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

Baroness Kennedy of Shaws Excerpts

Wednesday 20th December 2017 Lords Chamber

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[Baroness Kennedy of The Shaws]

That this House takes note of the Report from the European Union Committee, Brexit: justice for families, individuals and businesses? (17th Report, Session 2016-17, HL Paper 134).

[Baroness Kennedy of The Shaws (Lab)]

My Lords, this report was prepared by the Justice Sub-Committee of the European Union Committee, which I chair. I should like to thank the members of this committee: they are as stimulating a group of people as you could ever find—intelligent, analytical and always great company. I thank also the staff of the sub-committee for their support and hard work. We had some of the finest lawyers in government service helping us to prepare this work and wonderful civil servants. I especially want to commend Amanda McGrath, whose quiet competence ensures that our work is effective.

The Government’s view is that once we leave the European Union there can be no jurisdiction for the Court of Justice of the European Union. That step would have profound ramifications for the UK’s continued participation in the European Union’s programme of civil justice co-operation—the so-called Brussels regime—that ensures that civil court decisions handed down by a court in one member state of the European Union will be respected and enforced in another member state.

That may sound arcane to non-lawyers, but will noble Lords please bear with us in understanding just how important this is? These three regulations—the Brussels I Regulation (recast), the Brussels IIa Regulation and the Maintenance Regulation—together play a significant if hitherto unheralded role in the daily lives of UK and EU citizens, their families and businesses in our nation, who work, live, travel and do business within the European Union. These regulations regulate a pan-European system of civil justice co-operation, which has been proved to work.

The regulations really do work. They provide certainty, predictability and clarity about where the resulting legal dispute should be pursued. They also provide for the automatic recognition and enforcement of judicial decisions and judgments throughout the European Union. To put that into lay terms, it means that if you are a small business in Britain doing business with Poland, and your Polish contractor does not supply you with the widgets you need and fails in the contract, you can go to a local court in Britain and get an order against him for that failure. It can then be enforced in Poland, so that you get either compensation or the follow-through of your contract. If you are a British woman whose marriage to an Italian ends in divorce and you have problems securing maintenance for your children, you can secure in the family court here an order on maintenance and have it put into effect in Italy in short order, as others on my committee will explain. The effect is that there will be distraint on the wages of a worker in Italy so that the mother of the children can receive maintenance. These things work smoothly. They have been developed over decades and I assure noble Lords that it is very difficult to replace what has been developed with the great input of British lawyers.

Far from being an imposition, the Brussels regime reflects the UK’s legal culture. The UK has been instrumental in shaping its content and it serves our country very well indeed. The UK Government had the choice of whether to opt in to these regulations or to opt out, and they chose to opt in. They did so with a sensible rationale. Since the referendum result, the Government have decided to opt in to the current renegotiation of the Brussels IIa Regulation, which will seek to update its provisions. That updating, perfecting and improving continues, depending on the development of our societies and ensuring that there will be effective remedies across Europe.

Clearly, by their actions, successive UK Governments from across the political spectrum have recognised that these regulations offer effective, predictable and clearly defined solutions to the legal issues encountered by UK citizens and businesses. These issues will not cease when we leave the European Union. So the question that our inquiry sought to resolve was: what alternative plans do the Government have to replace the Brussels regime once we leave the European Union? The Government state that they want close co-operation with the European Union on these matters—an aspiration the committee strongly supports. The issue, however, is not the aspiration, but rather the details. I am sorry to weary noble Lords with them, but they are rather important. If only some people actually bothered with the small print on some of these problems. Our concern is that very little is known about the Government’s thinking on these highly complex matters. We have found that there are alternatives, but any option that avoids the jurisdiction of the European Court of Justice will be less effective and more complicated than the existing system. Indeed, since the publication of our report, the committee—and other committees in Parliament—have found an ever-growing body of evidence that highlights the deep complications that will be caused by the Government’s red line on the European Court of Justice.

Turning first to the Brussels I Regulation (recast), covering civil and commercial matters, the UK could seek to use a combination of matters to fill the gap that will be created. The Lugano convention operates between EU members and Iceland, Norway and Switzerland; it applies to jurisdiction and the enforcement and recognition of judgments. We should be very clear that the Lugano convention is inferior to the Brussels regulations, operating as it does under an earlier and less effective iteration of the regulations that did not participate in the upgrading of regulations; it is stuck in aspic, as it were.

The Rome I and II Regulations deal with applicable law, namely which law ought to be applied in any given legal dispute with an external element. The Hague Convention on Choice of Court Agreements sets out uniform rules determining which countries’ authorities are competent to take child protection measures. This combination appears to offer at least a workable solution to the post-Brexit loss of the Brussels I Regulation (recast). However, it seems likely that there would be greater recourse to arbitration, which is thrown up by government as the answer to everybody’s prayers, but I assure noble Lords that it is not perfect. I support arbitration in the right circumstances, but although such arbitration would allow for judgments, it would not allow for enforcement. It would be harder—perhaps sometimes impossible—to compel courts in other EU states to support judgments made in the UK, and vice versa.

For the Brussels IIa Regulation—covering matrimonial matters and parental responsibility—and the Maintenance Regulation, finding an alternative poses a greater challenge than for the Brussels I Regulation (recast). Only yesterday morning, I spoke to a colleague at the Bar who described being involved in matters concerning a child with one parent in the United States and one here. They are not super-rich people—the kind who hit the headlines in our media—but an ordinary, middle-class family who will be crippled by the expense of American litigation, because they do not have the same arrangements in America as we have in Europe.

The Government have proposed to apply the 2005 Hague Convention on Choice of Court Agreements that covers most, although not all, of the same ground as the EU family law regulations, including rules for jurisdiction and for recognition and enforcement in child matters. The concern is about which matters would not be covered; we questioned that again and again. The Lugano convention would offer some support in cases involving maintenance. The 1996 Hague convention would offer some support on parental responsibility and measures for the protection of children, but less clarity and protection than the Brussels regulations.

Overall, there is no obvious replacement for the Brussels IIa Regulation and the Maintenance Regulation, so it seems likely that obtaining justice in these areas will be harder and less reliable. In the absence of clear replacements for the Brussels regime, our report also considered the fallback position, namely a return to common-law rules. Some of those who are romantic about common law and advocate a return to it do not realise the advancements that have been made, building on common-law principles. It was interesting that all the witnesses who assisted in our inquiry—bar one, who was an academic and not involved in practising law in the courts, dealing with real citizens’ lives—were concerned by the prospect of a simple return to the old ways of common law, as we had in the 1950s and 1960s. Their observations included that common law would be particularly detrimental to those involved in family law litigation, especially with the increase in cases for the already stretched family courts.

I said that the Government want close co-operation with the European Union on these matters. This should be an absolute priority, to give proper protections to citizens and businesses. So it is concerning that the Government’s formal response to our inquiry conceives of an eventuality in which the UK does not agree an arrangement for future civil judicial co-operation and in which ongoing co-operation in this area would be wound down.

I finish by highlighting the personal dimension to this matter. As with many aspects of Brexit, citizens face uncertainty about future rights and protections. The longer we wait for decisions and clear commitments from the Government, the greater the uncertainty for our citizens. Furthermore, the loss of the so-called Brussels regime will be felt most profoundly by those families who rely on its provisions, for example for the enforcement of judicial decisions. Small businesses will feel it, too. We know that the big corporates can lawyer themselves up to the eyeballs and get themselves lawyers in other nations. That will be no problem for them, but it is a problem for small businesses, families and people who go on holiday where something tragic happens and they want justice. We have these arrangements, which work effectively. To compound the issues, the UK’s family court system has said it would struggle to cope with such a radical change to the current arrangements. This is a matter of some seriousness. I beg to move.

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[Lord Keen of Elie]

There is no legal barrier to us becoming a party to the Lugano convention, but that would be a subject of negotiation with the council to the Lugano convention. I believe it was the noble Baroness, Lady Kennedy, who suggested that the CJEU was somehow a red line in this respect. I emphasise that it is not a red line, but it is an issue that has to be addressed in the context of the present negotiations.

I will touch on one or two points made by noble Lords in the debate, beginning with the noble Baroness, Lady Kennedy of The Shaws. Again, I go back briefly to her suggestion that our rejection of the direct jurisdiction of the CJEU had a profound effect on civil judicial co-operation. I simply cannot accept that. It does not apply in the context of the UNCITRAL rules, the Hague convention or Lugano. Therefore, there are clearly areas where we can negotiate and determine judicial co-operation without accepting the direct jurisdiction of that court.

The noble Baroness also observed that Lugano had not been upgraded. I think she suggested it was essentially stuck in aspect, or something of that kind.

[Baroness Kennedy of The Shaws]

I said aspic. It is a sort of jelly.

[Lord Keen of Elie]

Indeed so. I am familiar with it—absolutely ghastly stuff.

It is not stuck; it so happens that the convention has moved more slowly than Brussels in this context. Lugano was essentially in parallel with Brussels I. When Brussels moved on to Brussels Ia Lugano did not accelerate at the same speed, but that is not to say that it is in aspic.

I may have misheard the noble Baroness, but she suggested, in the context of arbitration, that there was no allowance for enforcement of arbitral judgments. That is not the case, because the New York convention provides for enforcement of arbitral judgments. That applies right across the world. It is not limited in any sense to the EU. Again, it seems arbitration—and commercial arbitration, which is particularly important in the context of the City of London, for example—is not affected by these issues of reciprocal judicial agreement and enforcement.

The noble Baroness, Lady Shackleton of Belgravia, suggested that the Government’s response was disappointing. I hope we have moved on from that point. She suggested that the reference to things being wound down would not do, but with great respect, we have no desire to see any of this wound down. We seek certainty, predictability and an outcome that we can say is in parallel with Brussels Ia, Brussels II and the other regulations referred to.

The noble Lord, Lord Cashman, referred to the Brussels regulations having a significant role. He is absolutely correct about that and we acknowledge it. Indeed—I believe I can get this far—we certainly agree as to our goal. He may feel that we are a little less certain than others about how we get to it, but there is no suggestion or intention of us walking away from these regulations. We will have to address the question of the direct jurisdiction of the CJEU and we acknowledge that.

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[Baroness Kennedy of The Shaws]

My Lords, I am grateful to everyone who has spoken, to all my committee members and to others. I am grateful also to the Minister for his recognition of this committee’s work and of the very high quality of evidence that we received from voices that should be listened to by government on the problems that will arise if we do not succeed in achieving the close co-operation referred to throughout this debate and the certainty that flows from it.

I hope that the Government, as they continue to negotiate Brexit, will take note of the concerns that have been expressed in the report, today and by our witnesses. Predictability and certainty, as the Minister has said, rely upon reciprocity. Rome I and II do not give reciprocity; they do not need reciprocity to work and I think the Minister will know that. It is different. The Brussels regulations give us something much more profound and the concern should be to make that possible in whatever is negotiated henceforth. Our concern is that we are likely to get something less: because of drawing a line around the court, we will no longer be party to the development of law.

One important thing—and I do not say this as a British lawyer, but on behalf of all colleagues and brilliant people I know in the law—is that the law has developed in Europe with a huge input from British lawyers, such as the Minister himself. To pull ourselves out of that discourse, which often takes place in the courtroom as well as in the committees and the other processes that develop law, would be a great shame and a great step back from the development of very positive co-operation.

So I hope that in the negotiations the Government will take note of this report, which is really urging that citizens will lose something serious if we do not maintain the current framework and if we are not party to developments as we go forth; that has been one of the great riches to emerge from the great collaborations across Europe. I say this not just of these matters but of all other rights, be it intellectual property rights, our rights as consumers, our rights as citizens—all our human rights. It is really important that we play a part in that development. We have done so, to our great credit, so far. Please, let that continue: that is the message of this report to the Government. I beg to move.

Motion agreed.