UK Civil Litigation: The Brexit Effect

19 July

 

The outcome of June’s EU referendum has caused shockwaves across political and economic spectrums and it is almost certain to affect the legal sphere as well, with much of our legislation intricately entwined with EU laws. We don’t yet know exactly how or when this is going to start changing our laws, but below are three specific areas of civil litigation which are likely to be most affected.

 

1.      Jurisdiction for Hearing Disputes

 

At present, the European system relating to jurisdiction (which means whether a court has the authority to hear a dispute or not) is governed by the Brussels Regulation. This allows for the easy selection of jurisdiction for disputes involving parties from different EU states. For example, if you were to hire an EU-based construction company to carry out work in the UK, and the construction company was negligent, you would be able to sue the EU company here in the UK because the rules say that correct jurisdiction is where the work was carried out. In other words, it wouldn’t matter that the construction company was based in an EU country – they could still be sued in the UK courts.

Once we leave the EU, the Brussels Regulation will no longer automatically apply to the UK and a replacement system will be needed. If Britain is unable to negotiate a system which allows for the same rules to apply, then there are other international rules which we could opt into (such as the Hague Convention), but unfortunately these rules aren’t as straightforward and efficient as the Brussels Regulation; and inevitably, less efficient systems lead to more time and more costs.

If we decide not to opt into any replacement system then lawyers will have to resort to the “common law” approach, which is likely to involve persuading a court (based on case law) that the facts of the case make it appropriate for that case to be heard in the UK. Again, this is not a time-effective or cost-effective option.

 

2.      Serving Court Documents

 

Prior to EU rules on the service of documents being implemented, it wasn’t easy to serve a claim on a defendant based abroad. This was because each European nation had its own rules on how to legally serve someone and to prove that they had been served with documents, meaning that if this was not done correctly then a claimant would be at risk of not effecting service properly (and thus not being able to continue with their claim).

The EU introduced the “Service Regulation” to deal with this issue, which provided for a straightforward – and more importantly, unified – system of serving a party in another EU state, making it much more difficult for an opponent to claim that they had not been legally served with documents.

Whether the UK will be permitted to continue with this system remains to be seen. 

 

3.      Enforcing Judgments

 

Another important part of the EU system of litigating between European nations is the “reciprocal enforcement” of judgments.

So, to take the example of the EU-based construction company: assuming you won your claim and the UK courts ordered the company to pay you damages, under the Brussels Regulation you could take that judgment and enforce it in the EU country’s courts against the company, meaning that the company would not be able to escape from the judgment by virtue of being based abroad.

Without this system or a similar replacement system, it may become very difficult to actually enforce judgments against parties in EU countries, making it less effective to obtain a judgment in the UK against European parties.

 

In summary, we currently have no real idea of what the spirit of negotiations between the UK and the EU relating to mutual litigation will be like, as much of the debate so far has been focused on the free market and the free movement of people. If the EU is open to negotiation on this issue, it is possible that the UK could decide to remain part of the European system in relation to jurisdiction, service and enforcement, in which case nothing will change. As with many outcomes following Brexit, it is a case of ‘only time will tell’.

 

For more information on this topic, contact our Dispute Resolution team.

 

 

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