Cross-border civil proceedings after Brexit

In order to avert a disorderly Brexit, the United Kingdom and the European Union agreed at the last moment on a trade and cooperation agreement that came into force on 1 January 2021. This agreement regulates numerous sub-areas of future legal and economic relations with the United Kingdom. However, international civil procedure law has been completely ignored. Cross-border civil proceedings with reference to the United Kingdom now come with some question marks, because with Brexit, the United Kingdom is considered a third country. The replacement of Union law by national law and international treaties also raises numerous legal problems. In particular, this concerns international jurisdiction, judicial cooperation and the recognition or enforcement of foreign decisions.

Determination of international jurisdiction

In the run-up to cross-border civil proceedings, plaintiffs must first carefully analyse,

which court would have jurisdiction over their case and, if there are several possible jurisdictions, which one offers the most favourable conditions. Conversely, the defendant’s defence strategy begins with the question of whether the action can possibly be attacked at the jurisdictional level. Since Brexit, however, it must first be clarified which jurisdiction rules apply at all. There are numerous rules and regulations that come into question for various cases, such as the European regulation MIFIR, which in Art. 46 VI obliges third-country providers of financial instruments to offer their customers established in the EU a place of jurisdiction (or arbitration) in a member state in advance.

Omitted jurisdiction rules for court proceedings with reference to GB

The previously applicable Brussels Ia Regulation has ceased to apply as a result of the UK’s withdrawal from the EU and is no longer applicable, except in the case of ongoing proceedings. However, it is to be expected that EU courts will continue to refer to the Brussels Ia Regulation in cases involving the United Kingdom, to the extent that it also regulates third-country constellations. Accordingly, the protective jurisdictions in favour of consumers and employees will continue to apply to defendants domiciled in the United Kingdom. Also unaffected are the exclusive jurisdictions, the rules on choice of court agreements and the rules on stay and discontinuance, which relate specifically to parallel proceedings before third-country courts. However, because the Brussels Ia Regulation is no longer applicable law in the UK, its application is limited to court practice in the EU. It does not confer jurisdiction on English courts.

The European Convention on Jurisdiction and the Enforcement of Judgments (Brussels I Convention), one of the predecessors of the Brussels Ia Regulation, has also been eliminated as a possible fall-back regulation. The Brussels I Regulation15 replaced the Brussels Convention in 2000. Although the Convention explicitly continues to apply to certain overseas territories, the Brussels I Convention is not European law, but a treaty under international law. And such treaties no longer apply to the withdrawing Member State after withdrawal.

Standard rules: Hague Convention on Jurisdiction (HCC)

Due to the UK’s withdrawal from the EU, the Hague Convention on Jurisdiction (HCC), among others, now applies, if applicable. Otherwise, the autonomous jurisdiction law of the ZPO is decisive. The Lugano Convention (LugÜ) would be a practical alternative, but this would first require the UK’s (re-)entry into this convention.

The HVDC has applied as a treaty under international law since 2015 for all EU Member States, with the exception of Denmark. The United Kingdom, in its new role as a third country, has declared (re)accession and is an HVDC contracting state. However, the scope of application of the HVDC is precisely defined:

  1. The UTCCC only covers exclusive choice of court agreements. In order to make such an agreement within the meaning of the UTCCR, it is sufficient if the parties agree on the international jurisdiction of the English or German courts. Alternatively, they can also determine the local jurisdiction party-autonomously, for example by directly designating the Frankfurt a. M. District Court or the London High Court.
  2. The HVC does not apply to contracts with consumers.
  3. Numerous practice-relevant disputes and areas of law are excluded from the scope of application of the HGÜ, e.g. cartel law or certain corporate and IP disputes.

Thus, in common disputes between companies over claims arising from a contract that also contains a jurisdiction clause, the UTCCR applies, but not in numerous other scenarios.

Application of the autonomous law of jurisdiction

If the HVC does not apply, the international jurisdiction of the state courts shall be determined by

for civil and commercial matters between the UK and the EU on both sides according to the respective autonomous procedural law.

English courts link this to the service of the action and in a second step examine the suitability of the forum depending on the individual case. German courts, on the other hand, apply the rules on local jurisdiction (ZPO), according to which Germany’s international jurisdiction is always given if at least one German court has local jurisdiction. The fact that courts in both countries use different rules to determine jurisdiction could lead to different views on jurisdiction in many cases.

The autonomous English procedural law also knows some instruments of jurisdiction law that were incompatible with European jurisdiction law and could now experience a comeback. For example, the common law doctrine allows English courts to decline jurisdiction even where jurisdiction exists on the grounds that another forum is more appropriate for adjudication. The ECJ had clarified that jurisdiction established under the Brussels Regulations must be compulsorily respected, but this restriction has disappeared with Brexit.

Compared to the Brussels Ia Regulation, the combination of HVDC and autonomous law is only a

Emergency solution. Moreover, these are only the problems that arise for the determination of jurisdiction. In our next article, you will learn what needs to be taken into account since Brexit if the desired cross-border proceedings are to be initiated and carried out in practice.

Contributing Advisors