Enforcement of Judgments Post Brexit

Enforcement of Judgments Post Brexit

Brexit remains a hot legal topic; despite being somewhat overshadowed by a plethora of emergency regulations and laws following the global Covid 19 Pandemic.

From 11pm on 31 December 2020 the EU-UK Trade and Cooperation Agreement (‘Brexit Deal’) came into effect.   It is from this date that cross border judicial cooperation in civil law was forced to embrace a ‘hard Brexit’.

Whether through intention, oversight or a sheer inability to cover every issue within the Agreement, the judicial landscape in this arena has been left wanting.

Hague Convention on Choice of Court Agreements (the ‘Hague Agreement’)

In a demonstration of some foresight, the UK applied to accede to the Hague Convention on choice of Court Agreements ahead of the Brexit Deal. This is not a new concept to the UK, as it was part of this convention by virtue of EU membership.

Our ongoing membership is likely to play an increasingly important role with respect to jurisdiction and the enforcement of judgments as between the UK and the remaining EU member states. However, this only applies in cases where the parties have entered into an exclusive choice of court agreement.

The Convention provides for relatively straightforward enforcement of judgments, applicable where (1) there is an exclusive jurisdiction clause concluded after its entry into force for the state of the chosen court (there are exclusions based on the scope of the Convention, so consumer contracts and employment are outside its remit) and (2) Proceedings were commenced after its entry into force for the state of the court seised.

The Lugano Convention

It had been hoped that the UK would also accede to the Lugano Convention, providing judicial assistance where no exclusive choice of court agreement is in place (ie where the Hague Convention above cannot assist).

It was intended that the Lugano Convention would offer a more comprehensive reference for cross jurisdiction judicial cooperation.

It is disappointing that, on 1 July 2021, notification was issued to the Parties to the Convention that the EU had refused to give its consent to the UK’s accession to this Convention. It was felt that, by its nature, the Lugano Convention should be reserved for those States with close regulatory integration with the EU.

At this time the UK is therefore unable to rely on the Lugano Convention.

Enforcement of Judgments outside of the Hague Convention

Having been denied access to the Lugano Convention, the fall-back position for enforcement of judgments will depend on the domestic rules in England and relevant EU State.

The Statutory regimes of the Administration of Justice Act 1920 and Foreign Judgments (Reciprocal Enforcement) Act 1933 may allow registration and enforcement, being arguably more economical and quicker than the common law rules under CPR Part 74.

As a matter of English common law, the enforcement of foreign judgments requires the creditor to commence a fresh cause of action in the English Courts. The foreign Judgment itself forms the cause of action in this scenario. The Limitation Act 1980 will also apply for common law rules.

Potential Future Advancements

The Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (HCCH 2019 Judgments Convention) facilitates the effective international circulation of judgments in civil or commercial matters.

At the time of drafting, this is not in force; but it is to be hoped that this Judgment Convention will complement the existing Hague Convention and provide a more stable, overarching regulatory framework for the facilitation of cross jurisdictional enforcement.

The ongoing impact of Brexit continues to affect companies and businesses with cross-border relationships.

As active members of Eurojuris, with comprehensive experience of domestic and  foreign recovery, our specialist team at Rix & Kay Solicitors LLP are here to advise you on any specific concerns you may have and welcome your contact.