A Brexit panel session was one of several that took place during the In-house Counsel Litigation Conference on 22 May 2018, sponsored by Stewarts. The panel moderator was Sir Christopher Bellamy QC, and panel members were Hugh Mercer QC and Martin Howe QC.
The key topic for discussion was how future cross-border disputes will be resolved once the UK’s exit from the EU becomes a reality, on the assumption that a new trade agreement will be negotiated. Once we leave, the previous system whereby the Court of Justice of the European Union (CJEU) decides on state to state matters, as well as person to state, person to company, and company to company matters, etc. will no longer automatically apply and the CJEU will become a foreign court. However, parties relying on a new trade deal will still require a method of recourse when disputes arise.
Martin Howe QC posited the idea of a joint EU/UK treaty tribunal at the highest level, the decisions of which would be binding. Underneath the tribunal would sit the CJEU and a UK international treaty court, which would operate under a non-binding cooperation of interpretation. Several examples were used to examine how this might work in practice.
Example 1: A mutual agreement is reached not to offer state aid. The EU then approves massive state aid to FinTechs to entice those operating in London. How would the UK resolve this breach of the agreement?
In these circumstances, the UK would complain at government level to the treaty tribunal.
Example 2: A mutual agreement is reached to ensure that public tendering procedures remain open. A Spanish company claims to have been excluded by the UK government from a public tendering procedure, the main reason being because they are Spanish. What can be done?
In order for the UK to have agreed to and fulfil such an agreement, it would first have to be incorporated into domestic law. An Act, for example, providing for equality in public procurement would undoubtedly contain obligations of public authorities to give equal access in tendering. If the public authorities do not do so, the Spanish company could apply for a Judicial Review of the decision. However, it may be necessary to consider whether the current remedies available in administrative proceedings would be adequate in the case of financial loss.
Example 3: The same Spanish company takes its case to the UK court and the judge misinterprets the agreement – where to next?
It is not envisaged that the treaty tribunal would be open to private parties and would only deal with state to state matters. There would otherwise be the potential for masses of cases to come before it. It is therefore possible that such a model might cause a reduction in the rights of private parties to challenge legislation.
The panel then debated whether it might be more practical simply to retain the current CJEU structure rather than attempt to implement a new and more complicated structure. Hugh Mercer QC did not object to the potential for the CJEU retaining some sort of jurisdiction when it came down to such matters as conflicts of law, as judicial cooperation is encouraged by the instruments determining them (eg Rome I and Rome II). However, matters such as free movement would require a neutral arbiter, something that the CJEU would not be once the UK leaves the EU. Martin Howe QC agreed with the latter point, suggesting that it was almost unheard of in international relations for a sovereign state to agree to binding powers of interpretation of the other treaty court. However, that did not mean that cooperation was not possible and valuable.
Also briefly considered was the current status of the ‘Withdrawal Bill’ and what it means for current EU law and future non-compliance. At present, the UK’s position in relation to EU law will be as it is now. All EU Regulations will become English law and all EU Directives will not, unless they have been implemented. Rome I and Rome II will be introduced, but questions remain over Brussels I and how the UK will deal with the enforcement of European judgments moving forward. In this respect, it seems likely that an arrangement similar to the Lugano Convention will occur, although the panel highlighted that such an arrangement has not received the priority that might be expected in current negotiations. Whilst current EU laws will be implemented, there will, of course, no longer be any right of action based on the UK’s failure to comply with general principles of EU law and no right to Francovich damages.
Finally, it was asked whether, once UK withdrawal is completed, current UK EU law specialists, such as those sitting on the panel, could continue to advise on EU law. Overall, it was considered that it would not be sensible to continue to rely solely on a UK qualification if a practitioner were to provide such advice. Rather, effective EU qualifications that go beyond a practising certificate should be sought. While it is possible that negotiations might include a clause agreeing that the rights of existing lawyers should be grandfathered into the treaty, the current argument against such a clause is that lawyers would thereby be given higher priority than other professionals.
Key points to take away:
- It is vital that any negotiated treaty contain a mechanism of interpretation and recourse to allow for the successful determination of cross-border disputes
- On Brexit day, the UK will be as it was in relation to current EU legislation
- It is likely that the UK will seek to adopt an approach similar to the Lugano Convention in relation to the enforcement of European judgments
- UK EU specialist lawyers should consider their position post-Brexit and seek further qualifications if they are to continue to advise on EU law
- The law and lawyers do not currently seem to be a priority in negotiations
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In-house Counsel Litigation Conference 2018
To see a summary of the sessions with links to all summary write-ups from the conference click here.
Media contact: Lydia Buckingham, Senior Marketing Executive, +44 (0) 20 7822 8134, email@example.com