with Johanna Spittle, of Lupton Fawcett Denison Till

AS A member state of the EU, the UK is party to a framework of legislation which sets out the rules that courts must apply when determining the governing law of court claims, their jurisdiction over disputes and the procedure for enforcing judgments across the EU.

Although this legal framework will continue to apply until the exit negotiations are finalised, inevitably our withdrawal from the EU will have an impact on certain aspects of dispute resolution.

Parties entering into contracts with customers and suppliers overseas will normally try to agree in advance which country’s court will have ‘jurisdiction’ to hear a claim if the parties fall out and which set of laws will apply.

As an EU state, we are subject to a set of rules that apply throughout the EU which are used to determine the jurisdiction of courts in EU member states and to determine which country’s law applies to a contract and, where agreements have been reached, how these agreements are to be interpreted.

When the UK leaves the EU, these rules will no longer apply and it is not yet known whether similar agreements will be reached between the UK and the EU.

If you are negotiating contracts with other business in the EU it is therefore more important than ever that you ensure that you include clear jurisdiction and governing law clauses in those contracts to avoid expensive arguments later down the line.

Our exit will also affect how judgments are enforced and the service of court claims in EU countries.

At present if you obtain a judgment in the UK and you wish to enforce it against a defendant in another EU country (other than Denmark) there is a simple mechanism for recognising and enforcing those judgments.

This will not apply when the UK leaves the EU unless a similar framework is negotiated between the UK and the EU.

Similarly as things currently stand there is, generally, no need to obtain the permission of the English court to serve proceedings on a defendant domiciled in another EU member state.

Again, when we leave the EU, unless arrangements are put in place to continue this framework,

Claimants wishing to serve English proceedings in the EU may need to apply for court permission unless clauses are put into contracts providing for English jurisdiction and the appointment of an agent for service of court claims in England.

The current legal framework will not change until the exit negotiations between the UK and the EU are finalised, but if businesses are negotiating contracts which are likely to govern trading relationships in future years it is sensible to take steps now to prepare for the impact that the UK’s exit will have on dispute resolution.

l Johanne Spittle is a director in the dispute management team at Lupton Fawcett Denison Till.

For more information, contact johanne.spittle@luptonfawcett.law or on 01904 561425.