On 27 October Christopher Deacon, a partner in our International Injury team, spoke at a webinar hosted by the UK Law Societies Joint Brussels office for a discussion about access to justice in cross border litigation.
The discussion saw the panellists explore what the future arrangement between the UK and EU regarding jurisdiction, recognition and enforcements of judgments in civil and commercial matters might look like after 1 January 2021 in relation to each panellist’s practicing area and jurisdiction. The changing private international law landscape was discussed in light of both the Lugano Convention and The Hague Judgments Conventions.
Chris was joined by Guido Callegari, Partner at De Berti Jacchia Franchini Forlani, Italy and Philip Thorsen, Partner at Mazanti-Andersen Korso Jenson, Denmark, and Diana Wallis, Senior Fellow in Law, University of Hull and member of the Law Society of England & Wales’ EU Committee, moderated the discussion.
Chris discussed the perspective of weaker parties to disputes and consumer rights in cross border disputes, where the loss of the current regime will result in profound consequences. A number of important rights such as direct actions against insurers, joinder of the insured and consumer contract provisions will be lost for those domiciled in the UK, EU and Lugano Convention states. Further, consumers or those representing consumers will not be able to pursue a defendant under one of the special jurisdiction provisions once the transition period ends.
In terms of enforcement of judgments where proceedings have started after the end of the transition period, the European rules will no longer apply and a claimant wanting to enforce a judgment from the UK will have to look at local rules in the country where they are seeking enforcement.
Notable concerns in the absence of the European regime were raised, namely, that it opens the way for extensive defences to be made at the enforcement stage. Furthermore, enforcement of a judgment from the EU 27 or a Lugano state post-transition in the courts of England and Wales, will need to rely on common law rules which require a fresh set of proceedings, are more costly and lengthy in nature and give more flexibility to resist enforcement.
It was discussed that the 2019 Hague Judgments Convention is not a substitute for the current European regime as it only deals with enforcement and not jurisdiction. It is a starting point and there was hope that the Hague will develop another Convention for jurisdiction rules to protect consumers and weaker parties in disputes. The Judgments Convention excludes the carriage of passengers and goods from its scope (Article 2.1.F) and so there is some divergence over whether claims for damages by those injured in a road traffic accident or airline disaster would be covered. Interim measures are also excluded (Article 3.1.B) which could in effect exclude enforcement of an interim award of damages for claimants of serious injury disputes.
Guido Callegari discussed the impact on employment law from an Italian perspective. He referenced the situation where, in the absence of the current framework, an Italian worker working for a UK company with no subsidiaries in Italy could struggle to serve a claim on the UK company. Similarly, an Italian court could decline its jurisdiction over Italian citizens’ employment contract with a UK company if the contract were performed abroad.
He went on to say that the 2019 Hague Judgments Convention will apply to employment matters. However, there is still a long way to go before this Convention will be truly applicable in both Italy and the UK and the process of ratification of the Convention is still ongoing and implementation has not even started yet.
Philip Thorsen discussed the position of Danish businesses if the UK does not accede to the Lugano Convention. Giving an outline of Denmark’s position in the EU landscape, he explained how Denmark has had an ambivalent attitude to the EU leading to several opt-outs, however, Denmark has remained a strong ally with the EU particularly in the current political climate. In terms of the position after the transition period ends, uncertainty remains which is always bad for business and there will be direct and indirect effects. Directly there are concerns that a UK judgment will not be enforced in Denmark without another agreement being in place, such as the Lugano Convention. This is because under the Danish legislation, foreign judgments are not recognised or enforced without applicable treaty. Indirectly, businesses will be affected in the UK and the EU as consumers will be unaware of their position in a dispute if the Lugano Convention does not apply.
If the UK and the EU were not to agree on the Lugano Convention, some scholars discuss fallback on other regimes such as the Brussels Convention that pre-dates the current Brussels Regulation. There are questions about whether that can realistically be revived given that it has been superseded by the Brussels Regulation. Another is revival of the old bilateral conventions.
However, the EU has an exclusive competence in the area and any agreement on enforcement of judgments will need to be reached with the EU. It is doubtful whether the EU states can proceed here unilaterally anymore, apart perhaps from Denmark which has an opt-out from the EU regime.
There are certain aspects, which are largely not touched by Brexit, such as arbitration. It is to be expected that there will be a large uptake in use of arbitration when doing business with the UK. In addition, the Rome Regulations on law applicable to contractual and non-contractual obligations will not be affected by Brexit. They allow for a universal choice of law in the EU area, and the UK has adopted the same provisions domestically.
With respect to recognition and enforcement of judgments, the Hague 2005 Choice of Court Agreements Convention will apply from the beginning of January 2021. There are two limitations though: it only applies where there is an exclusive choice of court agreement, and that agreement was reached during the period when the Convention applies. The UK implementation says that the effective date is October 2015 – this is when the EU ratification took effect. However, the Commission has indicated that the Convention will take effect between the EU and the UK only from 1 January 2021, the date when the UK becomes independently a party to the Convention.
In summary, all panellists hoped for and shared the same aspiration for an agreement seeing the UK accede to the Lugano Convention as it is a known system in Europe for practitioners and it includes in particular the provisions for protection of the weaker parties.
Chris Deacon commented:
”I was delighted to join the panel for a lively discussion about the benefits of the European regime and how the Lugano Convention can help replicate most of those benefits at the end of the Brexit transition period. It is clear that the Hague Judgments Convention does not go far enough in protecting weaker parties to a dispute. I was inspired and encouraged by the perspective of fellow European lawyers, Guido and Philip, on the fundamental importance of the Lugano Convention on jurisdiction and enforcement, not just to UK domiciled claimants but also individuals and businesses throughout Europe. Hopefully this pawn in the political negotiations will soon be put to one side so that Lugano becomes a reality in the post-Brexit private international law landscape between the UK and EU27/EFTA states.”
This article is based on an original review of the webinar prepared by the UK Law Societies’ Joint Brussels office which can be found on their website, here.
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