UK Signature of the 2019 Hague Convention Paves the Way for Easier Enforcement of European Judgments

A new era for the recognition and enforcement of foreign court judgments is on the horizon following the UK’s decision to join the Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the “2019 Hague Convention”).

Current enforcement regime

In a post-Brexit world, the recognition and enforcement of EU court judgments in UK courts, and conversely of UK court judgments in the EU, remains somewhat in limbo following the UK’s exit from various conventions that facilitated the cross-border application of foreign decisions.

Prior to Brexit, and during the Brexit transition period (which ran from exit day (31 January 2020) until 31 December 2020), the UK benefited from the following enforcement regimes:

1. The Brussels 1 Recast Regulation¹ - This regulation provides a set of rules for determining the correct jurisdiction in which civil and commercial matters should be heard. Broadly, it holds that a court judgment (made on 10 January 2015 onwards) in one Member State is enforceable in all other Member States without parties having to seek permission to implement it.

2. The 2007 Lugano Convention – This treaty operates between EU member states and European Free Trade Association countries (excluding Liechtenstein). It similarly governs the cross-border recognition and enforcement of court judgments in reciprocal countries. It applied to the UK during the Brexit transition period (which ended at 11pm GMT on 31 December 2020), but ceased to apply thereafter except for proceedings commenced by 31 December 2020. Since then, the UK applied to join the 2007 Lugano Convention in its own right on 8 April 2020, however the European Union blocked its accession in May 2021, and further developments appear to be at an impasse.

3. The Hague Convention of June 30, 2005, on Choice of Court Agreements ("Hague Convention") – This convention applies to all EU member states (excluding Denmark) plus Mexico, Singapore and Montenegro. It is more limited in scope since it only applies to disputes arising out of agreements containing exclusive choice of court jurisdiction clauses.

Of the three instruments above, only the last is still effective because the UK acceded to the 2005 Hague Convention in its own right on 1 January 2021. While the Brussels 1 Recast Regulation and the 2007 Lugano Convention both dealt with (a) establishing jurisdiction, and (b) matters of recognition and enforcement, the 2019 Hague Convention considers matters of recognition and enforcement only. As a result, parties must look to the 2005 Hague Convention plus the common law rules in England and Wales that address jurisdictional issues, as well as the local laws on jurisdictional matters in the country where they are seeking recognition/enforcement (of a judgment given by an English court).

2019 Hague Convention

On 12 January 2024, the UK government signed the 2019 Hague Convention, an instrument that seeks to implement a new global regime for the recognition and enforcement of judgments ensuing from civil and commercial matters. It is hoped that the 2019 Hague Convention will streamline the process for cross-border enforcement of foreign judgments, thereby simplifying the process and reducing costs.

At present, the 2019 Hague Convention operates between the EU (excluding Denmark) and Ukraine, however the Convention will soon operate on an international scale. Uruguay will accede to the treaty in October this year. It has also been signed but not yet ratified by Israel, Costa Rica, the Russian Federation, and the USA.

A government consultation concluded earlier this year that it would be in the UK’s best interest to join the 2019 Hague Convention because:

1. It would provide greater certainty to businesses and individuals subject to cross-border litigation, particularly since the Brussels 1 Recast Regulation and the 2007 Lugano Convention no longer apply to UK litigants.

2. It would encourage international trade and investment.

3. It is expected to boost the UK’s status as a global centre for dispute resolution; and

4. Unlike the 2005 Hague Convention, the 2019 Hague Convention would allow parties to agree to non-exclusive jurisdiction clauses.

The 2019 Hague Convention will be ratified after it has been put before Parliament and not received any objection for 21 sitting days. It will come into force 12 months after ratification and will only apply to judgments handed down in cases in which “proceedings were instituted” after that date. The latest development in the implementation process was the approval by the Commons Delegated Legislation Committee of the House of Commons, on 21st May 2024, of the necessary secondary regulations for amending the Civil Jurisdiction and Judgments Act 1982 to incorporate the mechanisms set out in the 2019 Hague Convention.    

As reported in our recent blog post, found here, the Civil Procedure Rule Committee has indicated that the government hopes to achieve ratification before July 2024, in which case it is hoped that the Convention will be a working instrument before early 2026.

Comment

The UK’s agreement to join the 2019 Hague Convention is positive and signals something of a return to the UK’s pre-Brexit position of being closely connected to a well-established EU enforcement regime. This should reinforce the UK’s status as a key jurisdiction for cross-border litigation.

Indeed, the geographical reach of the 2019 Hague Convention goes beyond the EU and it is intended to grow, so the scale of cross-border reciprocity under this Convention could potentially exceed previous arrangements when the UK was a member of the EU, albeit only in matters of recognition and enforcement but not for questions of jurisdiction (in respect of which it has already been noted that the Brussels 1 Recast and 2007 Lugano regimes no longer apply).

A further consequence of the 2019 Hague Convention not addressing jurisdiction is that parties will have to seek the court’s permission to serve documents out of the jurisdiction on foreign parties pursuant to Civil Procedure Rule 6 and Practice Direction 6B. These provisions include a forum conveniens test which, before Brexit, was irrelevant under Brussels 1 Recast. The application of this test to any given cross-border dispute is highly fact-specific and therefore something on which specialist advice should always be sought.