One of the central functions of a contract is to be able to enforce its obligations. Within the EU, under the new Recast Brussels Regulation (the Regulation), it is now easier, quicker and cheaper to enforce EU judgments within England and Wales.
The Regulation applies to all proceedings instituted on or after 10 January 2015 within the EU. This article looks at the key changes introduced and key points to be aware of when seeking to enforce.
The main change in relation to enforcement is the abolition of the requirement for a declaration of enforceability. Previously, this declaration had to be obtained before any enforcement procedure could commence. Now, all a judgment creditor needs to do is to serve the EU judgment on the judgment debtor along with a translation (if requested) and a certificate from the original court (a simple form set out in Annex 1 of the Recast Brussels Regulation). The judgment can then be enforced as if it were an English judgment, using all the usual enforcement procedures available (including third party debt orders and charging orders over assets). The new procedure is set out in Articles 39 to 44 and is replicated in the civil procedure rules of England & Wales at 74.4A and 74.9.
Challenges to enforcement
The Regulation (Article 45) provides very limited grounds to challenge the enforcement of an EU judgment.
Generally, the enforcing court cannot look into the underlying merits or jurisdiction of the original court.
Its ability to refuse or stay enforcement is restricted to the following grounds:
1. Public policy - this only applies to exceptional cases. To fall within this exception, enforcement would need to infringe a 'fundamental principle' of the legal order of the enforcing state. Examples cited by the English courts of such a fundamental principle include contracts involving trading with the enemy or in restraint of trade.
2. Default judgments - enforcement can be refused if a default judgment has been obtained and the defendant was not served with proceedings in a way which enabled him to arrange a defence unless the defendant failed to challenge (i.e. appeal) the default judgment within the relevant time. This key provision was recently examined by the English High Court in the case of Reeve v Plummer  EWHC 4695 (QB). Here, the court held that even if service complied with all relevant rules of service, it might still be insufficient to allow a defendant to arrange its defence. To benefit from this provision, the defendant must have appealed the default judgment within time. In Reeve v Plummer, the courts refused a stay of enforcement against two defendants who had not appealed the Belgian default judgments within time but allowed a stay of enforcement against the one defendant who had lodged such an appeal.
3. Irreconcilability with another judgment - the enforcing court can refuse to recognise a judgment if it is irreconcilable with a judgment given between the same parties in the enforcing member state. For example, if an arbitral award in the enforcing state is registered as a judgment and a party then seeks to enforce a subsequent conflicting judgment from another EU member state, the enforcing court could refuse recognition. Given the restrictions within the Recast Brussels Regulation on competing judgments from member states being issued, the scope for this to arise is hopefully limited. The arbitration example is, of course, possible as arbitration is outside of the scope of the Brussels Recast Regulation.
4. There are other, very limited jurisdiction grounds relating to specific areas such as insurance, consumer and employee issues.
The ease of recognition and enforceability within the EU has been greatly increased. The following will assist parties to capitalise on this.
- To take advantage of the new rules, parties must ensure that EU courts have jurisdiction over any disputes. Review jurisdiction clauses in agreements to ensure this is the case
- In addition, if is likely that enforcement of a foreign judgment will be required in England and Wales, it is important to ensure correct service pursuant to the EU Service Regulation
- Finally, if a judgment is obtained in default, be sure to check that in addition to compliance with the EU Service Regulation, the defendant has actually been made aware of the proceedings in such a way as to allow him to arrange a defence. Failure to comply with this additional step may lead to a delay or refusal to enforce any judgment obtained
If in doubt, seek legal advice at an early stage.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.