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'Business as Usual' Post-Brexit on Governing Law Position Says UK Government

on Monday, 23 October 2017.

The UK Government has published a series of position papers on Brexit. In one, it has sought to reassure business and individuals that it will be 'business as usual' in terms of enforcing their legal rights where there is a cross-border element.

It has said that it will be implementing into UK law what is already the case in terms of choice of law and jurisdiction. This will mean transposing the rules on Rome I (choice of law in contracts), Rome II (governing law in non-contract situations) and Brussels Ia (which courts have jurisdiction to hear a dispute, and recognition and enforcement of judgments made in other EU Member States). The UK Government is looking for mutual agreement on these principles so that the EU agrees that these will apply reciprocally.

The UK Government emphasises that reaching agreement on this would be of mutual importance. It says that many companies in the EU choose English law to govern their business transactions, and 40% of global commercial arbitrations concern English law as the governing law. It says that the position should be straightforward given the existing close civil judicial co-operation.

Consumer Confidence

The UK Government argues that consumers should be confident that their existing rights and ability to bring claims should be unaffected and the judgments should be enforceable. Businesses also need certainty and this underpins investment.

International Civil Judicial Co-operation

The position paper also promises that the UK will continue to play its part in increasing international civil judicial co-operation with others, such as through active support of the Hague Conference on Private International Law and the United Nations Commission on International Trade Law (UNCITRAL), as well as participation in the Lugano Convention.

One area that will prove contentious is the role of the European Court of Justice and the resolution of disputes between the UK and the EU following Brexit, particularly around the withdrawal agreement and new trading agreement. The UK Government says that, although cases decided or brought prior to the Brexit date will still apply to the UK, the direct jurisdiction of the European Court of Justice must cease following Brexit. There is detail to be worked through here, but the principle is that to give effect to sovereignty being brought back to the UK, an independent country cannot be ruled by another jurisdiction's courts.

What Does This Mean for Businesses?

There is not much that is a surprise here, but the devil will be in the detail and what can be agreed around the terms of co-operation between the UK and EU courts, including over matters around Brexit. Let's hope that the negotiators on both sides recognise the obvious common ground and work sensibly together on reaching agreement in the areas that are slightly trickier, with the objective of achieving a good deal for businesses and citizens in the UK and the EU.

If you have any thoughts on this, please contact Paul Gershlick in our Pharmaceuticals and Life Sciences team on 01923 919 320 to share them.



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