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Following the end of the Brexit transition period on 31 December 2020, we have received several enquiries as to how jurisdiction and enforcement of orders in cross-border disputes will be determined as from 1 January 2021.
Proceedings started up to 31 December 2020
When proceedings started before 31/12/2020, within the European Union (EU), the rules on which country's courts have jurisdiction over a dispute and the enforcement of judgments will continue to be determined by the Brussels I Regulation and the Lugano Convention, which provides for the parties' contractual choice of jurisdiction and judgments from the courts of member states are recognised and enforceable across the EU.
Proceedings started after 1 January 2021
Post Brexit, the Brussels I Regulation and the Lugano Convention will no longer rule the jurisdiction and the recognition and enforcement of judgments in civil and commercial matters when one of the parties is domiciled in the United Kingdom (UK).
In order to address this issue, the UK has taken some actions which include applying to join the Lugano Convention in its own right. Although the Lugano Convention would offer a similar framework to the Brussels Regulation, the process to its approval will take months and a decision from the EU on the UK’s accession is still pending, in other words, it is not guaranteed.
In the meantime, jurisdiction and enforcement of judgments for matters issued in the UK will be determined by common law, supplemented by the Hague Convention 2005 (the HC2005), which UK has acceded in its own right with effect as from 1 January 2021. The HC2005, to which all EU member states are party, requires the court of choice in an exclusive choice of court clause to hear the case and prevents the courts of the other countries from hearing proceedings when they are not the chosen court. Therefore, parties may now consider adding exclusive jurisdiction clauses in their contracts to avoid future disputes on this matter.
In addition, the HC2005 requires any judgment rendered by the chosen court to be recognised and enforced in the courts of all other contracting parties. Moreover, many EU member states enforce foreign judgments under their national laws, regardless of international arrangements. This is the case in the UK and Spain; among others. However, there may be additional requirements, and thus more time and cost involved.
Written by Eugenia Pagán Sánchez.
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One of the consequences of the extraordinary measures imposed by the Spanish Government through its Royal Decree 463/2020 of 14th March, caused by the Covid-19 pandemic, by which the Alarm Status was declared in Spain, is that the procedural deadlines have been suspended.
Introduction
The Government was unclear as to whether the term to be suspended is to be considered a term or a period, and whether the suspension of the term should be interpreted as suspension or interruption. The difference according to Spanish law is quite important since a “term” refers to a specific date whereas a “period” refers to a range of 2 dates and “suspension” means that a deadline is placed in standstill which period resumes counting when such standstill disappears whereas a “interruption” means that the clock to comply with a deadline or bring an action starts from the first date of the period provided when such interruption takes place. Accordingly, the Abogacia General del Estado published a clarification note on 20th March clarifying that the interpretation of the government’s regulation in this particular is that all terms and period are to be considered suspended and not interrupted and accordingly, once the Alarm Status disappears, the clock will resume counting for the period left when it got into standstill.
Having made the above preliminary clarification, please note the following measures established in this regard:
Court Orders
Terms are suspended and time limits provided for in procedural laws are suspended and interrupted for all court orders. The calculation of time limits shall be resumed at the time when this Royal Decree or, as the case may be, any extensions thereof become ineffective.
Criminal Jurisdiction
In the criminal jurisdiction, suspension and interruption shall not apply to habeas corpus proceedings, proceedings entrusted to the guard services, proceedings with detainees, protection orders, urgent prison surveillance proceedings and any precautionary measures relating to violence against women or minors. Likewise, in the investigation phase, the competent judge or court may agree to conduct those proceedings which, because of their urgent nature, cannot be postponed.
Exceptions made to the rest of jurisdictions
With regard to the rest of the jurisdictional orders, the interruption referred to in the first paragraph shall not be applicable to the following cases:
- The procedure for the protection of the fundamental rights of the person foreseen in articles 114 and following of Law 29/1998, of 13 July, regulating the Contentious-Administrative Jurisdiction, nor to the processing of the judicial authorizations or ratifications foreseen in article 8.6 of the mentioned law.
- The procedures for collective conflict and for the protection of fundamental rights and public freedoms regulated by Law 36/2011, of 10 October, which regulates social jurisdiction.
- Judicial authorization for non-voluntary internment on grounds of mental illness, as provided for in Article 763 of Law 1/2000 of 7 January on Civil Procedure.
- The adoption of measures or provisions for the protection of minors as provided for in article 158 of the Civil Code.
Notwithstanding the provisions of the preceding paragraphs, the judge or court may agree to take any legal action that is necessary to avoid irreparable damage to the rights and legitimate interests of the parties to the proceedings.
Suspension of administrative deadlines
- Terms and time limits for the processing of procedures by public sector entities are suspended. The calculation of the time limits will be resumed at the moment that the present royal decree or, if applicable, its extensions, becomes invalid.
- The suspension of terms of deadlines will be applied to the entire public sector as defined in Law 39/2015, of 1 October, on the Common Administrative Procedure of Public Administrations.
- Notwithstanding the above, the competent body may, by means of a reasoned decision, agree to the measures of organisation and instruction strictly necessary to avoid serious damage to the rights and interests of the interested party in the procedure and provided that the interested party agrees, or when the interested party agrees that the time limit should not be suspended.
- This provision shall not affect the procedures and decisions referred to in paragraph 1 where these concern situations closely linked to the facts justifying the state of alert.
Suspension of limitation and prescription periods
The periods of limitation and expiry of any actions and rights shall be suspended during the period of validity of the state of alert and, where appropriate, any extensions thereto.
Written by Antonio Arenas
Managing Partner
e-mail: antonio.arenas@scornik.com
Direct Dial: 0044 2039629920
Mobile: 0044 7540667073
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European small claims procedure
The purpose of the European Small Claims Procedure is to improve access to justice for both consumers and businesses by reducing costs and accelerating civil procedures with regard to claims within its scope. This procedure also ensures that the judgments given within the European Small Claims Procedure are recognized and enforceable in another Member State (i.e. any country member of the European Community) without any intermediate procedure, or without the need for a declaration of enforceability in the Member State of enforcement (abolition of exequatur). The parts may choose to submit this procedure as an alternative to those provided for in the internal laws of the member states.
Scope of the Regulation
This Regulation is applied in cross-border cases to civil and commercial matters where the value of a claim does not exceed €5000 excluding all interest, expenses and disbursements. Claims about the status or legal capacity of persons, rights in property arising out of a matrimonial relationship, maintenance obligations, wills and succession, bankruptcy, social security, arbitration, employment law, tenancies of immovable property (with the exception of actions on monetary claims), violations of privacy and of rights relating to personality are not included.
Before 2015, the procedure was applied in cross-border cases to civil and commercial matters where the value of the claim did not exceed 2000€. However, on December 2015, the Regulation (EU) 2015/2421 of the European Parliament and of the Council was published increasing the ceiling as regards the value of the claim to 5000€.
What is the meaning of cross border cases regarding this procedure?
A cross-border case will be one in which at least one of the parties is domiciled or habitually resident in a Member State other than the Member State of the court or tribunal seized. For example, the United Kingdom and Spain.
Procedure
The Procedure shall be written but the court or tribunal shall hold an oral hearing if considers this to be necessary or if a party so requests. The enforcement procedures shall be governed by the law of the member state of enforcement, i.e. the country where the defendant resides.
Languages
The claim form, the response, any counterclaim, any response to a counterclaim and any description of relevant supporting documents shall be submitted in the language or one of the languages of the court or tribunal were the claim is filed. Once the judgment is given, if it had to be enforced, for example in Spain, the claimant would have to submit an official translation of the judgment into Spanish or the language of the Autonomous Community, when applicable, where the competent court for enforcement is located.
Costs
The unsuccessful party shall bear the costs of the proceedings. For example, expenses resulting from the other party having been represented by a lawyer or another type of professional or any other disbursement resulting from the notification and translation of documents, which are proportionate to the value of the claim.
Brexit
If the United Kingdom exits the European Union, it is likely that the Regulation will no longer be available for those claiming or receiving claims through the Regulation. We therefore advise to those considering using the Regulation to claim, to do so before the exit takes place.
Written by Ángela Fernández.
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