While a range of outcomes, including a departure under the terms of the current Withdrawal Agreement, remains possible, it is important for businesses to plan for a no-deal Brexit, in which the UK leaves the EU without a withdrawal agreement or other deal. Here we look at the potential impact of a no-deal Brexit on dispute resolution.
Current EU framework
Currently the UK is part of a harmonised EU legal system that includes cross-border frameworks dealing with jurisdiction, governing law and enforcement.
Implications of no deal
In the event of no deal:
EU Member State courts will continue to recognise choice of law clauses, irrespective of where the contracting parties are domiciled, under the Rome I and II Regulations. English courts will continue to recognise choice of law clauses, irrespective of where the contracting parties are domiciled, under national legislation implementing the Rome I and II Regulations. Choice of courts and enforcement
The principal EU instrument on cross-border civil and commercial disputes is the recast Brussels Regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the Brussels Regulation). TheBrusselsRegulation currently determines which court has jurisdiction over a dispute and provides for "mutual recognition" and enforcement of court decisions between EU Member States. In the event of no deal, the UK will no longer participate in the Brussels Regulation.This means that choice of court clauses in favour of the English courts, and English court decisions will no longer be recognised in the EU as they are now. Instead, either the Hague Convention will apply or the courts of Member States will apply their own laws and local law advice will be required. The 2005 Hague Convention entered into force on 1 October 2015 and has been ratified by the EU, Mexico, Montenegro and Singapore.It applies to choice of court agreements made after its entry into force in the state of the chosen court.The UK will accede to the Hague Convention on the date of Brexit. The Convention establishes a parallel regime for the recognition of exclusive jurisdiction clauses (but not asymmetric or non-exclusive clauses) and the enforcement of judgments arising from that exclusive jurisdiction...