The Enforcement of EU Judgments in England and Wales

A consequence of the Brexit withdrawal period ending on 31 December 2020 was that judgments issued by EU states are no longer enforceable in England and Wales as before.

The previous EU framework, known as the ‘Recast Brussels Regulation’, allowed for non-excluded judgments given in one EU Member State to be quickly and easily enforced in all other Member States. The Recast Brussels Regulation was also supplemented by the 2007 Lugano Convention for judgments from the EFTA states of Iceland, Norway and Switzerland.

The Recast Brussels Regulation and the 2007 Lugano Convention still apply to the enforcement in the UK of judgments given in proceedings instituted between 10 January 2015 and 31 December 2020. However, there is some divergence between Member States on when a claim is deemed to have been ‘instituted’ under their national laws. In certain French proceedings, for example, proceedings are not considered ‘instituted’ until a Defendant files an objection to the claim.

For foreign proceedings instituted after 31 December 2020, two principle enforcement regimes now apply in the UK.

Hague Convention on Choice of Court Agreements (aka “The Hague Convention”)

All EU Member States are bound by The Hague Convention. Post-Brexit, the UK also remains bound.

Generally, a final and conclusive judgment given by a court in the EU, where the contract designated an exclusive choice of court agreement, shall be recognised and enforced in the UK.

Contractual debt claims are covered, and since most commercial agreements include an exclusive jurisdiction clause, the Hague Convention will apply to the bulk of debt-based judgments from EU Member States. Final injunctions are also included in the regime. Creditors should take care when dealing with contracts formed other than by written agreement; many commercial relationships are formed verbally, or “on a handshake”, and these will not be covered unless a clear and separate agreement exists as to jurisdiction.

The Hague Convention excludes certain categories of judgment – in particular those for matters involving insolvency, wills, family law, consumer, insurance (except in limited circumstances), company law, employment and disputes over certain rights in land. Arbitrational awards are also excluded.

The common law regime

This refers to use of the domestic law of England and Wales to obtain an enforceable debt-based judgment in this jurisdiction, rather than relying on international treaties. Where the Hague Convention is unavailable to the holder of a judgment from an EU Member State, this would usually be the preferred course of action.

The purpose is to obtain a court Order in this jurisdiction, which mirrors the foreign judgment as far as possible. The judgment holder files a new claim in the courts of England & Wales (usually at the High Court), attaching the foreign Order and seeking summary judgment on grounds that the dispute has already been adjudicated. This is only available for final judgments, meaning Orders currently under appeal are excluded, and only applies where the Order is for a defined sum of money.

One slight advantage for a defendant in this jurisdiction is that it raises the possibility of a further attempt at defending the claim. Since The Hague Convention is typically used where contracts contain an exclusive jurisdiction clause, the courts here must be satisfied that the foreign court had proper jurisdiction to hear the original claim. In making that determination, they will apply the laws of England and Wales rather than any laws applicable in the foreign court.

As a general rule under English law, where this is no express agreement between the parties, jurisdiction will be the place where the contract was formed, that is to say, from where the acceptance of an offer is communicated. The court may also look at where the services were performed. The court will look at all circumstances of the case and take into account the complexities of communications over email and telephone, according to which both the English and foreign courts might be appropriate to hear the matter. This is on the basis that, in principle, it is possible for a contract to be formed in two places at once.

The possibility of defending the claim again is usually lost where the foreign court had ‘consensual jurisdiction’. This means both parties had submitted to the jurisdiction of the foreign court, even though the right of that court to hear the claim may have been arguable. Appearing in a foreign court to contest jurisdiction does not amount to consensual jurisdiction. When a claim has been actively defended on its merits, the courts in England and Wales will usually determine that both parties agreed to the jurisdiction of the foreign court, even if they may have been unaware of their right to challenge jurisdiction. There is a general principle under common law against litigating the same matter twice; accordingly, the grounds for effectively hearing a claim again in the courts of England and Wales are deliberately narrow.

Future developments

The enforcement of foreign Orders in this country has become substantially more difficult since the UK left the EU. The above regimes clearly have their limits. In particular, there needs to be a regime for enforcement of judgments excluded under The Hague Convention that would otherwise have applied in the UK under the previous EU framework. It remains to be seen what progress, if any, will be made in this area in the coming months.