UK Government publishes position paper on future judicial cooperation with EU countries on cross-border civil and commercial matters
First it is important to note that the EU and UK government are in broad agreement that any pre-Brexit contracts or civil liability will be governed by the same choice of law and jurisdiction result as at present, including at least in practice the jurisdiction of the ECJ.
The EU position paper does not address the long term situation though the UK one does. In simple terms, it proposes that the UK should accede to the 2007 Lugano Convention and the Hague Convention on Choice of Court Agreements which in summary would approximate to but not replicate the present Brussels Recast Regulation. Accession to the latter would be a far preferable alternative but would cross the line of the government’s phobia regarding the jurisdiction of the ECJ in the long term.
Accession to the Hague Convention would avoid the pitfalls of reliance solely on the Lugano Convention regarding parties’ choice of jurisdiction in commercial contracts. But of course, all of this is only theoretical. Accession to the Lugano Convention requires the agreement of the EU, Norway, Iceland and Switzerland.
Jurisdiction of the ECJ
It is also clear that the UK government seems prepared to accept the jurisdiction of the ECJ if that is the choice of the parties, although it would probably contend that such jurisdiction is indirect rather than direct jurisdiction arising from the automatic application of its decisions across the UK.
From the perspective of a commercial barrister, it is very difficult to understand how any of these proposals produce a better system of choice of law, jurisdiction and enforcement than exists at present under the EU regulations. Rather it will result in complex transitional arrangements (and commercial cases tend to have long tails) and a more complicated and less certain result in relation to jurisdictional and choice of law issues. Moreover, it certainly will not have the simple enforcement procedures available to commercial parties across borders under the Judgment Regulation.
As an insurance policy against future complications commercial parties would, we believe, be wise to seek the advice of lawyers long before March 2019 as to how they can best minimise the uncertainties resulting from this both in existing and future cross border contracts