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2 THE CONFLICT OF LAWS AND JURISDICTION

Law of Insurance Contracts

Chapter 2

THE CONFLICT OF LAWS AND JURISDICTION1

2-1 INTRODUCTION

“ Contracts are incapable of existing in a legal vacuum. They are mere pieces of paper devoid of all legal effect unless they were made by reference to some system of private law which defines obligations assumed by the parties to the contract.”2 This book is about English law, which is relevant chiefly when English law governs the contract, naturally when the contract is placed in a purely domestic sphere. Where there may be said to be an international element to the contract the parties may wish to choose English law. This chapter is concerned with identifying the law that governs the contract of insurance. It is also concerned with the distinct, although related, question as to jurisdiction; such term connotes the way in which one determines the most appropriate forum for dispute resolution. The current schemes for both conflict of law matters and for jurisdiction are the products of developments at an EU level. It may be thought that after the UK’s exit from the EU in 2020 change over the short term might be expected. Nevertheless, it is arguably in the interests of both the UK and the remaining 27 EU Member States that the schemes remain, not least because they represent a coherent set of rules which have proven application. The commentary in this chapter is based on the assumption that once the Brexit dust settles the schemes that were enjoyed prior to the UK's departure from the EU will largely remain intact. That is the approach taken by the European Union (Withdrawal) Act 2018, in particular sections 2 to 3, and the Law Applicable to Contractual Obligations and Non-Contractual Obligations (Amendment etc) (EU Exit) Regulations 2019.3 All that said, the progress of negotiations as to jurisdiction appears to be currently stalled because of objections made by the European Commission.4 The negotiations may it seems be complicated by the UK’s current stance which is not to seek membership of the European Free Trade Association (EFTA) nor that of the European Economic Area (EEA) scheme, presumably because of the implications for free movement of persons which that would entail; it is theoretically possible to be a member of EFTA without adoption of the EEA, as is the case for Switzerland. The current position in law is that the Civil Jurisdiction and Judgments Act 1982 has been amended by the Private International Law (Implementation of Agreements) Act 20205 in order to remove references to the Brussels Conventions and thus to remove from English law the cross-border scheme across Europe; similarly removed are references to the Lugano Convention. In this unsatisfactory state of play, insurance parties may be advised to consider the Conventions under the Hague Conference on Private International Law. Particularly relevant may be the Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters and the Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. Further, to the extent that planning is possible consideration may also need to be given to the Convention of 30 June 2005 on Choice of Court Agreements.6 This scheme has the force of law in the UK by virtue of the Private International Law (Implementation of Agreements) Act 2020 which also inserts the Hague Convention 2005 into the Civil Jurisdiction and Judgments Act 1982 (as to which see Schedules 3D and 3F).7

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