Brexit and applicable laws and jurisdiction and enforcement in civil and commercial matters
The implications of any "no deal" Brexit for the governing laws of contracts and for the jurisdiction of courts and the enforcement of judgements in civil and commercial matters is of great concern to lawyers and increasingly to the business and financial world at large.
Some light, however, is beginning to appear through the cracks!
On 10th December 2018, the UK Government published an admirably brief three clause draft Statutory Instrument, in exercise of its powers under the European Union (Withdrawal) Act 2018, with the rather less than brief title, however, of "The Law Applicable to Contractual Obligations ( amendment) (EU Exit) Regulations 2018".
This draft Statutory Instrument makes the amendments deemed necessary to preserve in UK law, post a "no deal" Brexit, two prime pieces of EU legislation - the Rome I Convention on the law applicable to contractual obligations and the Rome II Regulation on the law applicable to non-contractual obligations. It would come into force on "exit day" - which , as everybody knows, is currently 29th March 2019 at 11pm (the witching hour, Brexit-style!).
On 22 January 2019, the rather unglamorously-named "sifting committee" of the House of Commons recommended that this draft Statutory Instrument be debated in Parliament.
"Applicable laws" is the easy bit! Much more difficult is how to deal with issues of court jurisdiction and enforcement of civil and commercial judgments in a post-Brexit "no deal" world. Currently, the so- called Recast Brussels Convention 2012 deals pretty comprehensively with this subject for most EU member states, running alongside the Lugano Convention 2007 for most EFTA states. The UK has been very much part of those arrangements, bringing much certainty to difficult questions of private international law on jurisdiction and enforcement issues.
Should the UK leave the EU with no alternative arrangements in place, questions of jurisdiction and enforcement would revert to the existing common law and statutory rules affecting the UK in its dealings with the rest of the world. This is a patchy and imprecise system and not conducive to international business relations and more likely to make private arbitration a more effective means of adjudication and enforcement than Court - based jurisdictions and judgments.
As a precaution, on 28th December 2018 the UK deposited its instrument of accession to the Hague Convention on Choice of Courts Agreements 2005, which is less comprehensive than the Brussels/ Lugano regime but applies where there is an exclusive jurisdiction clause in favour of one of the contracting states ( being currently the states of the EU, Mexico, Singapore and Montenegro). The Hague Convention would come into force for the UK on 1st April 2019 unless the UK withdraws its instrument of accession beforehand in the event of a suitable withdrawal agreement being reached between the UK and the EU.
Certainty on the issues highlighted in this post lies at the bedrock of international commercial life and is part of a larger picture of uncertainty which is likely to follow a "no deal" Brexit, if it happens.
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