Following the official notification by the United Kingdom of its intention to implement Article 50(3) of the Treaty on European Union, the EU and the UK now have two years to negotiate the conditions of their future relationship. Among numerous issues to address, it is in both sides’ interests to ensure there remains an effective legal framework for mutual recognition of judgments.

The current regime

In accordance with Articles 36 et seq. of the Regulation EU 1215/2010 (Recast Brussels Regulation) providing for the principle of mutual trust, judgments rendered by the UK courts are currently automatically recognised and enforced, without any declaration of enforceability being required, in other EU Member States, and vice versa. Article 50 (3) of the Treaty on European Union and the withdrawal process will deprive the UK of the applicability of EU Regulations and will inevitably create confusion regarding the recognition in the EU of judgments handed down by the UK courts.

There are three broad options for what could replace the Recast Brussels Regulation in governing the recognition and enforcement regime between the UK and the EU.

1. UK joins existing conventions

There are two existing conventions on recognition and enforcement that the UK could look to join.

  • The UK could join the 2005 Hague Convention on choice-of-court agreements, which was entered into by the EU on behalf of the Member States (other than Denmark). The Hague Convention is a more limited regime than some of the other options, as it only covers jurisdiction and enforcement related issues in cases in which parties have agreed on an exclusive jurisdiction clause conferring jurisdiction on the courts of a Contracting State. However, it would be open for the UK to join without further negotiation and has already been implemented into UK law, so would be a relatively straightforward solution. The UK may also decide to join the Hague Convention regardless of what is agreed with the EU, in order to benefit from mutual recognition with Contracting States outside the EU (currently only Mexico and Singapore, but this list could grow).
  • The UK could (re)join the European Free Trade Association (EFTA), allowing it to accede to the 2007 Lugano Convention on jurisdiction and the enforcement of judgments in civil and commercial matters. The Lugano Convention is very similar to the 2001 Brussels Regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, so would be similar to the current regime (albeit without certain reforms that were brought in by the Recast Brussels Regulation). It is also possible for non-EFTA states to join the Lugano Convention, so this route may be open to the UK even if it does not join EFTA. However, this is subject to certain qualifications, including the unanimous consent of all Contracting States, so would need to be agreed as part of the wider Brexit negotiations.

2. UK and EU enter into a new, bilateral convention

The UK could enter into a new, bilateral treaty with the EU, which could provide for a clear legal framework regarding matters of jurisdiction and cross-border enforcement of judgments. This could be a faithful copy of the Recast Brussels Regulation or a copy of the tailored-version that is currently applicable to Denmark, or just a new or adapted agreement.

3. The possible application of the multilateral 1968 Brussels Convention

If the UK does not join either an existing or a new Convention before leaving the EU, the question is what would be the default position?

The 1968 Brussels Convention used to constitute the framework for the reciprocal recognition and enforcement of judicial decisions between the Contracting States until the adoption of the first Brussels Regulation, later replaced by the Recast Brussels Regulation, which successively replaced the Convention between the Member States. The Brussels Convention already established the principles of (i) a presumption of lawfulness and (ii) the enforcement of the judgments of the Contracting States.

As a third State to the EU, the UK could claim to retain for its benefit the Brussels Convention, of which it remains a Contracting State, since the Brussels Regulations are intended to replace the Convention as between the Member States (article 68 of the Regulation), which the UK would no longer be.

However, some obstacles to the applicability of the Convention remain. On the one hand, when the UK became a Contracting State to the Convention in 1978, the Member States of the European Community were not as numerous as the Member States of the European Union in 2017. As a consequence, if applicable, the Convention would only apply to the 1978 Contracting States and not to all Member States. On the other hand, the Court of Justice of the European Union could consider that the withdrawal of the UK from the EU constitutes a “fundamental change of circumstances” which could terminate the Convention or withdraw the UK from the Convention in accordance with the terms of the 1969 Vienna Convention on the Law of Treaties.

4. In the absence of any bilateral convention

If the UK does not within the two years of negotiations enter into (or be able to rely on any existing) convention on the international effectiveness of foreign judgments with the EU itself or with each Member State, the solution is to be found in the rules of private international law of each State where the judgment seeks to have effect.

In France for instance, in order to be effective, a judgment handed down by a UK court should pass the test of international regularity before the French court in an exequatur procedure. This would be the case if the UK judgment (i) was handed down by a judge who may be considered by the French court to have jurisdiction over the dispute; (ii) was handed down in accordance with the French international public order (on the merits and on the procedure); and (iii) was not obtained in fraud of the law.

This exequatur procedure would obviously constitute jurisdictional uncertainty which could be detrimental to British litigants.

The enforcement of judgments from an EU Member State in the UK would be subject to common law rules. This would mean needing to satisfy the UK court that the foreign court had jurisdiction and that the judgment was final, and for a sum of money (but not taxes, a fine or other penalty). The grounds for resisting recognition of a foreign judgment under the common law regime are also wider than under the Recast Brussels Regulation. On a practical level, rather than simply enforcing the foreign judgment, it would be necessary to commence fresh legal proceedings for recovery of a debt, which would add cost and complexity to the process.

What will happen next?

While neither side has yet set out its preferred option for the mutual recognition of judgments post-Brexit, the EU has set out what it is seeking by way of transitional provisions. The European Council’s negotiating objectives, published on 22 May 2017, provide that the recognition and enforcement of national judicial decisions handed down before the withdrawal date should remain governed by the relevant provisions of EU law applicable before the withdrawal date. If the UK agrees with this (and this could be one of the few points that the EU and UK are able to agree easily), it would mean that litigants could continue to use the existing Recast Brussels Regulation for any judgments given before the date of the UK’s withdrawal (likely to be 29 March 2019).

Beyond that, in the coming months we will see the UK and the EU’s preferred solutions to ensure the continued mutual recognition and enforcement of UK and EU decisions. In the absence of agreements that would take time to negotiate, the possible application of the 1968 Brussels Convention could be invoked by parties based in the UK to enforce their decisions in a Contracting State, and vice versa, or failing that the national laws of individual States may give a viable fall-back option.

All of this uncertainty means that litigants and contracting parties should be giving careful thought to where and when they bring legal proceedings, and their choice of law and jurisdiction clauses in contracts.