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Schemes of Arrangement and Voluntary Collective Redress: A Gap in the Brussels I Regulation

The general rule of the Brussels I Regulation is that a defendant should be sued in the courts of the place where he is domiciled.1 The prevalence of the forum rei reveals a deeper paradigm of the Regulation. Brussels I was drafted having adversarial proceedings in mind. For long, the notion “defendant” has not given rise to much diffi culty since most proceedings relating to civil and commercial matters indeed imply a plaintiff and a defendant. Recent cases in the United Kingdom and the Netherlands have, however, demonstrated that it is not always easy to identify the defendant. Schemes of arrangement in England and voluntary collective redress in the Netherlands essentially seek, via court intervention, the extension of the binding effects of a settlement agreement to parties that were initially not privy to that agreement. Being outside its comfort zone, Brussels I is not well equipped to deal effectively with applications aimed at binding third parties. Schemes of arrangement and voluntary collective redress are essentially outof-court dispute-settlement mechanisms. By means of an application to a court, the settlement agreement is sought to bind all parties affected by the scheme. It is uncertain whether the courts in the Member States may derive from Brussels I international jurisdiction over the applicant and third parties affected. Schemes of arrangement and voluntary collective redress do, however, not only lead to ambiguity at the jurisdictional level. The powers of the English and Dutch courts appear to be mainly confi ned to a review of the intentions of the contracting parties. Does the court genuinely decide on the issues between the parties on its own authority? Doubts may therefore arise as to whether a decision sanctioning a settlement agreement will benefi t from the free movement of judgments as guaranteed by Brussels I.