Interested in learning about the execution of foreign judgments post-Brexit in England and Wales? Read on to find out everything you need to know!
In December 2020, Brexit came into effect, and the EU’s regulations on jurisdictions and recognition and execution of judgments in civil and commercial issues ceased to apply in the UK since it was no longer an EU member. Since January 2021, the UK has had no clear legal system for the execution of foreign judgments post-Brexit. Today, businesses rely on domestic recognition regimes in the country, which include additional procedural steps to recognise a foreign judgment. It makes enforcing these foreign judgments more time-consuming, costly, and challenging.
Let’s explore this in detail:
The Hague Agreement
Before moving forward with Brexit, the UK agreed to the Hague Convention on the choice of Court Agreements. It’s not new to the country since it was part of this convention due to its EU membership. The Hague Convention can be applied in cases where the parties have entered into an exclusive choice of court agreement. The convention allows a relatively straightforward execution of foreign judgments post-Brexit.
It is applicable when:
- An exclusive jurisdiction clause is concluded after entering into force for the chosen court’s state. There can be exclusions to the rule based on the scope of the Hague Convention. Employment and consumer contracts are outside its remit.
- Proceedings are commenced after it enters into force for seized court’s state.
The Lugano Convention
The UK did not accede to the Lugano Convention for instances where judicial assistance was needed when no exclusive choice of court agreement was in place, and hence, the Hague Convention cannot be applied. Had the UK agreed to the Lugano Convention before Brexit, it would have offered a more thorough reference for cross-jurisdictional judicial cooperation.
Moreover, in July last year, the EU had refused to give the UK its consent to access the Lugano Convention. The EU reasoned that this convention should be reserved for member states of the EU and states with close regulatory interaction with the European Union.
It was felt that, by its nature, the Lugano Convention should be reserved for those States with close regulatory integration with the EU. It is why the UK is unable to rely on this convention.
Enforcement of Judgments beyond the Hague Convention
Since the UK has been denied access to the Lugano Convention, it has to rely on domestic rules in England and Wales to enforce and execute foreign judgments post-Brexit. The statutory regimes of the Foreign Judgments (Reciprocal Enforcement) Act 1933 and the Administration of Justice Act 1920 might enable the registration and execution of these judgments. They are arguably swifter and more economical than the common law regulations under CPR Part 74.
Under English common law, enforcing foreign judgments demands the creditor to start a fresh cause of action in the court of law. However, the foreign judgment itself creates the cause of action in this case. The Limitation Act 1980 will also apply to common law regulations.
Prospective Future Developments
The promising Convention of 2nd July 2019, rooted in the recognition and enforcement of foreign judgments in commercial and civil matters, enables the effective and seamless international circulation of judgments in commercial and civil issues. The UK hopes the Judgment Convention will continue to complement the Hague Convention and offer a more stable, comprehensive regulatory framework to facilitate cross-jurisdictional enforcement. That said, Brexit will continue to shape and affect the law and foreign judgments.