How will Brexit affect European procedures?

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Brexit is an abbreviation for “British exit,” referring to the UK’s decision to leave the European Union following a referendum that was held on 23rd June 2016. There is no denying it: The United Kingdom will be leaving the European Union. The only question that keeps us all under its spell: Will there be a ‘deal’, a ‘no deal’ or an ‘extension’, and what are the effects of these scenarios on European Procedures?

Article 50 Lisbon Treaty

Article 50 makes it possible for any country to leave the European Union and it describes what happens after this article is triggered. Any country that wishes to leave the EU must notify the European Council and negotiate its withdrawal from the EU. Once triggered, a country will have two years to reach a Withdrawal Agreement. An agreement between the United Kingdom and the European Union must therefore be reached before 29th March 2019. If no deal is reached, the Treaties shall immediately cease to apply to the United Kingdom.

What happens next?

If the Withdrawal Agreement is ratified before 30th March 2019, EU law will cease to apply to and in the UK on 1st January 2021, i.e. after a transition period of 21 months. If the Withdrawal Agreement is not ratified before 30th March 2019, there will be no transition period and EU law will cease to apply to and in the UK as of 30th March 2019. This is referred to as the “no deal” or “cliff-edge” scenario. Lastly, there is also the possibility of extending Brexit for a few months, or even a few years.

    • Deal Scenario

The deal scenario entails a so-called: “Transition Period”. This would mean that the UK could remain subject to EU rules and policies for another 21 months, until 31st December 2020. That would include remaining under the jurisdiction of the European Court of Justice. Proceedings between European plaintiff/defendants and English plaintiff/defendants that are pending on the withdrawal date can still be continued under European rules for international jurisdiction. If the European Payment Order[1] or the European Small Claims Procedure[2] are lodged before the end of the transition period (so before 31st December 2020), the European regulations still apply.

      • No Deal Scenario

In both economic and legal sense, the most disruptive scenario is a no deal scenario. If a no deal Brexit occurs, the United Kingdom will step out of the European Union on 29th March 2019 without a Withdrawal Agreement on their future relationship. As it seems this is the most likely outcome, proceedings between European plaintiff/defendants and English plaintiff/defendants that are pending on or after the withdrawal date, will not be continued under European rules for international jurisdiction. It is probable that the European Payment Order and the Small Claims Procedure also cannot be continued after this date. International treaties/conventions may apply.

Do you want to know more about how a no deal scenario might affect you? Read our Blog: ‘Brexit: Deal, no Deal or extension?’.

      • Extension of Brexit

The only way to leave on time is without a deal: a chaotic Brexit without agreement. This is a disaster scenario for both the EU and the UK. Therefore, there have been whispers about a possible extension of Brexit. How long this extension may be, is not entirely clear. The UK talks about a few months; however, Brussels is considering a few years.

The Hague Conference on Private International Law

After the transition period in a deal scenario (31st December 2020) and in a no deal scenario (29th March 2019), recognition and enforcement will be governed by the national rules of the Member State in which recognition/enforcement is sought. In some instances, international conventions, such as the conventions developed by The Hague Conference on Private International Law[3] apply, provided that both, the EU/EU Member States and the United Kingdom are parties to the convention.

Conclusion

As of right now, it is not advisable to start a European Payment Order or a Small Claims Procedure against an English defendant. If a no deal scenario occurs, it might not be possible to continue these procedures. We advise you to wait until 29th March 2019 to see if the Withdrawal Agreement will be signed. We can only guess the possible outcome, until then, Brexit will keep us all under its spell…

Do you have any concerns or questions regarding Brexit and European procedures? Then contact us. Our specialists can assist you with all your questions and difficulties regarding Brexit and its effect on European procedures.

 

[1] A simplified procedure for cross-border monetary claims which are uncontested by the defendant, based on standard forms.

[2] This is designed to simplify and speed up cross-border claims of up to €5000.

[3] The World Organization for Cross-border Co-operation in Civil and Commercial Matters.