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8 February 2023
Disputes Quick Read – 41 of 105 Insights
Disputes Quick Read: Why the UK should join the Hague Judgments Convention 2019
- Quick read
What is it?
The Hague Judgments Convention 2019 is an international convention that aims to create a common framework for cross-border recognition and enforcement of court judgments in civil or commercial matters between contracting states. It was concluded in 2019 and has been acceded to by 26 of the 27 EU member states (excluding Denmark) and ratified by Ukraine. It will enter into force in all these jurisdictions on 1 September 2023, a year after accession/ratification. Several other states have signed it but not ratified it, including the United States.
The UK has not signed it. A consultation on the issue of whether it should join has been launched and closes today.
What are the 2019 Hague Convention advantages?
- If more states ratify it then it has the potential to provide a global framework for the recognition and enforcement of court judgments, reducing the costs and complexities of the current cross-border enforcement process. Just as the New York Convention has made enforcement of arbitral awards far easier in the over 170 contracting states to it, and is a big appeal factor of arbitration, so this has the potential to introduce something (somewhat) similar for court judgments.
- It applies to judgments where there is a non-exclusive jurisdiction clause, including asymmetrical jurisdiction clauses, and so is broader in scope than the 2005 Hague Convention on Choice of Court Agreements (to which the UK has already acceded). It also applies to a wider range of disputes. It therefore provides for a more straightforward recognition and enforcement regime for that wider range of disputes.
- While of wider application than the 2005 Hague Convention, certain matters are still excluded, including disputes involving insolvency, intellectual property and certain antitrust matters.
- It does not address jurisdiction at all. This increases the risk of parallel proceedings in different jurisdictions when recognition or enforcement under the 2019 Hague Convention could be postponed or refused. Work has started on a separate convention to deal with jurisdiction.
So why does it matter?
Following the UK's exit from the EU and the end of the transition period, there is a significant gap in the legal framework for the reciprocal recognition and enforcement of judgments between the UK and the EU. Currently, where the 2005 Hague Convention does not apply, the position reverts to domestic law rules and (potentially) any separate bilateral treaties. In practice this means a party wishing to enforce either a judgment of the English and Welsh courts in an EU member state, or a judgment of the courts of an EU member state in England and Wales, will likely need to commence new proceedings (where they wish to enforce) which takes time and increases costs.
The 2019 Hague Convention would help to fill the gap. It is not a perfect solution. It does not replicate the scope of the legal framework that applied before the UK left the EU: the Brussels Regime and the Lugano Convention. However, since the UK has been unable to join the Lugano Convention, for now, this looks to be the next best thing.
If the UK does ratify the 2019 Hague Convention, then it will only take effect a year after ratification and has no retroactive effect. It would, therefore, only apply to proceedings which are started after it comes into force, so earliest would be proceedings started in 2024.
Overall, however, given that it looks like we will have to accept a patchwork of regimes following Brexit, this is a welcome start to help fill the gap, to give a boost to English and Welsh courts for cross-border matters and a possible step to an even more global framework.
We will report on the Ministry of Justice's report when it is published later this year.
If you would like to know more, please reach out to a member of our Disputes & Investigations team.
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