In the Pre – Brexit world European Insurers dealing with UK parties could rely on Regulation (EU) No 1215/2012 setting out the legal framework on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels Recast Regulation).
This was also applicable to UK Insurers and their dealings with European parties. Having a set of harmonised legal rules is especially important for Insurance Contracts and Claims as the UK was and continues to be the biggest and most stable Insurance Market, being home to the unique Lloyd’s of London market. Brexit inevitably meant that Insurers and Insurance brokers had to revisit their practices with regards to placing business as well as revising choice of law and jurisdiction clauses and reviewing cross border claims procedures to adhere to the changing legal landscape. This article will attempt to reference the legal processes and safeguards now in place to assist in seamless transactions.
It used to be the norm that UK markets especially on commercial Insurance contracts would provide cover for European businesses and persons on a Freedom of Services basis or even on a non-admitted basis where permitted . Following Brexit placing business in this manner is no longer possible which meant that should an Insurer not have a European registered subsidy/company they would essentially not be able to underwrite any European aspect of any risk or pay claims within that territory, which would be catastrophic to their businesses and most importantly would affect insurance pools and markets on a global level. Practically not much has been done by Regulators to cover the gaps in placing of business however, from a pragmatic perspective insurer company have come to the rescue, as regulators failed to take appropriate measures in time to replace the regulations, by setting up European Branches to cater to European risks and to be able to pay claims within the Union.
Furthermore, the UK did not adopt the Brussels Recast Regulations into domestic law leaving a gray area in that part. The first question that comes to mind is should there be any legal disputes where would proceedings take place and under what law? With regards to governing law, it is safe to say that the UK has embedded the Rome I Regulation (Regulation (EC) No 593/2008) of the European Parliament and of the Council on the law applicable to contractual obligations)  within domestic law. However, when a European counter party has not done the same it is evident that there is a possibility that local courts in contrast to UK Courts may still apply mandatory local legal provisions and subsequently, differentiate at a great extent from the parties’ initial wishes for application of UK Law.
Concerning choice of jurisdiction clauses and enforcement of judgments, post Brexit the UK government has announced that after December 2020 where there is an exclusive jurisdiction clause clearly stated in a contract and the Hague Choice of Court Convention to which both the EU (excluding Denmark) and the UK are parties can apply then the English courts will apply this. We are yet to see how this actually plays out. On the contrary with regards to contracts entered between 1 October 2015 and 31 December 2020 where the previous European Regime was applicable the Hague Convention will not have retrospect effect and therefore the UK Courts will apply English Law, however should the rules of the Hague Convention have been incorporated previously, these would still be applicable.
On the other hand the EU Commission has issued guidance (Notice to Stake Holders 18/01/2021) stating that for proceedings commencing in an EU member state involving a UK Party post 31 December 2020, lacking the incorporation of the Hague Convention Rules local Law will apply and confirmed that the Hague Convention will apply to exclusive jurisdiction clauses in contracts entered into following 31 December 2020. It is visible that these may leave gaps in this area as whilst the UK government has announced the continuous application of The Hague Convention since October 2015 when it came into force the EU Commission has declared that the UK’s membership to the Convention was terminated and restarted on 01 January 2021. Should EU courts take on this approach it would mean that the Hague Convention principles will only apply to choice of jurisdiction clauses incorporated into contracts after that date. Additionally, Insurers should ensure that when dealing with a UK element they do incorporate exclusive choice of law provisions and avoid, allowing multiple legal regimes to apply.
Similarly, with regards to enforcement of judgments subject to the date of the contract if the parties have incorporated the Convention’s provisions and an exclusive jurisdiction clause means that a judgment made in one contracting state must be recognised and enforced in other states. However this process of enforcement is still unclear and differs between territories primarily due to the fact that the supranational uniform instrument created to fill the gaps in this area
The Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, is not yet in force.
It is worth noting that the Hague Convention on the Choice of Court would not be applicable to most personal injury claims brought by natural persons and not corporations and non – commercial Insurance contracts as it is only applicable only to civil and commercial matters and where a clear and exclusive choice of forum/ law is made, with its’ clarity and exclusivity being determined by local judiciary on each occasion.
Arguably, where the Hague Convention on the Choice of Court does not apply and there are no bilateral agreements in place recognition and enforcement of such clauses will be subject to the local laws of the venue which is likely to make the process longer, more cumbersome and definitely more expensive. Whilst the majority of EU laws are expected to still recognise an English choice of law and jurisdiction, we are yet to see how this turns out.
For Cyprus specifically, matters are slightly less complicated since domestic legislation that allows the enforcement of UK Court Judgments in Cyprus the “Reciprocal Enforcement of Certain Judgments issued by the Courts of the Commonwealth Countries” (Cap.10 as amended by Law 130(I)/2000)  is already in place. Similarly, both the UK and Cyprus are parties to the Brussels Convention  (Brussels recast regulation predecessors) which applies on Jurisdiction and the Enforcement of Judgments in Civil and Commercial matters with exceptions and was retained post Brexit. Furthermore, the UK has the ‘Administration of Justice Act 1920 (AJA) that provides for the registration of judgments issued by the superior courts of specified jurisdictions by which a sum of money is made payable’  including Cyprus.
Additionally, there is the possibility that the UK and Cyprus will sign a bilateral agreement to further clarify and simplify the regime governing enforcement of foreign courts and should this take place then “The Judgments of Foreign Courts (Recognition, Registration and Enforcement by Convention) Law” of 2000 (Law 121(I)/2000)  will also be applicable.
An alternative and favourable solution to cross- border litigation especially for commercial insurance contracts is arbitration which offers an alternative dispute resolution method which is attractive to Insurance Companies globally due to the confidentiality it may offer as well as global enforcement and the offering of final and binding awards under the auspices of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). The Convention enjoys over 167 state parties practically rendering an arbitral award globally enforceable with less challenges and regardless of the choice of law clause and provides a relatively harmonious legal regime. Especially following from and learning from the pandemic it appears that there is a growing interest in arbitration. The Queen Mary reports of 2015-18 which survey the views of arbitration users, reflect that, the most favoured characteristics of arbitration are: ‘finality, enforceability, confidentiality, flexibility and party autonomy’. The 2021 International Arbitration survey by the Queen Mary University shows that 31% out of 1218 respondents from various business sectors their post pandemic preferred method of resolving cross border disputes would be arbitration and another 58% chose International arbitration with ADR.  These views are reflected in major arbitral institution’s rules, in the New York convention and most importantly, in the UNCITRAL model law, which forms the basis of many domestic arbitration laws, with the idea that awards are ‘final and binding’ prevailing.
In conclusion although, Brexit has indeed complicated matters relating to International Insurance placements and cross border litigation, in theory a relatively competent and harmonious regime, even with a few gaps, exists to facilitate certain types of litigation proceedings between EU and UK parties. We are yet to see how the courts deal with the extensive application of these provisions and there is an inherent risk amongst others of relying de trop on judicial interpretation of choice of law and jurisdiction clauses. Additionally in contracts that the Hague Convention on the Choice of Court does not apply, and no bilateral treaty is in place there is an increased risk of having to litigate at a foreign jurisdiction, parallel proceedings and the accompanying increased costs. Therefore, perhaps it is time for Insurers to look towards alternative dispute resolution methods for contracts involving a non-EU risks and counterparties.
By Mary Christoforou
 Gibson, Dunn and Crutcher LLP ‘ Enforcement of Foreign Judgments 2015’ page 124,
 Queen Mary University, White & Case ‘International Arbitration Survey: The Evolution
of International Arbitration’ (2018)
 UNCITRAL Model Law on International Commercial Arbitration 1985,Back to News