Brexit – What Next? Will Young presents at the Cross Border Law Conference

At the time of writing (December 2020), we remain in the transition period, where we will remain until 31^st December 2020. Generally things have remained the same, in terms of the applicability of pre-Brexit rules, and will continue to do so until the end of the transition period. The question, though, is what will happen after?

The easy part is applicable law: because Rome I and II do not depend on reciprocity (and can have effect to apply the law of a non-signatory state), the UK courts can continue to apply the rules contained in Rome I and II despite the UK’s departure from the EU, and that is what they will do – see The Law Applicable to Contractual Obligations and Non-Contractual Obligations (Amendments etc) (EU Exit) Regulations (SI2019/834).

Jurisdiction and Enforcement of Judgments

The position in relation to Jurisdiction is much less clear, however. Brussels Regulation Ia will cease to apply from 1^st January 2021, and therefore, in default of any deal or alternative solution, there will be a return to the common law rules in relation to jurisdiction.

One potential solution that has been mooted is for the UK to acceded to the Lugano Convention, which is in very similar terms to the 2001 Brussels Regulation. If this was achieved, there would be some differences to the current Brussels Ia regime, but the outcome would be a broadly similar regime in relation to jurisdiction and enforcement of judgments.

The differences include the loss of the right of a consumer to bring consumer claims in their own court irrespective of where the other party is domiciled (i.e. the other party does not have to be domiciled in a member state under Brussels Ia, whereas it does under Lugano). Also, the Lugano Convention still has the problem of the “Italian Torpedo”, which Brussels Ia addressed by way of an amendment. This is perhaps less likely to arise in personal injury than commercial claims, but is a potentially significant difference between Brussels Ia and Lugano.

The idea of accession to Lugano as a replacement for the current Brussels Ia regime is less straightforward than it has been made to appear in some quarters, however. There would need to be agreement from all EU states in order for the UK to be able to acceded to Lugano, and this has not been forthcoming so far, and it has been reported that the EU is unwilling to give consent to the UK’s accession in a way that is decoupled from the remainder of the Brexit negotiations.

In any event, accession to Lugano would take time – there is a three month objecting period even after approval by the current contracting parties is obtained, during which any contracting party could object. So the earliest that the UK could re-join Lugano, even if unanimous agreement was achieved at the start of December 2020 would March 2021. The longer it takes for unanimous approval to be achieved, the longer the time-lag and the lacuna.

Another option is the Hague Convention. The UK deposited its instrument of accession on 28^th September 2020, so as to come into force on 1^st January 2021.  This offers some assistance, where a choice of jurisdiction has been made in advance, but will not be relevant in a tortious claim where there is no such jurisdiction agreement in force.

In terms of enforcement of judgments, this is the flip side of the coin of jurisdiction: even if a UK-based Claimant can establish that the English courts have jurisdiction, that will only be a benefit if the courts of the country where the Defendant is based will recognise and enforce an English judgment. Absent Lugano or Brussels Ia applying, the national rules for the country in question would apply in relation to attempts to enforce a judgment of the English court. In any such case, therefore, advice from a local lawyer in relation to the local rules on enforcement of foreign judgments is likely to be a prudent step. There are potential implications in relation to enforceability, delay and costs, to name but the most obvious issues.

Motor Insurance Directives

Another very significant difference after the end of the transition period (assuming there is no deal) will be the position in relation to the Motor Insurance Directives and motor claims in the EU.

The MIB has worked with the Council of Bureaux in Brussels to try and avoid or minimise disruption  in relation to the Green Card system (such as by removing the requirement for the “Green cards” to actually be printed on green paper, making them more easy to print off at home!).

More fundamentally, however, the Fourth Motor Insurance Directive relies on reciprocity, which will be lost from the end of the transition period, absent any deal.

Accidents involving uninsured drivers in the EU can currently be brought by a UK domiciled Claimant against the MIB, who can then claim an indemnity back from the equivalent compensatory body in the country where the accident took place (see the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensatory Body) Regulations 2003). The Directive also imposes an obligation to have local claims representatives in all member states to deal with visiting victim claims. The right to claim via a local claims representative or the MIB if the accident was caused by an uninsured driver, will be lost with no deal; a Claimant would have to sue in the country where the accident took place – and some countries (for example France), do not allow claims against the equivalent of their MIB by non-residents.

If the UK does not join Lugano (or until it does), Odenbreit claims, brought directly against foreign insurers in the UK courts would be unavailable.

The European Communities (Rights Against Insurers) Regulations 2002 is the basis for a direct right of action against motor insurers in domestic UK accident claims, and was instituted as part of the implementation of the Motor Insurance Directives here. It is freestanding UK legislation, so the right would not be lost automatically on 1^st January 2021, but absent any deal there would no longer be any obligation on the UK government from that date to maintain this right. There is, to date, no indication that the Regulations will be repealed or amended to reduce the scope of the right, but it remains a possibility.

Overall, considerable uncertainty remains, even as the date for the end of the transition period approaches. If cases can be issued before then, that would appear sensible. If not, then it is probably sensible to assume that there will be at least a significant period during which the common law rules of jurisdiction will apply, and in which the enforcement of judgments of the English courts will depend on national rules.

Watch the webinar

This article summarises a recent webinar by cross-border injury claims specialist, Will Young. Will discussed this subject in detail at the Outer Temple Annual Cross Border Conference recently. Watch the recording of his webinar below.

About the Author

Will Young has a particular interest in claims involving cross-border personal injury and travel law.

He acts for both Claimants and Defendants in claims with an international or cross-border element to them in a number of areas, including: package travel claims, cross-border RTAs, Athens Convention, and aviation (e.g. “Denied Boarding” Regulations) claims.

He has been instructed in a number of cases involving catastrophic injury following RTAs abroad, or with a cross-border element to them.

Webinars & Recordings 17 Dec, 2020