Brexit: justice for families, individuals and businesses? Contents

Chapter 4: Options for the future

99.During our inquiry, witnesses proposed a number of alternative post-Brexit solutions that could mitigate the loss of these Regulations, while taking into account the Government’s aim of bringing an end to the CJEU’s jurisdiction in the UK (see Box 13).

Box 13: No CJEU/no Danish model

In the area of EU civil law, Denmark enjoys a complete opt out. However, in 2005 the Danish Government signed an international agreement with the then European Community, to participate in both the original Brussels I Regulation and, more recently, the Brussels I Regulation (recast). 148 By virtue of this agreement Denmark must accept the jurisdiction of the CJEU to interpret this legislation, and Danish courts (which, importantly for the purposes of the Treaty’s preliminary reference procedure, remain courts “of a Member State”149 are obliged to refer questions on the legislation’s interpretation to the CJEU (Article 6).

The Government’s stated desire to bring an end to the CJEU’s jurisdiction in the UK post-Brexit appears to rule out the suggestion made by some witnesses to this inquiry that the UK should seek to emulate the Danish model.150

Advice for the Government

Civil and commercial law

100.On behalf of the Bar Council, Hugh Mercer QC told us that “for this area of civil justice co-operation you need a sensible approach”. The remaining EU Member States had an interest in their “citizens having certainty in dealing with the UK”, while the Government should recognise that “our citizens and our businesses need certainty dealing with the EU”. He concluded that “both sides have a really strong mutual interest in making sure that the little guy does not suffer as a result of Brexit when he is involved in cross-border situations”.151

101.Sir Richard Aikens pointed out that with the movement of people across borders, “and with trade with Europe both being as evident and important as they are, it is inevitable in the civil and commercial sphere that there will be cross-border disputes of all sorts”. He argued that to “dismiss from your priorities list the question of how we are to deal with cross-border disputes seems to me to be, with respect, irrational, so I hope that it is on the list somewhere”.152 The current uncertainty would “create some anxiety”, but the solution was simply to “get on and do a deal … it is not beyond the wit of sensible and rational people … and two years should be plenty of time in which to do it”.153

102.Professor Fentiman, in contrast to all our other witnesses, emphasised the UK’s strengths in any negotiation:

“We would not be negotiating from a position of weakness … we need not be worried about the absence of the EU rules, because if indeed the common-law rules were, post-Brexit, to occupy the space, we would have a well-known and certain body of rules regarded throughout the world as the world-leading rules in that area. There is no need for urgency.”154

Family law

103.David Williams QC said that his “first choice would be to maintain Brussels II or the recast Regulation—whatever shape that eventually takes—in force as part of the negotiation, if we could”, but he acknowledged that “that necessarily involves the Court of Justice of the European Union having the interpretive role”. He therefore hoped that a way could be found to maintain these Regulations, while “cutting out the CJEU … because that is what is in the interests of children”.155

104.Tim Scott QC sought a similar goal. He said that the two Regulations were “mutually beneficial for all member states”, and argued that “for the stability of families and the welfare of children across the EU it is important to preserve this framework”. He believed that the stability provided by the two Regulations would make this solution “easy to sell at an emotional/political level to the British people”.156

105.Sir Mathew Thorpe made a simple plea to the Government: “Do not overlook the importance of family law.”157

Non-CJEU alternatives for the BIR

Do nothing: the common law will suffice

106.Professor Richard Fentiman argued that, in the immediate aftermath of Brexit, “we do not need … to do anything other than allow the common law rules to fill the space”.158 He believed that when the BIR fell away, “there will not be a vacuum; it will simply be the case that the widely used [common law] rules, which are considered around the world as state of the art … would simply occupy the space vacated by the EU regime”. In this way, “there would be no loss of performance post-Brexit. The courts and litigants will be able to continue and the rules that would be used are very satisfactory”.159

107.We put Professor Fentiman’s view to our other witnesses. Former Court of Appeal judge the Rt Hon Sir Richard Aikens accepted that “you could go back”. But this “would not be satisfactory, it would create an enormous amount of uncertainty, and for all areas of the law it would not be helpful”.160

108.Richard Lord QC felt that falling back on the common law rules would not be “an absolute disaster”, but would be a “retrograde step and [would] cause difficulty”. He concluded that it was not “a realistic or practical option”;161 it would be a “recipe for confusion, expense and uncertainty”.162

109.Oliver Jones said he “could not disagree more” with Professor Fentiman.163 He rejected the suggestion that “we could or should be relaxed about simply leaving the current regime and putting nothing else in place and allowing the common law to return to a judicial space from which it has been on hiatus for the past 30 years”. This “does not tally with the views of anyone I have spoken to in the London legal market”.164

110.David Greene, on behalf of the Law Society, agreed. The common law “might provide answers … but the world has moved on a bit in 40 years. We have moved to a much more international and more European-focused United Kingdom.”165 In his view, “the development of common law is a very expensive process … We would be going back all those years and trying to develop the common law quite quickly to meet modern conditions”. He concluded: “That is the problem with going back: it has … uncertainty.”166

111.Hugh Mercer QC, on behalf of the Bar Council, argued that the UK courts would “suffer if we go with the common law”.167 The BIR’s rules operated “on the basis of saying, ‘In circumstances A, B and C, you go to Italy. In circumstances D, E and F, you go to England’”. In contrast, the “common law system will always decide [on a] discretionary basis which is the appropriate court. That means that a defendant who wants to string things out always has the possibility of an argument; he cannot be struck out on that basis and he can always argue the point”.168

112.He acknowledged that the common law might help deal with judgments from other jurisdictions, but it would not “help with the export of judgments: what happens to English judgments when they arrive in Italy, Spain, Portugal or France”.169 Echoing the Law Society’s views on costs, he warned that “oligarchs can always afford the common law”, but for “the little guy… certainty and uniformity” were provided by the BIR.170

113.The Minister accepted that if the UK were to fall back on to the common law, “we would not have the reciprocity and the mutual agreement” on which the BIR was built. This solution was “certainly not [the Government’s] choice”.171

114.The balance of the evidence was overwhelmingly against returning to the common law rules, which have not been applied in the European context for over 30 years, as a means of addressing the loss of the Brussels I Regulation (recast). We note that a return to the common law would also not be the Government’s choice.

115.A return to the common law rules would, according to most witnesses, be a recipe for confusion, expense and uncertainty. In our view, therefore, the common law is not a viable alternative to an agreement between the EU and the UK on the post-Brexit application of the Brussels I Regulation (recast).

116.Nonetheless, in contrast to key aspects of the two Regulations dealing with family law, Professor Fentiman was of the opinion that in the event that the Government is unable to secure a post-Brexit agreement on the operation of the Brussels I Regulation (recast), a return to the common law rules would at least provide a minimum ‘safety net’.

Seek UK Membership of Lugano Convention plus Hague Convention on choice-of-court agreements

117.Professor Fentiman also suggested that a long-term solution “might involve … membership of … the Lugano Convention” (see Box 14). He proposed this approach because it would introduce a “degree of uniformity into the process”, and “all the evidence surrounding the Lugano Convention … is that having that … soft approach to the CJEU is perfectly workable, and you do not have to submit to its compulsory, mandatory judgments”.172

118.Professor Peers said that “whatever relationship we might wish to seek with the European Union, the Lugano Convention is clearly there as a precedent”.173 But, he added, the UK would inevitably lose the influence it currently enjoys as an EU Member State, because “we could not influence it by appearing in court … or having a British judge, a British Advocate-General, and so on, as part of the system”. On the other hand, it would mean that CJEU could not issue “rulings that will be directly binding on us”.174

Box 14: The Lugano Convention

The scope of the Brussels regime outside the EU has been extended by the Lugano Convention, concluded on 16 September 1988 between the (then) 12 Member States of the European Community and the (then) six Member States of the European Free Trade Association (EFTA).

Its effect is to create common rules regarding jurisdiction and the enforcement and recognition of judgments across a single legal space consisting of the EU Member States (including Denmark) and, since 2007, three of the four EFTA states (Iceland, Norway and Switzerland: Liechtenstein, which joined the European Free Trade Association in 1991, is not party to the Lugano Convention). The Lugano Convention was given effect in the United Kingdom in 1991.

The Convention covers the same subject matter as the original Brussels I Regulation, which was replaced within the EU in 2012 by the BIR. The Convention, therefore, does not cover the most up-to-date version of the legislation, and retains the inherent shortcomings of the Brussels I Regulation. For example, the problems caused by the rigid application of the lis pendens rules (highlighted in Box 6) remain an issue, and the enforcement in the UK of judgments delivered by the courts of Iceland, Norway and Switzerland are subject to an additional registration requirement (Article 38(2)). In this way, the mechanisms for the recognition and enforcement of judgments are not as straightforward as those under BIR. Its rules do, however, cover maintenance-related claims (Article 5(2)), so it could be a replacement for the MR.

Judicial oversight

Protocol 2 of the Lugano Convention deals with the uniform interpretation of the Convention. Under the Protocol, the national courts of Iceland, Norway and Switzerland are not subject to the CJEU’s jurisdiction. Instead, “any court applying and interpreting this Convention shall pay due account to … any relevant decision … rendered by the courts of the States bound by this Convention and by the Court of Justice” of the European Union.

119.Sir Richard Aikens argued that if the UK could not remain in the current system, “the answer is to do what is being done with Lugano”. He explained that, in effect, there were two systems under the Convention: “If an EU state is involved … it has to go to the CJEU.” For the non-EU states, they do “not have to send things to the CJEU [they are] just bound to have regard to the CJEU’s decisions on the interpretation” of the Convention”.175

120.Professor Jonathan Harris QC also suggested that UK participation in the Lugano Convention seemed to be “a more plausible solution [and a] more politically acceptable option”. This was principally because “Norway, Iceland and Switzerland are not directly subject to the European Court of Justice’s jurisdiction. Their national courts are bound to have regard to [the CJEU’s] case law”. But he added a caveat, that the Lugano Convention was “not quite as good as [the BIR]. It does not have quite as streamlined a procedure for enforcement. The protection against proceedings brought in breach of an English exclusive jurisdiction clause in another member state is not as good.” Nevertheless, he concluded, “it is an awful lot better than nothing at all”.176

121.Richard Lord QC accepted that the easiest solution might well be “to go back to Lugano with this idea … of just paying due regard to” the CJEU. But he also warned that “you would lose some of the additional advantages that you get in Brussels I recast as opposed to Lugano”.177

122.The Law Society expressed similar views. David Greene said: “We are looking for certainty … we would regard Lugano as the second choice compared with Brussels, but it might be Lugano.” His colleague, Dr Helena Raulus, told us: “Of course, as an alternative, it is possible to enter Lugano, but then some of the consumer issues start to fall out.” She therefore added that the Law Society “would also encourage amending Lugano”.178

123.Alongside membership of the Lugano Convention, various witnesses also proposed UK ratification of the 2005 Hague Convention on choice-of-court agreements (see Box 15). Professor Fentiman described the 2005 Convention as “an important international instrument”.179 Professor Adrian Briggs agreed.180

Box 15: 2005 Hague Convention on choice-of-court agreements

The 2005 Hague Convention on choice-of-court agreements seeks to promote the freedom of businesses to agree that a particular court should have jurisdiction to deal with disputes that might arise. It also ensures that judgments of the chosen court are recognised and enforced by other courts. The Convention covers an area which is dealt with, as between EU Member States by the BIR, it is thus a matter of exclusive EU competence, and was ratified by the EU in June 2015. 181

124.Professor Jonathan Harris QC also suggested ratification of the 2005 Convention, noting that “the UK is already bound by virtue of the EU’s ratification and … the UK could ratify in its own right once it leaves the European Union”. He suggested that “there would be some advantage to reassuring the public and business if there was an early announcement of an intention to ratify that Convention as soon as the United Kingdom can”.182

125.Professor Harris also recommended that the Government “announce that if no other deal is forthcoming, the rules in what are currently called the Rome I and Rome II Regulations on choice of law for contractual and non-contractual obligations will be enacted into domestic statute, so at least we would have certainty that choices of English law will continue to operate on broadly the same basis”.183 The Rome I and Rome II Regulations are described in Box 16.

Box 16: Rome I and Rome II

These two Regulations deal with the issue of applicable law, namely in any given legal dispute with an external element which law ought to be applied (for example, the case scenario in Box 4). The Rome I Regulation 184 applies to contractual relations, while Rome II deals with non-contractual obligations.185

Because neither of these Regulations relies on reciprocal arrangements, they could be implemented in the UK via the Great Repeal Bill, without the problems described in respect of the three Brussels Regulations.

126.The combination of UK membership of the Lugano Convention, implementation of the Rome I and II Regulations through the Great Repeal Bill, and ratification of the Hague Convention on choice-of-court agreements, appears to offer at least a workable solution to the post-Brexit loss of the BIR.

127.The inclusion in the Lugano Convention of a requirement for national courts to “pay due account” to each other’s decisions on the content of the Brussels I Regulation, without accepting the direct jurisdiction of the CJEU, could be compatible with the Government’s stance on the CJEU’s status post-Brexit, as long as the Government does not take too rigid a position.

128.This approach will come at a cost. In particular, it will involve a return to the Brussels I Regulation, with all its inherent faults, which the UK as an EU Member State succeeded, after much time and effort, in reforming.

Non-CJEU alternatives for the BIIa and the MR

Do nothing: return to the common law II

129.Sir Mathew Thorpe recalled that prior to the enactment of the BIIa and Maintenance Regulations, the common law principle of forum conveniens ruled family law. This principle, which still applies for non-EU cases, involved a “great deal of expensive litigation … in trying to establish which court was the more convenient”. He added that “even if litigants can afford all the expenses it … takes up court time”.186

130.Tim Scott QC agreed, arguing that “there are strong structural and practical reasons” against a return to the common law rules. He argued that if “we were to go back to forum conveniens in intra-EU cases … a potentially very large number of cases will be imposed on an already fully stretched family court that is having to relearn the law”.187

Fall back on alternative international arrangements: the 1996 Hague Convention

131.We also considered alternative international law solutions. David Williams QC accepted that the 1996 Hague Convention (see Box 11) could offer the UK a “default position … provided steps are taken to re-enact it”. But, he added, there would be a cost, because the Convention “is not as extensive” in its coverage as the BIIa.188 As an example, he cited the BIIa’s mechanisms for cooperation between national authorities, the European Judicial Network (EJN), and practitioners. The advantage of the BIIa was that “if you are operating in the same system, it makes it much easier to work productively together for the benefit of the child”.189

132.Jaqueline Renton also highlighted the 1996 Hague Convention’s shortcomings: while “there is a backstop on children”, it does not “provide a divorce backstop”. She also argued that the Convention would provide cover on “jurisdiction … but there will be no reciprocal enforcement; you will effectively be talking to yourself”.190

133.Professor Rebecca Bailey-Harris recognised that finding solutions to the loss of these two Regulations was a “massive task”. She echoed Jacqueline Renton’s comments about divorce law, saying that “there is just no … safety net”. She therefore suggested that there might be an argument for “enacting the divorce parts of [the BIIa] into domestic legislation and trying to achieve reciprocity by negotiation” with the remaining EU Member States.191

The Lugano Convention as a replacement for the Maintenance Regulation

134.Turning to the MR, Professor Bailey-Harris suggested UK membership of the Lugano Convention (see Box 14) as a potential alternative. She noted that “although [the Lugano system] does not have its own court, it takes on the CJEU’s jurisprudence as advisory”.192

135.In contrast to the civil and commercial field, we are particularly concerned that, save for the provisions of the Lugano Convention on cases involving maintenance, there is no satisfactory fall-back position in respect of family law.

136.Our witnesses were unanimous that a return to common law rules for UK-EU cases would be particularly detrimental for those engaged in family law litigation. The Bar Council also suggested that an already stretched family court system would not be able to cope with the expected increase in litigation.

137.The Bar Council specifically called for the EU framework in this field to be sustained post-Brexit. But while this may be the optimal solution in legal terms we cannot see how such an outcome can be achieved without the CJEU’s oversight.

138.Other witnesses suggested the UK rely on the 1996 Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in respect of Parental Responsibility and Measures for the Protection of Children. But the evidence suggests that this Convention offers substantially less clarity and protection for those individual engaged in family law based litigation.

The Minister’s view

139. The Minister approached our questions regarding the UK’s post-Brexit options from two standpoints. First, he emphasised the Government’s desire “to make a new agreement, a new relationship, with the EU for the future that is constructive and tackles these important issues”.193 He stated that the Government’s “preference is to reach agreement within the two-year period and for it to be implemented thereafter”. If this proved impossible with regard to the BIR, he noted that “there are common law rules”.194

140.As for the BIIa, he recognised that it “was very helpful”, but he did not confirm the Bar Council’s suggestion that the Regulation’s framework should be maintained post-Brexit: “We will not necessarily ask to be in Brussels IIa; we may well make a separate agreement that one hopes has its main provisions”.195

141.Second, the Minister frequently repeated the Government’s view that post-Brexit the CJEU “would not [be] overseeing anything that we do”.196 When pressed on the detail of any post-Brexit arrangements, and the issue of judicial oversight, he said that “other arrangements would have to be made”. He acknowledged that there were “existing tools that one could look at, such as Lugano, but we are not at that point”. He also suggested other models, such as the EU’s trade agreements with Canada and South Korea.197

142.The Minister held fast to the Government’s policy that the Court of Justice of the European Union will have no jurisdiction in the UK post-Brexit. We remain concerned, however, that if the Government adheres rigidly to this policy it will severely constrain its choice of adequate alternative arrangements.

143.Clearly, if the Government wishes to maintain these Regulations post-Brexit, it will have to negotiate alternative arrangements with the remaining 27 Member States to provide appropriate judicial oversight. But the Minister was unable to offer us any clear detail on the Government’s plans. When pressed on alternatives, he mentioned the Lugano Convention and “other arrangements”. We were left unable to discern a clear policy.

144.The other examples the Minister drew on, Free Trade Agreements with Canada and South Korea, do not deal with the intricate reciprocal regime encompassed by these three Regulations. We do not see them as offering a viable alternative.

145.We believe that the Government has not taken account of the full implications of the impact of Brexit on the areas of EU law covered by the three civil justice Regulations dealt with in this report. In the area of family law, we are very concerned that leaving the EU without an alternative system in place will have a profound and damaging impact on the UK’s family justice system and those individuals seeking redress within it.

146.In the civil and commercial field there is the unsatisfactory safety net of the common law. But, at this time, it is unclear whether membership of the Lugano Convention, which is in itself imperfect, will be sought, offered or available.

147.We call on the Government to publish a coherent plan for addressing the post-Brexit application of these three Regulations, and to do so as a matter of urgency. Without alternative adequate replacements, we are in no doubt that there will be great uncertainty affecting many UK and EU citizens.

148 Council Decision 2005/790/EC of 20 September 2005 on signing, on behalf of the Community, of the Agreement between the European community and the Kingdom of Denmark on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L 299/61, 16 November 2005

150 See for example, the Rt Hon Sir Richard Aikens at Q 35: “I think the best model is actually the Danish one. I can see no difficulties with it except one: what will be the position of the Court of Justice of the European Union?”; or Professor Rebecca Bailey-Harris at Q 12: “the Bar Council’s position, in both general civil law and family law, is to attempt to negotiate something like the Denmark jurisdiction agreement, whereby Denmark has not opted straight in to the Regulations but has a special arrangement”.

180 Written evidence from Prof Briggs (CJC0002), para 47

181 Hague Convention on Choice of Court Agreements (2005):–47ed-9ed5-e0972510d98b.pdf

184 Regulation No 593/2008 of 17 June 2008 on the law applicable to contractual obligations (Rome I)
OJ L 177/6, 4 July 2008

185 Regulation No 864/2007 of the European Parliament and the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) OJ L 199/40, 31 July 2007

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