Publications & Insights Impact of a "No Deal" Brexit on the Litigation of Cross-Border Disputes
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Impact of a "No Deal" Brexit on the Litigation of Cross-Border Disputes

Thursday, 23 May 2019

As a member of the EU, the UK has been a party to a number of EU regulations[1] which are designed to streamline cross-border litigation and to provide for judicial assistance and co-operation across EU Member States.  

In a “no deal” scenario, these EU regulations are likely to be repealed by the UK with potentially very significant consequences for cross-border litigation. In such a scenario, there would be no agreed framework for ongoing civil judicial cooperation between the UK and the EU including on such matters as jurisdiction, the enforcement of judgments and the service of proceedings.

Jurisdiction & the Enforcement of Judgments

The Brussels Regulation (Recast)[2] regulates the jurisdiction of disputes between EU Member States, determining which court of which Member State should have jurisdiction to hear a civil and commercial dispute where there is a cross-border element.  This Regulation also governs the recognition and enforcement of judgments across Member States and provides that a judgment of one Member State will be recognised in the other Member States without any special procedure being required.  This Regulation provides that if a party has an enforceable judgment issued by one Member State (for example, the Irish High Court) it can be enforced by authorities in another Member State where the defendant has assets (for example, the UK) without any further intermediary procedure being required.  

In the event of a “no deal”, the UK Government’s draft “The Civil Jurisdiction and Judgment (Amendment) (EU Exit) Regulations 2019”, published in December 2018[3], provides that the Brussels Regulation (Recast) will cease to apply in the UK.  Absent an agreement with the EU, the UK Government envisions that the UK will revert to existing domestic common law and statute rules, which currently apply in cross border litigation concerning the rest of the world, to govern its relationship with the EU.

A "no deal" potentially means there is scope for conflict to arise as to which court should have jurisdiction to determine a dispute involving a cross-border element between an EU Member State and the UK.  It is also likely that it will be harder to have a judgment obtained in Ireland recognised and enforced in the UK (and vice versa) and more expensive to do so. 

Ultimately, however, much will depend on the agreement (if any) that is negotiated between the UK and the EU following Brexit and whether the UK will seek to become a signatory to similar conventions to the Brussels Regulation (Recast) such as the Lugano Convention[4].

The Service of Legal Documents

The Service Regulation[5] applies to all EU Member States and regulates the service of legal documents (such as a summons) in civil or commercial proceedings between EU Member States.   Under the Service Regulation, the service of legal documents (such as a summons) is provided through a fast and secure procedure via a "transmitting agency" and a "receiving agency" between EU Member States.  In Ireland, the County Registrars are the “transmitting agency” for the purposes of the Service Regulation. 

The UK Government’s draft “The Service of Documents and Taking of Evidence in Civil and Commercial Matters (Revocation and Saving Provisions) (EU Exit) Regulations 2018”, provides that, in the absence of a deal with the EU, the Service Regulation will cease to apply in the UK.  In effect, in a "no deal" scenario, the UK will no longer transmit legal documents for service in Member States under this Regulation and will no longer comply with requests made by Member States to serve legal documents on parties in the UK. 

The UK is a contracting State to the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (the “Hague Convention”).   The Hague Convention effectively governs the service of judicial documents in non-EU Member States.  The UK Government expects that post Brexit requests for service of judicial and non-judicial documents in civil and commercial matters involving the UK and States that are party to the Hague Convention (of which Ireland is one) will be carried out under that Convention. The process under the Hague Convention is broadly similar to that provided in the Service Regulation except that legal documents are submitted to the “central authority” (who is the Master of the High Court) rather than the “transmitting agency”.  Ultimately, in the event of a "no deal" Brexit, it will be necessary to consider the provisions of the Hague Convention when serving Irish proceedings on a UK defendant.

For more information on the above or for general advice on this topic, please contact Jon Legorburu, Head of Litigation and Dispute Resolution, Mona Costelloe, Partner or Gráinne Murphy, Senior Associate at ByrneWallace.

[1] This article will focus on two such regulations - the Brussels Regulation (Recast) and the Service Regulation.

[2] Regulation No. 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition of enforcement of judgments in civil and commercial matters

[4] The Lugano Convention is between EU Member States and Iceland, Norway and Switzerland and seeks to unify the rules on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters

[5] Regulation No. 1393/2007 of the European Parliament and of the Council of 13 November 2007 on the service in the Member States of Judicial and Extrajudicial documents in Civil or Commercial Matters