Reed Smith Client Alerts

Why is Brexit important?

It may not be recognised quite how many of the world’s international commercial disputes are litigated in the UK, mainly in London. While difficult to give a percentage, it is generally agreed that London is far and away the most important centre for the hearing of such disputes.

It is estimated that the total annual revenue generated by legal services in the United Kingdom (including Scotland) in 2017 was in excess of £35 billion and that litigation in England involving foreign clients was in excess of £4 billion.

Auteurs: Lindsay East

The current position

One of the core values of the EU is that there should be commonality, so to speak, between the legal systems of all of the members of the EU. This is dealt with through a series of conventions and other treaties entered into by the various countries that now form the EU. Some of the key treaties are:

  • The Brussels Convention and Recast Brussels I Regulation – the aim of these is that a claimant who has obtained a judgment from a member state, may enforce that judgment in any other member state without issuing separate proceedings in that other member state. The Recast Brussels I Regulation now governs the enforcement of judgments and the question of jurisdiction
  • The Lugano Convention, which governs the enforcement of judgments between what used to be called the EEA countries – namely, Iceland, Switzerland and Norway – and those states that were EU members prior to 2004 (including Poland).
  • Rome I and Rome II determine the applicable law of a dispute between parties in the EU. Rome I deals with contractual disputes and applies where there is no express choice of law clause in the contract. This will be the case, for example, in oral or implied contracts. If there is an express choice of law clause, then that will apply. If not, Rome I provides that a contract will be governed by the law of the country with which it is most closely connected. Rome II deals with non-contractual disputes, that is to say, tort or delict. Rome II introduced a change in the law of most countries in that it states that the applicable law for the resolution of non-contractual disputes is determined on the basis of where the damage occurs, or is likely to occur, regardless of the country, or countries, in which the act giving rise to the damage occurs.