The recent flow of Brexit policy papers issued by the UK government has continued apace with the release of documents related to the settlement of cross-border disputes and the jurisdiction of the European Court of Justice (ECJ) which presides over disputes involving EU law.
The UK is calling for ‘close cooperation’ with the EU to resolve commercial, consumer and family cross-border disputes that arise after Brexit. Decisions on which court holds jurisdiction in such instances is currently determined by EU regulations. The policy paper addresses the question of what system will take its place beyond March 2019.
It proposes a future partnership on civil judicial cooperation and the introduction of a new system to determine the choice of law in cross-border dispute resolution cases. It appears to accept a continuing need for judgements obtained in EU countries to be applied to individuals and businesses in the UK.
However, until now, the position of the UK government regarding the jurisdiction of the ECJ has been less in the spirit of continued cooperation. In her Lancaster House speech in January 2017, the Prime Minister said: “Leaving the European Union will mean that our laws will be in Westminster, Edinburgh, Cardiff and Belfast. And those laws will be interpreted by judges not in Luxembourg but in courts across this country.”
The policy paper on ECJ jurisdiction contains a nuanced softening of language, rejecting the idea of the UK remaining under the ‘direct jurisdiction’ of the ECJ. The introduction of the word ‘direct’ for the first time suggests that the UK will continue to accept some jurisdiction of the ECJ. The policy paper series of options, including the proposal to establish a new arbitration panel to comprise of representatives of the UK and EU plus an independent third party.
A possible alternative would be to use the European Free Trade Area (Efta) court which governs Iceland, Lichtenstein, and Norway’s relationship with the Single Market. However, it tends to closely follow the rulings of the ECJ which may mean that it is an unpalatable option for advocates of a ‘hard’ Brexit.
As with the future of customs arrangements between the UK and the EU, the business community is seeking clarity and certainty on how commercial disputes will be resolved after Brexit and during any subsequent transitional period, both in regard to the system used and its guiding principles.
Article published: 24th August 2017
