Recognition and enforcement in the EU in the event of a 'no deal' Brexit

If the UK and the EU do not enter into a withdrawal agreement or if no extension is granted to the deadline, then various EU laws/regulations will no longer apply to the UK after 11pm on 29 March 2019.

In the event of a “no deal Brexit” The Civil Jurisdiction & Judgments (Amendment) (EU Exit) Regulations 2019 will revoke the Recast Brussels Regulation & the 2001 Brussels Regulation and the Service of Documents & Taking of Evidence in Civil & Commercial Matters (Revocation & Saving Provisions) (EU Exit) Regulations 2018 will revoke the EU Service Regulation.

The result of leaving the EU without a deal is that both jurisdiction and enforcement of judgments will be determined by a combination of existing common law and statute and when it applies the Hague Convention.

The UK has already taken steps to join the Hague Convention in its own right by depositing its  instrument of accession and this will come into force on 1 April 2019. The Hague Convention gives effect to exclusive choice of courts agreement in favour of the contracting states and provides that the judgment will be recognised and enforced in the other contracting states too.

It is important to note that the Hague Convention will only apply to those cases where there is an exclusive jurisdiction clause in the agreement between the parties. It does not contain any rules relating to jurisdiction where there is no exclusive choice of law clause in place.

Some concern has also been raised about whether the Courts in EU Member States will uphold exclusive jurisdiction clauses entered into after the convention came into force on in the EU on 1 October 2015 but before 1 April 2019 when the UK will become a member in its own right. The uncertainty being whether the EU Courts may decide to only uphold English exclusive jurisdiction clauses entered into on or after 1 April 2019. However, the majority view remains that English exclusive jurisdiction clauses are likely to remain valid and enforceable across the EU under the Hague Convention.

If there is no exclusive jurisdiction agreement in place then the Hague Convention will not apply and in those circumstances the UK Courts will need to apply common law in order to determine the validity and enforceability of non-exclusive jurisdiction clauses and the appropriate jurisdiction when there are is no jurisdiction agreement in place.

In relation to service of proceedings, once the EU Service Regulation is repealed on exit day, the UK will no longer despatch documents for service in EU Member States and simply will not comply with requests by Member States to serve documents on parties in the UK under the EU Service Regulations. Instead, we will need to consider if proceedings can be served under the Hague Convention if it applies to the proceedings and if not we will need to consider how best to serve under the appropriate Member State’s law and whether such service will mean that any resulting Judgment will be recognised and enforced in that Member State.

In summary, if there is a “no deal Brexit” and there is an exclusive jurisdiction agreement in place between the parties then it will be possible to rely upon the Hague Convention. However, where the jurisdiction clause is non-exclusive or there is no agreement as to the jurisdiction, common law will apply which will create more uncertainty.