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CJEU jurisdiction and judicial cooperation after Brexit

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The government has published two new position papers setting out its approach to agreements covering judicial cooperation and dispute resolution between the UK and EU after Brexit, on the assumption that the UK will no longer be under the direct jurisdiction of the CJEU. The papers also list the main principles the UK government will apply if agreement cannot be reached, and explore possible models for continued reference to decisions of the CJEU.

In the first paper, ‘Providing a cross-border civil judicial cooperation framework: a future partnership paper’ (see, the government states that the UK will seek an agreement with the EU that allows for close and comprehensive cross-border civil judicial cooperation on a reciprocal basis, which reflects closely the substantive principles under the current EU framework. The paper also prepares for the worst, listing the main principles the UK government will apply if agreement cannot be reached.

The paper repeats the government’s position that, after leaving the EU, the UK will be outside the direct jurisdiction of the Court of Justice. Nevertheless, future civil judicial cooperation will need to recognise that the Court of Justice remains the ultimate arbiter of EU law within the EU. 

In the absence of an agreement, the paper sets out in an annex the general principles the government proposes to apply in winding down the existing relationship. These include:

·         Applicable law: determined by existing EU rules governing the applicable law for contractual and non-contractual obligations for contracts concluded before the withdrawal date and, in respect of non-contractual liability, to events giving rise to damage which occur before withdrawal date.

·         Jurisdiction: determined by existing EU rules governing jurisdiction to determine disputes for all legal proceedings instituted before the withdrawal date.

·         Choice of court: determined by existing EU rules where a choice has been made prior to the withdrawal date, including recognition and enforcement of decisions over disputes arising, whether before or after withdrawal date.

·         Recognition and enforcement of judicial decisions: determined by existing EU rules for decisions given before the withdrawal date, and for decisions after the withdrawal date in proceedings instituted before that date.

·         Judicial cooperation procedures and requests for information: governed by existing EU rules where requests are pending on the date of withdrawal within the European judicial network in civil and commercial matters, subject to agreement on the minimum procedural stage which should have been reached for these rules to continue.

Sarah Lee, partner at Slaughter and May, commented: ‘It is useful to see that, while the government would like to go further, it has accepted almost all of the EU27’s position on separation issues. So even if the parties cannot reach a new relationship agreement, they are in principle agreed on the desirability of a potentially lengthy transitional period.’

This should provide a measure of certainty for commercial parties, Lee added. For example, contracts signed before March 2019 that include English jurisdiction clauses would be upheld by the courts in EU member states, even if proceedings were not instituted until after the UK’s exit.

Guy Lougher, partner at Pinsent Masons, welcomed: ‘consensus about the scope of what needs to be covered in the withdrawal agreement, even if there isn’t yet agreement on how the issues are to be addressed’. He is encouraged ‘that the government has clearly noted the significant interest in the underlying issues and the need for workable solutions from practitioners and relevant bodies’.

For Simon James, partner at Clifford Chance, the government's position echoes that held by most of the legal profession, which is: ‘to continue the current comprehensive cooperation with the EU, but will the EU agree, and, if so, on what terms and when?’

The second paper, ‘Enforcement and dispute resolution: a future partnership paper’ (see, sets out the UK’s position that, where the withdrawal agreement or other agreements between the UK and the EU are intended to give rise to rights or obligations for individuals and businesses operating within the UK, these will generally be given effect in UK law. They will be enforced by the UK courts and ultimately by the Supreme Court. The government will expect UK individuals and businesses operating within the EU to have recourse to the courts of the remaining 27 member states.

However, one of the options explored in the paper notes that where agreements between the EU and third countries replicate language which is identical in substance to EU law, it may be agreed that those terms should be interpreted and applied by reference to decisions of the CJEU, whether preceding or following the agreement.

The paper looks at several existing precedents where the EU has reached agreements with third countries which provide for cooperation in resolving disputes without the CJEU having direct jurisdiction over those countries. These include:

·         joint committees;

·         arbitration models;

·         reporting and monitoring requirements;

·         reference to pre- and post-agreement CJEU decisions;

·         supervision and monitoring; and

·         provision for voluntary references to CJEU for interpretation.

The European Commission and the UK meet on 28 August for the third round of their Brexit negotiations.

Issue: 1366
Categories: News