No deal Brexit: Procedural Changes

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4 min.

A deal, a no deal or an extension? Nobody can be certain right now. However, in case of a no deal, many changes will occur to the United Kingdom and to the European Member states regarding the competence of the court in international procedures. Furthermore, the government of the United Kingdom has claimed that they will retain the Rules of the Rome I and Rome II Regulation regarding the applicable law in cross border procedures.

European Payment Order Procedure and The Small Claims Procedure

It is completely unclear what the status of these ongoing European procedures will be on and after 29th March 2019. It is probable that European Payment Order procedures[1] and Small claims procedures[2] that are pending on the withdrawal cannot be continued after this date in a no deal scenario. After 29th March 2019, these procedures will not be possible in a dispute between a party based in a Member state and a counterparty based in the UK.

Ongoing court proceedings in the UK on exit day

The UK government has elaborated that they will seek to provide legal certainty for businesses, and individuals who are involved in court proceedings in the UK on exit day. This could mean that these ongoing cases on exit day may continue to proceed under the current rules.

Applicable Law after Brexit

The objective referral rules from the Rome I and Rome II Regulation, which still apply to an agreement between a European party and a UK party, will in principle no longer apply after the UK will leave the EU. However, the government of the United Kingdom has claimed that:

“[…] Businesses and individuals can generally continue to use the same rules as they do now to determine which law would apply in cross-border disputes. This is because all parts of the UK will retain the Rome I and Rome II rules on applicable law in contractual and non-contractual matters, which generally do not rely on reciprocity to operate.”

Following the aforesaid, not much will change when it comes to the rules for applicable law, even in the event of a no deal.

Do you want to know more about the enforcement and recognition of court judgments after Brexit? Read our blog: ‘Enforcement and recognition of court judgments after Brexit

Choice of court after Brexit

Furthermore, in the event of a no deal, the UK government has said they are going to take the necessary steps to re-join The Hague Convention on Choice of Court Agreements. If this convention is ratified, judgments by the chosen court must be recognized in all states where the convention is applicable. Currently the UK is participating in this convention due to the EU membership. It is anticipated that The Hague Convention on choice of court agreements will come into force in the UK on 1st April 2019 if there is a no deal Brexit.

Do you have any questions regarding the amendments of agreements due to Brexit or would you like any further clarification? Contact us today. Our specialists can advise about how Brexit might affect you and what the best possible steps are in judicial procedures against a UK based company.

 

 

[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.