Open Britain Background Briefing: The Government’s position paper on “Providing a cross-border civil judicial cooperation framework”

Overview

Today, the Government published its Brexit position paper on co-operation on civil and commercial matters, entitled “Providing a cross-border civil judicial cooperation framework”. The paper can be found here. In the document, the Government outlines its approach to ongoing as well as future cases on civil and commercial issues affected by Brexit, and any eventual new UK-EU relationship. The Government’s paper is in reaction to a position paper by the EU27, which can be found here, and Open Britain’s assessment of that paper can be found here.

Open Britain’s assessment of today’s position paper identifies four main points:

  1. The Government accepts in its negotiating position that the current existing system for civil co-operation works well for the British people, and it therefore seems strange that the Government is jeopardising this by pursuing a path that will bring the existing system to an end. 
  2. The Government’s approach risks undermining existing legal guarantees for issues ranging from child protection and domestic abuse to cross-border insolvency and small claims issues.
  3. There is a contradiction at the heart of this paper. The Government says on the one hand it will “take back control” of laws and sovereignty but at the same time says it would like to continue to participate in the Lugano Convention, which states that courts from contracting parties to the Convention should take into consideration judgements made by the European Court of Justice.[1] 
  4. As with almost all the Government’s position papers so far, this document provides very little detail as to how in practice the Government wants to achieve the aims it has set out.

 

Open Britain’s Position

The Government is pursuing a path which is not in the country’s interests, undermining existing legal frameworks and causing uncertainty and confusion for individuals and businesses alike. It is also very likely that its proposed solution to this uncertainty cannot be squared with the Government’s red line of ending the jurisdiction of the European Court of Justice. The Government is going to have to start publishing, in precise technical detail, what it actually wants to achieve, otherwise the uncertainty surrounding its stance on these negotiations and the country’s future will only grow.

In Detail

“…Building on years of cooperation across borders, it is vital for UK and EU consumers, citizens, families and businesses, that there are coherent common rules to govern interactions between legal systems…”

  • With the Government acknowledging the importance of having built up co-operation across borders, Open Britain queries the Government’s policy of pursuing a hard Brexit which would call this kind of co-operation into question. 

“The UK believes that international intergovernmental cooperation and mutual recognition benefits all parties. The UK currently participates in the EU’s civil judicial cooperation system provided by a range of EU instruments (see Box 1). This framework provides predictability and certainty for citizens and businesses from the EU and the UK about the laws that apply to their cross-border relationships, the courts that would be responsible, and their ability to rely on decisions from one country’s courts in another State. It plays an important role in enabling businesses to trade with confidence across borders, providing legal certainty in cross-border transactions and avoiding delays and excessive costs where individual and family rights need to be protected in cross-border situations.” 

“When the UK withdraws from the EU, we will leave the civil judicial cooperation system that exists between EU Member States. We will therefore need to negotiate and agree a new civil judicial cooperation framework, as an aspect of the deep and special partnership with the EU.” 

  • The Government accepts here that there are many benefits to the current arrangements for citizens and businesses, involving deeply integrated civil judicial cooperation between the UK and the EU, at the same time as they are taking Britain down a path that could threaten this cooperation.

“Within the EU’s system of civil judicial cooperation, the main instruments which have been agreed and in which the UK participates are set out below.

Civil and commercial instruments

● The Brussels I Recast Regulation – Brussels Ia – (1215/2012) covers jurisdiction and recognition and enforcement of judgments and applies between EU Member States.

● Rome I Regulation (593/2008) covers applicable law in contracts.

● Rome II Regulation (864/2007) covers applicable law in non-contractual obligations.

● Insolvency Regulation (1346/2000 and 2015/848) covers jurisdictional rules and applicable law and recognition of insolvency proceedings in cross-border insolvencies.

● The small claims (861/2007 revised by 2015/2421), enforcement order (805/2004) and order for payment (1896/2006) Regulations facilitate means for obtaining decisions on claims that can be enforced throughout the EU. 

Family instruments

● The Brussels IIa Regulation (2201/2003) covers jurisdictional rules in matrimonial and parental responsibility matters and the recognition and enforcement of judgments.

● The Maintenance Regulation (4/2009) covers rules for determining which court has jurisdiction for, and the recognition and enforcement of, maintenance decisions.

● Regulation on protection measures in civil matters (606/2013) covers recognition and enforcement of protection measures, including for victims of domestic violence.

EU instruments covering both civil and family matters

● EU Service Regulation (2007/1393/EC) covers rules for serving documents in other EU countries.

● Taking of Evidence Regulation (2001/1206) covers cross-border processing of requests to take evidence.

● Legal Aid Directive (2002/8) covers rules for the grant of legal aid in crossborder disputes.

● Mediation Directive (2008/52) covers access to alternative dispute resolution and settlement of disputes through the use of mediation in cross-border disputes.

● European Judicial Network in Civil and Commercial Matters (2001/470/EC) facilitates cross-border cooperation for judges and practitioners and access to justice for those involved in disputes.”  

  • As this list makes clear, there are numerous issues, ranging from cross-border child abduction cases, to domestic violence cases, to contractual disputes between businesses from different EU member states, where the current arrangements provide legal certainty and clarity for British people and businesses. A hard Brexit or a ‘no deal’ Brexit has the potential to create legal limbo in all of these areas and make life more difficult for British people and businesses.

“A close cooperative relationship between the legal systems of the UK and the EU is of mutual importance, and thousands of EU corporations have established a place of business in the UK. Companies across the EU choose to use English law to govern their affairs and it is the most popular contract law used for conducting international transactions. Research indicates that English law governs around 40 per cent of global commercial arbitrations.”

  • The Government must recognise that a hard Brexit, or a ‘no deal’ Brexit, would threaten the UK's established status as a global legal centre, as leaving the EU without a deal on mutual recognition of court judgements would damage the UK’s thriving legal profession, which as Ministers rightly point out does a great deal of business with companies from across the EU.[2]

“The best way to ensure legal certainty for both UK and EU citizens and businesses as we leave the EU is to facilitate a smooth transition to a new relationship in civil judicial cooperation…The optimum outcome for both sides will be an agreement reflecting our close existing relationship, where litigating a cross-border case involving UK and EU parties under civil law, wherever it might take place, will be easier, cheaper and more efficient for all involved.” 

“The UK will therefore seek an agreement with the EU that allows for close and comprehensive cross-border civil judicial cooperation on a reciprocal basis, which reflects closely the substantive principles of cooperation under the current EU framework…”

“The UK is clear that international civil judicial cooperation is in the mutual interest of consumers, citizens, families and businesses in the EU and in the UK. With this in mind, we are seeking a close and comprehensive framework of civil judicial cooperation with the EU. That framework would be on a reciprocal basis, which would mirror closely the current EU system and would provide a clear legal basis to support cross-border activities, after the UK’s withdrawal.” 

“Avoiding disruption and providing legal certainty is our guiding principle in negotiations on separation issues.” 

  • The Government must provide more detail about how they plan to achieve “a new relationship in civil judicial cooperation”. This paper contains no solid proposals for how to alleviate the threat of Brexit-related legal uncertainty currently hovering over UK citizens and businesses. 
  • Open Britain calls on the Government to outline how it intends to make litigating a cross-border case easier than exists under the current system, which seems a highly unlikely aim given that Britain will be leaving the Single Market under their plans.
  • Open Britain questions how the Government is going to “take back control” of our laws and maintain its red line on the jurisdiction on the Court of Justice of the European Union if it is looking to pursue a system which would mirror the current system in which the UK participates in as an EU member state.
  • If the Government is concerned about disruption and legal certainty it has to start asking itself serious questions as to why it is looking to go down a path which will achieve neither.

“When the UK leaves the EU, the EU Treaties will cease to apply in the UK. Leaving the EU will therefore bring an end to the direct jurisdiction of the CJEU in the UK, because the CJEU derives its jurisdiction and authority from the EU Treaties. Ending the direct jurisdiction of the CJEU in the UK will not weaken the rights of individuals, nor call into question the UK’s commitment to complying with its obligations under international agreements; where appropriate, the UK and the EU will need to ensure future civil judicial cooperation takes into account regional legal arrangements, including the fact that the CJEU will remain the ultimate arbiter of EU law within the EU.

“Applicable law: the existing 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 withdrawal date. This will be necessary to avoid uncertainty or confusion as to which rules apply, which could cause disadvantage to families, businesses and individuals.”

“Jurisdiction: the existing EU rules governing jurisdiction to determine disputes should continue to apply to all legal proceedings instituted before withdrawal date.” 

“Choice of court: where a choice of court has been made prior to withdrawal date the existing EU rules should continue to apply to establishment of jurisdiction, and recognition and enforcement of any resulting judicial decision, where a dispute arises to which such a choice applies, whether before or after withdrawal date.” 

“Recognition and enforcement of judicial decisions: the existing EU rules governing recognition and enforcement of judicial decisions should continue to apply to judicial decisions given before the withdrawal date, and to judicial decisions given after the withdrawal date in proceedings which were instituted before that date.” 

  • Open Britain welcome the fact that the Government is finally laying out some guidelines for businesses and individuals on legal matters where much needed clarity has been missing.
  • However, the Government needs to look at how they have seemingly contradicted themselves about their own red-line on the European Court of Justice in this negotiating paper. It is not possible to both end the jurisdiction of the ECJ in the UK and at the same call for existing EU rules to apply to all legal proceedings instituted before the withdrawal date and by looking to be part of a convention that follows ECJ rulings.
  • Open Britain calls on the Government to explain how it can still justify its decision to leave the Single Market, when its own position paper admits that the ECJ will still have some control over our laws after Brexit, whether we leave the Single Market or not.    

“…Similarly, we will seek to continue to participate in the Lugano Convention that, by virtue of our membership of the EU, forms the basis for the UK’s civil judicial cooperation with Norway, Iceland and Switzerland.”

“The Lugano Convention deals with jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. It applies between EU Member States and Switzerland, Norway and Iceland (European Free Trade Association (EFTA) Member States). Other, non-EU member countries can accede to the Convention under certain conditions. The Convention is open to: future members of EFTA; Member States of the EU; and any other state, subject to the unanimous agreement of all the contracting parties.” 

  • Open Britain queries how the Government intends to “take back control” when the Lugano Convention states that courts from contracting parties to the Convention should take into consideration judgements made by the European Court of Justice.[3]

“Citizens, consumers, families and businesses in both the UK and in EU Member States need to be able to plan ahead. As such, the UK and the EU would benefit from an interim period that allowed for a smooth and orderly move from our current relationship to our future partnership.” 

“It is clear that the mutual interests of the UK and the EU are best served by continued close and comprehensive civil judicial cooperation. Nonetheless, in the event that we do not agree an arrangement for future civil judicial cooperation with the EU, it will be important to have reached a common view on the general principles that would govern how ongoing cooperation in this area could be wound down.”

  • Open Britain welcomes the fact that the Government have accepted the need for an interim period in these negotiations, although the Government need to spell out precisely what that will mean in detail.