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Katherine Allen
Katherine Allen
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Brexit: Implications for Cross Border Claims

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On 23 June 2016 the UK voted by a narrow margin to leave the European Union.  The decision sent shockwaves through the UK, Europe and beyond and it seems that everyone has a view about the wisdom of the move.  President Obama was vilified by the Leave campaign for expressing his views before the referendum, and on the very day the result was announced Donald Trump touched down in Scotland (one of the very few parts of the UK where there was a majority vote to remain) declaring the result a victory for the power of the people.

So what effect will leaving the EU have on cross border accident claims pursued in the United Kingdom?

In the short term the simple answer is none.  The process of the UK’s extraction from the EU will not even start until it gives formal notice of the intention to leave under Article 50 of the Treaty of the European Union.  The UK’s Prime Minister, Theresa May has announced that Article 50 will be triggered in March 2017.  Once it has been triggered there will be a period of negotiation between the EU and the UK as to the arrangements for its withdrawal.  Article 50.3 states that European Treaties will cease to apply to the withdrawing State from the date of entry into force of any withdrawal agreement or, in the event that agreement has not been reached, two years after Article 50 has been triggered unless this period is extended.

It may therefore be March 2019 or later before the divorce is actually finalised, and until it is finalised the UK remains a Member State of the EU and will be bound to its legislation just as we were before 23 June. Theresa May has also told her fellow EU leaders that Britain expects to be part of EU decision-making until the axe falls.

Much EU law in this area has been in the form of Directives which can only be implemented into UK law by UK legislation.  For example, Council Directive 90/314/EEC – the Package Travel Directive – which deals with who is liable for the proper performance of a package holiday contract was implemented into UK law by the UK statutory instrument known as the Package Travel, Package Holidays and Package Tours Regulations 1992.  A new Directive (Directive 2015/2302) was adopted in November 2015 and Member States have until 1 January 2018 to transpose this into their national law.  It is highly likely that the UK will still be a European Member State at that time and it is thought that the current government does have the appetite to implement the directive in the UK.  If it is enshrined in new UK legislation then this will continue to apply post-Brexit (and if not, the existing 1992 Regulations will continue to apply although it is accepted that these are now very out-dated given that the way in which people book their holidays has changed significantly since the early 1990s).

EU Regulations, however, have direct effect in Member States and so do not require national implementation legislation.  European Regulations currently prescribe how to determine what country’s courts have jurisdiction to deal with claims against foreign Defendants (Regulation 1215/2012) and the law that will apply in a cross-border claim (Regulation 864/2007).  Once the UK leaves the EU these Regulations will ostensibly no longer continue to have effect. For more info about this, check our this article.

In early October the government announced that it will introduce the “Great Repeal Bill” which is intended to repeal the European Communities Act 1972 (the Act which currently makes EU laws applicable in the UK) and then convert existing EU law, such as the Regulations referred to above, into domestic law where it is practical to do so.  This would mean that on the day the divorce is finalised, the majority of EU law will still apply in the UK.  The idea is that this will then give the government time to look at the individual provisions and decide what to keep and what to reform.

However, it does not appear that the government has thought about the extent to which the EU will reciprocate in their application of what will then be UK law.  Regulation 1215/2012, for example, ensures that UK Claimants injured in a road traffic accident in an EU Member State can sue an insurer domiciled in an EU Member State in their domestic court.  This makes the process of bringing claims for compensation for injuries arising out of a road traffic accident much less troublesome for the victim than it would otherwise be.  This benefit arose directly out of the UK’s status as a Member State.  Will EU insurers really still be happy for a country which is no longer a Member State to seek to benefit from these advantageous rules?

This question, along with many others, will no doubt be considered as part of the negotiation process.  It therefore remains to be seen whether UK citizens involved in accidents in other parts of the EU will continue to enjoy the protection and benefits that they have become used to after Brexit.

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