March 27, 2017

The Justice Committee says that the Government must address four priorities for the justice system in negotiating the UK’s new relationship with the EU.

The report recommends that the Government should:

• continue co-operating on criminal justice as closely as possible;
• maintain access to the EU’s valuable regulations in inter-state commercial law;
• enable cross-border legal practice rights and opportunities; and
• retain efficient mechanisms to resolve family law cases involving EU Member States and the UK.

In civil justice, EU regulations establish procedures on choice of jurisdiction, and mutual recognition and enforcement of judgments, for transnational disputes. The Brussels I Regulation governs commercial matters, while Brussels II applies to divorce, child contact and other family cases.

As for commercial law, the report recommends that the Government should aim to replicate the provisions of Brussels I Recast as closely as possible, perhaps using the EU-Denmark agreement as a blueprint. As a minimum, it must endeavour to secure membership of Lugano II and the 2005 Hague Convention in its own right. Rome I and II should be brought into domestic law. The Government must also address the potential liabilities for non-performance of contractual duties that financial institutions may face as a consequence of Brexit.

The Court of Justice of the EU is the ultimate interpreter of EU law. The Government has in recent months repeatedly stated its intention to end its jurisdiction in the UK. However, the report concludes that it remains unclear how civil justice co-operation will work without the CJEU or another court playing a limited arbitral role.

Bob Neill MP said: “Protecting the UK as a top-class commercial law centre should be a major priority given the clear impacts on the economy of failure to do so: the Government should look to replicate existing provisions as closely as possible. … We believe that a role for the Court of Justice of the European Union in respect of these essentially procedural regulations is a price worth paying to maintain effective cross-border tools of justice.”

The Committee recognises that the legal services sector underpins many areas of UK economic activity; the report concludes that its ability to continue to facilitate these in the EU will diminish without protection of existing practising rights there for UK lawyers, and that there is also clear evidence of reciprocal benefit. The report recommends that the Government include achieving this protection in its Brexit negotiating strategy.

The Committee believes that overall the implications of Brexit for the legal services sector give cause for concern, but not hyperbole: most of the sector’s strengths are unabated, and sensible discussions between the UK and the EU ought to protect many of the advantages of their existing cooperation. However, the report recommends that the Government should consider and promote the legal services sector in the context of its expected post-Brexit trade recalibration and the pursuit of new deals; it should outline steps it will take to protect and provide opportunities for the sector. To access the report, click here.