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Litigators fear impact of Brexit on court reform programme

Brexit doesn’t mean London loses its position as the jurisdiction of choice, says LSLA president

15 November 2016

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The government’s preoccupation with all things Brexit is raising fears among lawyers that promised court reforms will be deprioritised.

A leaked memo seen by The Times claims Whitehall is currently working on more than 500 Brexit-related projects and may need to recruit 30,000 extra civil servants to deal with the increased workload, suggesting that other crucial government reforms will be delayed or kicked into the long grass.

The London Solicitors Litigation Association has said it is concerned that the sheer weight of Brexit work facing the government means vital reforms aimed at modernising the civil court system in England and Wales may cease to be a priority for the Ministry of Justice.

‘It is critically important that this does not happen’, said Ed Crosse, president of the LSLA and partner at Simmons & Simmons. ‘Court reform initiatives, such as those proposed by Lord Justice Briggs, must be given priority if we are to guarantee effective civil dispute resolution in London and prevent disputes work from moving to the continent to other tribunals.’

Speaking to Solicitors Journal, Crosse said the raft of court reforms currently under discussion were important to ensure the UK remained on ‘the front foot as a good place to litigate’.

‘The concern I have is that the government is going to be submerged with dealing with Brexit and that its focus on court reforms may lessen as a result,’ he said. ‘For example, the proposal to invest massively in digitalisation of the civil court will require substantial investment of time and money; there are questions being raised as to whether this programme will continue.

‘I believe it will, and indeed must, since it underlies so many other reform initiatives that are being pursued, such as the online court, and the reallocation of civil court business from London to the regions’ he added, ‘but there is a general concern that Brexit is occupying the government and that might mean court reforms are put on the back-burner.’

With uncertainty growing over UK lawyers’ place in the world post-Brexit, the association has proposed a package of practical steps, which it says would help to safeguard the country’s leading position as a centre for international litigation in the years ahead.

‘Brexit doesn’t have to mean that London exits its position as the jurisdiction of choice for international civil litigation,’ said Crosse. ‘English law and litigation in the UK generates billions of pounds for the UK Treasury every year.’

The estimated value of UK legal services was £32.1bn in 2015, according to the latest report from IRN. A separate report by TheCityUK in July found the sector’s trade surplus has nearly doubled over the past decade to £3.4bn in 2015, while its contribution to the economy represented 1.6 per cent of GDP, more than agriculture. It also found the UK accounts for 10 per cent of the global market for legal services and 20 per cent of legal services in Europe.

‘Understandably, the position of the UK legal market may not at the top of government’s “to-do” list as it approaches Brexit negotiations with the EU, but as lawyers we can offer solutions and advise the government how best to ensure that the UK does not lose ground to the fierce competition that exists elsewhere in the EU.’

To defend the UK’s legal status, the LSLA has called on the government to protect the jurisdiction of the UK courts by concluding a treaty with the EU and Denmark, which tracks the provisions of the Recast Regulation using the existing ‘Denmark Model’ as a precedent. The only change necessary would be that the UK would need to pay due account to, rather than be bound by, decisions of the Court of Justice of the European Union.

‘This would provide certainty and continuity for all parties, as the same rules for the allocation of jurisdiction and the mutual recognition and enforcement of judgments would continue to apply, albeit by way of an international treaty rather than directly applicable EU regulation,’ explained Crosse.

The signing and ratifying other agreements, such as the Lugano II Convention covering the position with European Free Trade Association member states who are not part of the Brussels Regulation (Recast) Regime, and the 2005 Hague Convention on Choice of Courts Agreement, would offer further protection for the UK.

‘EU member state agreement is not required for the UK to re-sign up to this convention post Brexit,’ added Crosse. ‘It offers a quick and practical solution for commercial parties who wish to appoint the courts of England and Wales to resolve their disputes on an exclusive basis.’

The LSLA advised that parties should continue to include dispute resolution clauses which provide for the UK courts to have exclusive jurisdiction over any contractual disputes, adding that such a clause will be enforceable throughout the EU post-Brexit, assuming the UK signs the Hague convention. In addition, parties can continue to select English law to govern agreements, safe in the knowledge that the Rome I and Rome II Regulations EU oblige member states to recognise that choice.

‘I’m keen for the UK not to succumb to some the scaremongering that legal commentators elsewhere in the EU are trying to engender – that it is somehow “game over for UK litigation”, because is it not,’ Crosse told Solicitors Journal.

‘There are clear legal routes that can be taken by the government to secure arrangements equivalent to those under the Brussels regime. These proposals should not be controversial – maintaining the current arrangements under the Brussels regime for the mutual recognition and enforcement of UK and EU judgments is as much in the remaining EU member states’ interests as it is in the UKs,’ he said. ‘This can be done, but the government needs to act.’

John van der Luit-Drummond is deputy editor of Solicitors Journal

john.vanderluit@solicitorsjournal.co.uk | @JvdLD

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