This article examines the UK Government's response to the EU position paper on judicial cooperation in civil and commercial matters.
Her Majesty's Government (HMG) has responded to the EU position paper on Judicial Cooperation in Civil and Commercial Matters in a paper entitled “Providing a Cross-Border Civil Judicial Co-Operation Framework”. The EU paper deals only with post-Brexit transitional measures. The HMG paper considers the long-term issues.
What is striking about the HMG paper is how closely the proposals for transition following Brexit mirror those in the EU position paper. Both agree that the EU rules governing the applicable law for contractual and non-contractual obligations should continue to apply to contracts concluded before the withdrawal date and, in respect of non-contractual liability, to events giving rise to damage which occur before the withdrawal date. Both agree that the existing EU rules governing jurisdiction will continue to apply to all legal proceedings instituted before the withdrawal date. Both agree that where a choice of court has been made prior to the withdrawal date, the existing EU rules should continue to apply where a dispute arises whether before or after the withdrawal date. Both agree that the existing EU rules governing the recognition and enforcement of judicial decisions should continue to apply to judicial decisions given before the withdrawal date although the HMG paper adds that such EU rules should also apply to judicial decisions given after the withdrawal date in proceedings instituted before that date.
So far, so good, and a very large measure of agreement. Having said that, the position of HMG impliedly accepts that the Court of Justice of the European Union (CJEU) will continue to have jurisdiction in these transitional cases, seemingly contrary to the statement in the HMG paper that leaving the EU will “bring an end to the direct jurisdiction of the CJEU in the UK …”. But perhaps a distinction is being drawn here between “direct jurisdiction”, whereby decisions of the CJEU automatically apply in the UK, and where the CJEU only has jurisdiction over parties who have opted to accept such jurisdiction through, for example, choice of law or forum, which could be characterised as indirect.
Where the HMG paper goes further than the EU paper is in its proposals for the long-term position following Brexit. HMG proposes that the UK “will seek to continue to participate in the  Lugano Convention …” The problem with this is that it will require the agreement of the EU, Norway, Iceland and Switzerland. But, crucially, if the UK does accede to the Lugano Convention in its own right, it will not be bound by decisions of the CJEU, although it will have to pay such decisions “due account”. This may explain why HMG has opted for the 2007 Lugano Convention rather than the Denmark approach of separately acceding to the Brussels Recast Regulation which would carry with it the direct effect in the UK of CJEU decisions.
A further potential problem is that the 2007 Lugano Convention is based on the outdated Brussels 1 Regulation which has significant defects compared with the current Brussels Recast Regulation. In particular, the Brussels 1 Regulation allowed choices of jurisdiction to be undermined by the abusive commencement of proceedings in a non-chosen jurisdiction, the so-called Italian torpedo. However, the HMG paper also proposes that the UK will sign up in its own right to the Hague Convention on Choice of Court Agreements to which the EU is presently a party. This may in practice remedy the deficiencies of the 2007 Lugano Convention, at least as far as commercial parties are concerned. Under the Hague Convention, a court other than that chosen by the parties must decline jurisdiction, effectively preventing the use of the Italian torpedo. If so, this looks like a cunning plan by HMG.
More generally, one can discern a more general policy shift by HMG in this paper in relation to the “direct jurisdiction of the CJEU in the UK”. It appears that HMG will not object to the CJEU having jurisdiction where this results from the parties choice of jurisdiction or law or the like. Where the line in the sand appears to lie is in decisions of the CJEU having general force in the UK absent such choice. This apparent concession may permit a more flexible approach to jurisdiction and choice of law post-Brexit for commercial parties.
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