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No Lugano Convention – what’s next for UK-EU whistleblowing disputes?

Introduction

Cross-border disputes between the UK and its European neighbours have, thanks to Brexit, become that bit more complicated. The two main regimes governing jurisdiction in cross-border disputes, namely the Brussels I Regulation and the Lugano Convention 2007 ceased to apply in the UK as of 1 January 2021.

The Brussels Regulation I sets out the rules that courts in EU Member States use to determine whether they have jurisdiction in disputes with links to more than one Member State, and ensures that judgments in such disputes are enforceable across the EU.

The Lugano Convention 2007 is an international treaty negotiated by the EU on behalf of Member States with three European Free Trade States (EFTA), namely Iceland, Norway, and Switzerland, and contains a similar jurisdictional regime to the Brussel I Regulation.

In April 2020, the UK applied to re-accede the Lugano Convention as an individual (non-EU) member to bring much-needed clarity to post-Brexit UK-EU civil and commercial disputes. However, re-accession requires the unanimous consent of the contracting states, and while the three EFTA states voiced their support of the UK’s re-accession, the European Commission strongly opposed it.

At the time of writing, refusal of the UK’s request still needs to be officially confirmed by the European Council, but the prospects of the UK re-acceding to the Lugano Convention are grim. So, what’s next for UK-EU whistleblowing disputes?

Former pre-Brexit position

The Brussels I Regulation and the Lugano Convention contain substantially the same jurisdictional framework, and feature special jurisdiction rules for employment contracts. Importantly, these special jurisdiction rules normally still apply even if an employment contract contains an exclusive jurisdiction clause (i.e. a clause providing that the courts of one country alone will be able to hear disputes).

Note that for the purposes of jurisdiction, “domicile” for an individual means their personal home, and for a company means its principal place of business or central administration/headquarters.

The rules provide that an employee is able to sue their employer in either:

  • the courts of their employer’s domicile state,
  • the courts of the state where, or from where, the employee habitually carries out their work (or where they last did so), or
  • if the employee does not have a habitual place of work, the courts of the place where their employer’s business is located.

Employers, on the other hand, have much less jurisdictional choice; they may only sue an employee in the courts of the state where the employee is domiciled.

Example

Nissrine, a whistleblower, is domiciled in Scotland and employed by the English branch of a company domiciled in Italy. She works most of the year from the company’s branch in Germany.

Nissrine wishes to bring a detriment claim against her employer. She will have jurisdiction options of both Italy and Germany.

Current post-Brexit position

The Civil Jurisdiction and Judgments Act 1982 (“CJJA 1982”) governs cross-border disputes within the UK, and determines whether the courts of England and Wales, Northern Ireland or Scotland have jurisdiction. The CJJA 1982 is materially similar to the Brussels I Regulation.

Section 15C(2) applies to employment contracts, and provides that an employee may sue their employer in either:

  • the courts for the part of the UK where their employer is domiciled, if the employer is domiciled in the UK,
  • the courts for the part of the UK where, or from where, the employee habitually carries out their work, or where they last did so, (regardless of the employer’s domicile), or
  • if the employee does not have a habitual place of work in the UK, in the courts for the part of the UK where the business which engaged the employee is situated (regardless of the employer’s domicile).

Section 15C(3) provides that if an employee is domiciled in the UK, their employer may only sue them in the courts for the part of the UK where the employee is domiciled.

Example

Fern, a whistleblower, is domiciled in Northern Ireland and employed by the Northern Irish branch of a company domiciled in England. She always works in Northern Ireland.

Fern wishes to bring a detriment claim against her employer. She will have jurisdiction options of both Northern Ireland and England.

As explained, these sections of the CJJA 1982 apply only to disputes within the UK. If a dispute crosses UK borders (e.g. if one of the parties is based in the EU), the Hague Convention on Choice of Court Agreements 2005 (“Hague Convention”) will be engaged.

The Hague Convention provides that where there is an exclusive jurisdiction clause in a contract favouring the courts of a contracting state, the other contracting states will give effect to it. However, Article 2(1)(b) specifically carves out exclusives jurisdiction clauses in employment contracts from the scope of the Hague Convention.

Therefore, in UK-EU whistleblowing disputes, it’s now up to the relevant national laws of each individual country to determine whether the courts of that country have jurisdiction to hear the dispute.

Example

Alec, a whistleblower, is domiciled in England and employed by the English branch of a company based in Spain. He always works in England.

Alec wishes to bring a detriment claim against his employer. Alec will be able to sue his employer in England. Whether he can sue his employer in Spain will depend on Spain’s national laws on jurisdiction.

Conclusion

In summary, the UK’s failure to re-accede the Lugano Convention will have minimal impact on whistleblowers who both live and work in the UK for a UK-domiciled employer, as their ability to sue in the UK under the CJJA 1982 remains unaffected.

However, whistleblowers whose work has a cross-border element (e.g. they work partly from an EU state, or their employer is based in the EU), are now left to navigate the murky waters of national jurisdiction regimes.

Nevertheless, hope might be on the way in the form of the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. Unfortunately, it’s unlikely to be introduced anytime within the next five years, so for now, at least, cross-border UK-EU whistleblowing disputes are likely to increase in complexity as domestic regimes are engaged.

The rules on jurisdiction are tricky and it’s a good idea to seek specialist legal advice if you’re involved in a cross-border dispute. For advice on how best to raise concerns and the protection available to whistleblowers in the UK, contact our Advice Line.