Enforcing judgments outside England and Wales; what has changed?

Enforcing English judgments outside the UK has always required careful consideration and review of both the rules and agreements between the new countries involved. This was made easier between EU countries; however, the transitional period and implementation of Brexit have added another dimension to this matrix, which can be a minefield for those owed money by companies registered abroad.

Below is a brief appraisal of the position – we will return to it in more detail.

Enforcing English judgments issued before 1 January 2021 in the EU

If the English judgment was handed down before 11pm on 31 December 2020, it must be enforced in the EU using the pre-Brexit position. This is because the UK was treated, for the purposes of enforcement, as an EU member state until the end of the transition period.

In these circumstances, the starting point is that the enforcement procedure is governed by the law of the enforcing state. This means that you can enforce an English judgment in an EU member state as if you were enforcing the judgment in England.

It is also important to consider whether the enforcement process was started before the end of the transition period, as this will alter what is needed, including the requirement to obtain a certificate from the English court certifying that the judgment is enforceable no longer applies.

Enforcing English judgments from 1 January 2021 in the EU

Things become far more complicated in this position.

The first consideration is whether the contracts in the dispute have an exclusive jurisdiction clause; if so, it needs to be considered whether the Hague Convention on the Choice of Courts Agreements can be applied. If they do not, you must follow the national law of the country in which you are seeking to enforce.

This convention provides that judgments given by signatory states are automatically enforceable in the other signatory states. Signatories to the convention include the whole of the EU and some non-EU countries. The UK was a signatory through its membership with the EU, but this ended alongside the transition period on 31 December 2020. The UK rejoined as an independent state on 1 January 2021. As a result, different countries have different positions on whether the convention applies to disputes over contracts agreed before this break in the UK’s membership.

The European Commission decided that the UK should only be treated as a signatory to the convention after it joined in its own right on 1 January 2021. The Commission’s view is that new disputes over contracts signed before 1 January 2021 cannot benefit from the convention and judgments cannot be automatically enforced. Instead, in order to enforce the judgment, you must follow the national law of the country in which you are seeking to enforce.

However, the Commission’s decision is not binding. It is up to individual signatories to the convention to determine whether to follow the Commission’s decision.

Enforcing an English judgment issued after 1 January 2021 in a non-EU country

The UK was also a signatory to the Lugano Convention, another cross-border enforcement treaty, through its membership with the EU; however, at the end of the transition period, the UK ceased to be a signatory.

On 8 April 2020, the UK applied to rejoin the Lugano Convention following the end of the transition period; however, it is still waiting for this application to be approved. This means that there could also be significant changes to the way UK judgments are enforced outside the EU.