Towards the end of 2023, the UK Government announced its decision, following a consultation, that it will sign the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the “2019 Hague Convention”) “as soon as practicable”. We consider why this is important to parties litigating in the English courts.
Following Brexit, the rules for enforcing English judgments in EU and European Free Trade Association ("EFTA") states changed in respect of proceedings issued after the expiry of the transition period on 31 December 2020.
The background
Prior to the exit of the UK from the EU and the expiry of the transition period, English judgments could be enforced in EU member states (subject to some exceptions) pursuant to instruments including The Recast Brussels Regulation and The 2001 Brussels Regulation, and could be enforced in certain EFTA states pursuant to the 2007 Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the “2007 Lugano Convention”).
Thereafter, these regimes generally ceased to apply to the enforcement of English judgments in EU and EFTA states. The UK independently became a contracting state to the Hague Convention of 30 June 2005 on Choice of Court Agreements (the “2005 Hague Convention”), which provides a framework of rules between contracting states including in relation to the enforcement of a judgment given by a court of a contracting state designated in an exclusive jurisdiction agreement. However, to date, the UK's request to independently join the 2007 Lugano Convention to facilitate enforcement in states contracting to that Convention is still pending.
Accordingly, the enforcement of English judgments in EU and EFTA states is currently governed by several regimes: the 2005 Hague Convention which, as set out above, is limited; various reciprocal discrete enforcement arrangements which the UK may have in place; and national rules of the country where enforcement is sought. This serves to increase complexity and uncertainty in the enforcement process.
The 2019 Hague Convention
The 2019 Hague Convention entered into force on 1 September 2023. According to the status table in respect of the Convention, the EU (except Denmark) has acceded to the Convention, which has also been ratified by Ukraine and Uruguay. Other countries (Costa Rica, Israel, Montenegro, North Macedonia, the Russian Federation and the USA) have signed the Convention but are yet to ratify it.
The aim of the 2019 Hague Convention is to “promote effective access to justice for all and to facilitate rule-based multilateral trade and investment, and mobility, through judicial co-operation” and to enhance such co-operation “through the creation of a uniform set of core rules on recognition and enforcement of foreign judgments in civil or commercial matters, to facilitate the effective recognition and enforcement of such judgments”.
Subject to some exclusions, the 2019 Hague Convention requires contracting states to recognise and enforce civil and commercial judgments given by a court of another contracting state.
The consultation
The UK Government launched a consultation on the UK becoming a contracting party to the 2019 Hague Convention. It was recognised that the Convention seeks to “provide a uniform approach to increase legal certainty”, which would benefit businesses and consumers conducting transactions and working across borders and would provide certainty in respect of the enforcement of English judgments (and subject to necessary formalities in respect of all UK jurisdictions, UK judgments) overseas.
Although the Government acknowledged that some downsides of joining the 2019 Hague Convention were flagged in the consultation responses, the overwhelming response was that the benefits outweigh the downsides and the UK should join the Convention.
Next steps and comment
The Government has confirmed that it will move to sign the 2019 Hague Convention as soon as practicable. The Convention will then need to be ratified by the UK and the Convention will have effect 12 months thereafter (in accordance with its terms).
This is a welcome development for claimants litigating in the UK. It will make the enforcement of judgments easier in the EU and beyond, streamlining processes and making the prospect of enforcement of an English judgment abroad more certain and efficient. It will be particularly useful for businesses operating across borders and/or if a judgment debtor has significant assets overseas.
As recognised in our recent article, “England and Wales - the place to be for dispute resolution”, the London Commercial Courts are venues of choice compared to other jurisdictions. This development will continue to promote the UK as the preferred forum for dispute resolution and will put the UK judiciary at the forefront of developing case law relating to the workings of the 2019 Hague Convention.
Contact
For queries relating to complex cross-border, multi-jurisdictional disputes and related issues, including enforcement overseas, please contact Fraser Mitchell, partner in our Dispute Resolution team.
The UK joining Hague 2019 would provide a set of common rules for the recognition and enforcement of civil and commercial judgments between the UK and the other Contracting Parties, including the EU. The Government believes that the Convention would therefore benefit both businesses and consumers operating and living across borders, between the UK and other countries. It would provide assurance that UK judgments in scope will be recognised and enforced in current and future Contracting Parties to the Convention, and vice versa, which will in turn encourage trade and investment.
unknownx500
