BREXIT: UK publishes rules for cross-border mediation post-Brexit

Out-Law News | 19 Nov 2018 | 4:15 pm | 2 min. read

The UK government has moved to amend existing laws on cross-border mediation to account for Brexit.

Currently, rules for cross-border mediation are governed by the EU’s Mediation Directive, which came into force in 2011. The government has published the Cross-Border Mediation (EU Directive) (EU Exit) Regulations 2018 (33 page / 532 KB PDF) to ensure that domestic legislation will continue to apply to EU cross-border mediations that started before Brexit.

The government said that current reciprocity rules on which the Mediation Directive is based will no longer apply after Brexit, which means that common rules such as those relating to limitation periods and confidentiality will not apply to certain mediations.

Litigation expert Jim Cormack QC of Pinsent Masons, the law firm behind, said the repeal of the Mediation Directive in the UK would have relatively little impact in practice.

"There are two main aspects to the EU cross-border regime," Cormack said. "One is that a mediator cannot generally be compelled to provide evidence about the mediation in court proceedings or an arbitration. However, our domestic law, across the UK jurisdictions, already recognises and gives effect to the confidentiality which the parties have agreed to apply to a mediation and there are strong policy reasons, in terms of encouraging mediation and settlement of disputes, for this to continue to be the case."

"The second main aspect is the extension of certain time bar periods during a cross-border mediation. However, in practice a party facing an imminent time bar issue is likely to issue protective court or arbitration proceedings in any event, which can in effect be placed on hold if there is a desire to mediate," Cormack said.

"The significance of the repeal is perhaps more symbolic as it explicitly recognises that Brexit results in the end of reciprocity in this respect between the UK and the relevant remaining member states of the EU," he said.

The government said cross-border mediations which only fall within the scope of the directive because one party is domiciled or normally resident in the UK, or because judicial proceedings or arbitration are taking place in the UK, will no longer be recognised by the directive.

"The UK parliament cannot legislate to restore reciprocity and to ensure that EU member states continue to apply the special rules set down in the Mediation Directive to cross-border mediations involving parties domiciled or habitually resident in the UK which would not otherwise fall within the scope of the Mediation Directive," the government said in guidance accompanying the statutory instrument.

It added that "unilateral application" of the directive’s requirements in the UK after Brexit would mean different rules would apply to mediations involving parties based in the EU compared with those based in the UK or other non-EU countries.

"This could create uncertainty for parties as to which set of rules apply," the government said. "In addition, the government believes that the distinction and preferential treatment of parties involved in EU cross-border mediations will no longer be justified when the UK ceases to be an EU member state."

The new regulations mean that after Brexit takes effect, all future cross-border mediations will be subject to the same rules. However, any EU mediations that start before Brexit will still be governed by the Mediation Directive.

The regulations do not make provision in relation to court rules, or matters which fall under the competence of the Scottish parliament.