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      Your disputes

       

      Current state of play

      There is currently one set of rules governing which country should have jurisdiction in a dispute, and the recognition and enforcement of civil and commercial court judgments between member states. The general rule is that the courts of the member state where the defendant is domiciled have jurisdiction. This is subject to a number of exceptions, including:

      • where the parties have agreed that the courts of another member state should have jurisdiction;
      • cases involving a particular subject matter where the courts of a member state have exclusive jurisdiction (for example, real estate); and
      • cases involving employment contracts, consumer contracts or contracts of insurance.

      Parallel proceedings in the courts of more than one member state are prohibited where those proceedings involve the same or related issues.

      There is mutual recognition and enforcement of judgments between member state courts subject to limited exceptions.

       

      What should I be thinking about now?

      • Do I need to think about amending jurisdiction clauses in agreements conferring jurisdiction on the English courts?
      • I do business in the EU from the UK. All of the contracts with my clients are subject to the exclusive jurisdiction of the English courts. What can I do to make service of English proceedings as straightforward as possible if a Brexit occurs?
      • Should I be concerned that English judgments will no longer be as easily enforceable in the EU in the event of a Brexit, and if so is there anything I can do about it?
      • I am based in Germany and regularly deal with customers in the UK. If I successfully sue any of my customers in the German courts, will I be able to enforce the resulting judgment in the UK if it leaves the EU?
      • As a US business operating in a number of EU countries, including the UK, should I be concerned at the risk of parallel proceedings if I sue an Italian counterparty in England? Would it make enforcement of judgments easier if my business’ contractual arrangements were subject to the jurisdiction of a member state other than the UK?

       

      What could the position be following a Brexit?

      The answers to many of the above questions would depend on the nature of a post-Brexit UK/EU relationship

      To give an idea of the range of possible outcomes, we have considered what the position would be under the ‘Norwegian option’ and the ‘World Trade Organisation (WTO) option’ – on the basis these are at opposite ends of the spectrum of existing models for an alternative relationship with the EU.

      What if the UK leaves the EU but joins the European Free Trade Association and remains part of the European Economic Area (EEA)? (the Norwegian option)

      It is likely that the UK would sign up to the Lugano Convention, which currently applies to the EU, Switzerland, Norway and Iceland. This is similar to the current EU regime and as a result there would be no significant change in this area.

      What if the UK leaves the EU without any form of free trade agreement? (the WTO option)

      If the UK did not become a member of the EEA, it could still seek to sign up to the Lugano Convention (see above). It could also seek to sign up to the Hague Convention on Choice of Court Agreements, which provides a similar regime and is currently in force between the EU and Mexico. 

      In the absence of any agreement with the EU on jurisdictional matters, English courts are still likely to respect provisions in contracts that confer jurisdiction by agreement on the English courts. 

      The question of how such clauses will be treated by EU member states in this scenario will be a matter for the laws of those member states. 

      Finally, in the absence of any agreement with the EU, the enforcement of English court judgments in the EU is likely to be significantly more complex than at present.