Brexit: Justice for Families, Individuals and Businesses (EU Committee Report)

Earl of Kinnoull Excerpts

Wednesday 20th December 2017 Lords Chamber

[The Earl of Kinnoull (CB)]

My Lords, it is a pleasure to follow the noble Lord, Lord Judd. “K” seems to follow “J” quite a lot. He always brings great passion and the wisdom born of many long years of public service, and we are very lucky that he does. I am glad to say that he brings it to every committee meeting, too. I feel that he needs a large carpetbag—in my case, I need a very small toothpaste bag for such things.

I add my thanks and congratulations to the noble Baroness, Lady Kennedy of The Shaws, on her leadership of our committee. She brings the most marvellous crispness and robustness to meetings, which I find energises us—and we had a strong flavour of that in her speech in introducing the debate. What an excellent survey of the report and state of affairs that was.

I add, as others have, my heartfelt thanks to committee staff for their hard work. They in fact work on every report of the EU Select Committee, being the legal resource. In the 18 months or so since the Brexit vote, there have been 24 Brexit reports from the EU Select Committee, and the standard of work has been high throughout. I do not know how they do it, but they continue to exude an atmosphere of calm efficiency and good humour. I can see some of them there, but I hope that the others are having a mild afternoon off.

Although this report is only 37 pages long, it represents a rounded and important summary and analysis of vital issues that need to be addressed as part of the Brexit process. It was published on 20 March, but I regret that the government response arrived only on 1 December, more than eight months later, well outside the conventional two-month period, even taking into account the election period. I note that the response itself relied heavily on the government paper, Providing a Cross-border Civil Judicial Cooperation Framework, of 22 August. The Minister has a strong personal reputation for getting things done on time, being a good Scot, and I ask him to explain briefly some reasons for this delay on this very important topic. As we have heard today, so many people are relying on certainty in this area.

In my remarks I shall confine myself substantially to the perspective of business. Business thrives on certainty. I started the debate by noting down the names of all the noble Lords who made more or less the same point on certainty. However, as that includes everyone who has spoken in the debate so far, I shall not list them. But the certainty point is what everything comes back to; anything that can be done to provide greater certainty benefits business and thus our economy.

From the business perspective, the uncertainty falls in two broad areas. They are what I am calling the “pipeline”, or civil law matters in train at the date of exit, and the “new future”, or matters that arise after the date of exit. I have assumed that any transitional period matters would be part of the pipeline, not only because of recent comment but because it would simply make submissions far too complex to try to analyse them separately.

Turning, therefore, to the pipeline, I feel that the news has seemed quite good. The EU published its views on 12 July in its paper on judicial co-operation in civil and commercial matters. The UK responded with its paper of 22 August, which I referred to earlier. Annex A of that paper deals with the UK’s views on pipeline issues. The pleasing thing is that, between the two, there is quite a lot of common ground, I feel. In the interim, we have had four months where, presumably, more discussions have been held. Indeed, we have had some further evidence in paragraph 91 of the joint report of 8 December:

“On cooperation in civil and commercial matters there is a need to provide legal certainty and clarity. There is general consensus between both Parties that Union rules on conflict of laws should continue to apply to contracts before the withdrawal date and non-contractual obligations where an event causing damage occurred before the withdrawal date”.


Can the Minister tell the House how close the parties are in terms of agreeing pipeline matters?

I move to the new future—matters that arise after the date of exit. The evidence that we took painted a remarkable picture concerning the development of judicial co-operation in the EU and, in particular, the Brussels I Regulation (recast). This was—and I am disapplying my normal British reserve—that the UK had a huge influence in the legal developments that made judicial processes work well within the EU. The wonderfully named legal tactic, the “Italian Torpedo”, was widely employed to frustrate proceedings prior to the Brussels I Regulation (recast). The lis pendens rule used to apply so that, where proceedings involving the same parties and same causes of action were brought in different member states, any court other than the first court seized stayed its proceedings until such time as the jurisdiction of the first court seized was established—a good rule to prevent parallel proceedings, but misused in the regular commencement of Italian proceedings, where progress is notoriously slow.

The Brussels I Regulation (recast) defeated this by disapplying the “first in time” rule where an exclusive jurisdiction clause existed between the parties. This Brussels I Regulation (recast) change was thanks to pragmatic British pressure and diplomacy. Indeed, the British-engineered Brussels I Regulation (recast) regime is very helpful to commerce, providing certainty and a good framework. The Government paper of 22 August clearly aspires to that and the second half of paragraph 91 of the joint report that I referred to a moment ago states:

“There was also agreement to provide legal certainty as to the circumstances under which Union law on jurisdiction, recognition and enforcement of judgements will continue to apply, and that judicial cooperation procedures should be finalised”.


Again, I am mildly heartened, but the detail and certainty is not there and is not what business seeks.

The Bar Council has published a series of papers in this area, The Brexit Papers, which I commend to the House. Paper 4, Civil Jurisdiction and Judgments, suggests a practical route forward with admirable certainty:

“Enter into an agreement based on the Denmark-EU Jurisdiction Agreement, both with the EU and with Denmark albeit with a clause providing not for interpretative jurisdiction of the CJEU but for ‘due account’ to be taken of the decisions of the courts of all ‘Contracting Parties’”.


Secondly:

“Sign and ratify the Lugano II Convention, to preserve the present regime vis-à-vis Norway, Iceland and Switzerland”.


Thirdly:

“Sign and ratify the 2005 Hague Convention on Choice of Court Agreements”.


And, finally:

“Enter into an agreement based on the Denmark-EU Service Agreement, both with the EU and with Denmark”.


I found this and its associated reasoning clear and convincing and a good route forward. In closing, I therefore ask the Minister to comment on this Bar Council proposal.