Brexit impact on cross-border disputes

Current rules determining jurisdiction in cross-border disputes could be swept away post-Brexit, solicitors have warned.

According to solicitors at CMS Cameron McKenna, key concerns are likely to be “whether or not the new regime will complicate the recognition and enforcement of English court judgments in EU member states; and the effect of the new regime on the rules for determining jurisdiction”.

They point out that, as the UK’s withdrawal has not yet been negotiated, the rules which will replace the current system are unknown. “Understandably, this may cause some anxiety for parties that could be affected by these changes.”

Partners Sarah Grenfell and Guy Pendell, and senior associate Kushal Ghandi, explain that current EU rules on jurisdiction are mainly contained in the Recast Brussels Regulation, with the default position being that a party should be sued in the member state in which it is domiciled. After Brexit, this regulation may no longer apply.

The UK could therefore negotiate to follow the 2007 Lugano Convention, like Iceland Norway and Switzerland, or accede to the Hague Convention on Choice of Court Agreements. However, the Convention does not provide a comprehensive regime regarding jurisdiction, as it only applies to exclusive choice of court agreements, according to Grenfell, Pendell and Ghandi. Alternatively, the UK could negotiate bilateral or multilateral treaties with EU member states, “an option that would likely lead to significant uncertainty”.