Leaving the EU: Legal Services

Alex Chalk Excerpts

Wednesday 21st November 2018 Westminster Hall

[Robert Neill]

That is entirely right. Some of the worst examples, before we developed the mutual enforceability of judgments, related to child abduction. In cases involving non-EU states, in which we are a third country, the parent here—frequently the mother—was at a significant legal disadvantage and did not have the protections that we have under the current arrangements, particularly the recast Brussels arrangements. I am glad that my hon. Friend has raised that issue.

I want to make two other points very briefly. First, I support my hon. Friend’s point about English law. Those of us who have practised know that, because of the reputation of our system, it is almost the norm to find English law clauses in international contracts. We want that to continue, but it is concerning that the Bar Council and the Law Society have been reporting evidence—so far anecdotal, but strong—that the uncertainty and the risk of a crash-out arrangement without contractual continuity is leading some firms to advise their clients to have clauses excluding English law from contracts. It would be extremely troubling if that were to persist. The longer the uncertainty, the greater the risk.

Simmons & Simmons, a leading law firm, conducted a survey of clients in Germany, France, Italy, Spain and the Netherlands to look at what the courts in those countries might adopt if we were a third country and could not rely on the current arrangements. It reported that 88% of clients—people abroad buying British services—thought that the Government needed to make an early public statement to remove uncertainty, and 50% said that, without that, they would be inclined to move away from choosing English law or jurisdiction clauses. The situation is urgent, so I will back the withdrawal agreement because it will get us into a transitional arrangement, which will give continuity for that period. More importantly, contracts will run beyond the date on which we leave, and significant commercial litigation will almost certainly take more than two years to work its way through. I hope that those issues will also be taken on board.

Will the Minister consider a couple of suggestions by the City of London Corporation and TheCityUK, to which I am grateful, about failsafe devices—I do not like to use the word “backstop”, because it has certain controversial associations—that we could have in parallel with seeking to get the withdrawal agreement through and get into the transition period? It has been suggested that it would be reasonable to look at a means of copying the text of the Rome I and Rome II regulations into our own private international law. Those regulations, of course, determine the applicable law for contractual obligations. As well as seeking the transition, many lawyers think it would be advisable to copy those texts—in parallel, I suggest, as a belt and braces operation—which are much superior to anything that went before, into our law. It is also important that we consider re-signing The Hague convention as an independent party. That would be a failsafe, not my preferred objective, but we need to have those eventualities in mind. That would assist with certainty.

In her Mansion House speech, the Prime Minister talked about the Lugano convention. I think that most people would concede that Lugano, in its original form, is nothing like as good or effective as Brussels I and II in their recast form. They are the gold standard that my hon. Friend the Member for Huntingdon referred to. Will the Minister take away the idea that, to get us anything like as good as we have under Brussels, any Lugano would have to be a Lugano plus plus plus?

[Alex Chalk (Cheltenham) (Con)]

I am grateful to my hon. Friend, the Chair of the Select Committee on Justice, for giving way. The comments made in this debate bear a striking similarity to those made in the debate that followed the production of the Committee’s report. That just goes to stress the urgency of the situation. Law firms cannot wait forever to get a degree of certainty; the time for action is fast running out. Does he share my concerns about that?

[Robert Neill]

I agree that there is a danger of us becoming a legal version of groundhog day in these debates. I know that the Minister is absolutely committed to achieving continuity, but there is a real sense of frustration among practitioners because, although there are warm words, promises and statements of intent, and a Brexit law committee in which practitioners are involved is being set up, none the less, despite those strong wishes, the detail on future arrangements remains extremely scarce. If the Prime Minister succeeds in moving us on to the next stage, as I hope she does, it is absolutely critical that that detail is fleshed out at the earliest stage. I hope that we will take the opportunity of strengthening the political declaration that comes as part of the package with the withdrawal agreement, as the Prime Minister said today, so that it makes more reference to legal services in particular.