The UK remains the jurisdiction of choice post-brexit

16th November 2022 | Greg Pooler | Global Mobility, International Presence, Litigation

In this article Greg Pooler explains the effects of Brexit on the UK’s cross-border disputes market following a talk he and Sherrards’ partner Marta Grieve gave to the legal community in Poland at the British embassy in Warsaw.

Brexit, once a topic of uncertainty, has now settled into the legal landscape, but its effects on UK cross-border disputes continue to evolve. The UK legal market remains one of the most influential in the world, generating billions in revenue and serving as the governing law of choice for international contracts. However, with the post-Brexit legal framework firmly in place, businesses and legal practitioners must adapt to new rules for resolving disputes.

How Has Brexit Changed Cross-Border Litigation?

Before Brexit, the UK’s cross-border dispute framework was largely governed by EU regulations, which made enforcing judgments and serving legal documents across EU borders relatively straightforward. These regulations included the Brussels Recast Regulation, the Lugano Convention, and the EU Service Regulation.

However, since leaving the EU, the UK is no longer part of these agreements. Instead, the Hague Convention on Choice of Court Agreements has become the primary legal instrument governing cross-border disputes. While this provides a solid framework for commercial disputes with exclusive jurisdiction clauses, it does not offer the same comprehensive coverage as the previous EU system. Some of the key differences include

• Enforcement of UK judgments in the EU – Since Brexit came into effect, the Brussels Regulations and Lugano Convention have fallen away. This represents the biggest impact on cross-border disputes. As a result, the Hague Convention on Choice of Court Agreements – to which the UK is a party in its own right as of 1 January 2021 – now takes centre stage as the main reference point for conducting cross-border disputes. Note the emphasis on commercial disputes because whereas the Brussels Regulations apply to a broad range of civil disputes, Hague’s principal limiting factor is that it only applies to cross-border disputes where there is an exclusive jurisdiction clause in favour of a contracting state (note asymmetric or optional jurisdiction clauses do not qualify).  
• Limited scope of Hague – Hague is also a lot narrower in application, excluding from its ambit certain categories of dispute including consumer law, employment disputes and insolvency cases (among others). Its other major limitation is that it does not extend to interim relief such as freezing orders that could under certain conditions previously be passported into other EU member states. 
• Changes in service of proceedings – EFTA states are not a party to Hague, meaning the UK’s failure to join Lugano (despite its best efforts) creates a gap between the UK and EFTA states which is mitigated slightly by the fact that Norway and the UK have agreed to continue to apply Lugano; as to the remaining EFTA states, the recognition and enforcement of judgments is a question of the national law of those states. The EU Service Regulation has likewise been revoked and has been substituted for the not too dissimilar Hague Service Convention. Lastly Rome I and II continue to apply as they form part of the package of EU legal instruments which the UK continues to apply post Brexit as “EU retained law”, which in simple terms incorporated EU law as it stood at the end of the transition period into English law.

The UK Legal Market’s Resilience

Having identified the actual differences in the EU landscape, what does this mean in practice? While Brexit has introduced some procedural hurdles for cross-border litigation, its impact is less severe than it may seem. Despite some changes, the UK remains a leading jurisdiction for resolving cross-border disputes, with strong legal frameworks still in place.

Key factors help maintain the UK’s strong position in international dispute resolution:

• • Most commercial agreements remain covered – The Hague Convention applies to many cross-border contracts, provided they include exclusive jurisdiction clauses.
  • Recognition and enforcement of judgments continue – While the Brussels regime no longer applies, many EU countries have national laws that allow UK judgments to be enforced, and the UK has a robust framework for recognising inbound judgments.
  • Strong bilateral agreements – The UK maintains longstanding legal arrangements with key trade partners like Canada, Australia, India, and others, ensuring continuity in dispute resolution.
  • Anti-suit injunctions offer protection – The English Courts can now issue anti-suit injunctions, preventing parties from undermining jurisdiction clauses, which was restricted under EU law.
  • Minimal changes to service of proceedings – The Hague Service Convention largely replaces the EU system, and from 2021, UK courts no longer require permission to serve proceedings abroad when an English jurisdiction clause exists.

  Arbitration remains a strong alternative – International arbitration, governed by the New York Convention, is unaffected by Brexit and continues to thrive, further reinforcing London’s role as a global legal hub.

 

What This Means for Businesses and Legal Professionals

Some perceive a conspiracy of silence as to the adverse impacts of Brexit on the UK more generally.  But there is good reason to believe in the resilience of the UK legal market and that it has largely emerged unscathed; what empirical data there is suggests that Brexit has neither dented English law as a brand nor the Courts of England as the forum of choice for the resolution of disputes. 

We do however caution that it is still early days and warn against complacency.  The recent Portland Commercial Courts Report indicates that between 2021 and 2022 there has been a dip of 20% in the number of Commercial Court judgments that have been issued (possibly a function of the considerable resource constraints the Commercial Court has been experiencing in terms of judge availability) but the trend since 2016 remains upwards.  Moreover, 54% of the litigants in the Commercial Court were international, up from last year’s 50:50 split.  Of these non-UK litigants, the number of nationalities represented in the Commercial Courts has also expanded, with (interestingly) the number of EU litigants increasing slightly from 11.5% to 12% over the last year. 

London retains its pre-eminence as the preferred seat for arbitration: the number of referrals to the LCIA has increased in 2021/2022 to 444, representing a doubling of its case load of the last 10 years.  The growth in London-seated arbitration is possibly a collateral effect of Brexit in view of the enforcement benefits of the New York Convention.

Lastly, if English law is to be dislodged then there needs to be a viable alternative.  It is true that some economies have started to evolve their own body of commercial law creating competitive pressure on English law. However, much of what gives English law its considerable export value remains: the sophistication and depth of its body of contract law, the malleability of the common law and the potency of its precedent value to market participants.  In short, there are plenty of reasons to be hopeful that English law will maintain its market dominance and that English Courts, and London in particular, will continue to be the forum of choice for the resolution of cross-border disputes.

Need Expert Legal Advice?

The UK remains a top choice for international dispute resolution, but navigating the post-Brexit legal framework requires careful planning. If your business operates across borders and you need guidance on jurisdiction clauses, enforcement of judgments or arbitration, our expert legal team is here to help.

Get in touch with us today to discuss how we can support your legal needs in a post-Brexit world.