Deal or No Deal: Now is the time to enforce judgments from EU Member States
Brexit day on 29 March 2019 is fast approaching and the Government is yet to agree a deal. A 'no deal' Brexit is becoming a genuine possibility. If it becomes the reality, there will be stark implications for individuals and business seeking to enforce judgments from EU Member States in the UK following successful civil claims. At this time, it is difficult to predict what the exact impact on enforcement proceedings will be as, like many other issues in the event of a no-deal Brexit, the future is uncertain.
While the UK remains in the EU, it is part of a system that facilitates reciprocal enforcement of judgments, operating across all EU member states. This is facilitated by the Recast Brussels Regulation. Both the UK and the EU have intimated their aspiration that this coherent regime of reciprocal enforcement will continue to flow openly between the UK and Member States post-Brexit. However there is no certainty that this will be the case.
In the event of a no-deal Brexit, all reciprocal enforcement agreements in place between the UK and EU would cease. There is currently no agreed EU framework in place which would provide for continued judicial cooperation between UK and EU Member States post-Brexit. Furthermore, it is more than likely that the Government will repeal most of the existing judicial cooperation rules. This would result in a reliance on our domestic and statutory rules which are applicable in relation to enforcement against individuals and businesses domiciled in non-EU Member States.
Uncertainty remains…
Moving forward, individuals and businesses will need to carefully consider how our domestic and statutory rules interact with the relevant EU Member States' national laws so as to establish the correct procedure for enforcing judgments in cross-border disputes. There is a clear risk that certain countries may not recognise judgments from the UK courts, despite parties having incurred substantial expense obtaining judgment, and vice-versa the UK courts may not be in a position to recognise European judgments. Application of these differing rules is likely to make enforcement of judgments across the EU a slower, more expensive and uncertain process.
Taking proactive steps now to avoid the ambiguity of the post-Brexit landscape will pay off in the long term.
So what can you do now?
Parties who need to enforce judgments obtained in a different EU Member State would be wise to at least effect a registration of the judgment in the UK courts before 29 March to take advantage of the automatic recognition and enforcement mechanism currently accessible while the UK still has EU membership.
This is a highly time sensitive issue that, if not considered seriously, could cost individuals and businesses further expense in time and money to enforce a judgment that they are entitled to.