Draft Law Applicable to Contractual Obligations and Non-Contractual Obligations (Amendment etc.) (EU Exit) Regulations 2019

Yasmin Qureshi Excerpts

Wednesday 13th March 2019 General Committees

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

I reassure my hon. Friend the Member for Huddersfield, in the light of his questions to the Minister, that I have had the chance to go through this statutory instrument as a barrister and shadow Justice Minister, and that we have consulted the Law Society and the Bar Council. My hon. Friend has put his views about lawyers on the record, but I take no offence.

I do not wish my hon. Friend to think that somehow we are succumbing to what the Government want us to do. We have been doing our homework and have scrutinised this statutory instrument. My hon. Friend may be aware of the legal concepts of public international law, which is treaty based, and private international law, which is also known as conflicts of law. Conflicts of law are general provisions that set out the laws to be applied in the event of a dispute, such as a dispute over a transaction that has taken place, a custody dispute or any kind of dispute between people from two different jurisdictions.

Let me give an example of countries outside the EU, because these regulations will apply after we have left the European Union. The current position is that if the matter is a private, personal or family law issue, such as custody or divorce, the accepted norm is that the domestic domicile laws of the individuals will apply. If the issue is to do with business, the laws that apply could be to do with where the business took place or where the companies are based. There are already set rules determining different types of conflicts of law that arise outside the European Union.

The benefit of being part of the European Union was that we did not have to have any of these arguments about which law applied to which situation, or about how to get a judgment given in one country executed in another; these arguments do happen when countries are outside the European Union. Just as with goods and services, the European Union gave a seamless transfer of rights and contracts.

All the issues that my hon. Friend the Member for Huddersfield outlined are clear. When we are part of the European Union, the process is seamless. However, if and when we come out—depending on what happens —we will need to deal with such problems. The purpose of this statutory instrument is to address that lacuna—the gap that will be left if we leave without a deal.

As the Minister said, Rome I and Rome II regulations are the two basic treaties that currently cover this statutory instrument. If we leave the EU, Rome I and Rome II will not operate and that would cause all sorts of chaos.

[Mr Sheerman]

My hon. Friend is confusing me a bit. I am having an Alice in Wonderland moment. As far as I can see, the Minister and the shadow Minister are saying that this is such a little change that it does not really matter. Why are we here? Why are the Government producing this SI and why, once again, does the person representing the Opposition seem to be agreeing? A very small number of these Committees ever divide. I do not know what the purpose of having an Opposition is, if we are always going to agree with the ministerial position. The Back Benchers have to pick up the cudgels. I do not want this to be described as discrimination; to get the balance right, I do not like lawyers or accountants.

[The Chair]

Let us get back to the subject of the SI, if we can.

[Yasmin Qureshi]

I am grateful to my hon. Friend, but what I am saying—and what the Minister was also saying—is that there are issues that need to be addressed. The statutory instrument will address the gaps that will be left if we leave without a deal. Let me provide some examples, which I hope will reassure my hon. Friend that this statutory instrument is needed. If we Brexit without a deal, we need to have these provisions in place.

The Rome I and Rome II regulations set out the rules by which the law is to be applied to a case with a cross-border dimension. For example, the parties to a contract can choose to apply English law to the dispute, even though the case would be heard in France, and the French court must apply the English law to the dispute. Under Rome I, if the parties agree on English and Welsh law—or any other—as the governing law of the contract, this has to be respected by the courts of the EU member states. Given that it applies to third countries and there is no need for reciprocity, recognition of the choice of English laws should not be affected, as long as Rome I remains unchanged.

Rome I states that consumer contracts will be governed by the law of the country where the consumer lives if the business operates or undertakes marketing in the consumer’s country. As many consumers undertake cross-border transactions, Rome I will ensure that any dispute undertaken can be dealt with using the laws with which they are familiar. That is why it is important to keep Rome I, which is one of the things that this statutory instrument will do.

Rome II outlines rules for determining which law governs non-contractual obligations, for example in relation to a tort, where the general rule is that the national court must apply the law of the country in which damage was done. There is no need to secure reciprocity or mutuality of the arrangements, because the Rome II rules apply automatically to third countries, and the courts of European Union member states will continue to apply English and Welsh law when the rules dictate so.

In essence, the draft regulations are giving effect to the two Rome convention treaties. They are needed, so the Labour party will not press the Committee to a Division or oppose the introduction of the statutory instrument. It is required.