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Some claims could still be influenced by CJEU under Brexit dispute resolution proposals

The UK's proposal for a legal disputes framework after the UK leaves the EU lacks detail and the fall back provisions leave the door open to ECJ influence after Brexit, an expert has said.23 Aug 2017

The UK government published the paper on Tuesday arguing for the implementation of a 'cross border civil judicial cooperation framework' to resolve disputes between the UK and EU following Brexit.

Continued co-operation is in the interests of both the UK and the EU, the paper said. The UK wants an agreement that "would mirror closely the current EU system and would provide a clear legal basis to support cross-border activities after the UK's withdrawal", the paper said.

Britain intends to leave the "direct jurisdiction" of the Court of Justice of the European Union (CJEU), but the government understands that future civil judicial cooperation would need to take into account "regional legal arrangements, including the fact that the CJEU will remain the ultimate arbiter of EU law within the EU", it said.

Litigation expert Stuart McNeill of Pinsent Masons, the law firm behind Out-Law.com said: "The paper addresses two main areas of interest: the law that applies to contractual and non-contractual matters; and which courts have the jurisdiction to determine a claim and the recognition and enforcement of any judgment that they issue."

"On the choice of law there are no surprises. The paper confirms what already appeared to be the case from the UK's Repeal Bill, namely that the UK plans to transpose the European rules on conflict of laws, Rome I and II, into domestic law. The UK is free to do this unilaterally and so nothing will change," McNeill said.

"Everything else however requires reciprocity. As expected the government aims to negotiate a new judicial cooperation agreement with the EU in order to maintain the relative ease with which intra-EU judgments, or those of Norway, Iceland, Switzerland and others, are recognised and enforced. The paper emphasises the 'shared interest' in achieving this aim but there is no detail about how this might be done," he said.

"In the absence of agreement the UK’s paper on transitional arrangements is almost identical to the EU’s paper issued on 12 July, except that the UK goes further, providing for mutual recognition and enforcement of decisions of EU member state courts and UK courts after Brexit takes effect, provided the proceedings started prior to that date," said McNeill. "The EU paper seemed only to propose recognition of decisions actually given pre-Brexit. This provides greater certainty for claimants but means that where member states’ courts have, after March 2019 but in proceedings instituted earlier, handed down decisions influenced by rulings of the CJEU, the UK will have to recognise such member state court decisions and will thereby implicitly be recognising CJEU jurisprudence."

Brexit secretary David Davis said in a column in the Sunday Times (registration required) this week that the UK would bring about an end to the direct jurisdiction of the CJEU and that finding a mechanism to manage disputes between the UK and EU over their agreements would require a "new and unique solution".

Under that solution the UK could follow the precedent set by the European Free Trade Association court. That body handles disputes between Iceland, Liechtenstein and Norway with the EU single market.

The Department for Exiting the EU also published two position papers ahead of the third round of negotiations focusing on the trade of goods and services (11 page / 242KB PDF), and confidentiality and access to documents (4 page /168KB PDF).