Brexit & Conflict of Laws: Part 3

In the final part of this series I look at how English law’s approach to the  choice of applicable law may change post Brexit. For historical and political reasons the change may be radical. I conclude this series of blogs by making tentative predictions as to how English law’s approach to the conflict of laws may change following Brexit.

Applicable law post Brexit

Just as the ‘Brussels regime’ exists in relation to Jurisdiction, one could say that the ‘Rome regime’ exists in relation to the choice of applicable law. Rome I (Regulation EC 593/2008) relates to contractual obligations and Rome II (Regulation EC 864/2007) relates to non-contractual obligations. Further, Rome I was preceded by the ‘Rome Convention’ (80/934/EC), which sought to harmonise the choice of law rules applicable to contractual obligations. Britain was a Contracting State to the Rome Convention. Critically, however, the Rome Convention did not cover ‘non-contractual obligations’ – hence English law’s development of choice of law rules as codified in the Private International Law (Miscellaneous Provisions) Act 1995.

Another critical distinction is that unlike the Brussels regime which complements the patchwork of existing English law, the Rome I and Rome II Regulations are universal, meaning that the rules codified in the Regulations will apply to determine the applicable law whether or not the law to be applied is of an EU Member State. This universality of the Rome regime is a key distinction to the Brussels regime which only applies to determining jurisdiction between Member States (and Contracting States in relation to the Brussels Convention). To put it another way, the Rome regime creates an overarching set of rules in relation to choice of law which has, for the time being, rendered English law which pre-existed the Rome regime of no effect[1].

When Brexit happens are we likely to abandon the modern Rome regime and return to the rules set out in the Private International Law (Miscellaneous Provisions) Act 1995 (tort and delict), the Rome Convention (80/934/EEC) (contractual obligations) and the common law? Will we return to system which is less rigid in its determination of which law is to be applied? Will we return to the Harding v Wealands [2006] UKHL 32 rule that assessment of damages is a matter of the lex loci and therefore for English law to determine? The natural result of repeal of the European Communities Act 1972 and Brexit via article 50, would be to remove the force of law from the Rome I and Rome II Regulations which relies on the doctrine of direct effect under EU law. If, as I consider likely, the transition between Brexit and the new relationship between the EU and Britain is not seamless but dependent upon a) a transitional agreement and b) a new agreement to set the terms of relationship between Britain and EU it would appear that the Private International Law (Miscellaneous Provisions) Act 1995 would serve to fill the void on non-contractual obligations on a temporary basis and the Rome Convention would fill the void in relation to contractual obligations. The Rome Convention is given the force of law in England and Wales by section 2 of the Contracts (Applicable Law) Act 1990.

Assuming a deal to replace the Rome regime is reached either at the time of the article 50 Brexit negotiations (unlikely) or following the article 50 Brexit negotiations (more likely), is it likely to replicate the Rome regime or will it strike radical new ground? It is interesting to note that both Rome I and Rome II contain the same text at recital 6: The proper functioning of the internal market creates a need, in order to improve the predictability of the outcome of litigation, certainty as to the law applicable…” Accordingly if, uniform rules as to applicable law form part of the single market, prima facie maintaining the status quo would be in accordance with Britain’s known goals. Britain may be keen to enter into a Convention with the other EU Member States in relation to non-contractual obligations but this would surely be a long and uncertain process. The existence of the Rome Convention in relation to contractual obligations provides a viable long-term solution in relation to choice of law and contractual obligations, although it is to be noted that the Rome Convention is not exactly the same as the Rome I Regulation.

Consideration may be given to unilaterally enacting legislation to re-empower the Rome I and Rome II Regulations, which would ensure the same rules were to be applied in Britain in regards to the choice of law, as in the rest of the EU. However, that would probably not be a satisfactory solution as, where there was a dispute as to the meaning of the Regulations, the CJEU would determine the interpretation in EU Member States and English courts would determine the interpretation in Britain which would give rise to the possibility of two parallel yet incompatible systems.

Interestingly, if Britain were to adopt the Norwegian model this would augur against a codified system (the Rome regime) in relation to choice of law. I understand Norway has not enacted the Rome Convention, nor the Rome Regulations nor any comprehensive choice of law codification[2]. This suggests that codification into English law of the Rome I and Rome II Regulation may not be a top priority for EU Member States. In other words, the only viable long-term solution to replicate Rome II on non-contractual obligations would appear to be for Britain to enter into a Convention with the other EU Member States. If this were to happen, it would not, in my opinion, happen quickly and there has been no indication from government or the EU, that I am aware of, that such measures are intended.

Conclusion

Uncertainty reigns and will continue to reign for a long time. Even upon article 50 agreement (or the passing of 2 years from the article 50 trigger) the agreement is only likely to cover the terms of the exit and is unlikely to cover the terms of the new relationship. Despite the many calls for a quick agreement to be reached between the UK and the other Member States, I remain healthily sceptical that this is achievable: distilling 43 years of EU law into a form agreeable by Britain and the other 27 EU Member States and which the European Parliament is willing to ratify is a herculean task which is bound to catch up in 1 or 2 Gordian Knots.

If I were to make a bet (I would make it a small bet), it would be that once Brexit has formally taken place via article 50 and repeal of the European Communities Act 1972:

  • In the area of jurisdiction, the Brussels Convention will come back into force for a short while until the Lugano Convention is given the force of law via domestic legislation. The Brussels Convention is the historical predecessor to the Brussels Regulations and is, as discussed in part 1 of this series, significantly different to the modern Brussels Regulations. However, the Lugano Convention, to which Britain had given the force of law until 1 January 2010, replicates the Brussels I Regulation, which has itself been modified. Given the long history of the Brussels regime in English law a complete departure from the Brussels regime seems too radical to be likely.
  • In the area of choice of law, the Rome Convention will have the force of law in relation to contractual obligations immediately upon Brexit and until there is the political desire to update the Rome Convention which is not a carbon copy of the Rome I Regulation, dealing with contractual obligations. In relation to non-contractual obligations the change brought about by Brexit could be more radical as there is no predecessor Convention to the Rome II Regulation. Accordingly, it seems likely that the common law rules and Part III of the Private International Law (Miscellaneous Provisions) Act 1995 will pick up from where they left off when Rome II came into force on 11 January 2009 – at least in the short term. In my opinion, it would probably take a new convention between Britain and the EU to replicate Rome II in English law after Brexit and there is no indication that this is likely is the foreseeable future. It looks like a return to the rule in Harding v Wealands (supra) is a real possibility!

[1] See section 15A of the Private International Law (Miscellaneous Provisions) Act 1995.

[2] See: ‘Codifying Choice of Law around the World: An International Comparative Analysis’, Dr Symeon C. Symeonides, Oxford University Press 2014, at p. 304; and ‘Recent private international law codifications: National report for Norway’, Guidetta Cordero, International Academy of Comparative Law 2010

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