The landscape for enforcing foreign judgments in England and Wales has undergone significant changes following Brexit, creating new complexities for litigants. This article explores the current situation, the challenges that arise in this post-Brexit environment, and offers insights for legal practitioners navigating this evolving landscape.
The Impact of Brexit on Enforcement
The End of the Brussels Regulation
Before January 1, 2021, the enforcement of judgments across EU member states was governed by the Brussels Regulation (Regulation (EU) No 1215/2012). This regulation provided a streamlined process for the automatic recognition and enforcement of judgments, allowing litigants to enforce a judgment obtained in one EU member state in another member state without the need for additional proceedings.
However, with the end of the Brexit transition period, the Brussels Regulation ceased to apply to the UK. This has resulted in a significant shift in the enforcement landscape, particularly for judgments from EU countries. Litigants must now navigate a more complex legal framework, which can vary significantly depending on the jurisdiction of the original judgment.
The Need for a New Framework
In the wake of Brexit, the UK has sought to establish new frameworks for the recognition and enforcement of foreign judgments. While the UK has applied to rejoin the Lugano Convention, which would provide similar protections to the Brussels Regulation, this application was rejected by the European Commission on 4th May 2021. Until a new framework is established, the enforcement of foreign judgments will rely on existing bilateral treaties and common law principles.
Key Challenges in Enforcing Foreign Judgments
1. Loss of Automatic Recognition
One of the most significant challenges post-Brexit is the loss of the automatic recognition mechanism. Judgments from EU states are no longer automatically enforceable in England and Wales. Instead, litigants must now engage in a more involved process to have their foreign judgments recognized and enforced, which can lead to delays and increased legal costs.
2. Bilateral Treaties and Common Law
For judgments from non-EU countries, enforcement relies on existing bilateral treaties or common law principles. The UK has several treaties, such as the Foreign Judgments (Reciprocal Enforcement) Act 1933 and the Administration of Justice Act 1920, which may provide a basis for enforcement. However, the applicability of these treaties can be uncertain, particularly in light of Brexit. Practitioners must carefully assess whether a treaty exists between the UK and the country of the original judgment and whether the judgment meets the treaty's requirements.
3. The Hague Convention
The Hague Convention on Choice of Court Agreements (2005) provides some framework for enforcement, particularly for judgments arising from exclusive jurisdiction clauses. This convention facilitates the recognition and enforcement of judgments in civil and commercial matters where parties have agreed to submit to the jurisdiction of a particular court. However, this applies only under specific circumstances, and many judgments may fall outside its scope. Practitioners must determine whether the judgment in question falls within the parameters of the Hague Convention to leverage its benefits.
4. Case-by-Case Evaluation
Under the current legal framework, each foreign judgment must be evaluated individually. This means that the English courts will not automatically recognize a foreign judgment as enforceable; instead, they treat it as a debt that must be re-litigated unless it falls under a recognized treaty. This case-by-case approach can lead to inconsistent enforcement outcomes, as different judges may interpret the law differently or apply various grounds for refusal.
5. Legal Uncertainty and Complexity
The evolving legal landscape means that practitioners must navigate a complex web of rules and procedures that can differ significantly based on the jurisdiction of the original judgment. This uncertainty can lead to increased legal costs and delays in enforcement. Furthermore, the lack of clarity regarding the recognition of judgments can deter foreign litigants from pursuing claims in England and Wales, potentially impacting the attractiveness of the UK as a jurisdiction for international dispute resolution.
Future Considerations
As the UK continues to seek avenues for improving the enforcement of foreign judgments, including potential accession to the Lugano Convention, the situation remains fluid.
Business owners seeking to enforce foreign judgments in England and Wales post-Brexit should consider the following key steps
1. Determine the Applicable Enforcement Regime
The first step is to identify which enforcement regime applies to the foreign judgment:
Hague Convention on Choice of Court Agreements (2005): This applies to judgments from exclusive jurisdiction clauses in civil and commercial matters, including money judgments and final injunctions. It covers most EU member states as well as Singapore, Montenegro and Mexico.
Bilateral Treaties and Statutory Regimes: The UK has several bilateral treaties and statutory regimes, such as the Administration of Justice Act 1920 and the Foreign Judgments (Reciprocal Enforcement) Act 1933, which may apply to judgments from specific countries, mostly Commonwealth nations.
Common Law Regime: If no other regime applies, the foreign judgment must be re-litigated in England and Wales under common law principles. A new claim is filed attaching the foreign judgment and seeking summary judgment.
2. Comply with the Applicable Enforcement Procedure
The procedure for enforcement depends on the applicable regime:
Hague Convention: File an application in the High Court with an authenticated copy of the judgment and English translation. Provide details of the judgment and evidence it is enforceable in the originating jurisdiction. The court can then issue a registration order.
Statutory Regimes: More limited to money judgments. The judgment must meet specific jurisdictional requirements. The judgment creditor must apply to have the judgment registered in the High Court.
Common Law: File a new claim in the High Court attaching the foreign judgment and seeking summary judgment. The court will determine if the foreign court had proper jurisdiction under English law.
3. Consider Timing and Jurisdiction
Timing: The enforcement regime depends on when the original proceedings were instituted. The Brussels Regulation still applies to judgments from proceedings started before January 1, 2021.
Jurisdiction: Carefully consider the jurisdiction of the original judgment. Certain regimes have specific jurisdictional requirements, and the English courts will examine this under English law principles.
4. Seek Legal Advice
Given the complexities of the post-Brexit enforcement landscape, it is crucial for business owners to seek legal advice to:
- Determine the applicable enforcement regime
- Ensure compliance with the relevant procedures
- Assess the enforceability of the foreign judgment
- Prepare for potential re-litigation under the common law regime
By following these steps and seeking expert legal guidance, business owners can navigate the challenges of enforcing foreign judgments in England and Wales in the post-Brexit era. Careful consideration of the applicable regime, procedures, and jurisdictional issues is essential to successfully enforce foreign judgments.
Summary
The post-Brexit environment has created substantial challenges for the enforcement of foreign judgments in England and Wales. Navigating these complexities requires careful consideration of the applicable legal frameworks, the potential need for re-litigation, and the impact of bilateral treaties and conventions. Legal advice is essential to ensure that parties can effectively enforce their rights in this new landscape.
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Avinder Laroya is a Senior Consultant Solicitor, Mediator and Arbitrator and conflict coach, she is an expert in International Dispute Resolution. If you enjoyed this article you can subscribe to my newsletter below.
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