Choice of law will remain murky post-transition

The draft Brexit withdrawal agreement gives welcome confirmations on judicial co-operation, jurisdiction, and the recognition and enforcement of judgments post-exit on 29 March 2019.

However, almost everything once the transition period has passed remains unclear.

Transition period  

The transition period is the key limit on the operation of the provisions, but is in itself a source of uncertainty. We do know from article 126 that the transition period will operate at least until 31 December 2020.

However, recent comments by both Theresa May and Michel Barnier suggest that the transition period could be extended for one or two years beyond that date. Such an extension is provided for under article 132(1).

While this leaves the length of any extension unspecified, it does clarify that only one extension will be permitted.

Therefore, all we know is that the measures under discussion will apply at least until 31 December 2020 if the withdrawal agreement clears its political hurdles.

Choice of law

The Rome Regulations provide clear rules on choice of law in contractual (Rome I Regulation) and non-contractual (Rome II Regulation) disputes throughout the EU.

Under article 66(a), these Rome I rules will continue to apply to disputes involving a British party where the contracts were concluded before the end of the transition period.

In theory, many of these contracts will be of a lengthy duration, meaning that the Rome I provisions could be activated by a breach many years after any transition period has passed.

Tort claims

Under article 66(b), the Rome II rules governing choice of law in non-contractual disputes will also continue to apply to events causing damage that occurred prior to the end of the transition period.

Many types of tort claims fall into this category.

Therefore, while again it is likely to operate after the transition period, it is unlikely to have as long an impact as the Rome I equivalent, as many of the actions will be subject to national limitation periods.

Jurisdiction

Similarly, the jurisdiction rules under a number of pieces of EU legislation will continue to apply in relation to actions commenced before the end of the transition period. These regulations are:

• The Brussels Recast Regulation (covering most civil and commercial matters),
• The Brussels II bis Regulation (covering many marital and family matters),
• The Maintenance Regulation,
• The General Data Protection Regulation,
• The Trade Mark Regulation,
• The Community Design Rights Regulation,
• The Posted Workers Directive, and
• The Community Plant Variety Rights.

Related legal proceedings after the transition period, for example, a lis pendens issue where an action has already been initiated in another member state, will also continue to benefit from these well-established provisions, even if the second action is initiated after the transition period.

Recognition and enforcement of judgments

A key concern for many commercial and non-commercial persons is the regime governing the recognition and enforcement of judgments.

One of the most beneficial aspects for parties to litigation is the streamlined process that has evolved in a number of EU instruments since the Brussels Convention.

The current versions of these streamlined processes will continue to apply where the underlined proceedings have been instituted before the end of the transition period under article 67(2).

Similarly, court approved settlements in matters instituted before the end of the transition period will also benefit from the current regimes.

However, it now seems clear that the enforcement of settlements that are not court-approved, but which arise from proceedings that pre-dated the end of the transition period and were concluded within the transition period, but are sought to be enforced after the transition period, will fall outside the scope of the withdrawal agreement.

The European Enforcement Order process will also continue to apply to judgments where the relevant certification was applied for before the end of the transition period.

Service of documents

The Service Regulation [ital] has allowed for a relatively efficient and recognised system for the transfer of legal documents between member states.

To avoid documents being stuck in limbo, where a document is received for service before the end of the transition period, the provisions of the regulation will continue to apply. This is provided for in article 68(1).

Other areas temporarily covered

Articles 67(3), 68 and 69 maintain co-operation in a number of other areas until the end of the transition period, including:

• Proposals to place a child in another state,
• Requests received for the taking of evidence,
• Cross-border mediations,
• Insolvency proceedings, and
• The European small claims procedure.