Currently, when a dispute arises between parties in different countries within the European Union, those parties turn to EU law to determine which country’s laws will apply, which country’s courts have jurisdiction and how to enforce Judgments. If no deal is agreed over Brexit, many of the rules on court jurisdiction and enforcement will be repealed as they rely on co-operation between the relevant countries.
Where will a no-deal Brexit leave you?
Parties may state within their terms and conditions which law and jurisdiction they would prefer to apply. However, if those terms are not incorporated into a contract, or where no such provision is made within the terms, a “no deal” Brexit may be beneficial to Claimants.
EU law sets down a number of rules to determine which country’s courts have jurisdiction to hear a case and this can vary case to case.
If no deal is agreed, common law rules will apply in England and Wales. If there is a sufficient connection between the claim and England and Wales, the “first served” rule will apply. This will mean that money claims may be heard in the Courts of England and Wales if, before the customer commences proceedings in their own country, the Claimant:
- is able to serve a claim on a non-UK based customer whilst they are in England or Wales; or
- obtains the permission of the English or Welsh Court to serve English or Welsh proceedings on a non-UK based customer.
Claimant’s should therefore consider commencing proceedings promptly in a no-deal Brexit, before alternative rules are brought into force.
In contrast, enforcement of English and Welsh Judgments may not be as straightforward under a “no deal” Brexit.
Existing rules generally mean that the Claimant does not need to obtain in-depth advice on the customer’s local court rules and instead they can ask the English or Welsh Court to certify the Judgment so that it is enforceable in the customer’s local jurisdiction, usually with few obstructions.
Without a deal, the Claimant would need to turn to local laws to determine how to enforce the Judgment. This may be more time- and cost-consuming. Claimant’s should consider enforcing any Judgments prior to a no-deal Brexit.
What if a deal is reached?
At the moment, the current proposals provide for a transitional period up to 31 December 2020, within which most EU laws will continue to apply. During this transitional period, the UK and the EU will negotiate the future of judicial co-operation.
If you have an outstanding debt owed to you by a European national, please contact our specialist Litigation & Recoveries team for advice on your options pre and post Brexit to make the most of the potential changes.