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Businesses choosing EU courts over UK due to Brexit uncertainty

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The UK’s decision to leave the EU may result in a substantial minority of businesses changing from having their contractual disputes heard in the UK to being heard in EU courts suggests research from Thomson Reuters Legal business, the world’s leading source of intelligent information.

35% of businesses surveyed by Thomson Reuters Legal business said they have already changed contracts so that disputes are heard in EU courts rather than in the UK.

Thomson Reuters says that although London has historically been a global centre for dispute resolution, Brexit could weaken this position. Uncertainty over whether the UK will continue to from a regime for mutual recognition of court judgments between the UK and EU Member States has caused concern amongst some businesses.

The research found that of the 35% of businesses surveyed changing dispute resolution clauses in their contracts, over half (51%) have chosen for disputes to be heard in EU courts, such as those in France or Germany, rather than in the UK.

Businesses monitoring Brexit negotiations for clarity over future legal regime

Although 65% of businesses surveyed have not made any changes to contracts as yet, two fifths of those (39%) say they intend to review contracts if there is no significant progress in negotiations before March 2019 on the future regime that will apply after Brexit for the mutual recognition of court judgments.

Of this group, over a third are considering selecting different jurisdictions or choice of law clauses in their contracts and 20% indicated that they are looking at arbitration instead. Arbitration is an alternative form of dispute resolution that resolves disputes outside of courts, judgments from which are enforceable under the New York Convention, which is not affected by Brexit.




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