2-1 INTRODUCTION

“[C]ontracts 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 the 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 has been stalled because of objections made by the European Commission.4 The EFTA states of Norway, Iceland and Switzerland have each given consent to the UK joining the Lugano Convention. The EU’s current stance is that it would not be appropriate for the UK to be part of the jurisdiction scheme because it is an essential feature of the common area of justice and a “flanking measure” for the EU’s economic relations with the EFTA/EEA states which participate to some extent in the EU’s internal market—free movement of goods, services, capital and people. The implication is that the scheme is predicated on a high level of trust which is now absent in the relationship with the UK.5 Following the decision of the European Commission to reject the UK’s request to accede to the Lugano Convention the Council of the EU will have the final say. That is by way of qualified vote (55 per cent of the EU member states, representing 65 per cent of the EU total population). The negotiations may have been 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. All that said the European Parliament has itself recently noted6 the fragmentation of the legislative landscape and the regression of judicial co-operation because of Brexit. Further that there is an increasing need for co-operation between all states within Europe, whether those states are within or outside the EU, not only with respect to commercial matters but also regarding security.