Brexit and EU private international law: cross-border judgments – unintended consequences

This blog post is by Dr. Jonathan Fitchen.

The UK’s vote for Brexit has thrown up a huge range of complex legal problems concerning the disengagement of the UK from the European Union. One such problem concerns the effect of Brexit on existing private international law, also known as ‘conflict of laws’,  in the UK. These are issues of particular interest and concern to the School of Law, especially those in the University of Aberdeen’s Centre for Private International Law. This interest is not simply an academic one, as our colleagues have at various times directly advised on and participated in the development of the law in this area.

Private international law (PIL) deals with questions that arise when a civil case between private parties also involves a foreign element. PIL provides the answers to basic legal questions arising from the foreign element including:

Can I bring my case before my local court (or not)?

If I can do so, what law should be applied to the dispute by that court?

If I win, can I get my judgment enforced abroad?

Does any earlier or competing foreign litigation affect or stop my case?

The EU has put in place many PIL Regulations to replace the different complex national answers to these basic questions with harmonised answers (in different Regulations) applying across all (or very nearly all) EU Member States. These PIL Regulations simplify the otherwise very complex interactions of different systems of PIL (each with different approaches to, and answers for, the questions noted above) and also simplify many of the complex legal issues arising in PIL that affect the lives of ordinary private individuals and businesses in Scotland, England and Wales and Northern Ireland.

Given our present dependency in the UK on EU PIL Regulations, the effect of a ‘clean-break’ Brexit on PIL in England and Wales, in Scotland and in Northern Ireland will be profound: the EU PIL Regulations that provide many aspects of what we in the UK presently understood to be ‘our’ private international law will cease to apply unless positive legislative action is taken by the Scottish Government (PIL is a devolved matter) and by the Westminster Government to off-set this eventuality post Brexit. This might sound technical (it is) and abstract (it isn’t) but the basic point as it concerns the cross-border enforcement of ‘UK’ judgments in the rest of the EU can be simply illustrated with a before and after example.

Example

FACTS – An English company sells goods to a German company. The contract calls for the German company to collect the goods from the factory in England with payment due within one week of collection: though this arrangement has worked well in the past, this time the English company is not paid by the due date. The English company goes to the English court and wins a judgment that obliges the German company to pay it the money due and also its costs. The problem is that the goods and the German company are both in Germany.

NOW – The English Company can quickly and cheaply automatically enforce the English judgment against the German company using the EU’s Brussels Ia Regulation (Regulation 1215/2012): there is no need to go to court in Germany to ask permission to enforce because the EU Regulation means that the incoming UK judgment has to be treated as if it is an enforceable German one. The EU’s Brussels Ia Regulation has streamlined the enforcement process by presuming that the foreign (English) judgment is valid (etc.) and by reducing to an absolute minimum any possibility of the German company challenging the enforcement of the UK judgment in Germany.

AFTER BREXIT – The EU’s Brussels Ia Regulation will no longer technically apply to the English claim, nor to the overseas enforcement of the English Judgment as far as the other 27 EU Member States are concerned. If nothing has been done by the Scottish and Westminster Governments to avoid this prior to Brexit, it will be necessary for the English company to hire German lawyers to ask the German court to decide that the English judgment is capable of being recognised as a foreign judgment by the non-Brussels Ia PIL rules of the German legal system and then, assuming that the English judgment is so recognised, that it is then capable of actual enforcement in Germany. No part of this procedure will be automatic and neither will there be any presumptions that the English judgment is valid. It may well be possible that the enforcement of the English judgment will be obstructed by the un-harmonised German PIL enforcement law. Though post Brexit the precise outcome and legal costs of this example will vary from one EU State to another it is plain that enforcing such a judgment from the UK without the possibility of having recourse to the benefits offered by the EU’s PIL Regulations will take longer and cost more than it does at present.

So what is to be done?  

There is no simple solution to the basic problem that many important areas of ‘our’ PIL in the UK are currently contained in EU Regulations that will, unless action is taken by the Scottish and Westminster Governments, seemingly cease to apply immediately the UK leaves the EU. The seriousness of the issue extends much further than the business dispute in the example above as different EU PIL Regulations presently govern matters as diverse as:

  • cross-border family law (including parental responsibility for children and the payment of maintenance);
  • cross-border civil claims and commercial claims;
  • cross-border insolvencies;
  • what law will be applicable to cross-border disputes over contracts or over tort / delict claims.

If these numerous EU Regulations are allowed to cease to apply at the end of the day before Brexit, we will find ourselves thrown back on domestic civil procedure rules that assume that the EU PIL Regulations still apply when in fact they do not do so: if the legislators do not act to prevent it, the delays, costs and legal problems associated with this uncomfortable reality will become plain whenever a UK judgment concerning a matter formerly governed by an EU PIL Regulation is presented for enforcement elsewhere in the EU.

Some glimmers of hope?

It may be that the legislators in the UK will consult on this matter and then act to minimise the PIL risks of Brexit for their citizens. The Brexit negotiations could – if the matter is placed high enough up on the agendas of each side and is pursued with sufficient determination by the UK – lead to the UK being able to retain the benefits of some of the existing EU PIL Regulations on some sort of a reciprocal basis by also allowing those in the 27 State version of the EU the possibility of using their EU PIL ‘rights’ within the post-Brexit UK.

The UK will replace some EU PIL with PIL derived from Hague PIL Conventions that the UK is already a party to and these Conventions will apply between the UK and the EU (apart from Denmark, in some cases). These Conventions cover child abduction, inter-country adoption, parental responsibility, access, maintenance for children and spouses and exclusive choice of court agreements in commercial cases. There is also the longer term possibility that the ongoing work on the planned global Hague Judgments Convention will succeed (it has already had its first Special Commission in June 2016) and deal with the problem of getting UK judgments recognised in EU States and indeed elsewhere in the world.

What next?

The Scottish Government, the Westminster Government and the representatives in Northern Ireland need to appreciate the nature of the looming private international law problems and to formulate effective strategies to protect their citizens and businesses from the impending uncertainty. The University of Aberdeen’s Centre for Private International Law is looking forward to contributing to that task.

Addendum

The Centre for Private International Law has just published a working paper entitled “Respecting Reverse Subsidiarity is an excellent strategy for the European Union at The Hague Conference on Private International Law: currently being well deployed in the Judgments Project“, by Professor Paul Beaumont. It also considers some implications of Brexit. The final version of that paper will be published in a Polish review: Europejski Przegląd Sądowy, 2016, issue 10 (which translates as “European Judicial Review”).

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