As 29 March 2019 approaches, it seems that the UK is left with three options: (i) to reverse the triggering of Article 50 and remain in the European Union (EU); (ii) to leave the EU on the terms outlined in the withdrawal agreement and political declaration; or (iii) to leave the EU without a deal.

This article will first give an overview of the existing legal landscape for judicial and civil cooperation within the EU, and then consider what that landscape might look like for the UK and the remaining 27 countries of the EU (EU 27) in future. Next, it will consider how Brexit should input into the drafting of dispute resolution clauses and how you can ensure that contracts remain effective and enforceable post-Brexit (whatever that entails).

The existing regime

There are three key EU regulations which govern civil judicial cooperation at present: (i) the Rome I Regulation which governs the law applicable to contractual obligations; (ii) the Rome II Regulation which governs the law applicable to non-contractual obligations; and (iii) the Recast Brussels Regulation which deals with jurisdiction in civil and commercial disputes and rules for enforcement and recognition of foreign judgments across the EU.

The Rome I Regulation provides parties entering into cross-border EU contracts with certainty that their contractual choice of law will be respected. The Rome II Regulation sets out a regime to set forth the law applicable in cases of tort and other non-contractual matters. The Recast Brussels Regulation sets out rules through which it can determine in which Member State’s courts cases should be heard and provides a relatively simple mechanism by which judgments against EU counterparties or counterparties with assets in the EU can be enforced.

Jan-Mar 2019 issue

Shepherd and Wedderburn LLP