Menu

News Article

Legislation & Litigation

Changes to Jurisdiction:

By CreditMan Thursday, January 22, 2015

You may not find it interesting but it could be important to you!

Brussels Regulation and Brussels Regulation (recast)

The Brussels Regulation is the key European instrument on jurisdiction and enforcement issues in civil and commercial matters. It is applied by the courts of all 28 EU member states. Please note the changes do not alter the current status quo of intra UK litigation in the UK's three law districts of England and Wales, Scotland and Northern Ireland.

The Brussels Regulation has undergone an extensive period of review and, from 10 January 2015, the revised Brussels Regulation (that is, the Brussels Regulation (recast)) will be applied by member state courts. Following a detailed consultation, the UK opted into the Brussels Regulation (recast), and it will also be applied by Denmark.

The Brussels Regulation is widely considered to have been a successful European instrument.
However, there have been concerns about aspects of its application, in particular in relation to its lis pendens provisions (that is, its provisions concerning related proceedings). Frequently, concerns have focused less on the language of the Brussels Regulation itself and more on its application by
member state courts and the Court of Justice of the European Union, often raising delicate issues.

So what are the Main Changes?

The following key changes made by the Brussels Regulation (recast) for commercial parties are as follows:

* Amendment to the rules relating to jurisdiction agreements, expanding the scope of the application of those rules.
* Changes to the related actions (or lis pendens) provisions where there is an exclusive jurisdiction clause.
These amendments are aimed at addressing the problem of the so-called "Italiantorpedo". In short, a new provision frees up a member state in an exclusive jurisdiction clause to proceed to determine a dispute, even if proceedings have been commenced first (in breach of contract) before another member state court. This amendment effectively disapplies the "first-in-time" rule in the Brussels Regulation where there is an exclusive jurisdiction clause, a rule that has been frequently criticised by commercial parties.
* New rules concerning third state (that is, non-EU) matters and defendants, principally a new provision introducing a limited international lis pendens rule.
* An enhanced arbitration exclusion.
* The abolition of exequatur, further simplifying the recognition and enforcement of member state judgments in other member states.

Overview of the Regulation (Recast)

While there are many important amendments in the Brussels Regulation (recast), much remains the same, for example:

* The default rule under the Brussels regime (that defendants should be sued in the courts of their domicile) remains untouched in the Brussels Regulation (recast) (now Article 4).
* The alternative grounds to found jurisdiction remain unrevised. This means that for contractual claims, an alternative jurisdictional ground may be for proceedings to be brought in the courts of the place of performance of the contract (now Article 7(1) (a).
* In matters relating to tort or delict, proceedings may be brought in the place where the harmful events occurred or may occur (now Article 7(3)).
* The further alternative jurisdictional grounds where there are related proceedings, outlined in existing Article 6 are largely unchanged. For example, where there are multiple defendants and the claims are closely connected, a claimant may bring proceedings in the court seised of the original proceedings (now Article 8(2)).

Conclusion

The allocation of jurisdiction within the UK's three law districts is governed by Schedule 4 of the civil Jurisdiction and Judgements Act 1982. The Brussels Regulation (recast) does not affect the current rules which most credit controllers will be familiar with.

However with increased cross border UK trade within the EU the abolition of exequatur will be a welcome addition. It will make it simpler and easier to enforce a UK's judgment in the courts of a debtor domiciled in an EU member state.

Questions?

This article, along with many other news articles can be found on our website www.debtscotland.com.

Should you have any questions or comments then please don't hesitate to contact me using the details below.

Best regards,

Stephen Cowan
Managing Partner
Yuill + Kyle
Debt recovery + Credit control Lawyers, Scotland
scowan@yuill-kyle.co.uk

W: http://www.debtscotland.com/
T: 0141 331 2332
Debt Recovery Ignited!