Recognising and enforcing EU Judgments in England & Wales post Brexit

The Pre-TCA Procedure for Enforcing Judgments in England & Wales

Prior to the TCA, the UK was subject to the Brussels Recast I Regulations (‘the Regulation’) which allowed recognition and enforcement of a Member State judgment in another Member State.

The process was relatively straightforward, and the EU Judgment would be treated like an English judgment, with parties being able to avail from a powerful selection of enforcement tools (including freezing orders) from the High Court. As explained below, the position has now changed post the TCA.

Enforcing EU Judgments post the TCA

The TCA includes provisions to explain how the trade relationship between the EU and UK would look after Brexit. However, the TCA remains silent on the enforcement of judgments between the EU and UK. For now, judgments will be enforced either through i) the Hague Convention on the Choice of Court Arguments (‘the Hague Convention’) or ii) common law rules.

1. The Hague Convention

Under the Hague Convention, only judgments obtained under exclusive jurisdiction clauses will be recognised. The judgment will be recognised, and thus enforceable, only if it is effective in the court of origin. The procedure for recognition, declaration of enforceability or registration for enforcement, and enforcement of the judgment are all governed by the enforcing state.

In applying for a judgment to be enforced, the creditor must supply a complete and certified copy of the judgment, the choice of court agreement, documents necessary to establish the judgment has effect (or is enforceable in the original state), any other documents verifying that the conditions for enforcement have been met, and (if necessary) certified translations of these documents.

However, the Hague Convention does not, amongst other things, govern non-exclusive contractual clauses and tortious claims. This regime is ultimately much more restricted in its powers to enforce judgments across Member States. Importantly, under the Hague Convention interim applications such as injunctions and freezing orders cannot be enforced.

1. Common Law Rules

For judgments that do not fall under the scope of the Hague Convention, the common law rules must be applied, which dictate that a judgment creates an obligation which can be enforced as a debt in fresh legal proceedings, normally by way of ‘summary judgment’. This may also require parties to serve the proceedings out of jurisdiction and parties may need to consider obtaining permission of the court to do so.

After fresh proceedings are issued, the creditor is likely to be able to obtain summary judgment on the basis that no defence exists against the claim. Additionally, the courts of England & Wales have the power to award interest on a foreign judgment following a successful application for summary judgment, even if the foreign court had no power to do so. Furthermore, on the debtor’s failure to acknowledge service of the proceedings and/or file a defence, the creditor may also be able to obtain a judgment in default.

Undoubtedly the shift from the Regulation to the common law rules has implications for judgment creditors with EU judgments who need to enforce those debts. The necessity for fresh proceedings, is not as streamlined and cost-efficient as under the Regulation but once judgment has been obtained the creditor can take the usual steps to enforce the judgment in England & Wales.

The Lugano Convention 2007 (the “Lugano Convention”)

There remains scope for the landscape of enforcing EU judgments in England & Wales to yet be modified.

It is still possible that the UK’s accession to the Lugano Convention will be consented to by all current members. If this were the case, then there would be no requirement for fresh proceedings to be initiated in England & Wales as required under common law rules and additionally, the scope of the Lugano Convention would be wider than that of the Hague Convention.

Going forward

We encourage our clients who may be dealing with EU judgments to take specialist legal advice to help navigate the issues that may occur post Brexit. Whilst the future remains uncertain in terms of the Lugano Convention, England & Wales remains a robust jurisdiction to enforce judgments and there remains a wide range of enforcement tools available once a judgment is recognised. The Dispute Resolution team at Memery Crystal are experienced in dealing with enforcement of foreign judgments and can help clients deal with enforcement of judgments here in England & Wales.

This article was authored by Chris Louth and Tasneem Bhindarwala. If you have any queries, please contact the Chris below.