In Short
The Situation: On January 12, 2024, the United Kingdom signed up to the Hague Convention of July 2, 2019, on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters ("Hague 2019").
The Result: The United Kingdom's prospective ratification of Hague 2019 will facilitate the mutual recognition and enforcement of judgments across the world (but, in particular, in Europe).
Looking Ahead: Hague 2019 will come into effect a year after being ratified by the United Kingdom, which could be as early as 2025.
Recognition and Enforcement: A New Dawn for the United Kingdom
On January 12, 2024, the United Kingdom took the first step toward accession to a new worldwide regime for the recognition and enforcement of judgments by signing up to Hague 2019.
Hague 2019. Hague 2019 provides a global framework for the mutual recognition and enforcement of foreign judgments on civil and commercial matters. Its primary aim is to streamline the recognition and enforcement process for its member countries, saving costs through consistency and uniformity of rules, and providing greater clarity for those seeking to enforce judgments across jurisdictional boundaries.
The process for implementing Hague 2019 requires a country to: (i) first, sign up to the convention; and (ii) subsequently, ratify it through its legislative bodies. Following ratification, the relevant country will then automatically accede to Hague 2019 (i.e., the convention will come into effect for that country) and become what we refer to as a "Convention State" after a period of 12 months. Hague 2019 officially came into force on September 1, 2023, and counts all of the countries in the European Union (with the exception of Denmark) and Ukraine among its Convention States.
Significance for the United Kingdom. In short, once the United Kingdom becomes a Convention State, Hague 2019 will be by far the broadest-in-scope multilateral convention or treaty on recognition and enforcement of judgments to which the United Kingdom is a party.
The accession of the majority of EU countries as Convention States is particularly significant for the United Kingdom in a post-Brexit world, in which the United Kingdom has lost the benefits of the enforcement regimes provided by the Brussels Recast Regulation ("Brussels Recast") and the Lugano Convention (2007) in relation to proceedings issued after the end of the transition period. Prior to Brexit, Brussels Recast offered the United Kingdom a simplified procedure for the mutual recognition and enforcement of non-excluded judgments issued by the courts of any EU Member State. Further, the Lugano Convention, to which the United Kingdom was subject via its membership in the European Union, operated in a similar manner to Brussels Recast but also included Switzerland, Norway, and Iceland as members.
Following Brexit, the recognition and enforcement of English judgments in EU Member States, and vice versa, has become more complex, with parties having to navigate several different legal systems and procedural requirements. In England and Wales, this takes the form of common law rules on recognition and enforcement of judgments, which offer judgment creditors less certainty and can lead to additional costs. In order to address this issue, the United Kingdom applied to join the Lugano Convention in its own right on April 8, 2020, but its accession was blocked by the European Union in May 2021.
At present, therefore, the only enforcement treaty between the United Kingdom and the European Union is the Hague Convention of June 30, 2005, on Choice of Court Agreements ("Hague 2005"), but it is more limited in its application than Hague 2019 because it applies only to judgments deriving from claims on contracts with an exclusive jurisdiction clause. Hague 2019, therefore, should be a game changer with respect to the mutual recognition and enforcement of judgments between the United Kingdom and the European Union.
Scope of Hague 2019
There is little doubt that the primary draw for the United Kingdom's accession to Hague 2019 is to reinstate the kind of mutual recognition and enforcement regime with EU countries that was lost following Brexit. But the key question is whether Hague 2019 can go further. Can it become a global framework that governs and facilitates the recognition and enforcement of judgments worldwide?
Beyond the European Union, Ukraine acceded and became a Convention State in 2023, and Uruguay will do the same in late 2024. Russia, the United States, Costa Rica, and Israel have all signed up to Hague 2019, although their legislative bodies have not yet formally ratified it. As such, there is market optimism that the scope of Hague 2019 will expand over time.
While several commentators online are hopeful about the potential scope of Hague 2019, it is far from certain that such wider adoption will take place, with notable key jurisdictions beyond the European Union showing little sign of moving toward ratification of Hague 2019:
- The United States has signed up to Hague 2019 but not yet ratified it. At present, the U.S. government has not taken any steps to implement the convention domestically, and it may never do so. Notably, the United States signed up to Hague 2005 in 2009, but that was never sent to the Senate for ratification, possibly because judgment enforcement is a matter of state—not federal—law, which makes it very difficult to implement nationwide standards.
- Australia is not a signatory to Hague 2019, and there is no indication that the convention is on the Australian government's radar. A change in position seems likely only if a number of Australia's major regional trading partners (where the rule of law does not apply or is selectively applied) also accede.
- China: A Chinese delegation actively participated in the negotiation of Hague 2019 (for example, in relation to the anti-monopoly and intellectual property provisions of the convention), but the Chinese authorities have not given any indication that they even intend to sign, let alone ratify, it. This is likely the result of geopolitical factors and conflicts between certain Chinese laws and provisions of Hague 2019. As such, there appears to be a long way to go before China becomes a Convention State.
From the United Kingdom's current perspective, the benefit of Hague 2019 appears to be limited to the fact it counts most EU countries as members, as opposed to having a wider international impact. For the time being, therefore, it remains unclear whether Hague 2019 can become a more impactful, global framework for the mutual recognition and enforcement of judgments.
Looking Forward
As we look to the future, litigants (both current and prospective) and judgment creditors alike have a lot to be hopeful for. The United Kingdom appears to be on the cusp of acceding to the most convenient and practical multilateral enforcement regime available to it since leaving the European Union.
Now that the United Kingdom has signed up to Hague 2019, the next stage is ratification. This requires the convention to be put before both Houses of Parliament by a Minister for a period of 21 sitting days. The convention will be ratified if neither House resolves that it should not be. Following ratification, the United Kingdom will formally accede to Hague 2019 and become a Convention State after a period of 12 months.
Presently, however, there has been no indication as to when Hague 2019 will be put before Parliament to be ratified, and the looming General Election may delay things further. Only time will tell if and when the United Kingdom will ratify and subsequently accede to Hague 2019. For now, it's a waiting game.
Four Key Takeaways
- The United Kingdom signed up to Hague 2019 on January 12, 2024. The effects of the convention will come into force 12 months after it has been ratified by Parliament, and will apply only to judgments in proceedings commenced after the convention had effect in both the state in which the proceedings were issued and the state in which the judgment is to be enforced.
- Once in force, Hague 2019 will make it easier for litigants to enforce judgments against parties and assets in other Convention States, and vice versa.
- Although there is no doubt that Hague 2019 has the potential to be a significant global framework, it is just potential for the time being. Indeed, it seems doubtful that, for example, Australia, China, and the United States will become Convention States.
- The main benefit (for the United Kingdom at least) is that most EU countries are Convention States. The United Kingdom's accession to Hague 2019 will, therefore, put it in a substantially similar position, with respect to judgment enforcement, to the one it was in prior to Brexit.
