In January 2017, the House of Lords’ EU Justice Sub-Committee will hear evidence from two senior UK Judges on the significance of EU legislation designed to facilitate cross-border civil disputes. However, it cannot be avoided that there is the smell of uncertainty about the detail of the consequences for us for ending the UK/EU relationship, if it ends hard.
At present, EU legislation protects parties’ abilities to choose what governing law there should be for their contractual relationships and the ability to choose forms a fundamental freedom offered by English law.
The current EU framework applicable to contractual and non-contractual obligations is enshrined in the Rome I and Rome II Regulations, respectively.
It is not beyond the realms of possibility that a decision could be taken to leave the rules as set out in the above regulations intact after Brexit. A possible consequence being that the English Courts would be the final arbiter of how the rules are applied - ultimately a job reserved for the European Court of Justice as things stand. If that were to happen, then nothing immediate would change, but it is possible that the interpretation of the two regulations could start to differ between the UK and the remaining EU member states over time.
If the Rome I and Rome II Regulations were no longer to apply following Brexit, then it is possible that the UK would revert back to the rules in force before those regulations became law. As such, in regards to contractual obligations, the Rome Convention; which applied to the law governing contracts made between April 1991 and 17 December 2009 could apply, which, of itself, would not materially alter the present position as we know it. However, in regard to non-contractual obligations, the Private International Law (Miscellaneous Provisions) Act 1995 - which is a regime which is unlike to Rome II - could operate so that the parties would not have an express right to choose the law applicable to non-contractual relations between them.
However, it’s anticipated that when the UK eventually leaves the EU, the courts of EU member states will continue to respect the parties’ choice as to governing law as before; so that on choosing English law the parties to a contract will still enjoy an application of the rules set out in Rome I and II.