Author: Alexander Wildschütz
In only a few hours 47 years of the United Kingdom’s membership in the European Union and in its predecessor, the European Economic Community, will come to an end. Over the next 11 months it will, hopefully, become clearer what shape the future relationship between the UK and the remaining member states will take.
What does today mean for the free movement of civil and commercial judgments, a fundamental requirement for cross-border trade?
The terms of the Withdrawal Agreement, now formally agreed by both sides, provide certainty during the transitional period which (currently) will end on 31 December 2020. Existing judgments will qualify for mutual recognition and enforcement without changes. The same applies to judgments which are to be given in the future provided that the underlying proceedings are commenced before 31 December 2020 regardless of whether the judgment in such claims is given at a later date. What constitutes “commencement of proceedings” is a question of the local lex forum. In most jurisdictions it will require at the very least the filing of the claim at court. Any business trading across the UK/EU borders should take stock of potential disputes now and closely monitor its relationship with partners based on the other side to ensure that if necessary all steps can be taken in time. Although English procedure discourages rushing into court proceedings these are exceptional times. The parties can still deal with such claims sensibly by agreeing a stay post-commencement.
As for judgments in proceedings not yet pending as of 31 December 2020 we simply have no clarity. The general expectation is that both sides will in the long term want to ensure that in the world of commerce the free flow of court decisions will continue even in the absence of a final deal. However, it is easy to imagine scenarios which will fall through the net come 1 January 2021 if the transition period is not followed seamlessly by a comprehensive deal. Until we have certainty the dispute provisions of existing and new commercial contracts deserve a very close look.