Brussels Regulation Reform—Effects Felt Beyond Europe

From 10 January 2015, the reformed Brussels Regulation will be applied by the courts of all Member States of the European Union to regulate matters of jurisdiction and the recognition and enforcement of judgments in connection with civil and commercial claims. The impact of the "key" aspects of the reforms has been the subject of a good deal of commentary. The fundamental change in approach toward consumer 1 jurisdiction and the associated risks to business and institutions that contract with consumers seems, however, to have gone largely unnoticed, or at least unreported. That is surprising when it is the aspect of the reform which, in terms of extraterritorial effect, is one of the most far-reaching.

Summary of "Key" Reforms

The headline reform is undoubtedly the change to the lis pendens provisions. The revision is designed to avoid the delays and costs associated with the much-bemoaned "Italian torpedo". Under the current regime, putative defendants fearing an imminent claim against them are able to preempt the action by commencing proceedings themselves before arguably slow-moving courts of certain Member States, even where there is little or no connection between those courts and the claim or the parties. Once issued, that party can rest easy in the knowledge that separate proceedings cannot be advanced by the wronged party before any other EU Member State court (even the court nominated in any applicable exclusive jurisdiction clause) until the court "first seised" declares whether or not it has jurisdiction. The new regime abolishes this rule and ensures the effective supremacy of any court nominated by an exclusive jurisdiction provision; every other Member State court is required to stay proceedings until the court nominated by the parties in their contract has determined whether or not it will hear the case. This change should address the most serious abuses of the lis pendens principle and one of the most criticised aspects of the current Regulation. Other key changes include: the application of the parties' choice of exclusive jurisdiction specified in their agreement, whether or not either party is EU domiciled; the express exclusion of arbitration from the scope of the Regulation; the express separation of jurisdiction agreements, meaning that they cannot be contested merely on the basis that the agreement of which they form part is said to be invalid; and the new discretion to have regard to proceedings pending before a...