Insight
Objection! Why the EU opposes the UK’s plans for cross-Channel litigation by Zach Meyers and Camino Mortera-Martinez, 18 June 2021
Brexit has made cross-border litigation harder. While bigger companies will cope, EU and UK citizens and small businesses will suffer. London is a hub for resolving cross-border disputes. English law and courts have traditionally been favoured by companies in international commercial contracts. Approximately 75 per cent of the UK’s commercial court cases involve at least one foreign party or relate to property or events outside the UK; in 2015, nearly half of those cases involved solely foreign parties. Britain’s membership of the EU helped boost this trend, as multinational companies could immediately enforce rulings from English courts all across the EU. As a result, the UK’s legal profession enjoyed significant business. However, litigation in UK courts has become less attractive to EU businesses and nationals after Brexit, because it is less straightforward to enforce UK court judgments in the EU. The UK wishes to protect Britain’s large commercial law firms by addressing this situation; the EU sees no reason to provide unnecessary benefits to the UK. Rather than bicker about providing more business for British lawyers, the EU and UK ought to co-operate to protect their nationals – such as those dealing with cross-border family law and employment disputes – who will be hardest hit by these changes. Neither the Withdrawal Agreement nor the EU-UK Trade and Cooperation Agreement (TCA) addressed judicial co-operation on civil and commercial matters. As a result of Brexit, the UK also left a number of international treaties dealing with judicial co-operation, which the EU had entered into on behalf of its member-states. These include the 2007 Lugano convention, an international treaty which clarifies where certain cross-border civil and commercial legal proceedings – such as disputes over contracts, insurance, employment law and family maintenance arrangements – should take place. For those matters, the convention ensures that court judgments from one participating country are recognised and can be enforced in any other country which is party to the convention. This outcome reduces costs and risks for parties to litigation, as it diminishes the scope for parallel court cases, disputes about which court should hear a case and difficulties in having judgments recognised and enforced. The Lugano convention also allows for parties to agree to have disputes about their contract heard in the member country with the most reputable judicial system, even if the case does not directly involve property, events or parties in that country. The UK has greatly benefited from this, with many CER INSIGHT: Objection! Why the EU opposes the UK’s plans for cross-Channel litigation 18 June 2021
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