Whilst the initial focus in the process of recovering money that you’re owed is likely to be on successfully securing a judgment against the non-paying party, it inevitably follows that the process of enforcing the judgment is the next key consideration. Judgments are not enforced automatically, and if the other party refuses to pay after receiving the court order, the onus is on you to enforce the judgment.
In this guide, we will take a high-level look at how to enforce a judgment made in the Courts of England & Wales against a debtor based elsewhere, but it’s always advisable to speak with a business disputes lawyer with expertise in cross-border disputes before taking any enforcement action to ensure that all of the correct rules and options are followed, improving your chances of successfully enforcing the judgment.
Contents:
Section 1: Enforcement in Scotland & Northern Ireland
In terms of the types of civil proceedings judgments that can be enforced in the jurisdictions of Scotland and Northern Ireland, both those that are monetary and non-monetary in nature are enforceable. There are some exceptions to this, i.e., judgments relating to insolvency and title to administer estates for example.
The first step to take if you’ve successfully secured a judgment that’s enforceable in Scotland or Northern Ireland is to obtain a sealed certificate from the English or Welsh court that awarded the judgment, or a certified copy in the case of a non-monetary judgment. (So, for example, if the judgment was awarded by the County Court in Sheffield, then that’s the court you would need to contact to obtain the above.)
The next step would be to apply to the relevant court in Scotland or Northern Ireland (the specific area will depend upon where the non-paying party’s business has their registered address) to register the judgment within six months of the date of issue of the certificate or certified copy.
Once the registration mentioned above has occurred, the certificate has the same force and effect as a local judgment, and you can then determine which method of enforcement best suits your needs in that local jurisdiction.
Section 2: Enforcement in the European Union (EU) & European Free Trade Association (EFTA) states
When it comes to judgments made in the Courts of England & Wales prior to 31 December 2020, they can be enforced in EU member states under what’s known as the Recast Brussels Regulation.
Enforcement of English and Welsh judgments in EU and EFTA states in relation to proceedings instituted after 31 December 2020 is governed by The Hague Convention on Choice of Court Agreements. Whilst this area is complex, the main relevant points on this are as follows:
- The Hague Convention requires Contracting States (in other words, those who have agreed to be bound by the treaty, whether or not it has entered into force) to recognise and enforce judgments given in civil or commercial matters in other Contracting States.
- The Hague Convention applies to enforcement of English judgments in EU states where the court has been given jurisdiction under an exclusive choice of court agreement. (An agreement setting out which court will hear a dispute between the parties that have entered into the agreement. Such agreements are commonly entered into as part of a contract between the parties, alongside an applicable law clause).
- The Hague Convention does not apply in circumstances where there is no jurisdiction clause in the contract, meaning that the rules of private international law will apply instead. Additionally, it applies solely to business-to-business matters; specialist advice would need to be sought for any other type of claim.
- All EU countries are a part of the Hague Convention.
Enforcement procedure
If you’re seeking to enforce a judgment made in England or Wales in an EU or EFTA state, you must be able to produce the following:
- Complete and certified copy of the judgment
- Exclusive choice of court agreement [as above]
- Documents establishing the judgment in the state of origin
- Any other documents verifying the conditions for enforcement
The next step would be to apply for registration of the judgment, at which point the party whom the judgment is against can file an appeal against registration under the relevant grounds. The responsibility to stop the judgment from being enforced is upon them. If any appeal is unsuccessful or in the absence of one being made, the court is then obliged to register the judgment if all the correct formalities have been complied with.
The above process means that the Hague Convention has the same effect as if the judgment had been given by the enforcing court. It’s worth highlighting that reciprocal arrangements for enforcement are common between the UK and some EU and EFTA states.
Section 3: Enforcement in the rest of the world (including the United States)
If it’s the case that the Hague Convention doesn’t apply to your dispute, then you will have to rely on the bilateral arrangements in place for the reciprocal enforcement of judgments (a bilateral arrangement being the broad term for a separate deal between two countries). The UK has bilateral arrangements in place for several countries, including, for example, Australia, India and some parts of Canada.
If there is no bilateral arrangement in place with the country you are concerned with, then enforcement will be subject to national law of that state – as would be the case, for example, for enforcement in Russia, China or the US.
Enforcing UK judgments in the US
Each US state has its own statutes under the federal law system. These statutory rules set out the procedure for enforcement. Some states view a foreign money judgment as conclusive between the parties and require only that the judgment be filed with the clerk of the court, while others require fresh proceedings to be commenced – hence the need to check the rules of the particular state in question.
However, the majority of US states have adopted what’s known collectively as the Recognition Acts. In summary, the effect of these Acts is that a judgment will be recognised by a state provided it is final and conclusive and grants or denies recovery of a sum of money.
Section 4: Overall practical considerations
There are a few practical considerations to outline in summary form that are worth bearing in mind if you’re thinking about cross-border enforcement. These are that:
- The court passing the judgment must have had jurisdiction to do so. This is determined by the rules of the enforcing state. In the common law countries, jurisdiction must be based on common law or the parties’ consent.
- The judgment must be final (i.e. not subject to an appeal).
- Certain kinds of money judgment (such as taxes) may be excluded.
- The enforcing court cannot review the merits of the case.
In terms of potential barriers to the recognition and/or enforcement of judgments, these could be that:
- The defendant did not have proper notice of the proceedings in the originating court.
- The judgment was obtained by fraud.
- Public policy: This may include lack of due process, procedural unfairness, or breach of natural justice.
- Inconsistency with a judgment given by a court of the enforcing state in a dispute between the same parties.
- In some civil law jurisdictions, including Germany, China, Japan and South Korea, reciprocity is a requirement for recognition and enforcement by judicial process. It does not appear to be a requirement in Brazil, France or the Netherlands, or in the common law countries.
Lastly, there are some common procedural themes to mention:
- Statutes of limitation may apply to the enforcement of judgments. Time limits can range from two years (for example, in Canada or China) to 20 years (New York State).
- Mandatory documents usually include a certified copy of the judgment, a sworn translation and documents establishing that the judgment is enforceable in the state of origin.
- In common law jurisdictions, a foreign judgment creditor may be entitled to summary judgment without a full trial.
- Freezing injunctions to safeguard assets to meet the judgment are available in some jurisdictions.
Summary
As illustrated by this article, cross-border enforcement is a specialised and technically niche area that is littered with nuances specific to the country within which you wish to enforce your judgment. Obtaining the right advice from a business disputes lawyer with a track record of experience in this area at an early stage minimises the risk of going down potentially costly false avenues and can increase your prospects of successful enforcement, thereby recovering what is rightfully owed to you and your company.
