What does a ‘hard’ Brexit mean for UK/EU disputes? Part 1: Governing law & jurisdiction clauses

• English and EU Member State courts are likely to continue to recognise a contractual choice of English law.

Jurisdiction clauses – position has changed:

• Exclusive choice-of-court agreements in favour of the English courts are likely to continue to be recognised by EU Member State courts.
• However, non-exclusive choice-of-court agreements will be subject to the local law of each EU Member State court, so including these types of clauses in contracts could carry risks of inconsistent court decisions, non-enforceability and/or increased costs and time delay in enforcement further down the line.
• You may therefore like to consider including an exclusive English jurisdiction clause or even an arbitration clause and/or a mediation clause.

Service of proceedings on parties in the EU – position has changed (and is likely to change again in or around Easter 2021):

• Currently, permission to serve out is needed for service on a party in an EU Member State in the same way as for Defendants located outside of the EU.
• An amendment to the Civil Procedure Rules is currently pending, which would remove the requirement to obtain permission to serve proceedings on a Defendant outside England where there is a contractual agreement to give an English court jurisdiction. This will likely take effect in the second quarter of 2021.
• You may therefore wish to consider providing for your contractual counterparty to appoint an agent to accept service of proceedings in the UK, in order to avoid the need to serve outside the jurisdiction.