Debt Collection and Brexit
Debt Collection and Brexit: How will British Exporters effectively manage their cross-border litigation post Brexit
After years of speculation over what the post-Brexit legal landscape might look like, reality is now replacing guesswork.
At the time of writing, the UK’s application to join the Lugano Convention has not made much progress. As a result, any court proceedings that are issued in the UK will not be enforceable across the EU, and this will remain the case until three months after the UK joins the Convention.
There is some good news for exporters in that Brexit is not retroactive, so any court action that began before the end of 2020 will be handled as though the UK had not left the EU. This also applies the other way round, to EU states trying to enforce court judgements in the UK.
Nevertheless, the current status of the UK will continue to cause difficulties for exporters until Lugano accession has been achieved. Until then, exporters face some difficulties in deciding on whether to hold off on new court action, which could affect their cash flow, or to find other ways of obtaining a judgement that can be effective across EU boundaries.
One step that businesses can take is to check and revise their terms and conditions (T&Cs) with particular reference to the jurisdiction clauses and get their clients to re-sign.
It is possible to draw up T&Cs that offer the option to file legal proceedings in non-English jurisdictions, though this needs to be done in consultation with a legal expert.
Another option to consider is in France. Since the beginning of March 2018, the Paris Commercial Court’s International Chamber began to deal with cross-border jurisdiction.
The Chamber features a panel of English-speaking judges and has clearly been positioning itself as a potential hub for cross-border litigation. This is made more practical by the fact that the Chambers’ rules state that they can hear a case if one or more of the parties involved is not French. Court papers have to be drafted in the French language, but you can make submissions to the court in English, which undertakes mainly oral proceedings. The judgements are also provided in the form of a sworn translation into English, produced by the Registry of the Court.
The International Chamber is also attractive in terms of cost. In fact, just a single €250 fee is enough to cover the whole procedure, making it a viable option for many businesses faced with the difficulty of debt collection across borders post-Brexit.
One aspect that is important to note is the fact that in France’s Commercial Court system, the judges are not technically legal experts, although they will be individuals who have had senior positions in the commercial world, such as CEOs.
Beyond this Court, exporters also have the option to turn to the rules set out in the 2005 Hague Convention referring to Choice of Court Agreements. The UK is still a party to the Convention in its own right, so the enforcement of foreign judgements in cross border disputes in a number of countries, including China, Ukraine, Singapore and the United States is still possible, despite Brexit.
For more information on UK Debt Collection or International Debt Collection, please contact us. Our website platform also offer International Letter Before Action Services. Credit Limits international is a member of the TCM Group.