Litigation Committee conference session, Milan, September 2023: Litigating in the EU and the UK after Brexit

Sean Adams
Gowling WLG, Birmingham

On Friday 15 September 2023, during the 4th IBA Litigation Committee Conference on Private International Law in Milan, the final session of the day sought to take stock of the post-Brexit position on jurisdiction and enforcement as well as service and evidence taking, and what that has meant (and will continue to mean) for cross-border litigation in the EU and UK. 

Tom Price of Gowling WLG (UK) LLP, who had compiled an excellent panel of speakers with a wealth of academic and practical knowledge on the subject, moderated the session. The speakers were Professor Jonathan Harris KC (Serle Court Chambers, England), Professor Chiara Enrica Tuo (University of Genoa, Italy) and Professor Dr Hakim Boularbah (Loyens & Loeff, Belgium).

To place the three presentations (which are explored in more detail below) in context, it must be recalled that for nearly 50 years, litigating around Europe was governed by a series of jurisdiction and enforcement (and related) regulations in force between the various EU member states, of which Brussels Recast was the latest iteration. However, as regards the UK, the formal withdrawal from the EU on 31 January 2020 cast aside, amongst other legislative regimes, both the Brussels Recast Regulation and the Lugano Convention. 

The position and approach in England & Wales

Prior to joining the EU in 1973, the English law position on jurisdiction and enforcement was governed by common law rules, which relied heavily on judicial discretion. Whilst those rules have continued to apply to situations involving disputes outside the EU regime, and where no other international treaty (e.g. the 2005 Hague Choice of Courts Convention) applies, they played little or no part in relation to matters involving the EU until Brexit took effect. Now such rules are highly relevant again for litigation involving the EU and UK, and given the volume of trade and disputes arising between parties in the UK and other European states there is a 'new dawn' for judges and practitioners alike as they seek to grapple with these common law rules. 

In terms of establishing the jurisdiction of its own courts, the UK, conscious of its position as a leading worldwide forum for the resolution of disputes, has taken steps to retain that pre-eminence in the post-Brexit era. Those steps include removing the barrier of having to seek Court permission to serve proceedings outside the borders of England and Wales where there is a jurisdiction clause in favour of the English courts (even if that clause would not be subject to the 2005 Hague Convention). The English procedural rules have also been amended to significantly widen the 'gateways' through which a claim has to pass if the English courts will adopt jurisdiction over a dispute (leaving, in effect, a broad judicial discretion as regards forum non conveniens as the only substantive control against inappropriate claims which should properly be resolved elsewhere). In addition, there is no longer a restriction on the English court's use of antisuit injunctions in relation to the pursuit of proceedings in the courts of an EU member state (which restriction originated from ECJ case law), which could give rise to an expanded use of (or at least requests for) such remedies in this sphere. 

Whilst the 2005 Hague Convention offers a convenient and familiar route for enforcement in cases where it applies (see further below), practitioners in England & Wales operating in cross-border litigation are now used to being asked about the ability to enforce European judgments. As Professor Harris explained, the English law regime (outside of the remit of the 2005 Hague Convention) is restrictive. The English courts will generally recognise overseas judgments where, for example, the defendant participated in the case on the merits or submitted to the jurisdiction of a foreign court, or if there is a relevant jurisdiction clause in play. However, the common law regime also looks on occasion to antiquated rules (such as considering whether a defendant happened to be present in the country from which the judgment originates at the time proceedings were commenced) as part of the test to determine enforceability. Whilst the lis pendens rules is a factor considered by the English courts, it is perhaps a less important factor than in some other European jurisdictions, and instead other aspects of the doctrine of forum non conveniens test are likely to play a much more significant role over the coming years.

In short, and probably unsurprisingly, the UK is doing what it can to ensure that its courts are viewed as open and available for a wide variety of overseas and international disputes. The UK continues to reform the post-Brexit statute book (although it looks like many EU instruments, including Rome I and II will be retained for at least a few more years), and as time passes the development of English law in the 'new era' will continue to be shaped by judicial discretion as well as government. Whilst further attempts by the UK to re-join the Lugano convention any time soon seem unlikely, following a consultation on the 2019 Hague Judgments Convention (the results of which pointed overwhelmingly in favour of a preference for the UK to join) the panel predicted that we may soon see the UK accede to that instrument. Whilst not as broad as the Brussels Recast or Lugano regimes, such a step would represent an improvement to the current common law position on enforcement for those litigating between the UK and Europe. 

The importance of the 2005 Hague Choice of Courts Convention

In light of the current situation, the 2005 Hague Choice of Court Convention has become a key tool in the post-Brexit jurisdiction and enforcement arena. The UK became party to the 2005 Hague Convention by virtue of the EU's accession to it in 2015. Post-Brexit, the UK acceded in its own right with effect from 1 January 2021. Whilst this does create a useful regime for enforcement of judgments in a number of jurisdictions around the world (including the EU), it is not without its limitations. 

• In particular, the 2005 Convention only applies where an agreement contains an exclusive jurisdiction clause, and whilst it applies broadly in the context of civil and commercial matters there are some notable exclusions (e.g. family matters, insolvency). 
• There is also a divergence of views between the UK and the EU as to when the UK's accession to the instrument takes effect. Whilst the UK asserts that it is effective in relation to agreements entered into from 1 October 2015 (i.e. the same date on which it entered into force as regards the rest of the EU), the EU Commission's view (and that of certain EU courts) is that the UK only became party with effect from 1 January 2021 (i.e. after the end of the transition period and the UK's exit from the EU). Whilst this is an issue which will be of diminishing importance over the passage of time, at present it creates a potential lacuna, or at least uncertainty, in relation to the ability of parties to rely on the 2005 Hague Convention in respect of agreements entered into between 1 October 2015 and 31 December 2020.
• Finally, and of perhaps most significance to those practicing in this field, the 2005 Hague Convention does not create any enforcement regime in respect of interim relief. Given that many (but not all) domestic legal regimes in Europe still do not provide for the recognition of interim measures granted overseas (other than through the Brussels Regulation), this can create significant practical difficulties for those operating across multiple jurisdictions (e.g. for companies with pan-European supply chains). Another potential impact of this is that the ability to obtain worldwide freezing order relief in England, and to then export that to European jurisdictions which do not have that option in the judicial armoury (e.g. Italy) appears to have been lost (or at least significantly watered down). 

Despite those limitations, the 2005 Hague Convention remains useful. It must also be noted that the overarching message from the panel was that the English courts are generally supportive of foreign proceedings (particularly those from EU member states), and EU member state courts are likely to take a similar view of English proceedings. As a result, even in the absence of a formal, overarching recognition and enforcement regime there may still be practical options available, such as granting interim relief in aid of foreign proceedings. 

Other practical implications 

Whilst the issues canvassed above represent the 'big issues' in this area post-Brexit, they are far from the only ramifications, particularly from the practical perspective of litigating in the UK and Europe. 

Without providing an exhaustive list of those impacts, which range from the legal to the political and cultural, additional points highlighted by the panel include:

• Whilst the EU built a sophisticated regime in respect of the service of judicial documents, speeding up and reducing the costs of that otherwise cumbersome process, parties involved in UK-EU cross border disputes are now having to dust off the 1965 Hague Service Convention. In addition to being a much more cumbersome regime, this gives rise yet again to the uncertainty around dates of service which the EU regime had managed to resolve.
• A similar impact can be felt in the field of obtaining evidence for use in foreign proceedings. Again, the sophisticated EU regime finds itself replaced for UK-EU disputes by the 1970 Hague Evidence Convention. The old regime, in addition to being more cumbersome, creates greater scope for challenges to the seeking of evidence abroad as well as removing direct enforcement options. It is also not applicable in a number of EU states, including Belgium, Austria and Ireland.