How will Brexit impact litigation in Ireland?
Cross-border litigation involving UK entities, individuals or assets looks set to lose the EU comfort blanket of co-operative, inter-state rules. The stumbling blocks presented by Brexit are largely concentrated at the beginning and end of litigation - the institution of proceedings and the enforcement of judgments obtained.
Can you institute proceedings in Ireland against persons or entities resident in the UK?
Generally speaking, if you wish to bring action against a person (individual or entity) residing outside the jurisdiction, you must seek leave of the Irish courts. To do this you must lodge an application along with an affidavit to the Irish Courts. If granted permission by the Courts (or leave in legal terms) you are then permitted to issue proceedings and serve on the person outside of Ireland.
However, the ability to institute proceedings against EU domiciled persons is streamlined by EU law. The Brussels I Regulation and its successor, the Recast Regulation1, allow litigants to issue proceedings in Ireland against such persons without the leave of the court in specific circumstances (for example, where Ireland is the place of performance for the contractual obligation in dispute).
Can you enforce a judgment obtained in Ireland against individuals or entities resident in the UK?
Ireland’s membership of the EU affords litigants the ability to enforce judgments obtained in Ireland throughout the EU with relative ease pursuant to the Recast Regulation and the regulation establishing the system of European Enforcement Orders for uncontested monetary judgments2.
UK and EU agreement?
Post Brexit (and absent of a specific UK – EU deal), a litigant would need to:
apply to the Irish High Court for leave to issue proceedings against UK domiciled defendants; and
enforce Irish judgments in the UK through local UK enforcement mechanisms and requirements which could include commencing fresh proceedings in the UK rather than being able to rely on the Irish judgment itself.
This may result in cross-border litigation becoming more expensive and protracted.
It is currently unclear what arrangement, if any, the UK will negotiate to replicate these co-operative rules.
The Lugano Convention on the Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1988 is an agreement between the member states of the EU and six of the member states of the European Free Trade Association (EFTA). The UK government confirmed, in a Brexit white paper published in July 20183, that it will seek to participate in the Lugano Convention after its exit. However, the government went on to comment that it is “keen to explore a bilateral agreement with the EU which would cover a coherent package of rules on jurisdiction, choice of jurisdiction, applicable law, and recognition and enforcement of judgments in civil, commercial, insolvency and family matters”.
It remains to be seen what form this bilateral agreement might take. The Withdrawal Agreement, released on 14 November 20184, is subject to approval by the UK parliament and deals only with the applicability of the aforementioned EU rules up to the end of the proposed transition period (i.e. 31 December 2020). The transition period is the period of time from the date of entry into force of the Agreement up to 31 December 2020.
The Withdrawal Agreement provides that:
the Recast Regulation will apply to the recognition and enforcement of judgments given in legal proceedings instituted before the end of the transition period and to authentic instruments formally drawn up or registered and court settlements approved or concluded before the end of the transition period; and
Regulation (EC) No 805/2004 creating a European Enforcement Order for uncontested claims shall apply to judgments given in legal proceedings instituted before the end of the transition period and to court settlements approved or concluded and authentic instruments drawn up before the end of the transition period, provided that the certification as a European Enforcement Order was applied for before the end of the transition period.
What advantages can Ireland offer contracting parties agreeing on the jurisdiction of a future dispute?
Parties signing a contract today need a degree of certainty in how, when and where a dispute would be litigated. What can Ireland offer those seeking a jurisdiction to meet their business needs?
As outlined above, Ireland’s continued membership of the EU affords litigants the ability to sue EU resident defendants and enforce judgments obtained in Ireland throughout the EU with relative ease.
Contracting parties, in agreeing the jurisdiction of a future dispute, seek familiarity with court process and predictability.
The US, the UK and Ireland are all “common law” jurisdictions, where the court process is adversarial, judicial interpretation of statutes is of critical importance and courts follow previous decisions or “precedent”. The majority of other EU countries have a different “civil law” system, with an inquisitorial court process placing reliance on the prescribed content of codified law rather than previous court decisions. In European litigation terms, the UK has long been the foremost common law jurisdiction, not least due to its size and history.
After Brexit, Ireland will be the largest common law jurisdiction in the EU, with the added benefit of an English speaking judiciary. This could be attractive for potential litigants from common law countries outside of the EU such as the US, Canada and Australia.
In Ireland, litigants can avail of a fast-tracked court process within the commercial division of the High Court. This “Commercial Court” harnesses commercial expertise within our judiciary and it generally deals with business disputes valued at a minimum of €1 million and intellectual property cases. Cases are, on average, concluded within 10 months from the issue of proceedings.
Confidence in Ireland as a commercially nuanced legal system is illustrated by ISDA’s (International Swaps and Derivatives Association) recent publication of a master template agreement governed by Irish law (previously confined to either US, UK or Japanese law).
A post-Brexit Ireland will offer many benefits as a jurisdiction within which to do business and if necessary, litigate.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
This article was authored by Sinéad Power, Senior Associate in our Commercial Litigation Department.
1. Regulation (EU) No 1215/2012
2. Regulation (EC) No 805/2004
3. The Future Relationship between the United Kingdom and the European Union https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/725288/The_future_relationship_between_the_United_Kingdom_and_the_European_Union.pdf
4. Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community https://ec.europa.eu/commission/sites/beta-political/files/draft_withdrawal_agreement_0.pdf