Back to the common law. Jurisdiction and judgments if there’s a ‘no deal’ Brexit.

 

 

On 13 Sept 2018 the UK government stated that in the event of a no-deal Brexit, it would repeal most of the existing civil judicial cooperation rules and instead use the domestic rules which each UK legal system currently applies in relation to non-EU countries. This is due to the lack of reciprocity from EU Member States that would pertain after ‘exit day’.

So, for the bin, would be:

The 2012 Brussels Regulation (Recast). Back to common law. The return of the anti-suit injunction to protect London arbitration agreements from suits commenced in EU states.

The Enforcement Order, Order for Payment and Small Claims Regulations: which establish EU procedures for dealing with, respectively, uncontested debts and claims worth less than EUR5,000

The EU/Denmark Agreement: which provides rules to decide where a case would be heard when it raises cross-border issues between Denmark and EU countries, and the recognition and enforcement of civil and commercial judgments between the EU and Denmark

The Lugano Convention: which is the basis of our civil judicial relationship with Norway, Iceland and Switzerland.

Most of the Insolvency Regulation, which covers the jurisdictional rules, applicable law and recognition of cross-border insolvency proceedings, although the EU rules that provide for the UK courts to have jurisdiction where a company or individual is based in the UK will be retained.

In addition, last year shipping minister John Hayes told members of the UK Major Ports Group that the hated 2017 Port Services Regulation will be “consigned to the dustbin” in the UK due to Brexit.

 

Staying out of the bin will be Rome I and Rome II on choice of law in contract and non-contractual matters. No reciprocity is involved with these regulations.

The Government intends the UK to accede to the 2005 Hague Convention on Choice of Court Agreements in its own right and anticipates that the convention would come into force across the UK by 1 April 2019. This is somewhat of a surprise as article 31 (a) provides the convention to come into effect for each state ratifying it on the first day of the month following the expiration of three months after the deposit of its instrument of ratification, acceptance, approval or accession. So, 1 July 2019.

The Convention does not apply to: consumer or employment contracts; insolvency; carriage of passengers or goods; maritime pollution; anti-trust/competition; rights in rem in immovable property, and tenancies of immovable property; the validity, nullity or dissolution of legal persons, and the validity of decisions of their organs; various matters concerning the validity or infringement of intellectual property rights; the validity of entries in public registers; arbitration and related proceedings

 

 

 

Shipping Law and ‘that referendum’. Part Two. Regulations.

With the repeal of the European Communities Act 1972, EU Regulations will cease to be part of UK law. There are three important Regulations of concern to shipping practitioners.

  1. The Brussels Recast Judgment Regulation 1215/2012
  2. The Rome I Regulation on choice of law for contracts
  3. The Rome II Regulation on choice of law i in non contractual matters.

If these are not re-implemented into domestic law, then this we are back to the common law as regards jurisdiction.  When suing a defendant domiciled in the UK it would once again become possible to seek to stay proceedings on grounds of forum non conveniens.

As regards choice of law, we would be back  to the Contracts (Applicable Law) Act 1990 whose provisions are quite similar to those in Rome I. For tort it would be back to the Private International Law (Miscellaneous Provisions Act) 1995 whose provisions contain significant differences from Rome II.

If losing the three Regulations is regarded as non conveniens then Parliament needs to re-enact them into domestic law. Rome I and Rome II could be re-enacted without the need for any action from the remaining 27 EU Member States, although Parliament may choose to amend parts of the Regulations. Possible candidates for amendment of Rome II would be:(a) clarification that it does not apply to torts on the High Seas and; (b)  providing that the applicable  law  where limitation proceedings are brought before the courts of the UK is that of the UK.  Some thought would have to be given as to whether the ECJ should be treated as having any authority as regards interpretation of the domestic legislation which re-enacts the two Regulations.

With the Brussels Recast Judgment Regulation the position is more complex if it is thought to be desirable to maintain a common jurisdiction framework with the remaining EU  Member States. They would need to amend the Regulation to include the UK, perhaps with a simple definition clause ‘Member state includes the United Kingdom’ and similar amendment, mutatis mutandis, with references to a ‘non-Member State’. The UK would also  have to agree to  the authority of the ECJ as regards the domestic legislation reimplementing the Regulation.

An alternative would be for the UK to ratify the 2007 Lugano Convention which tracks the provisions of the 2001 Brussels Regulation  (the ‘unrecast’ version). However, this would require the UK first to become a member of the European Free Trade Associaton, or to obtain the agreement of all the Contracting Parties, the European Community and Denmark, Iceland, Norway and Switzerland.

The UK could also ratify the  Hague Convention on Choice of Court Agreements 2005 (Hague Convention), which came into force as between the Member States and Mexico on 1 October 2015 ( for intra EU matters the Recast Regulation prevails).  The Convention deals with exclusive jurisdiction clauses in favour of a Contracting State and for recognising and enforcing judgments within Contracting States in respect of contracts with such clauses.

In our next blog I shall address some of the shipping related Directives that will cease to have effect following repeal of the European Communities Act 1972.