Cross-border disputes are common in today’s world, and it is increasingly likely that a judgment handed down in one jurisdiction must be enforced in another.
But how has Brexit affected the enforcement of European judgments in the UK?
In this blog, our specialist Dispute Resolution lawyers consider the position and look at whether it is possible to enforce a European judgment in the UK post-Brexit.
Background: Enforcement of Judgments from EU and EFTA States in England and Wales Pre-Brexit
Following a referendum held in the UK in June 2016, the UK left the European Union on 31 December 2020 and ceased to be an EU member state.
Previously, the UK could enforce foreign judgments in civil and commercial matters under the European framework of the Brussels Regulations and the Lugano Convention.
This is generally still the case for judgments from proceedings that were initiated before 31 December 2020, which can be enforced in the UK using the pre-Brexit European regime.
To enforce these judgments, parties must obtain a certificate from the original court verifying the judgment is enforceable, which is then served on the debtor.
Current position: Enforcement of European Judgments in England and Wales Post-Brexit
For proceedings that began post-Brexit (after 31 December 2020), parties will need to consider three potential options to try to enforce European judgments in England and Wales.
- The Hague Convention on Choice of Court Agreements (the Hague Convention).
EU member states (and other states) are bound by the Hague Convention 2005, which ensures the effectiveness of choice of court agreements made between parties to international commercial contracts.
The UK also continued its participation independently in the 2005 Convention post-Brexit from 1 January 2021, meaning it is also bound.
Ratification of the Hague Convention means that the final judgment issued by a court in the EU, in matters where the contract designated an exclusive choice of court agreement, can be recognised and enforced in the UK.
Most contractual debt claims will be covered under the Hague Convention, as are the majority of debt-based judgments from EU member states. However, certain categories of judgment are not covered by the Hague Convention, notably those for matters involving family law, intellectual property and insolvency. Arbitration awards are also excluded.
At the start of this year, the UK government also signed up to the Hague 19 Convention, meaning judgments made in courts in England and Wales will be recognised internationally in the future.
The convention establishes a set of rules for how judgments are recognised and enforced between contracting states and applies to judgments obtained in proceedings that begin after the convention comes into force for a particular country. The UK ratified the convention on 27 June 2024, and it will come into force for the UK on 1 July 2025.
- The Statutory Regime
The statutory regime is contained in the following enactments, depending on the state where the judgment originates.
- Administration of Justice Act 1920 and statutory instruments made under it; and
- Foreign Judgments (Reciprocal Enforcement) Act 1933 and statutory instruments made under it.
The statutory regime covers enforcement of some judgments from Commonwealth and some other countries including possibly several EU and EFTA states.
To be enforceable under the statutory regime, a judgment must be:
- A money judgment (not including taxes, fines or other penalties).
- Final and conclusive.
Arbitral awards may be enforceable under the statutory regime.
- The Common Law Regime
When the Hague Convention cannot be used, parties can pursue enforcement action under the UK’s common law regime for judgments from EU and EFTA states.
This is based on the domestic case law precedent of England and Wales, rather than being codified in statute, and applications are considered on a case-by-case basis.
The objective is to obtain a court order from a court in England and Wales, which reflects the European judgment.
To do so, the judgment holder must file a new claim with the court, attach the foreign order and may seek summary judgment on the grounds that the dispute has already been adjudicated.
Enforcement orders under the common law regime are only available for final judgments, must be for a definite sum of money, and awarded by a court of competent jurisdiction.
Conclusion
Brexit has made the recognition and enforcement of judgments in the UK that originate from EU jurisdictions more complicated, expensive and time-consuming.
As such, those looking to enforce a judgment from an EU or EFTA State in the UK must seek specialist legal advice from an experienced lawyer specialising in dispute resolution who will advise on the best way to proceed.
Many global commercial enterprises and high-profile individuals are increasingly turning to international arbitration as an effective form of non-court dispute resolution (NCDR).
Arbitration is used as an effective means to resolve various cross-border conflicts, including family law issues, maritime law and shipping, international commercial contracts, and investor claims against states.
With parties free to choose the jurisdiction where their dispute is heard, London continues to prove a popular choice as an arbitral seat.
Read our previous blog ‘Six Reasons London is the Perfect Choice as the Seat of International Arbitration’ by clicking here.
Dispute Resolution Lawyers London
At Muscatt Black Graf, our Dispute Resolution team deals with civil and commercial disputes and provides practical and pragmatic legal advice to ensure any disputes are resolved quickly and cost-effectively.
We offer specialist dispute resolution advice in the following areas:
- Arbitration.
- Commercial/ Contract Disputes.
- Property Disputes.
- Insolvency.
- Probate and Trust Disputes.
We provide comprehensive legal advice across a wide range of service sectors, and both our work and client care are of the highest standard.
We act for HNWIs, professionals and corporates and take the time to really understand your situation so that we can work with you to secure a positive outcome for your case.
Muscatt Black Graf is a partner-led practice, so you can always rely on your case being handled by a specialist litigator.
For advice on Dispute Resolution matters, please email Muscatt Black Graf on contact@muscattblackgraf.com. Alternatively, click here to complete our online contact form.
This blog was prepared on 25 November 2024. It is not intended to be advice and should not be relied upon as such.