The Pre- Brexit Background |
The European Regime (consisting of the Recast Brussels Regulation, the 2001 Brussels Regulation, the Brussels Convention, and the 2007 Lugano Convention) enabled a simple pathway for the enforcement of a judgment in the EU Member States and European Free Trade Association member states (Iceland, Norway, and Switzerland), saving time and money by eliminating the need for any additional recognition requirements or procedures. For a similar goal, Regulation 805/2004 established European Enforcement Orders that applied to the majority of EU Member States in relation to the recognition and enforcement of uncontested claims.
Proceedings Commenced Before 31 December 2020 |
According to the UK Withdrawal Agreement, the European Regime for jurisdiction between the UK and the Member States would typically continue to apply to proceedings that began before December 31, 2020, as the provisions were incorporated into domestic law through the UK Withdrawal Agreement. However, the actual enforcement procedure will be determined by the law of the Member State seeking enforcement action.
European Enforcement Orders will be authorised to continue as long as the European Enforcement Order certificate was obtained before December 31, 2020.
Proceedings Commenced After 31 December 2020 |
The UK Withdrawal Agreement included no mention of any transitional provisions for the Lugano Convention 2007 or the Brussels Convention after December 31, 2020. For any proceedings initiated after the implementation period (1 January 2021), the previously in place processes for recognition and enforcement of judgments will no longer operate in relation to enforcing UK decisions in EU or the EFTA Member States or vice versa.
If any of the following options are implemented to enable a seamless process similar to the requirements of the European Regime, a foreign decision can be enforced within the UK by an EU or EFTA Member State, or a UK judgment can be enforced in an EU or EFTA Member State:
- The United Kingdom and the European Union reach an agreement on the recognition and execution of decisions within the United Kingdom and its member states:
- The United Kingdom joins the Lugano Convention 2007 on its own. All contracting parties must agree for the UK’s application to join the Lugano Convention 2007 to be successful. Although some countries, such as Norway, have stated their support for the UK’s accession, the EU has yet to state its view.
- As it has done with Norway, the UK forms an individual reciprocal arrangement between each Member State. Because there was no enforcement mechanism for the UK following the transition period for the Lugano Convention 2007, the UK and Norway agreed to provisions for ongoing recognition and execution of judgments during the period when the Lugano Convention 2007 no longer applied to the UK.
If none of the alternative agreements is reached, the UK or a Member State seeking to enforce the verdict will have to depend on that country’s private international law. As a result, if an EU or EFTA Member State wants to enforce a foreign judgment under English common law, the Claimant must first file a claim against the Defendant in England and Wales, citing the foreign judgment as to the basis for the claim. Only after obtaining judgment will the judgment creditor be able to enforce the judgment, which will be significantly more time consuming and costly than the methods available prior to Brexit.
If a UK judgment is to be enforced in an EU or EFTA Member State where procedures began after January 1, 2021, the process will be regulated by the laws of that state. It is crucial to highlight that not all EU Member States currently have provisions in place for the recognition of non-EU decisions.
The amendments will undoubtedly lengthen and raise the cost of enforcement actions, making it more vital than ever to acquire early local guidance on the applicable local legislation to the process required to enforce the judgment.
European Enforcement Post Brexit |
The United Kingdom and the European Union had joined the Lugano Convention, as did Iceland, Liechtenstein, Norway, and Switzerland, members of the European Free Trade Association (EFTA).
This treaty enabled members to recognise civil judgments across multiple legal systems, providing businesses and members of the public with a straightforward, affordable, and rapid way to have their judgments executed in nations (jurisdictions) where the defendant held assets.
A European Enforcement order before Brexit could have been transferred up to the High Court and had a Writ of Control issued within a few days for little more than the £71 court cost.
This was extremely beneficial to consumers and businesses in all countries. They could all seek justice in their native country’s courts without the assistance of interpreters or translators, and obtain a judgment. They could then forward the judgment to the appropriate Enforcement Officers in the defendant’s country for enforcement.
The Problem Area |
Brexit changed everything since the United Kingdom departed this treaty on December 31, 2020, when it ceased to be a member of the European Union.
The UK government attempted to foresee this by applying to join the pact in April 2020. Although the EFTA countries agreed for the UK to join, a unanimous vote was required. In this situation, the EU refused to admit the UK until the Brexit discussions were completed. Of course, the United Kingdom has officially left the EU, but the treaty has still to be agreed upon and remains a loose end.
At the time of writing (22 January 2021), the EU had not authorised the UK to join, putting persons and businesses in EFTA, the UK, and the EU at a significant disadvantage when it came to enforcing decisions.
The European Enforcement Order, European Order for Payment, and European Small Claims Procedure (Amendment etc.) (EU Exit) Regulations 2018 altered the Civil Procedure Rules in the UK.
It is hoped things will change by April 2021 and the UK will be allowed to join the Lugano Convention.
A Quick Solution |
Until the UK can join the Lugano Convention, the only path ahead is through Civil Procedure Rule Part 74. For certain countries, this will be the Administration of Justice Act of 1920, while for others, it will be the Foreign Judgments (Reciprocal Enforcement) Act of 1933.
An attorney would need to use form PF154 to apply to a Queens Bench Master for the judgment to be registered in England and Wales. The charges can be fairly high, and while they can be added to the debt, they will dissuade minor claims from being enforced against the UK.
Shergroup has collaborated with a qualified team of solicitors to manage this complicated procedure in order to make it as simple as possible for claimants to pursue their rights in England and Wales.
Summing-up
Foreign decisions must be registered at the High Court before they can be entered into England and Wales. We can handle the complete registration process for you. Once this is completed, you will have access to a wide choice of enforcement options. Shergroup Business Solutions Advisors can assist you with all of these issues, so call Shergroup immediately for more information. If the claim is defended, you must follow the standard court rules for enforcing a judgment overseas, as outlined in Part 74 of the Civil Procedure Rules.
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