The approach of Brexit is being viewed as an opportunity by other EU countries to establish themselves as international litigation hubs. Germany, the Netherlands, France and Belgium are all making plans to establish specialist commercial courts where entire proceedings can be carried out in English. At the moment, national legislation may stop short of allowing English-language judgments.
Proceedings begun after 10 January 2015 come under the Brussels I Recast Regulation, which means that UK judgments can be enforced across the EU relatively easily. When the UK leaves the EU, however, the rules that apply to Europe-wide enforcement of UK judgments are likely to be more complicated. As a result of this, litigants seeking EU-enforceable judgments may choose to have their cases heard in EU commercial courts, rather than UK courts, especially where a full English-language service is also on offer.
Most international contracts are governed by the English language and until now this has led to a logical association with English law and the English courts (or those of other native English language jurisdictions). This has for some time left continental European court systems less attractive for international business contracts and therefore dispute resolution.
However, a number of continuing EU member states have seen an opportunity afforded by Brexit to establish a different model. If EU countries can offer both English-language contracts and English-language litigation, there is no reason why businesses might not opt to replace English law with that of another jurisdiction and in that way attract legal work and business focus that has previously gone to the UK. This possibility has given renewed impetus to several EU initiatives which are summarised below.
Germany
In November 2017, Frankfurt’s upper district court announced the creation of a new, English-speaking commercial court in Frankfurt. While written submissions and judgments would, following German civil procedure, be in German, proceedings could otherwise be conducted in English. The president of Frankfurt's court specifically referred to Brexit as an opportunity for Frankfurt to become a centre for international litigation.
The Netherlands
Since 2016, a pilot project operated by the Rotterdam District Court has allowed civil cases involving maritime law, transport law and international sale of goods to be conducted in English. On 1 January 2018, a new Netherlands Commercial Court (NCC) is scheduled to open with the help of an amendment to the Dutch Code of Civil Procedure specifically aimed at providing for English-language proceedings and judgments.
France
The Legal High Committee for financial markets of Paris (HCJP) recommended in May 2017 that France should establish a court capable of deciding international trade and financial disputes governed by UK law in English. To this end, the HCJP called for new procedure rules and practical measures, such as the recruitment of specialist, English-speaking judges with experience in common law.
Belgium
To take advantage of Brexit, Belgium also plans to set up an English-language commercial court. The Brussels International Business Court (BIBC) aims to take on cases previously heard by UK courts or international arbitration tribunals. Parties will be required to agree in advance to allow the court to settle their differences with no right of appeal against decisions made. Hearings will be conducted and judgments delivered in English.
What does this mean for the UK?
The conclusion to be drawn from this is that the UK cannot assume that it will continue to be the jurisdiction of choice where dispute resolution is concerned. Where previously the link between English language, governing law and location was taken for granted, EU countries have now seen an opportunity to win a share of the market.
With the provision of legal services and the mutual recognition and enforceability of judgments a matter which has not yet been resolved in Brexit negotiations, these moves may be seen either as contingency planning or as grounds on which the continuing EU member states may prefer to leave dispute resolution outside the services on which a future free trade agreement may be entered.
Should you wish to discuss any aspect of this update further, please speak to Ian Tucker, Caroline Brown, or your usual Burges Salmon contact.