Exiting the European Union (Mediation)

– in the House of Commons at 8:04 pm on 18th February 2019.

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Votes in this debate

  • Division number 336
    A majority of MPs voted to repeal EU derived laws on mediation of cross-border disputes on civil and commercial matters and to treat all disputes involving overseas third parties in the same way.

Photo of Lucy Frazer Lucy Frazer The Parliamentary Under-Secretary of State for Justice 8:04 pm, 18th February 2019

I beg to move,

That the draft Cross-Border Mediation (EU Directive) (EU Exit) Regulations 2019, which were laid before this House on 21 January 2019, be approved.

This draft instrument forms part of our ongoing work to ensure that if the UK leaves the EU without a deal our legal system will continue to work effectively for our citizens. It is solely related to our no deal preparations. If Parliament approves the withdrawal agreement, which includes an implementation period, and passes the necessary legislation to implement that agreement, the Government would defer the coming into force of this instrument until the end of that implementation period. Once a deal and our future relationship with the EU had been reached, we would review whether this instrument needed to be amended or revoked.

This statutory instrument relates to mediation. That is a process whereby parties to a dispute attempt voluntarily to reach an agreement to settle their dispute with the assistance of a mediator but without a court needing to rule on it. In the civil and commercial field such a dispute might for instance relate to a contract, a debt or contact with children.

Photo of John Howell John Howell Conservative, Henley

As my hon. and learned Friend knows, I am hoping to become an associate of the Chartered Institute of Arbitration. I have spent much of my political life championing mediation as a means of settling disputes. To what extent are the Government committed to mediation for the future as a result of these measures?

Photo of Lucy Frazer Lucy Frazer The Parliamentary Under-Secretary of State for Justice

My hon. Friend is a member of the Justice Committee and has taken part in many debates on this subject. I know he has extensive experience of arbitration as well as mediation. I am very pleased that he is planning to go further on that. He must rest assured that the Government remain committed to mediation. It is a very important tool in the armoury to help people to resolve their disputes. Outwith this statutory instrument and the EU rules that we already have, as I will go on to explain, we have very strong domestic provision for mediation, and that will continue. The reason to bring forward this statutory instrument and the approach we have adopted is that the current arrangement with the EU is reciprocal and that following our leaving the EU we cannot rely on any reciprocity. This statutory instrument will therefore revoke the EU legislation.

In 2018, the European Council agreed a cross-border mediation directive which sought to harmonise certain aspects of mediation in relation to EU member state cross-border disputes. The aim of the mediation directive is to promote the use of mediation in such cross-border disputes. An EU cross-border dispute can be one between parties who are domiciled or habitually resident in two or more different member states, or it can be a dispute where judicial proceedings or arbitration are started in a member state other than the one where the parties are living. The UK, as a member state, enacted domestic legislation which gave effect to certain aspects of the mediation directive. I say certain aspects, because in many areas, such as ensuring the quality of mediation or information about mediation to the public, our existing arrangements already met the requirements or standards set out in the directive. However, to implement the directive the UK had to introduce some new rules for EU cross-border mediations involving UK parties.

The new rules first specify that if a time limit in a domestic law during which a claim could be brought in a court or tribunal expired during the mediation process, the parties could still seek a remedy through the courts or tribunals should the mediation not be successful. Secondly, the new rules define the rights of a mediator or someone involved in the administration of mediation to resist giving evidence in civil or judicial proceedings arising from information disclosed during a mediation. Various changes were also made to court rules to supplement the changes and to implement the requirements of the mediation directive relating to enforceability of agreements resulting from mediation.

Under the European Union (Withdrawal) Act 2018, the legislation implementing the mediation directive is retained EU law upon the UK’s exit from the EU. However, should the UK leave the EU without an agreement on civil judicial co-operation, the reciprocity on which the directive relies will be lost. Even if we were to continue to apply the enhanced EU rules to EU cross-border disputes, we would be unable to ensure that the remaining EU member states applied the rules of the directive to cross-border disputes involving parties based in the UK or judicial proceedings or arbitration taking place in the UK that were not otherwise in scope.

Accordingly, and in line with the Government’s general approach to civil judicial co-operation in the event of no deal, this instrument will repeal, subject to transitional provisions, the legislation that gives effect to the mediation directive’s rules on confidentiality and extension of limitation periods. It amends the relevant retained EU law in England, Wales and Northern Ireland, and in Scotland—in so far as it relates to reserved matters. Separate instruments will amend the related court rules in England, Wales and Northern Ireland. There is other legislation implementing the directive that is within the legislative competence of the Scottish Government, and I understand that they have decided to bring forward their own legislation in this area.

Turning to the impacts, this instrument is necessary to fix the statute book in the event of a no-deal exit. We have assessed its impact and have published an impact assessment. By repealing the domestic legislation that gave effect to the mediation directive, we will ensure clarity in the law applying to mediations between UK parties and parties domiciled or habitually resident in EU member states. We will also avoid a situation where mediations of an EU cross-border dispute conducted in the UK are subject to different rules on confidentiality or limitation than other UK mediations.

As I indicated, the instrument will change only the rules applying to what are currently EU cross-border mediations, and only in two respects: time limits and confidentiality. On time limits, claimants involved in such mediations who no longer have the benefit of an extended limitation period would, if they wanted more time to allow for mediation to take place, be able to make an application to the court and ask it to stay proceedings. Overall, this instrument will ensure that, post-EU exit, UK-EU mediations are treated consistently under the law with mediations between UK-domiciled or habitually resident parties, or UK parties and parties domiciled or habitually resident in non-EU third countries.

Photo of Bob Stewart Bob Stewart Conservative, Beckenham

As I read it, fundamentally, for people who are seeking mediation, there will not be much change if the instrument is enacted.

Photo of Lucy Frazer Lucy Frazer The Parliamentary Under-Secretary of State for Justice

That is precisely the position. All that is happening with this SI is that we are going back to the position before the directive was implemented. It was implemented in 2011, so it has been in place for only a number of years, and we will still have all the rules that regulate domestic mediations, which take place across the country in various jurisdictions. This measure will impact only two very small areas—time limits and confidentiality—and as my hon. Friend highlighted, much will remain the same.

As I have set out, without a deal in place on 29 March 2019, certain EU cross-border mediations involving UK-domiciled parties—except for those that had started before exit—would no longer be subject to the mediation directive rules in EU member states. The Cross-Border Mediation (EU Directive) (EU Exit) Regulations fix that deficiency and ensure that both the courts and UK citizens have clear and effective rules to follow during a cross-border mediation dispute.

Photo of Imran Hussain Imran Hussain Shadow Minister (Justice) 8:13 pm, 18th February 2019

Across Parliament and throughout the legal sector, there is serious concern that the Government’s inadequate planning for justice co-operation after Brexit puts the most vulnerable people in our society at risk. The Chair of the Lords EU Justice Sub-Committee took the step of writing to the Secretary of State in October to criticise his lack of planning and warned:

“The government needs to wake up to the reality of what having no answers on family justice will mean after Brexit.”

Many people are concerned that the Government’s failure to secure agreement on a form of continued participation in the European arrest warrant will leave us less safe.

We currently benefit from a well-established, frequently updated and comprehensive set of reciprocal justice arrangements with the EU. These cover everything from disputes over child custody to medical negligence abroad. As a recent House of Lords European Union Committee report states, these specific EU regulations provide “certainty, predictability and clarity”. Without an agreement with our European partners on what the future of those reciprocal arrangements looks like after we leave the EU, people who are forced to go to court or mediation to protect their rights could face extremely damaging consequences. Whatever claims the Minister makes about the secondary legislation that the Tories are bringing in, the Opposition need to see concrete action, not words, to defend rights, because we simply do not trust the Government to protect working people’s rights.

Photo of Mike Wood Mike Wood Conservative, Dudley South

The shadow Minister puts a lot of store in comments made by various House of Lords Sub-Committees on this statutory instrument. Will he tell us whether the Joint Committee on Statutory Instruments raised any objections to it?

Photo of Imran Hussain Imran Hussain Shadow Minister (Justice)

A number of objections have been raised, as I have set out, but the bottom line is that these regulations repeal legislation and mean effectively that the higher European standards will not be followed and that, instead, lower international standards will be.

Photo of Bob Stewart Bob Stewart Conservative, Beckenham

But I thought I just heard the Minister say that in the matter of mediation, there will be very little difference, and that is what we are talking about: mediation.

Photo of Imran Hussain Imran Hussain Shadow Minister (Justice)

Absolutely. The hon. Gentleman is right; we are talking about mediation. The Minister will know, and rightly pointed out, that there are two issues: time limits and confidentiality. This statutory instrument will repeal legislation that allows for extra time for that mediation, so that is substantially different. Perhaps the Minister can clarify that position in her closing remarks, because my understanding is that there is a substantial difference.

This statutory instrument would revoke and repeal the domestic legislation that enshrined in law the mediation directive. Many Members will be unfamiliar with the purpose of the mediation directive, but it is one of many examples whereby, through co-operation with our European partners, we have raised legal standards and protections across Europe. The European Statutory Instruments Committee—as raised by Mike Wood—considered whether this instrument could diminish rights. It found that it

“repeals legislation that extends the time limit for bringing certain claims in civil courts and employment tribunals to enable mediation”.

Some people may claim that legislation setting out the time limits for bringing civil claims is a minor issue, but it can have substantial real-world consequences. It could mean the difference between people being able to reach a mediated solution to a child contact case or not. The Government’s explanatory memorandum makes it clear that maintaining the standards of the mediation directive was an option available to the Government, but they have not sought to maintain the highest possible standards in all circumstances.

Why has the Minister not sought to maintain the highest possible standards? Can she guarantee today that if the statutory instrument passes and we move away from the high European mediation standards, people who rely on mediation for a family law matter—for example, a dispute over custody of a child—will be no worse off than they would have been had the mediation been conducted under the current European standards? I wait for her response, but she knows that the answer to that question is no.

For decades now, people from across the UK have travelled, lived and done business across Europe, safe in the knowledge that if something goes wrong they will be protected by legal systems that work, and work together. Many people from elsewhere in Europe have made their lives in the UK—some have started families, some created businesses, others are working in the NHS and other vital services—and they, too, trusted that they could rely on cross-border legal co-operation if something went wrong. That is why the Government’s failure to secure full judicial co-operation after we leave the EU is so damaging—it puts people’s rights at risk by lowering standards—and that is why we will vote against the SI. We in the Opposition know the Tories cannot be trusted to defend people’s rights.

Photo of Gavin Newlands Gavin Newlands Shadow SNP Spokesperson (Sport), Shadow SNP Spokesperson (Northern Ireland), Shadow SNP Spokesperson (Wales) 8:20 pm, 18th February 2019

Since that fateful day in June 2016, the Scottish National party has consistently raised justice co-operation post Brexit. No mitigation can replicate the arrangements we have as members of the EU. On the face of it, this statutory instrument seems less important than the grand examples of fleeing businesses, uncertainty about medicine supply chains and failed shipping contracts with firms with no ferries that result in millions of pounds being wasted, but it remains an important and undeniable example of utterly pointless self-harm. In this SI, the UK is willingly taking a course of action that will put both British and EU citizens in a worse position. Jim Cormack QC, of Pinsent Masons, has 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”.

Scotland has a separate legal system and approach to justice that is closely integrated with EU law, so the SI applies to Scotland only in a limited way. As the Minister identified, Scotland will legislate separately to repeal the relevant provisions within the legislative competence of the Scottish Parliament, including on court rules. Nevertheless, this is a significant SI, as it flows directly from the UK Government’s decision to leave the EU without showing due regard to the fact to two nations of this so-called precious Union of equals voted to remain—Scotland emphatically so.

Scotland is, then, being ripped out of the EU against its will, and I have serious concerns about the impact this will have on our justice system, which I remind the House has always been separate and distinct—even if Jeremy Corbyn was unaware of this fact when he visited Scotland recently. Over the past 40 years, EU law has become woven into the fabric of both Scots and UK law, and this has overwhelmingly been to our benefit, yet, even though these effective arrangements for judicial co-operation benefit victims, families, businesses and communities in Scotland and elsewhere in the EU, they face being repealed or are under serious threat.

What makes this worse is that throughout the whole Brexit process the Scottish Government, the Scottish Parliament and all our civic organisations have been roundly ignored, while the Prime Minister ploughs on with the least popular Westminster initiative since the poll tax. No attempt has been made to win over Scotland or even to listen to any of the concerns expressed in the country, which raises certain questions. For example, what consultation was carried out in Scotland with the Scottish Government, the Law Society or any other civic body?

Photo of Lucy Frazer Lucy Frazer The Parliamentary Under-Secretary of State for Justice 8:23 pm, 18th February 2019

I thank hon. Members for their important contributions, and I will respond briefly to some of the points raised. The shadow Minister, Imran Hussain, made broad criticisms of the Department’s justice planning, but we in the Department take our governmental responsibilities very seriously. We have laid before Parliament several SIs for no-deal planning, many of which we have debated and passed; we have the £17 million from the Treasury to prepare; and we are liaising and working with Her Majesty’s Courts and Tribunals Service and the judiciary to ensure that we are ready should we leave on 29 March without a deal. That said, the best way to avoid a no-deal outcome is to approve the Prime Minister’s deal. That is why I voted for it. If the hon. Gentleman would like to avoid a no-deal exit on 29 March, that option is open to him as well.

I will deal now with the shadow Minister’s specific points about the SI. We have always had very high mediation standards. Domestic mediations take place across the country in a wide range of jurisdictions; they did so to a high standard before this directive came into force a few years ago; and they will maintain those high standards when we leave the EU. As is said in my opening speech, we are revoking the EU directive because we cannot rely on reciprocity in the future—that is the approach we have taken in our SIs—and where we will not get reciprocity, we are revoking the instruments by which we are currently bound.

Photo of Imran Hussain Imran Hussain Shadow Minister (Justice)

Will the Minister confirm that as a direct result of the SI standards will be lowered, particularly with regard to mediation, because time limits will be reduced?

Photo of Lucy Frazer Lucy Frazer The Parliamentary Under-Secretary of State for Justice

If someone wants to stop a time limit running in mediation, they need only issue proceedings before a court, because that stops time running. If someone issues proceedings and asks for a stay of those proceedings, time stops running. That measure is available to people in mediation.

I will respond to the few points made by Gavin Newlands. I recognise that the Scottish system is a distinct legal system, but I challenge his claim that we have ignored the Scottish Government. I was in Scotland—in Edinburgh—two weeks ago sitting with members of the Scottish Government and other devolved Administrations, and I was pleased to hear Scottish Ministers praise my Department for our work at official level liaising with them on matters of justice. We have, then, been working hard to involve the devolved Administrations in these measures.

For those reasons, and because it will maintain clear and effective rules for our courts and citizens to follow during challenging EU cross-border mediations, I commend the instrument to the House.

Question put:

The House divided:

Ayes 198, Noes 137.

Division number 336 Draft Cross-Border Mediation (EU Directive) (EU Exit) Regulations 2019

A majority of MPs voted to repeal EU derived laws on mediation of cross-border disputes on civil and commercial matters and to treat all disputes involving overseas third parties in the same way.

Aye: 198 MPs

No: 137 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Absent: 310 MPs

Absents: A-Z by last name

Question accordingly agreed to.