And finally, as we edge ever closer to the frozen wilderness of life out of the EU, we look at the impact of Brexit on litigation.
England has built up a reputation for being the applicable law and jurisdiction of choice for international commercial contracts. Will Brexit change this?
In a recent survey carried out by Thomson Reuters 64% of respondents stated that they are already reviewing the dispute resolution clauses in their international contracts. This is, perhaps, to be expected – Brexit is as good a time as any to take stock of your contracts. On the face of things, however, this figure is worryingly high (for the Courts and those of us involved in the English litigation industry). This said, whilst 64% of respondents conceded that the clauses were under review, 54% of respondents stated that they are not considering taking a different approach to choice of law or jurisdiction clauses – so whilst reviews of such clauses are sensible, it seems that at least half of those surveyed have decided to leave their disputes in the hands of the English and Welsh courts.
What can those continuing to use the English and Welsh courts expect to change? One obvious issue that will need to be addressed is service of proceedings. Currently it is much simpler to serve a claim on an EU-based Defendant than one based in a non-EU country. The rules for EU countries are clear, and there are separate rules for non-EU countries. This is likely to change before too long. The rules around service of documents on EU-based Defendants may well start to resemble the rules around service of documents outside the EU. This will no doubt lead to more complex procedures and inevitably lengthier periods for service. At the moment, once a claim has been issued and sent to the receiving agent in an EU country, that agent must take no longer than one month to serve the claim. By contrast, we are currently involved in proceeding issued against an Indian-based Defendant and the current estimated time for service of that claim in India is one year.
Similarly, enforcement of judgments between EU member states is relatively simple as compared to enforcement in non-member states. Brexit will no doubt complicate this. Meanwhile arbitration, litigation’s more flexible alternative, is already readily enforceable in a number of countries. In Thomson Reuters’ above-detailed survey, 29% of respondents indicated that they are considering selecting arbitration instead of litigation. If enforcement of English judgments becomes a difficult and lengthy process for all countries outside England and Wales, then it is likely that this figure will rise.
For those not pursuing international disputes in the English courts Brexit could be beneficial.. Whilst a world-renowned legal system may be something to take pride in, there is no doubt that the Courts have been under intense time and resource pressure. The Civil Justice Statistics Quarterly in 2019 provided a mean time of 58.5 weeks from issue to trial for a fast or multi track trial. Alleviating this pressure even slightly could well result in better and often quicker access to justice as the Court's resources become less stretched.
Happy Brexit Day Everyone!