Call Us TODAY on 020 3588 4240

For our research on the implications of a “No Deal Brexit” and Brexit at large, we found this article today in the Daily Telegraph a thought-provoking and simple outline of the possible impact if the UK leaves the EU Brexit news with no deal in place.

 

Cashflow and Brexit

We encourage businesses to dig into this vital aspect of their forecasting to see if any of it is coming from an EU customer. If it is, a question should be how is that relationship, and the payment of invoices going to work after the deadline? Is the UK business going to be able to supply the EU Brexit business in the same way? 

 

Are more checks going to be put in place, so trading becomes more difficult, and worse could the EU customer look to another supplier in the EU referendum trading block to buy the same goods or services without the challenges of buying from a UK supplier? 

 

Money Recovery and Judgment Enforcement

The effect of all of this is of course the UK business suffers from a loss of business and consequently revenue, which in turn spirals into a downturn in business and eventually cashflow. At that point, the UK’s businesses own creditors may act to recover their own cash, leading down the path of claim, judgment, and enforcement.

 

Conversely, if a petition for parliament, government e-petitions, UK Parliament’s rejection of the government’s Withdrawal Agreement and business relies on an EU business as part of its supply chain, and the EU business cannot supply in the same way as it did pre-Brexit, then the UK business may suffer from not being able to supply its customer base with goods and or services. 

 

A UK business in this situation may see a downturn in trading and consequential loss in cash flow. Again, this can spiral into one or more creditors taking action against the UK business to recover its cash, with the same consequences outlined above.

 

This all seems bleak, and we certainly don’t wish to be unnecessarily gloomy. Our position is that just like any other change in the business environment, people should plan for change, and develop their contingency plans for the worst or best scenarios – and everything in between.

 

Impact of Brexit

Depending on where a business sits in the two situations outlined above, and no doubt there are many other situations we have not anticipated, business leaders should be making plans to ensure their cash flow through these uncertain times is protected.  Cash is the lifeblood of any business, and Brexit is an unknown threat. So, by planning for the worst impact, or hard Brexit – through to soft Brexit, having a plan for cashflow in this transition period is sensible and necessary. Even if you don’t think your business will be directly affected, it’s still worth thinking through about how your business receives its cash and is any part of that pipeline affected by trading with the EU.

 

Ultimately if cashflow is safeguarded then the need to issue a claim, enter a judgment, and enforce it, will be avoided.

 

Enforcement of Judgments

 

As for the wider impact of Brexit European Union on the United Kingdom and its borders with the EU exit, we will have to see what The impact of Brexit on the enforcement of English court judgments which will be on the transfer of judgments between the UK and EU countries which of course includes Eire with its border to the UK jurisdiction agreements.

 

Let’s not be under any illusion, the enforcement of court judgments between England and Wales, Scotland and Northern Ireland is not exactly straightforward and frankly should have been streamlined using technology to transfer court judgments. But it hasn’t and as far as we can see the systems in place today won’t change as a result of Brexit deal.  We suppose that is of some comfort!

 

Enforcement of a judgment in the EU just adds another layer of complexity. In our view, whilst policymakers may feel the enforcement process has been a success, the fact is that filling out the paperwork to transfer the judgment is only the tip of the iceberg in terms of achieving a successful outcome, which means having a network of enforcement agents across the EU who work with the same approach, and the same standards.  This is still very much a work in progress for all countries.

 

Enforcement in England and Wales – Writ of Control

What we can say with some certainty is that for EU countries wishing to enforce in England and Wales we believe the English and Welsh system provides a proven model to get the best outcome for payment of a court judgment. The transfer and enforcement of judgments into the High Court through the action department in the High Court in London is as good as it can be and is well supported.   EU businesses can then convert their EU judgment into a Writ of Control using the services of High Court Enforcement Officers to compel payment.

 

But the other way around, when a UK business wants to transfer to one of the member states outside of UK borders, the situation is in our view much less straightforward for all the reasons rehearsed above. The paperwork is largely the same, but the actual enforcement capability of EU states is fraught with red tape and delay. In fact, playing into the hands of Brexiteers, the historical ties between the UK and its old Empire serve us well today in terms of language, legal system and culture.  Transferring a judgment to Australia, New Zealand, or another Commonwealth country, is in some ways easier than transferring a judgment to the EU.

 

Brexit Consequences

Evidence in support of this contention is scarce, but in one article we found, it was said that only 6% of “citizens questioned” were aware of the European Payment Order and Commission’s Notice to Stakeholders. The article addresses the different approaches taken by the EU Member States back in 2016, and of course now with Brexit consequences on the horizon, there is going to be no improvement.

 

The bottom line is that no one anticipated the impact of petitions Brexit, least of all on the enforcement of court judgments. As it is, creating that system across the EU is still an ongoing project, which is now, like many aspects of commercial life, thrown up in the air.

 

We shall continue to follow the impact of Brexit on this key area of Shergroup’s own business in the weeks and months ahead. Our comments will no doubt change as the impact of the Brexit referendum unfolds. No one can predict the economic impact and therefore the ability to eventually enforce. What we can say is that businesses today do know their supply chains and their customers. We encourage businesses to dig a little deeper into their cash flow predictions to anticipate the impact of the changing market. Once this is done a business should still be able to plan for the various scenarios of a hard or soft Brexit.

 

Whilst we don’t expect this article to be of much comfort, one thing we can say to our followers and client community is – we are all in the same boat! For our part, we will do what we can to assist businesses on both the UK and EU side to make sense of the changes when it comes to enforcement and uses our contacts and experience to maintain as much consistency and confidence in the enforcement of court judgments as possible.

You Might Also Like

Content Writer​

DISCLAIMER NOTICE |

The following disclaimer applies to Shergroup Limited and its platform, shergroup.com. Please read this notice carefully before accessing or using any information provided on our platform.

  1. No Legal Advice | The information presented on shergroup.com, including but not limited to articles, blog posts, FAQs, and other resources, is provided for general informational purposes only. It is not intended to be, and should not be considered, legal advice. The information provided does not create a solicitor/client relationship between Shergroup Limited and the user.
  2. Not a Substitute for Legal Advice | The information on shergroup.com should not be relied upon as a substitute for obtaining legal advice from a qualified professional. The application of laws and regulations can vary based on specific circumstances, and legal advice tailored to your particular situation is crucial. Therefore, we may refer you to a member of our partner firm -Shergroup Legal – on legal matters or encourage you to take your own legal advice from your preferred advisor.
  3. No Guarantee of Accuracy | While we strive to provide accurate and up-to-date information, Shergroup Limited does not guarantee the accuracy, completeness, or reliability of any information on shergroup.com. The legal landscape is constantly evolving, and laws may vary across jurisdictions. Therefore, any reliance you place on the information provided is at your own risk.
  4. No Liability | Shergroup Limited, including its officers, employees, agents, and affiliates, shall not be held liable for any direct, indirect, incidental, consequential, or punitive damages arising out of your access to or use of shergroup.com or any information contained therein. This includes, but is not limited to, any errors or omissions in the content, or any actions taken or not taken based on the information provided.
  5. Third-Party Links | Shergroup.com may contain links to third-party websites or resources. These links are provided solely for convenience and do not imply endorsement or responsibility for the content, accuracy, or legality of such websites or resources. Shergroup Limited shall not be liable for any damages or losses incurred as a result of accessing or using any third-party websites or resources.
  6. Changes to Disclaimer | Shergroup Limited reserves the right to modify or amend this disclaimer notice at any time without prior notice. Any changes will be effective immediately upon posting on shergroup.com. It is your responsibility to review this notice periodically for updates.

By accessing or using shergroup.com, you acknowledge that you have read, understood, and agreed to this disclaimer notice. If you do not agree with any part of this notice, you should refrain from accessing or using shergroup.com.

Last updated | 19 July 2023

Should you have any questions or concerns regarding this disclaimer notice, please contact us at [email protected]