Brexit—impact of exit day for dispute resolution

Brexit—impact of exit day for dispute resolution

The UK's departure from the EU at 11 pm on 31 January 2020, also known as exit day, means that the will UK no longer be an EU Member State. The issue for dispute resolution practitioners is how this will impact them when dealing with cross border disputes that involve an EU element. There are two periods of time following exit day that will be relevant for dispute resolution practitioners: the transition or implementation period (IP) itself (which expires on IP completion day) and the period after IP completion day.

The implementation period

As at exit day the UK and the EU will enter into the transition period, also known as the implementation period. This is provided for in the Withdrawal Agreement, an international treaty between the UK and the EU, which has been implemented into domestic law by the European Union (Withdrawal Agreement) Act 2020 (EU(WA)A 2020). The Withdrawal Agreement references this period as the transition period, which is the preferred term of the EU, while the EU(WA)A 2020, s 39 uses the term ‘implementation period’ or ‘IP’.

The implementation period ends on the IP completion day, which is defined in EU(WA)A 2020, s 39 as meaning 31 December 2020 at 11.00 p.m. Article 132 of the Withdrawal Agreement provides that the transition period can be extended for up to one to two years. However, EU(WA)A 2020, s 33 contains a provision prohibiting the UK agreeing to an extension. This is in line with the UK government’s political commitments not to extend the implementation period and so an extension looks unlikely.

The Withdrawal Agreement provides for the UK to continue to be treated by the EU as an EU Member State for many purposes and the UK must continue to adhere to its obligations under EU law (including EU treaties, legislation, principles and international agreements) and submit to the continuing jurisdiction of the Court of Justice of the European Union in accordance with the transitional arrangements in Part 4 of the Withdrawal Agreement. The transitional provisions mean that there will be no change to the way practitioners approach general dispute resolution cross border issues during the implementation period—specific considerations may though apply for specific sectors such as intellectual property.

LexisPSL Dispute Resolution Subscribers can access the following Practice Notes providing guidance:

Brexit—introduction to the Withdrawal Agreement

Brexit implementation period—applicable law

Brexit implementation period—jurisdiction

Brexit implementation period—service of documents

Brexit implementation period—taking of evidence

Brexit implementation period—settlement

Brexit implementation period—European cross border processes

Brexit implementation period—enforcement

During the implementation period, consideration should be given to the position after IP completion date for those issues that are likely to arise after that date. For example, the enforcement of any UK court judgment in an EU Member State court (or vice versa) where proceedings are commenced in on or before 2020 (ie during the implementation period) but enforcement would not be required until 2021 or beyond.

After IP completion day

After IP completion day, the UK will no longer be treated by the EU as an EU Member State in any regard. Some of the provisions in the Withdrawal Agreement have the effect though that the EU regulations will continue to be applicable for a period of time after IP completion day. For example, where a request for evidence is received by a specified body in the Withdrawal Agreement before 31 December 2020 (ie IP completion day) then the request will continue to be processed after that date (see Article 68(b) of the Withdrawal Agreement).

Where the provisions in the Withdrawal Agreement are no longer applicable, then it is currently not clear what impact this will have for practitioners. There are two potential scenarios:

  1. the UK may reach specific agreements with the EU to continue the previous regime or to bring into force something similar
  2. where there are no agreements, then in effect a no-deal Brexit will occur in relation to all matters not deal with by the Withdrawal Agreement 

Brexit SIs

A large number of SIs dealing with the situation where there was no deal on the UK leaving the EU specifically provide for an in force date by reference to exit day.

EU(WA)A 2020, Sch 5, para 1(1) (dealing with subordinate legislation with commencement by reference to exit day) provides that any provision in subordinate legislation made under EU(W)A 2018 (which includes all of the Brexit SIs) that comes into force by reference to exit day is to be read as coming into force by reference to the IP completion day. However, EU(WA)A 2020, Sch 5, para 1(1)  did not come into force on 23 January 2020, when the Act itself came into force. On Wednesday 29 January 2020, the government published The European Union (Withdrawal Agreement) Act 2020 (Commencement No. 1) Regulations 2020, 2020/75. These regulations provide (at Regulation 3(b)) for EU(WA)A 2020, Sch 5, para 1(1) to come into force immediately before exit day. As a consequence, all references to ‘exit day’ in the Brexit SIs are replaced with ‘IP completion date’.

 

This analysis was first  published  on Lexis®PSL Dispute Resolution on 29 January 2020

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About the author:

Janna is a dispute resolution lawyer. She deals primarily with cross border issues and is active in the work being undertaken in relation to the implications of Brexit for Dispute Resolution lawyers. Janna also heads up a LexisNexis costs team bringing together expertise from across the company to deal with the costs issues facing the profession.