Enforcement of foreign judgments can be a legal minefield and since 1 January 2021, when the Brexit transition period ended, the position on whether foreign judgments can be recognised in the courts of England and Wales is even more complex than it was before.
We have produced a short 4-step checklist that can be used as a starting point when one considers whether or not a foreign judgment can be enforced in England. It is important to note that this is guidance only. It is not a definitive tool and is not a substitute for legal advice.
The EU / non-EU distinction
For decisions and judgments obtained in the EU/EEA Members States, various provisions of EU law provided for the reciprocal enforcement of such decisions and judgments. From 1 January 2021, upon the expiry of the transition period, the EU regime governing the recognition of foreign judgments fell away. However, in some cases, it is still possible to apply the EU regime.
When it comes to judgments obtained in countries outside the EU, England relies on the following statutory frameworks to enforce judgments from courts of such countries:
- The Administration of Justice Act 1920; and
- The Foreign Judgments (Reciprocal Enforcement) Act 1933
Checklist
These steps should assist in identifying whether a foreign judgment is likely to be recognised and if so, the likely process for enforcement in the courts of England and Wales.
Step 1 – check when proceedings started
If before the end of the transition period that is before 31 December 2020, then the position is clear. The pre-Brexit/EU regime continues to stay in place. So foreign judgments will continue to be enforceable in England, and vice versa.
The enforcement procedure is relatively straightforward. A prescribed form of certificate must be obtained from the original court and the certificate and judgment served on the relevant party before enforcement.
If after the end of the transition period that is after 31 December 2020, then the previous EU regime is no longer applicable, and you need to move to Step 2.
Step 2 – check whether there is a bilateral treaty in place between England and the country which is seeking to enforce the judgment or other statutory regime.
England entered into a number of bilateral treaties prior to joining the EU, which were incorporated into English law under the Foreign Judgments (Reciprocal Enforcement) Act 1933 (the “FJA”) and the Administration of Justice Act 1920 (the “AJA”). In the absence of the Recast Brussels Regulation, England should now be able to fall back on such treaties. These treaties largely ensure that judgments will be recognised and enforced reciprocally and potentially could be revived to provide a mechanism for recognition and enforcement.
The AJA provides for the recognition via registration and enforcement of money judgments given in certain foreign states, generally states that were formerly within the British Empire. Registration is essential for recognition of the judgment and is discretionary, though it will generally be ordered absent good reason. The applicable countries are France, Belgium, Germany, Austria, Italy and the Netherlands.
It is unclear whether the bilateral treaties with these 6 countries can be treated as in full force given that they were superseded by EU regulations but now appear to be revived given the UK's withdrawal from the EU.
If there is no bilateral treaty or any other specific regime between England and the country seeking recognition of its judgment, then you need to move to Step 3.
Step 3 – check whether exclusive jurisdiction clause under the Hague Convention on Choice of Court Agreements 2005 (the “Convention”) applies.
The Convention provides for relatively straightforward enforcement of judgments in a similar, although not identical, way to the Recast Brussels Regulation.
This works only in cases of exclusive jurisdiction clauses present in contracts/agreements. Further, for the Convention to apply, the exclusive jurisdiction clause must have been concluded/included in the contract or agreement after the transition period.
The Convention does apply to non-money judgments such as a final injunction and to summary judgments.
Note: If proceedings commenced after the post-transition period but exclusive jurisdiction clause had been entered into before the end of transition period then determining a suitable regime is more complicated and we strongly advise that you seek legal advice.
If the Convention does not apply, then you need to move to Step 4.
Step 4 – apply common law rules
In the absence of any further agreement on jurisdiction and recognition of judgments and/or in the absence of an exclusive jurisdiction clause, it remains necessary to apply English common law to enforce a foreign judgment in England.
- At common law, a foreign judgment is not directly recognised in England but instead will be treated as if it creates a contract debt between the parties. In other words, the English courts treat a foreign judgment as creating a debt between the parties, rather than requiring the matter to be re-litigated on the merits.
It is important to note is that the English court will generally not “look behind the judgment” of the foreign court. The decision cannot be set aside on its merits, either of fact or of law. Even if they can be satisfied that the decision of the foreign court is wrong as a matter of law this will generally not be reviewable by the English Court.
Generally, if the English court considers the foreign judgment to be conclusive and that the foreign court had jurisdiction, it will be difficult to prevent the enforcement of the foreign judgment.
More changes to come?
The departure from the EU has meant that the recognition and enforcement of foreign judgments has, and will continue to, become even more complex. The above steps should help identify options available, but it is also worth noting that there may be more change to come. The UK applied to join the Lugano Convention in its own right with the effect from 1 January 2021 but was rejected by the European Commission on 4 May 2021. It is also worth noting the new 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters. This relatively new international convention is aimed at making it easier to enforce court judgments across jurisdictions. The UK would have to accede to the Hague Judgments Convention in its own right to be able to enjoy the benefits it offers. At the time of preparing this note, the UK has not become party to the Hague Judgments Convention, and it remains to be seen if and how long it will take for the UK to become party.
Things may therefore change further, and litigants may find themselves having to navigate complex rules and procedures to enforce. However, good, early legal advice, and having a clear idea of which regime might apply can really help. Given the complexity of this area, legal advice is highly recommended.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.