Brexit and Cross-border litigation Regarding Horses: how it works, for now. Hannah Bradley, Solicitor at The Equine Law Firm
How cross border disputes and litigation regarding horses works, it also addresses the point that it will change with Brexit.
Buying a horse from another country will usually involve a degree of uncertainty in respect of the applicable court process. Many buyers do not foresee that they may need to navigate a foreign court system, should a problem arise. Dealing with a language barrier, court hearings abroad and an unknown process can be stressful.
The correct forum to resolve any cross-border dispute will depend on where the buyer and seller are domiciled. There are complex rules governing how cross border disputes are managed. A few examples of how those rules operate are given below.
EU legislation currently provides for circumstances where one or both parties to a transaction are domiciled in an EU member state. The general rule (subject to many exceptions) is that a party domiciled in an EU state is entitled to be sued in his own country. That means, in theory, if a horse is bought by somebody based in England, from an individual in Germany, and a dispute arose, a disgruntled buyer would need to bring Court proceedings in Germany.
One important exception to the general rule is if the Claimant can argue that the subject matter of a claim is closely connected to a particular country. For example, in the circumstances of the sale of a horse, the buyer may argue that the horse was delivered to a particular country, and that the performance of the contract was to be in that country, and therefore the court of that country would have jurisdiction over a dispute (rather than the Defendant’s home court, as may otherwise be the case).
The European legislation provides further specific provisions where one party is a trader and the other a consumer (in order to protect a consumer who is deemed to be in a weaker position than a trader). In broad terms (and again, subject to some exceptions) the rules enable a consumer based in an EU member state to sue a trader in his or her own country or in the supplier's country (regardless of whether that is within the EU or not), and restrict the trader to bringing proceedings in the consumer's own country.
Broadly similar rules (implemented by the Civil Jurisdiction and Judgments Act, as amended) apply to determine the correct jurisdiction of a claim as between England, Wales, Scotland and Northern Ireland.
The rules provided for by EU legislation will continue to apply to us until the UK leaves the EU. The implications of the UK leaving the EU in terms of how jurisdiction of disputes will be dealt with will depend on the arrangements that are eventually agreed between the EU and the UK.
If the European rules do not govern where a dispute should be heard (for example, if a Defendant is domiciled outside of Europe) then a further set of rules will apply. If an individual based in England wishes to bring a claim against an individual based outside of Europe then he or she must first get the permission of the English Court to do so, and must prove a number of issues, including that their claim has a reasonable prospect of success and that England is the proper place to bring their claim. This can be a long and difficult process. In deciding whether England is the proper place to bring a claim, the Court will consider the interests of all of the parties.
It is sometimes not easy to establish which rules will apply to a particular set of circumstances and parties can become embroiled in sub-disputes regarding the appropriate forum for a dispute. It is possible for the parties to a cross-border sale to avoid that uncertainty. The parties can agree, between them, before a horse is purchased, which national law will apply, and which Courts will have jurisdiction to hear any dispute. A “governing law” clause in a contract identifies which system of law will apply to any dispute arising from the contract. A “jurisdiction” clause will identify which court will hear any dispute. Any party buying from or selling to another country should seriously consider the need to have appropriate contractual provisions in place to manage the risk of becoming embroiled in a foreign court process.
Hannah Bradley, Solicitor at The Equine Law Firm