Enforcement and recognition of court judgments after Brexit
Right now, enforcement of judgments from civil and commercial claims are governed by the Brussels I Bis Regulation. This means that judgments made by Member State courts should be easily recognizable and enforceable in other Member States. After Brexit, the United Kingdom will become a third country such as Australia and China. What happens to the recognition and enforceability of court judgments from EU Member States in the UK if the Brussels I Bis Regulation is no longer applicable?
Enforcement and recognition ‘no deal’ scenario
Currently, the UK and the EU are negotiating a 21-month transition period. Based on the current Withdrawal Agreement, the Brussels Regulation would continue to apply during this period. However, in a no deal scenario this will (probably) not be the case. There are a few possibilities regarding the enforcement and recognition of foreign court judgments post-Brexit:
- The UK remaining in the current Brussels Regulation regime
- Ratification of The Hague Choice of Courts Convention
- Entering the Lugano Convention
- Domestic law
The UK remaining in the current Brussels Regulation regime
Now, under the Brussels I Bis Regulation, a judgment given in a Member State is recognized and directly enforceable in all other Member States without requiring any special procedure or declaration of enforceability. It has not been ruled out that the UK might maintain the Brussels Regulation regime.
Ratification of The Hague Choice of Courts Convention
This convention provides rules to ensure the effectiveness of exclusive choice of court agreements between parties with international commercial transactions. The EU Member States, Mexico and Singapore are signatories to The Hague Convention and therefore to The Hague Convention on Choice of Court Agreements 2005. The Hague Convention on Choice of Court Agreements 2005 states that:
“where there is an exclusive jurisdiction agreement between the parties to the dispute, all the contracting states are required to recognize and enforce any judgment made by the specified court.”
The membership to this convention will cease to apply to the UK on 29th March 2019. However, the UK government has stated that they want to accede to the convention themselves. If they accede to the convention, the UK may rely on this regime for the recognition of court judgments. This approach is, however, limited. Firstly, The Hague Choice of Courts Convention only applies to agreements where an exclusive jurisdiction clause exists. Secondly, as of right now it is not clear if The Hague Choice of Courts Convention, would apply to jurisdiction clauses entered into before the Convention came into force with the UK as an independent signatory.
Entering the Lugano Convention
This convention deals with the jurisdiction, the recognition and enforcement of court judgments between the UK, Iceland, Norway and Switzerland; the UK is aiming to become a party to the Lugano Convention after 29th March 2019. However, the UK cannot simply accede to Lugano unilaterally nor immediately after leaving the EU. Instead, the UK will need to be invited by one of the participating states.
There is also the possibility of including the enforcement and recognition of foreign judgments in domestic law. However, this does not ensure reciprocity now that other Member States are not obligated to recognize and enforce English judgments in their courts. Businesses will have to rely on domestic recognition regimes in the UK and the Member States. It would be unlikely that this would impose major burdens to the enforcement of judgments, but it may be more difficult and costlier.
As of right now, nothing surrounding Brexit can be determined with certainty. It remains to be seen how the UK will deal with the recognition and enforcement of foreign judgments. At the very least, it seems that the UK is going to ratify The Hague Choice of Courts Convention. Therefore, we recommend you include a clause in your commercial agreements where you make a choice of court and a choice of law. We can help with drafting such clauses. Contact us today to find out more.
Want to know more about what clauses you should include in your contracts due to Brexit? Read our blog ‘Preparations for Brexit: commercial contracts and Brexit clauses’.
Do you have any questions regarding procedures or commercial agreements post-Brexit or would you like further clarification? Contact us today. Our specialists can advise you about the enforcement of court decisions in the UK, about proceedings and about commercial agreements surrounding Brexit.