Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019
Debate between Lord Adonis and Lord Marks of Henley-on-Thames(5 years, 10 months ago)
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Lord Foulkes of Cumnock
I am most grateful to my noble friend. I take great exception to what the noble Baroness said. I am surprised that she knows a lot about convention, as she has not been here very long, but obviously she has picked it up from somewhere. Conventions are conventions, not rules that need to be and must be obeyed. I understand that one of the conventions is that when Ministers are explaining something and are asked a question, they normally give way and answer it. In all the Grand Committees that I have been in, throughout the years—I have been in a number—the Minister has given way. Of course, we are getting used to the noble and learned Lord, Lord Keen, by now.
Lord Marks of Henley-on-Thames (LD)
My Lords, it is not often that I confess to feeling sorry for the noble and learned Lord, Lord Keen, but on this occasion I do, and in the presence of a number of other distinguished lawyers, who have considerable experience of commercial litigation involving cross-border and cross-European border disputes. It is almost impossible to overestimate the importance of the regime that we have built up across the European Union for the resolution of issues of jurisdiction, recognition and enforcement in civil and commercial disputes. We have been promised so many times, in debate after debate on the Brexit issue, that we would not be in this position. The Government were going to get a deal, and one of the first things they would insist on in getting it is that we would preserve the cross-border jurisdiction, recognition and enforcement issues, or rules that we have built up with Brussels Ia.
We are in this position now; I entirely accept that the Minister opened this debate on these regulations on the basis that the Government are still hoping for a deal and that if there is a deal, we will continue along the course of resolving this issue. But it was with horror that many of us heard the noble Lord, Lord Callanan, last night refuse to accede to the Motion of the noble Baroness, Lady Smith, because it ruled out no deal—which it did not—and for him and the Government to be so prepared to countenance no deal.
In our view and that of almost every commercial lawyer with whom I speak, the issues surrounding cross-border litigation are being given far too little prominence and importance. What we are losing is clearly defined in the Explanatory Memorandum as,
“a system of uniform jurisdictional rules to identify the appropriate court in which to bring a civil law or commercial claim”—
that is the first bullet point on page 2—and,
“a simplified mechanism to recognise and enforce the judgment EU Member State/EFTA state courts in civil and commercial cases, with a view to reducing costs for litigants and increasing efficiency. The possibility for such simplified and almost automatic treatment of the judgment of one such state in another is based on the ‘mutual trust’ that each state will have applied the uniform rules of jurisdiction”.
This statutory instrument, subject to some relatively minor exceptions, effectively revokes Brussels Ia, which is at the heart of the Brussels regime. It is also significant that it abandons the European Judicial Network, which has been a forum for judicial co-operation of great use throughout the European Union, and does so with no replacement. The very limited exceptions that I mentioned were mentioned by the Minister: some consumer and employment cases—in British courts, of course—transitional cases and the choice of courts arrangements under the Hague Convention. That is, to coin a phrase used by some Brexiteers in the past, thin gruel indeed compared with the widespread benefits that we get from the system of judicial co-operation and our current arrangements.
Lord Adonis
My Lords, the noble Lord is making an extremely powerful case. For those of us who are not lawyers and are struggling to understand precisely what we are losing as a result of this no-deal regulation and the preparations, can he tell us what we as a country would lose by not being part of the European Judicial Network? It was not mentioned at all by the Minister.
Lord Marks of Henley-on-Thames
I shall move on to that in the course of what I have to say. I do not propose to deal with the detail of it, because the detail is all spelled out.
What we have at the moment is a common system for arranging which court will have jurisdiction, recognising the judgment of courts throughout the European Union and the other convention states and the enforcement of judgments across the European Union. The point of that, and what we will be losing, is the capacity for citizens and businesses to know that they can sue, wherever they are in the European Union, in the appropriate court and that that judgment will be enforced across the Union. That was not the case before the convention and will not be the case thereafter. We will effectively be thrown back on to the rules that pertained before the EU. Those rules are those we have with third countries and in many cases involve satellite litigation, duplication of litigation and duplication of costs. That means that our citizens and businesses will be left weaker and less protected. Notably, totally uncosted in the documentation surrounding this statutory instrument is that commercial disadvantage costs money.
The fact that Britain has become so successful and so attractive within the European Union owes not a little to the fact that its system of law and the mutual recognition and enforcement that it enjoys with other European countries has made it attractive as a gateway to the European Union for those outside the European Union, as well as an attractive forum in which to deal for other member states. Losing that advantage is important and will largely offset some other advantages that we have by having a stable, effective and well-respected legal system.
Lord Adonis
My Lords, if the noble Lord will forgive me, both he and the noble Lord, Lord Beith, have referred to the first sentence of paragraph 12.1, which I think is highly misleading to the lay reader until you have read it twice and understand what it says:
“The impact on business, charities or voluntary bodies of this instrument is, on balance, expected to be positive when compared to making no changes to retained EU law”.
That is very different from saying “when compared to the status quo”. The ordinary reader would expect the impact being compared to be that of this new regime compared to the status quo, whereas what the Government are doing, which is seriously misleading to the House and to the public, is claiming that, in comparison with exiting the EU and then making no changes to retained EU law, we are no worse off. That misses the massive elephant in the room: we are leaving the EU in the first place and so losing all the benefits, as he and other noble Lords have mentioned, that come from being in the EU and being part of this reciprocal regime in the first place. Could he tell me whether I have understood this issue correctly?
Lord Marks of Henley-on-Thames
The noble Lord has understood it absolutely correctly and has plainly made the point more eloquently than I did. It was the point I made when I mentioned that the noble and learned Lord had accepted that that was how the Government’s impact statement worked. The noble Lord is right to draw the distinction between the,
“impact on business, charities or voluntary bodies of this instrument is, on balance, expected to be positive when compared to making no changes to retained EU law”,
and the real meat of this, which is in the last part of the paragraph:
“However, as compared to the pre-Exit position, common law rules on jurisdiction provide for a discretionary rather than mandatory stay in the case of parallel proceedings. This creates an increased risk of parallel proceedings”—
precisely the point I was making—
“whether the court in the United Kingdom is seised first or second. This could increase the number and complexity of disputes before the courts and the cost of litigation for parties. Common law rules also involve a less efficient mechanism for recognising and enforcing judgments than using existing EU rules deriving from the Brussels regime, which will cost those seeking to have their judgment recognised in the UK more money and time”.
Addressing the Committee, I attempted to add my further point that it is not just the cost to litigants who go through all this but the attractiveness of the United Kingdom as a location for doing business that suffers from the fact that you cannot rely on a uniform system.
Before closing, I simply ask this. We are in this dreadful position of being a very short time away from the risk of a no-deal Brexit. As Sabine Weyand put it yesterday—I make no apology for her being blunt, because I think she was right to be—we could fall into it “by accident” rather than on purpose. What a travesty for a Parliament almost entirely opposed to a no-deal Brexit to be at risk of forcing our country into this calamitous outcome by accident—but that is where we are. So I ask the noble and learned Lord: in the circumstances, given that almost everybody accepts that this reciprocal set of arrangements for the justice system is of such crucial importance to our functioning legal system, what talks have there been at Secretary of State for Justice level with other members of the European Union to try to preserve some element of a reciprocal system that will replace what we have, even if we walk into this catastrophe by mistake?
Lord Marks of Henley-on-Thames
It is when you are litigating about two issues at once. You are litigating in a principal case and you have another case going on to decide one aspect.
Lord Marks of Henley-on-Thames
In this case, it is two jurisdictions. There is one case and you are having an argument, in another court, about whether it should be proceeding in court 1 or a court in another jurisdiction.
Lord Adonis
That is a very helpful elucidation, because I thought that it might be litigation that took place on a satellite.
Lord Adonis
I did not understand the concept. There are more absurd things. Given that the Government are now preparing for martial law, we are told, if there is a no-deal Brexit, litigating in relation to satellites would be a far less absurd proposition. I take the key point to mean that, under the existing Brussels regime in which we operate as part of the EU, you do not need to undertake satellite litigation, because proceedings in one jurisdiction count as proceedings in all jurisdictions. As a non-lawyer, I hope I have understood that point correctly. The satellite litigation to which the noble Lord refers is a considerable loss of benefit to people seeking to litigate. Not only is that the case, but it also makes this jurisdiction considerably less attractive to people to bring cases in, which I took to be the noble Lord’s other point. These are huge issues about the whole future of our legal system and the rights of redress that people have in it, all of which the Government are trying to hustle through in a statutory instrument subject to limited debate and with the Minister not prepared to take any interventions whatever.
The other key point that arises relates, as the noble Lords, Lord Beith and Lord Marks, said, to the final sentences in the long and highly convoluted paragraph 12. Those sentences, which completely contradict the earlier sentences, say that,
“as compared to the pre-Exit position, common law rules on jurisdiction provide for a discretionary rather than mandatory stay in the case of parallel proceedings. This creates an increased risk of parallel proceedings whether the court in the United Kingdom is seised first or second. This could increase the number and complexity of disputes before the courts and the cost of litigation for parties. Common law rules also involve a less efficient mechanism for recognising and enforcing judgments than using existing EU rules deriving from the Brussels regime, which will cost those seeking to have their judgment recognised in the UK more money and time”.
I do not understand why no assessment has been made in any quantified way of the impact of all those significant losses, as set out in the final sentences of paragraph 12.1. Perhaps the Minister will tell us why. Could he offer the Grand Committee some assessment? It is important before we agree to this statutory instrument that we have some assessment of its impact.
I am also surprised because some of the noble Lords present are members of the relevant EU committees and the Delegated Powers Committee. Why did they not ask for such an assessment to be conducted before the statutory instrument came to the House?
Lord Marks of Henley-on-Thames
The noble Lord may have noticed that in the impact assessment, among the business assessments, it just says “not applicable”. That seems a dereliction of duty.
Lord Adonis
I take the noble Lord’s point. Is he saying that he believes that they are applicable?
Lord Adonis
So why does it say that they are not applicable? These issues are significant.
The final issue in the debate, to which I hope the noble and learned Lord will respond, was raised by my noble friend Lord Beecham and other noble Lords. It is about the losses to this country of not being part of the European Judicial Network. My understanding is that there is nothing statutory about the network. Am I wrong? Is the network a formal institution of the European Union? If it is an informal body, and if belonging to it brings us great benefits, why can we not continue to be members of it even after we leave the European Union? Indeed, to the lay man, being part of the network would seem positively beneficial because, presumably, the network co-ordinates and promotes joint understandings. If we will be separate jurisdictions, with neither wanting, as far as possible, to operate in parallel, is that not all the more reason for us to be part of the network and not seek to leave it? If we crash out with no deal and all losses as set out or implied in the Explanatory Memorandum, why we are not seeking to remain part of the European Judicial Network? Might it be in the country’s best interests for the Government to seek to keep us in the network?