Law Gazette | 2 February 2017
Brexit will need new dispute resolution mechanism
By Michael Cross
A new mechanism for dispute resolution between the UK and the EU will be needed following Brexit, the government says today. A long-awaited white paper on the UK’s ’exit from and new partnership with’ the EU proposes a mechanism along the lines of those commonly set up in trade deals. The arbitration system negotiated as part of the EU-Canada Comprehensive Economic and Trade Agreement (CETA) is mooted as an example.
’As with any wide-ranging agreement between states, the UK will seek to agree a new approach to interpretation and dispute resolution with the EU,’ the paper states. ’This is essential to reassure businesses and individuals that the terms of any agreement can be relied upon, that both parties will have a common understanding of what the agreement means and that disputes can be resolved fairly and efficiently.’
It notes that CETA, which has yet to be ratified, establishes a joint committee to supervise the implementation and application of the agreement, under which parties can refer disputes to an ad hoc arbitration panel if necessary. However such procedures have proved controversial, with campaigners describing them as ’secret corporate courts’.
The white paper says that : ’The actual form of dispute resolution in a future relationship with the EU will be a matter for negotiations between the UK and the EU, and we should not be constrained by precedent. Any arrangements must be ones that respect UK sovereignty, protect the role of our courts and maximise legal certainty, including for businesses, consumers, workers and other citizens.’
Elsewhere, as announced by the prime minister, the white paper says that the government will ’bring an end to the jurisdiction’ of the Court of Justice of the European Union in the UK. ’We will of course continue to honour our international commitments and follow international law.’
Meanwhile a Great Repeal Bill will remove the European Communities Act 1972 from the statute book and convert the ‘acquis’ – the body of existing EU law – into domestic law. ’This means that, wherever practical and appropriate, the same rules and laws will apply on the day after we leave the EU as they did before.’
Law Society president Robert Bourns said the white paper ‘contains a number of positive commitments that will be welcomed by the legal sector’.
He said the paper recognises the need to maintain key cross-European legal mechanisms, including collaboration and information sharing in policing, security and criminal justice, and rules allowing for the mutual recognition and enforcement of civil court judgments.
‘Whatever the nature of our final relationship with Europe, these key parts of the justice infrastructure will be vital to maintaining public safety, commerce and access to justice. The government’s express recognition that "effective civil judicial cooperation will provide certainty and protection for citizens and businesses" is a welcome commitment to these core parts of our legal system," said Bourns.’
The Society also cautiously welcomed the white paper’s aim for ‘the freest possible trade in services between the UK and EU member states’.