How enforceable are English court judgments after Brexit?

Written jointly by Charlie Temperley and Sara Thomas Arano

The Brexit transition period ended on 31 December 2020 and despite the government's EU-UK Trade and Cooperation Agreement (the ‘Brexit Trade Agreement’) several aspects of the future relationship between the UK and EU remain uncertain including in relation to the enforcement of English court judgments in the EU.

As a member of the EU and, by extension, during the transition period, the UK had numerous methods for enforcing English court judgments in the EU. However, the key enforcement methods under EU regulations ceased to apply on 31 December 2020.

There is nothing in the Brexit Trade Agreement to address this issue or indeed anything else regarding civil judicial cooperation.

Pre-Brexit

Provided certain procedural rules were followed, EU regulations (eg, the Brussels (Recast) Regulation) allowed English judgments, in most circumstances, to be automatically recognised and enforced in any EU member state.

For potential claimants, this meant that they could issue court proceedings in the English courts (if appropriate to do so) in the knowledge that they were likely to be able to enforce any judgment they obtained in whichever EU member states the defendant or its assets might be.

To continue to take advantage of these regulations, claimants must have gone through the correct procedural steps in the English courts before 1 January 2021. In some cases, the procedural rules that needed to be followed mean that proceedings had to have been issued well in advance of 31 December 2020.

Post-Brexit

With the gap left by the Brexit Trade Agreement, enforcement of English judgments in the EU is now, in most EU jurisdictions, more difficult and complicated. The regulations that made enforcement relatively simple no longer apply and so English claimants will need to look to other enforcement regimes or proceed in accordance with the local rules of the country in which they are seeking to enforce their judgment. This creates a patchwork effect of different rules for enforcement which makes the process more complicated in many cases.

There are several regimes that might assist but none is presently as helpful as the previous EU regulations:

The Lugano Convention

The UK government applied to join the 2007 Lugano Convention in April 2020. This is an international treaty between the EU and other European states (these include European Free Trade Association states such as Norway and Switzerland). The original contracting parties and the EU were required to agree whether to allow the UK to join Lugano. The Lugano Convention would have offered a similar framework to the Brussels (Recast) Regulation which ceased to apply in the UK on 1 January 2021. However, on 4 May 2021 the European Commission announced that it was opposed to the UK's accession to the Lugano Convention.

Although this may not be the final word on the matter, it appears to be unlikely that the UK will be permitted to re-join Lugano any time soon.

The Choice of Court Convention

The UK government has now acceded in its own name the 2005 Hague Convention on Choice of Court Agreements. This convention has also been ratified by the EU, Denmark, Mexico, Montenegro and Singapore and, where it applies, provides a simplified enforcement process.

In summary, where a judgment has been given by a court that both parties have agreed is to have exclusive jurisdiction, that judgment will be recognised by the court of another Convention State for enforcement purposes, without a review of the merits of the judgment. Unfortunately, due to this limitation, the Choice of Court Convention is only a partial answer and will assist only English claimants in cases where the parties have agreed that a court will have exclusive (as opposed to non-exclusive) jurisdiction.

There is also some disagreement over whether the convention applies to exclusive choice of court agreements concluded in the UK on or after 1 October 2015 (when the EU originally ratified the convention) but before 1 January 2021 (when the UK became a contracting state in its own right).

The UK's position is that via its EU membership, the UK has been a contracting state without interruption since 1 October 2015 and that the convention therefore applies to contracts containing exclusive jurisdiction clauses that were entered on or after that date.

In contrast, the EU says that the convention will only apply to exclusive choice of court agreements concluded after the convention entered into force in the UK as a party in its own right. This means that the EU considers that the convention has no effect where the contract with the exclusive choice of court provision was entered prior to 1 January 2021. This is a further limitation.

The Judgments Convention

The more recent HCCH 2019 Judgments Convention also provides for a more streamlined cross-border enforcement process between the courts of contracting states. The Judgments Convention, however, has only been signed by Costa Rica, Israel, Ukraine and Uruguay, so it remains to be seen whether it will have any real practical effect.

The European Commission was expected to issue its decision on whether it will ratify and accede to the Judgments Convention before the end of 2020 but as at the date of this article it has not yet done so.

Reciprocal Enforcement Agreements

In the absence of another enforcement regime, whether an English judgment is recognised in the court of another country depends on local rules and general principles of reciprocity, or alternatively any bilateral enforcement treaty that exists between the UK and the country in which enforcement is sought. Some such agreements are in place but many are limited in scope and application.