Brexit: implications for dispute resolution after EU-UK transition ends
Despite the EU and UK’s eleventh-hour deal on trade in December 2020, no direct agreement was reached to replace the Brussels Regulation (recast) regime. This regulation provides a streamlined process for the reciprocal enforcement of judgments between the courts of EU Member States. Since 1 January 2021, therefore, the regime no longer applies to the UK.
In the absence of the Convention or a convention with a similar effect, ‘there will be no uniform system of rules by which an English judgment can be enforced in EU Member States’, says Leigh Crestohl, a partner at Zaiwalla & Co.
Crestohl explains that each case would depend upon the particular national laws of each country, which may offer a judgment debtor greater opportunities to resist enforcement. This, in turn, ‘introduces an element of uncertainty, increased cost and risk’, says Crestohl.
An important and attractive feature of the previous regime was the possibility of obtaining an English Worldwide Freezing Order, which could then be enforced in other EU Member States with relative ease. ‘This may be a more difficult route for claimants should the UK not accede to the Lugano Convention’, Crestohl says.
Companies may wish to review any standard form templates or agreements and highlight any clauses which may be problematic to enforce in the EU27.
‘In practice this may mean considering whether any choice of law agreement is going to be considered valid and effective under the laws of the other contracting party, as well as ensuring wherever possible that contractual terms are compatible with mandatory rules of the other party’s national law or EU law’, says Crestohl.
Read the full article on the International Bar Association (IBA) here.