerned post-Brexit remains a politically difficult issue.
The position under Protocol No 2 to the Lugano Convention provides greater flexibility to those state signatories outside the EU as it only requires the courts of non-EU Member States (of which the UK would be one) to “pay due account” to the case-law of the EU Court of Justice on the Brussels Regulation. Hence, Protocol No 2 appears to provide an acceptable way for UK courts to respect the case-law of the CJEU – without being bound by it – in the post-Brexit scenario.
The statements of support by other Lugano signatories for the UK’s accession to Lugano created the hope that this relatively “oven ready” solution could be implemented if the EU (and Denmark) also agreed to the UK’s accession. While the looser interpretive obligation in Protocol No 2 that would apply and the lack of EU Court of Justice jurisdiction will be less conducive in the EU’s eyes to ensuring a uniform approach than is currently the case, the fact remains that that is the position already for the existing non-EU signatories to the Lugano Convention. Moreover, despite any perceived disadvantages of this sort the Lugano Convention would still deliver a greater degree of harmonisation between the EU-27 and a large neighbour such as the UK than if the UK reverted to applying the common law rules on jurisdiction at the end of the transition period.
The factors outlined above looked auspicious for the UK’s desired accession as an independent signatory to the Lugano Convention. The Financial Times, however, recently reported that sources within the EU perceive allowing the UK to accede to the Lugano Convention as not in its interests and would disproportionately benefit the UK legal services industry: see “Britain risks losing access to EU legal accord” (27 April 2020). This has cast fresh doubt on the UK’s strategy of joining the Lugano Convention and as to the arrangements that will apply between the UK and EU after the end of the Transition Period.
It should be noted, however, that some experts take the view that not being in the Lugano system would offer the UK some advantages as well as disadvantages given the flexibility of the common law rules on jurisdiction. Reducing the issue to trying to identify an eventual ‘winner. in terms of which jurisdictions are less adversely affected overall in terms of their legal industries would however be disappointing to say the least. It is clear that if the UK is outside the Lugano system citizens in the EU and the UK are likely to be worse off in terms of the greater uncertainty, delay and expense they will likely face in seeking to enforce their legal rights across borders between these important jurisdictions — an issue which has been raised by many including the Bar Council.
Against this background UK preparations for the end of the transition period in the sphere of civil judicial cooperation are ongoing. Part of this preparation is the
Private International Law (Implementation of Agreements) Bill currently before Parliament. The Bill provides in clause 1 for the implementation in the UK (in its own right rather than as a member of the EU) at the end of the transition period of:
- the 1996 Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in respect of Parental Responsibility and Measures for the Protection of Children (“the 1996 Hague Convention”). The 1996 Hague Convention is important because it provides legal certainty that decisions relating to children (e.g. contact/ access arrangements) made in one country will be respected in others, so that people do not have to incur the expense and trouble of bringing fresh proceedings when they move to another country;
- the 2005 Hague Convention on Choice of Court Agreements (“the 2005 Hague Convention”). This aims at ensuring the effectiveness of exclusive choice of court agreements between parties to international commercial transactions (although it is more limited than the Lugano Convention); and
- the 2007 Hague Convention on the International Recovery of Child Support and other Forms of Family Maintenance (“the 2007 Hague Convention”), which makes it easier to put in place cross border arrangements for maintenance which helps to mitigate the financial impact of separation on children.
Clause 2 would give the UK government the power to implement any other international agreements relating to private international law through statutory instruments (SIs). Private international law is defined to cover issues such as jurisdiction and applicable law, recognition and enforcement of judgments, and co-operation on procedural matters such as service of documents or taking of evidence. For example, if the UK was able to accede to the Lugano Convention in its own right, the clause 2 power could (if enacted) be used to implement the Lugano Convention in the UK. The extent of the power delegated by clause 2 is currently a matter of controversy. Clause 2 would also enable the UK to implement other private international law conventions such as:
- the 2019 Singapore Convention (a new convention on the enforcement of mediated settlement agreements); and
- the 2019 Hague Convention on the recognition and enforcement of civil and commercial judgments (known as ‘the Hague Judgments Convention 2019’).
The provisions of the Bill when enacted will sit alongside other important legislation in this area including The Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019 (available here). These Regulations are made in exercise of the powers in section 8 of the European Union (Withdrawal) Act 2018 in order to address failures of retained EU law to operate effectively and other deficiencies in retained EU law (in particular to address reciprocal arrangements which no longer exist and are no longer appropriate) arising from the withdrawal of the UK from the EU. Moreover, they preserve the application of EU law in relation to cases on foot at the date of the end of the transition period.
Further developments in this area will be keenly watched.
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