Draft Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019

Yasmin Qureshi Excerpts

Tuesday 5th February 2019 General Committees

[Yasmin Qureshi (Bolton South East) (Lab)]

The Minister outlined legal issues dealt with by the recast Brussels regime, which has been in force since January 2015. One issue she did not mention is that when a person is one of a number of defendants, they can be joined to proceedings that are commenced in another member state where they are not domiciled if those proceedings are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments.

As the Minister said, the way the Brussels regime has been put into practice means that there is a seamless transfer of cases and judgments—a bit like the customs union, but for legal services. The Opposition recognise that this SI has to be tabled to ensure reciprocity, as the agreement between European Union member states and the UK on cross-border, civil and commercial disputes will no longer apply after exit day. The SI would also make provision for cases that start before exit day, but—as far as I know—the Ministry of Justice has not published an impact assessment of the draft regulations’ effect on the current system and on cases that are currently before courts.

Although the Law Society and Bar Council have been consulted, a number of bodies have reservations about the impact of these draft regulations. They are concerned, and we are concerned, about the impact that a no-deal Brexit would have on cross-border co-operation on civil justice. Trade between the United Kingdom and the European Union’s 27 countries has increased in the past 40 years, not least because of civil judicial co-operation.

One thing we are concerned about is the loss of the Brussels I framework for determining which national court has jurisdiction, and recognising where there is a choice of court clause or not between parties to the dispute. Following on from that, it provides for a near-automatic recognition allowing parties to enforce the judgment in all EU member states. It covers all judgments reached in civil and commercial matters, including contractual and non-contractual disputes, employment, insurance and consumer disputes.

Participation in Brussels I has been in four particular areas, and the impact is on four particular areas. First, it encourages cross-border trade. As it continues to grow, commercial parties will correspondingly need judgments to be enforced against counter-parties with assets in other countries. Brussels I allows them to do this easily and cheaply due to the near-automatic nature of the mechanisms. This can encourage—and has encouraged—investment in member states, and promotes the growth of UK businesses overseas. The ability to enforce judgments, or awards in the case of arbitration, in a country is often a threshold issue for businesses contemplating an investment in that country, so will be beneficial to UK businesses in the European Union, and for European Union businesses looking to continue to trade with the UK.

Secondly, Brussels I increased predictability and certainty, leading to reduced costs for businesses. Businesses have the certainty that they can enforce their rights, and that can easily recuperate assets in EU countries. This is particularly helpful for smaller businesses that do not have resources that are comparable to those of large companies.

Thirdly, Brussels I makes England and Wales attractive to litigants. Maintaining it would provide a continued incentive for parties to negotiate jurisdiction clauses in favour of the English courts. As mentioned in previous hearings, British legal services are worth about £24 billion, which will be massively impacted if we leave without a deal.

Finally, Brussels I provides an enormous amount of protection to consumers by allowing them to sue or defend themselves in the home court familiar to them without having to pay lawyers or high legal fees for that purpose.

Can I ask the Minister whether the Lugano convention has been considered? It deals with jurisdiction, recognition, and the enforcement of judgments in civil and commercial matters. It currently applies between European Union member states and Switzerland, Norway and Iceland—the European Free Trade Association area. Other non-European Union members can accede to the convention under certain conditions. We ask the United Kingdom Government to seek accession to the Lugano convention by applying to the Swiss Federal Council as soon as possible. The convention is not a European Union instrument although the European Union is party to it, so we ask the Government to make it a priority in their no-deal preparations. Will the Minister confirm if that has been considered or applied for? If not, why not?

Ms Ryan, I would like to indicate that the Opposition will be abstaining in the vote on this statutory instrument.

[The Chair]

Before I call the next speaker, I realise that not all Government Back-Bench members of the Committee are interested in this topic, but I would ask that they either work quietly or leave the room. It is not acceptable to be carrying on your own meeting from the beginning to this point in our sitting.