The latest view: Enforcement of judgments in a post-Brexit world On 31 December 2020 the Brexit Transition Period ended. Although the UK and EU have agreed some elements of their future trading relationship in the EU-UK Trade and Cooperation Agreement, this does not make long-term provision in relation to recognition and enforcement. As a result, litigants looking to enforce an English judgment in the EU and vice versa will likely will face some additional, jurisdiction-specific, procedural steps in order to enforce their judgment. Our flowchart1 helps you to navigate the permutations of enforcing judgments post-Brexit. June 2021 Enforcement of an EU27 judgment in the English courts Enforcement of an English judgment in an EU27 court After 31 Dec 2020 After 31 Dec 2020 On or before 31 Dec 2020 On or before 31 Dec 2020 No No Seeking enforcement of an English judgment in an EU27 court or an EU27 judgment in the English courts Apply the Recast Brussels Regulation3 Apply the Recast Brussels Regulation3 Apply the Hague Convention5 Apply the Hague Convention11 Is there a bilateral international agreement that can be relied upon?6 Is there a bilateral international agreement that can be relied upon12 Does the Hague Convention apply?4 Does the Hague Convention apply?10 When was the EU27 court seised of the claim?2 When was the English court seised of the claim?9 Yes Yes Key contacts Paul Chaplin Counsel, London T +44 20 7296 5611 [email protected] Louis Biggs Associate, London T +44 20 7296 2262 [email protected] Apply the English common law7 Apply the Foreign Judgments (Reciprocal Enforcement) Act 19338 Apply any relevant domestic provision of the enforcing EU27 state12 Apply that bilateral international agreement as incorporated in the enforcing EU27 State14 No Yes No Yes www.hoganlovells.com 1. This flowchart covers only judgments received in “civil and commercial matters” previously covered by the Recast Brussels Regulation – (for example, it does not include criminal matters). 2. Pursuant to Article 67 of the UK/EU Withdrawal Agreement (as incorporated by the EU (Withdrawal) Act 2018 (as amended by the EU (Withdrawal Agreement) Act 2019) in the UK, if proceedings are seised (ie the court has asserted jurisdiction – in the English courts, for example, this would be when the claim form is issued) before the end of the Brexit Transition Period, then the Recast Brussels Regulation continues to apply to determine jurisdiction and applies to the recognition and enforcement of any resulting judgment. Therefore, for judgments resulting from claims issued on or before 31 December 2020, the Recast Brussels Regulation will apply to English judgments enforced in the EU Courts. 3. The Recast Brussels Regulation provides that: “A judgment given in a Member State which is enforceable in that Member State shall be enforceable in the other Member State without any declaration of enforceability being required.” There is a wide definition of ‘judgment’ - As well as common money judgments (including costs orders), it covers the enforcement of non-money judgments such as injunctions, interim orders such as freezing orders, and in certain instances, default judgments. Under the Recast Brussels Regulation, all that is required to enforce an EU27 judgment in the English courts is that the judgment creditor must: (a) obtain a certificate from the court that issued the underlying judgment, detailing its substance and certifying that it is enforceable; and (b) serve the certificate and judgment on the judgment debtor and provide copies to the English court (and a translation if required). Following this, a judgment creditor can apply for the full range of enforcement orders available in the English courts. For example, a judgment creditor could: apply to take control of the judgment debtor’s assets; apply for a charging order; apply for a third party debt order; apply for an attachment of earnings order or apply for a receivership to be imposed. 4. On 31 December 2020, the UK independently acceded to the Hague Convention. The Hague Convention states that where there is an exclusive jurisdiction agreement (an “EJA”) between the parties to the dispute, all the Contracting States (after the UK’s independent accession, the EU27, the UK, Montenegro, Mexico and Singapore) are required to enforce any judgment made by the specified court. However, the scope of the Hague Convention is more limited than the Recast Brussels Regulation. It is therefore necessary to ask the following questions: (a) Is there an underlying EJA in favour of the EU27 court? The Hague Convention applies only where there is a pre-existing EJA in place between the litigants. (b) When was the EJA entered into? If the EJA was entered into prior to 1 October 2015, then the Hague Convention does not apply. There is uncertainty as to whether the Hague Convention will apply where the EJA was entered into prior to exit day, when the UK was only a Contracting State by virtue of it being a Member State. In order to address this issue, the UK has passed the Civil Jurisdiction and Judgments (Hague Convention on Choice of Court Agreements 2005) (EU Exit) Regulations 2018 (the “Hague Convention Regulations”). The Hague Convention Regulations make clear though that if an EJA is entered into between 1 October 2015 and the UK’s independent accession, then the Hague Convention shall apply in the English courts, as if the UK had remained a Contracting State without interruption. The Hague Convention Regulations also made supplementary and consequential amendments to CPR 6 and the Civil Jurisdiction and Judgments Act 1982 to facilitate the entry into force of the Hague Convention in the UK. (c) Are you trying to enforce a money judgment or a final injunction? If you are, then this is covered by the Hague Convention, however, the Hague Convention does not cover interim protective measures such as freezing orders. (d) Is it an excluded matter? The Hague Convention lists specific substantive exclusions to its scope, including, insolvency, arbitration, consumer, employment and antitrust matters, as well as other niche matters. The UK has also noted that in the UK, the Hague Convention will only apply to insurance contracts in certain limited circumstances. 5. The Hague Convention states that the enforcement of the judgment can only be refused by the English court on very limited grounds and there cannot be a review of the merits of the judgment given by the court of origin. However, it is still necessary to comply with the English domestic procedures for recognition and enforcement when enforcing an EU27 judgment (CPR74, sets out a three stage procedure for the enforcement of a judgment that the Hague Convention applies to). 6. If the Hague Convention does not apply, then the next stage to consider is whether the UK has any bilateral international agreements in relation to enforcement of judgments with the relevant country. For example, there are agreements in place with France, the Netherlands, Austria, Norway, Germany, Italy and Belgium. 7. A judgment creditor who seeks to enforce in the English Courts an EU27 judgment that is not covered by (a) the Hague Convention; or (b) a bilateral international agreement, would have to institute fresh legal proceedings in the form of a debt claim. The EU27 judgment can be adduced as evidence in support of such an action, although it will need to be: (a) final and conclusive; (b) for a sum of money; and (c) on the merits. This means that foreign injunctions or interim orders cannot be enforced under English domestic law. Further, the requirement that a judgment be ‘on the merits’ could provide an additional obstacle for enforcement of an EU27 judgment. The English courts impose a further requirement that the original judgment court must have had jurisdiction according to the rules which English law applies in such cases. The Common Law and statutory rules of England and Wales, Northern Ireland and Scotland are well developed, and are well understood by practitioners and courts because they have continued to apply to cross-border matters where the Brussels regime does not apply. In short, this is an existing, tried and tested regime of private international law rules already applied in the courts for non-Brussels regime cases. 8. The UK has entered into bilateral international agreements with a number of EU27 Countries, namely: France; the Netherlands; Austria; Norway; Germany; Italy; and Belgium. Certain judgments of these countries can be enforced pursuant to the Foreign Judgments (Reciprocal Enforcement) Act 1933. This sets out a more streamlined procedure for the enforcement of non-Hague judgments. However, it is limited to final and conclusive judgments of a superior court of the foreign country and only for judgments for a sum of money. 9. If the English proceedings were commenced before or on 31 December 2020, then pursuant to Article 67 of the UK/EU Withdrawal Agreement, the rules on both jurisdiction and enforcement of judgments under the Recast Brussels Regulation will apply where proceedings are commenced before the end of the Brexit Transition Period. Therefore English judgments of claims commenced on or before 31 December 2020 will still be enforceable in the EU27 courts under the Recast Brussels Regulation regime. If the English proceedings were issued after 31 December 2020, then the Recast Brussels Regulation will not apply. 10. Similar to the enforcement of an EU27 judgment in the UK, in deciding whether the Hague Convention applies to an English judgment in the EU27, it is necessary to ask the questions set out at note 4 above. There is some uncertainty as to whether the Hague Convention will apply where the EJA was entered into prior to Brexit, at which time the UK was a Contracting State only by virtue of it being an EU Member State (ie between 1 October 2015 and 31 December 2020 because the UK was treated as an EU member state for the purposes of the Hague Convention until the end of the Transition Period). The EU published a Notice to Stakeholders relating to the field of civil justice and private international law on 27 August 2020 which stated that according to Article 16(1) of the Convention, “The Convention will apply between the EU and the United Kingdom to exclusive choice of court agreements concluded after the Convention enters into force in the United Kingdom as party in its own right to the Convention”. Although this is not entirely clear, it seems to suggest that the Commission’s view is that the Hague Convention would not apply to an EJA in favour of the UK courts concluded prior to 31 December 2020 on the basis that, at that point, the UK was a Contracting State only by virtue of it being an EU Member State, and the Hague Convention only entered into force in the UK in its own right at the end of the Transition Period. In other words, the protection afforded to EJAs entered into prior to 31 December 2020 may have been lost when the UK left the EU and this protection may not be revived by the UK’s independent accession to the Hague Convention. The Commission’s view, although instructive, is not conclusive of what EU27 courts, or the CJEU, may decide. 11. The benefit of enforcement pursuant to the Hague Convention is that enforcement of the judgment can only be refused by the EU27 courts on very limited grounds and there cannot be a review of the merits of the judgment given by the court of origin. However, in comparison to the Recast Brussels Regulation, it is still necessary to comply with the domestic procedures for recognition and enforcement of the enforcing EU27 state. 12. Bilateral international agreements concerning enforcement exist between the UK and certain EU27 States namely: France; the Netherlands; Austria; Norway; Germany; Italy; and Belgium. Local law advice will be required as to how these apply in these EU27 States. Some commentators have also suggested that the Brussels Convention 1968 has been revived following the repeal of the Recast Brussels Regulation as against the UK, however, we have seen nothing in practice to support this view. 13. A judgment creditor who seeks to enforce an English judgment in an EU27 court where the judgment is not covered by the Hague Convention or a bilateral agreement would have to rely on the domestic provisions relating to private international law applicable in the EU27 State. Domestic law in relation to the enforcement of foreign judgments is well developed in each of the EU27 states. Given this, and the long-standing existence of cooperation, it is unlikely that the EU27 courts will restrict the enforcement of an English judgment post-Brexit. Nevertheless, as is the case before the English Courts, litigants looking to enforce an English judgment in the EU27 will likely be required to initiate fresh proceedings in that jurisdiction, and there will undoubtedly be additional, jurisdiction-specific, procedural steps that will need to be taken. As such, any enforcement action of an English judgment in the EU27 courts post-Brexit is likely to be more time-consuming and expensive. In many civil legal systems, for example, a declaration of enforceability must be obtained through exequatur proceedings before enforcement action can be brought. 14. Local law advice will be required as to how a particular bilateral agreement applies in the relevant EU27 State where the judgment is being enforced.