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Just when we thought we almost had it all…..
Is there a risk that BREXIT could threaten to steal the English Courts pre-eminent international jurisdiction for large scale commercial disputes?
After the UK’s withdrawal from the EU, whether on full exit or the EEA-type model, the Recast Brussels Regulation (“RBR”)[1] will no longer be directly applicable in the UK. If the UK becomes a remote outlier, which is not subject to the EU’s private international law rules, then we can expect more jurisdictional challenges and concurrent proceedings, increasing litigation cost and uncertainty. Importantly, the attractiveness of a UK judgment (despite its high quality) will be diminished if it cannot be easily recognised and enforced in 31 different countries across the EU and EEA.
It will therefore be imperative to have some jurisdictional arrangements in place. Absent some agreement to observe the RBR provisions in the UK, the UK could ratify the 2009 Lugano Convention, either as an EFTA State or a third state, along with Iceland, Norway, Liechtenstein and Switzerland. That would provide certainty with ongoing jurisdiction before the English Courts through the domicile of an anchor defendant with the ability to bring in related third parties. It would also provide for courts to stay proceedings or decline jurisdiction for lis alibi pendens and related proceedings as well as the recognition and enforcement of English judgments in 31 States.[2]
Failing that, the UK could have to reinvigorate its signature of the old Brussels Convention or resort to the Hague Convention on Choice of Court Agreements 2005 (akin to the position in the US and Singapore). Conceivably the UK could return to the heady days of the old common law of conflicts. Although esoteric, there could be advantages to that. Arguably, the old doctrine of ‘forum conveniens’ may provide a broader range of connecting factors justifying the assumption of jurisdiction by the English Courts and recourse to anti-suit injunctions could rise again. In the competition damages field, if the English Courts could circumvent the next five years of uncertainty and preliminary references regarding the interpretation and application of the Damages Directive, we would have the benefit not just of the ‘English torpedo’ but also the ‘English supersonic jet’, resulting in faster, procedurally efficient and pragmatic outcomes for litigants.
Once the transitional period expires, we may experience some turbulence in international litigation for some time with increased legal uncertainty, multiplicity of proceedings and jurisdictional challenges. The current surge in competition litigation and the fledgling development of collective consumer actions depends on the oxygen and momentum provided by litigation funders. Their commitment is reliant on legal certainty, procedural efficiency and volume of traffic. That makes it all the more imperative for the UK to have a clear vision of procedural reforms and jurisdictional rules, in place immediately on its departure from the EU, to secure the English Courts’ reputation as an international centre of judicial excellence.
This blog forms part of a wider discussion on the impact of Brexit for competition law damages in a recent article by Anneli Howard, published by Jordans in the Brexit edition of the Competition Law Journal, available here.
[1] Regulation 1215/2012 of the European Parliament and the Council on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) (2012) OJ L 351/1.
[2] There would be some disadvantages as the new provisions in the RBR dealing with jurisdiction clauses, Italian torpedoes and related proceedings in third party States would not apply.