The UK Law Societies’ Brussels Office hosted a lunchtime seminar on 24 May 2018 concerning the recognition and enforcement of judgments in civil and commercial matters following Brexit.
The Brussels I Regulation provides an affordable and efficient framework for the enforcement of judgments in civil and commercial matters across the European Union. It provides clarity on where proceedings should be initiated and streamlines the process if enforcing domestic claims across Europe for certain groups (such as consumers, employees, the insured and SMEs).
A lack of UK participation in this framework post-Brexit may have significant negative consequences as a judgment creditor would face a patchwork of different national rules rather than a uniform system. In addition, enforcement under national law alternatives tend to be more expensive and is likely to yield more unpredictable results.
The majority of the roundtable seminar revolved around the prospect of the Lugano Convention as providing a possible alternative for the UK, the history of which was summarised by Georges Baur. Agreed in 2007, its effects are materially the same as the Brussels Regulation and governs issues of jurisdiction and enforcement of judgments between the EU Member States and the EFTA countries other than Liechtenstein (namely Iceland, Switzerland and Norway).
It was agreed that Lugano would be the best option for the UK post-Brexit, as this would preserve most of the benefits currently available in a readymade package that could be swiftly implemented. It was not anticipated there would be great opposition in the EU and EFTA to the UK joining Lugano, due to the institutions similar aims in this matter.
An alternative of using The Hague instruments was also discussed. Peter Werner highlighted how although these are global in scope and form a reciprocal UK/EU27 regime which will continue for exclusive clauses, there is a problem of no retroactive action which means problems could arise regarding agreements made well before Brexit, won’t apply to insolvency and bankruptcy proceedings, and would not be able to be implemented very quickly which could cause a period of chaos and uncertainty. As such, it was decided that the Lugano Convention was likely to be the better choice for the UK and EU following Brexit, although the problem of lack of retrospective action could still apply to a relationship founded on Lugano.
Sarah Garvey made the point that currently the English jurisdiction clauses are attractive to commercial parties for many reasons unconnected with EU membership, such as the reputation for reliable, well tested precedent and procedure. If there is no agreement with EU27 on civil justice, there could be a limited group of cases where enforcing an English judgment could be more difficult in other jurisdictions, as it is unclear whether the approach of EU courts to respecting English jurisdiction clauses and judgments will change. However, English jurisdiction clauses are still likely to be highly attractive in most cases, although they may become more expensive and time consuming. It is also likely that parties may switch to arbitration rather than another court.
A short Q&A session followed each presentation, during which it was asked if there is any reason why the UK would not want to continue with Lugano. The opinion from Mr Baur was that there would certainly be no reason from any EFTA states, all of whom are very keen to keep the relationship and procedures as close as possible to their current formulation. It was also agreed that the lack of any deal or alternative being in place when time runs out would result in total chaos.
The speakers present at this event were Georges Baur (Assistant Secretary General, EFTA), Sarah Garvey (Counsel at Allen & Overy, Chair of the Law Society of England and Wales EU Committee), Murk Muller (MM Recht) and Peter Werner (Senior Counsel, International Swaps & Derivatives Foundation). The event was moderated by Helena Raulus (Head of Office, Head of UK Law Societies Brussels Office