Brexit: what about uniform rules for judicial cooperation in civil cases and the free flow of judgments? | In Principle

The English courts are among the most commonly selected in the world for resolving disputes. Most cases there are decided under English law, but membership in the EU is one reason for the popularity of English courts. After Brexit, does London have a chance to retain its position as a world leader in dispute resolution?

The popularity of the English courts can be attributed to qualities traditionally associated with the English legal culture: a professional, independent judiciary and bar, clear and transparent judicial procedures ensuring a high degree of predictability and efficiency of proceedings, and a stable and rational set of laws. But the advantages arising out of the United Kingdom’s membership in the European Union should not be overlooked, or the rules for judicial cooperation established by the EU: the free flow of English judgments in all EU countries and uniform rules for judicial cooperation in civil matters (national jurisdiction, applicable law, service of documents, and legal assistance in taking evidence abroad). With Brexit, will the UK forfeit these benefits, and will London cease to be a world capital of dispute resolution?

At the end of March, British Prime Minister Theresa May launched the procedure for the UK to leave the EU. In her letter to European Council President Donald Tusk, she called for negotiations over the terms of the UK’s exit to be conducted alongside negotiations for continued cooperation. May also expressed the hope that the rules for the new cooperation would be based on a “deep and special partnership.” This is a signal that London wants to negotiate solutions maintaining harmonious cooperation—not differing greatly from the current cooperation—across many fields, including judicial cooperation. But in February the British government presented an outline of legislative changes to prepare the UK for functioning outside the EU (a White Paper including a proposal for a “Great Repeal Bill”). The proposed solutions offer an unequivocal declaration by the government in London that the British legal system should remain entirely independent of the EU system. The Great Repeal Bill would “uncouple” the British legal system from the EU system. EU law and the case law of the Court of Justice adopted prior to Brexit would be carried over into the national legal system. However, EU law adopted after Brexit would no longer apply in the UK. Similarly, the Court of Justice would lose any jurisdiction over the UK, meaning that rulings issued after Brexit would no longer be binding in the UK.

Such radical changes could have huge consequences for the model of future cooperation in court cases between the UK and the remaining 27 EU member states. Over the longer term, the British legal services market could suffer. Thus this path has met with criticism from British legal scholars and practitioners. This suggests that the direction proposed by the government may still be adjusted. And it should also be borne in mind that the final shape of the solutions adopted in this area will also be influenced by the EU. Currently the EU’s leaders, primarily for political reasons, are backing the notion of a “hard break” that would strip the UK of any of its current benefits of EU membership. It should nonetheless be expected that during the course of negotiating specific legal solutions, reason will prevail and solutions will be adopted that are beneficial for all citizens on either side of the English Channel. Neither side can ignore the fact that over the past few decades, mutual relations have grown incredibly strong—not only in commercial exchange, but also among individuals and families. Several million citizens of other EU countries have settled in the UK, and many thousands of the British have decided to live on the Continent. The multiplicity of these relations will inevitably generate disputes, which will have to be resolved one way or another in the courts. Many of these disputes will contain a cross-border element and require cooperation between the courts. Until rules are developed, an unfortunate state of uncertainty will prevail among businesses and ordinary citizens who have so far been the beneficiaries of uniform rules for judicial cooperation. Undoubtedly, it is in the interest of both the UK and the EU to quickly establish new rules in this area.

Existing rules for judicial cooperation

Under current rules, judicial cooperation in the EU is based on mutual trust. EU law clearly and unambiguously defines the jurisdiction of the member states’ courts to resolve disputes. Agreements on choice of law and choice of forum must be respected. Judgments issued in other member states must be recognised and enforced automatically, without additional requirements (regulations 1215/2012, 2201/2003 and 4/2009). Rules for legal assistance are defined in detail, e.g. for examining witnesses (Regulation 1206/2001) and service of documents (Regulation 1393/2007). Moreover, cooperation has steadily grown over the years to cover new areas. Uniform rules for attachment of bank accounts (preservation orders) entered into force in January 2017 (Regulation 655/2014). The European Commission has announced further ambitious plans for more effective conduct of cross-border disputes (such as proposed regulations on the transparency of debtors’ assets).

Thanks to these legal instruments, judicial cooperation between EU member states has worked smoothly. An adequate level of legal security has been maintained, whether for large businesses or for citizens who are often the weaker party in litigation (consumers, employees, accident victims). Cooperation under EU instruments has been notably more effective that under international agreement like the Hague Conventions.

Quo vadis, United Kingdom?

The path laid down by the UK for post-Brexit changes may deprive it of the advantages of the uniform framework for judicial cooperation. This would follow in particular from the total rejection of the jurisdiction of the Court of Justice of the European Union, called for by British politicians. Uniform application of EU regulations would be impossible if the Court of Justice were not vested with the right to issue binding interpretations of EU law. The UK would have to begin pursuing judicial cooperation based on international instruments that are much less developed and do not provide effectiveness comparable to that offered by the EU instruments. This could pose a threat to the English court system and legal services market.

English lawyers and the bar have spoken out about these threats. They have been addressed in reports issued by the House of Lords European Union Committee (Brexit: justice for families, individuals and businesses?) and the House of Commons Justice Committee (Implications of Brexit for the justice system).

Both of these reports were drafted during parliamentary work on an overview of government policy in the context of Brexit, after hearing comments from leading scholars, practising lawyers, and bar officials. Both reports stress that it should be a priority for the government to adopt legislative solutions and work out the future relations with the EU so as to enable continued judicial cooperation under the existing principles. The authors suggest that the British government should consider adjusting its announced approach to the jurisdiction of the Court of Justice. They claim that maintaining this jurisdiction with respect to uniform legal instruments for ensuring judicial cooperation would be a fair price to pay for obtaining continued access to these instruments. The authors also point out that the EU solutions are largely the result of work by British lawyers, and over recent years have ensured a well-functioning legal framework for cross-border judicial cooperation. Thus there is no justification for abandoning these solutions. Both reports take the view that judicial cooperation under international instruments or common-law rules would not be as effective and could weaken the position of the British judicial system and legal services market.

According to the authors, the optimal solution for the UK would be to function in a system of judicial cooperation in civil and family matters under rules similar to those functioning with Denmark. Although Denmark is a member of the EU, it is not automatically a party to regulations in the area of judicial cooperation. But, perceiving the advantages offered by the EU system of judicial cooperation, the Kingdom of Denmark decided to sign an agreement with the European Community on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Council Decision of 20 September 2005, 2005/790/EC).

Consequently, under Art. 6 of the agreement, the Danish courts are required to resort to the Court of Justice under the same rules as other member states and must take due account of rulings by the Court of Justice. An analogous solution could thus be adopted by the UK. But this would require compromise on both sides. The EU would have to accept such conditions for participation and the UK would have to agree to maintain CJEU jurisdiction with respect to the relevant legal instruments. Such a solution would undoubtedly protect the legitimate interests of citizens of the UK and the EU.

An alternative would be to expand cooperation under international instruments. The UK could join the Lugano Convention and the Hague Conventions. But as the authors of the parliamentary reports conclude, this would be a step backward. The Lugano Convention copies the previous version of the Brussels I Regulation on jurisdiction, recognition and enforcement of judgments in civil and commercial matters (44/2001). It lacks a number of innovative solutions, including those designed to counter obstructive tactics involving filing of cases in courts where venue is not proper (“the Italian torpedo”), as well as an even simpler system for the free flow of judgments (changes we discussed in detail in our report on the recast Brussels I Regulation). The convention also does not cover family cases (divorce, maintenance, child custody and abduction). A platform for cooperation in many selected fields is offered by the Hague Conventions (including the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (1965), the Convention on International Recovery of Child Support and Other Forms of Family Maintenance (2007), the Convention on the Law Applicable to Maintenance Obligations (1973), the Convention on the Civil Aspects of International Child Abduction (1980), and the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (1970)). But cooperation under the Hague Conventions is narrower and less effective.

Summary

What solutions are ultimately chosen depends on the willingness to make concessions on both sides of the bargaining table.

In presenting the initial guidelines for continued cooperation, the British government made a step in the right direction. All of the options must be discussed in detail, however, to arrive at a solution that disrupts the parties’ mutual relations as little as possible. Thus EU leaders should also agree to enter into negotiations as quickly as possible. The reasons they have stated for refraining from such negotiations (maintaining the integrity of the EU) are important, but must not leave millions of businesses and families in a state of uncertainty.

Entering into negotiations does not mean the EU cannot propose tough conditions. But when it comes to the specific model of mutual cooperation, the Danish model offers the optimal solution. Under a bilateral agreement, the UK would remain a party to EU instruments for judicial cooperation in civil matters. This would allow it to enjoy all the benefits from clear criteria for jurisdiction, the free flow of judgments, and effective judicial cooperation. But the UK would have to accept the jurisdiction over these instruments by the Court of Justice.

This would allow the UK to benefit from ambitious future solutions in the area of judicial cooperation now being planned by the Commission. At the same time, the UK would gain influence over the shape of those provisions, and its legal system would not lose its current advantages. English courts would continue to be competitive with other European centres which, inspired by a state of uncertainty, are seeking to attract litigation to their own courts (e.g. The Justice Initiative Frankfurt am Main 2017). It would also be beneficial for the EU as a whole for the UK to remain within the European system of judicial cooperation. British lawyers would continue to exert an influence over EU law, encouraging it to adopt the best solutions from the two legal traditions: Continental civil law and English common law.

Aleksandra Lisicka, New Technologies practice, Wardyński & Partners

Łukasz Lasek, Dispute Resolution & Arbitration practice, Wardyński & Partners