Impact of Brexit on enforcement of judgments

Background Pre-Brexit

The European Regime (consisting of the following main instruments: the Recast Brussels Regulation, 2001 Brussels Regulation, Brussels Convention and the 2007 Lugano Convention) enabled a simple pathway for the enforcement of a judgment in EU Member States and European Free Trade Association member states (Iceland, Norway and Switzerland) saving time and costs by removing the need for any additional recognition requirements or procedures. Regulation 805/2004 was created for a similar purpose, it created European Enforcement Orders which applied to most EU Member States in relation to recognition and enforcement of uncontested claims.

Proceedings commenced before 31 December 2020

In accordance with the UK Withdrawal Agreement, the European Regime regarding jurisdiction between the UK and Member States will generally continue to apply to proceedings which started before 31 December 2020 as the provisions were implemented into domestic law though the UK Withdrawal Agreement. However, the actual enforcement procedure required will be governed by the law of the Member State to which the enforcement action is sought.

European Enforcement Orders will still be able to continue providing that the European Enforcement Order certificate was applied prior to 31 December 2020.

Proceedings commenced after 31 December 2020

The UK Withdrawal Agreement was silent in relation to any transitional provision beyond 31 December 2020 for the Lugano Convention 2007 or the Brussels Convention. For any proceedings that were commenced after the implementation period (1 January 2021), the mechanisms for recognition and enforcement of judgments that were in place previously will no longer apply in relation to enforcing UK judgments in EU or EFTA Member States or vice versa.

Whether a foreign judgment can be enforced by an EU or EFTA Member State within the UK, or conversely whether a UK judgment can be enforced in an EU or EFTA Member State, will depend on whether any of the following options are put in to place to enable a smooth process similar to the provisions of the European Regime:

• the UK and the EU create an agreement providing for the recognition and enforcement of judgments within the UK and Member States:
• the UK joins the Lugano Convention 2007 independently. In order for the UK to be successful in its application to join the Lugano Convention 2007, all contracting parties must consent. Although some countries such as Norway have confirmed their support for the UK to join, the EU has not yet made its position clear;
• the UK creates an individual reciprocal agreement between each Member State like it has done with Norway. As a result of there being no enforcement mechanism for the UK following the transition period in relation to the Lugano Convention 2007 both the UK and Norway agreed provisions for the continued recognition and enforcement of judgments during the period that the Lugano Convention 2007 no longer applied to the UK.

If none of the alternative agreements are put into place, the UK or Member State seeking to enforce the judgment will have to rely on the private international law of that country. Therefore, if a EU or EFTA Member State wishes to enforce a foreign judgment under English common law, the Claimant will first have to issue a claim against the Defendant in England and Wales and use the foreign judgment as the grounds for bringing the claim. Only once judgment has been obtained will the judgment creditor be in a position to enforce the judgment, this will of course be considerably more time consuming and costly compared to the options available pre-Brexit.

If a UK judgment is required to be enforced in an EU or EFTA Member State where proceedings were commenced after 1 January 2021 the process will be governed by the laws of that state. It is important to note that currently not all EU Member States have provision for the recognition of non-EU judgments. 

It is inevitable that the changes will increase the timing and costs of enforcement proceedings and it will be more important than ever to obtain early local advice on the applicable local laws to the process required to enforce the judgment.

For more information on the article above please contact Holly Ransley.