Litigation, Enforcement

Enforcement Post Brexit
 
In the UK it is suggested that EU Regulations can be transposed into domestic law via the so-called “Great Repeal Bill” or The European Union (withdrawal) Bill. English courts will continue to apply an essentially similar regime post-Brexit. This would be applicable for the Rome I and II Regulations. In contrast, the Brussels I Recast Regulation depends upon reciprocity and sincere cooperation between member states. If the UK is not a member of the agreed scheme then transposing the Brussels I rules into UK domestic law is of no assistance. The ease of recognition and enforcement of judgments under the Brussels I (Recast) would be lost. It is possible that superseded international conventions, such as the Brussels Convention 1968 and the Lugano Convention 1988, might spring back to life and that also old judgment recognition conventions may revive in significance after Brexit. However, we encourage our clients to commence cross-border enforcement proceedings between the UK and Germany, as soon as possible, in order to benefit from the great degree of certainty that the Brussels I (Recast) Regulation provides.

 


 

The European order for payment

 

Since 12 December 2008 a European order for payment procedure ((EG) No. 1896/2006) is placed at disposal in the member states of the European Union – with exception of Denmark. This procedure leads in cross-border cases in civil and commercial matters to a cost-efficient and fast enforceable title, and applies only to the collection of pecuniary claims for a specific amount that have fallen due at the time when the application for a European order for payment is submitted.

 

The enforcement is possible in the origin member state that means in the state in which the payment order was obtained, as well as in every other member state of the European Union – with the exception of Denmark. It might only be that it has to be translated in the appropriate language.

 


 

Introducing third parties into active proceedings (Third-party Notice)

Where claims are connected, the question may arise whether a party involved will give third-party notice of the claim to a third party. Third-party notice is not known in England in this form. Therefore, separate proceedings must be initiated against the third party during the active proceedings. The proceedings are connected, but the case must be examined before it is opened as with a normal claim.

If the party involved in the active proceedings wishes to involve the third party in the proceedings and has a contractual connection to this third party, whereby a clause governing jurisdiction has been agreed that does not make reference to England and is exclusive, the question arises whether the third party can still be included in the proceedings as per the EC Regulation 1215/2012 (EC Regulation 44/2001 was in effect until 9 January 2015) based on the close connection.

The English courts have refuted this and given more weight to the individual party’s wishes from the agreement on jurisdiction than the EC law (Hough v P&O Containers Ltd [1999] QB 8334, [1998] 2 All ER 978). The result may be questionable but the English courts have not yet decided otherwise and will therefore decide in this way in the future. This means, of course, that the desired legislation of the EC Regulation, which was intended to prevent two courts in different jurisdictions making contradictory decisions in connected cases, is entirely disregarded.

 


 

Enforcement of arbitration awards in England

Arbitration and the enforcement of arbitration awards are regulated by the Arbitration Act 1996 in England.

An arbitration award given in England will be declared enforceable after the appropriate application is made to the Court according to Art. 66 Arbitration Act 1996.

Foreign arbitration awards made in a country that, like England, is a contracted member state of the New York Convention 1958 on the Recognition and Enforcement of foreign arbitration awards are always declared enforceable in England. The precise procedure for declaring enforceability by English courts (County Court or High Court) is laid out in Art. 100 of the Arbitration Act 1996. It is a relatively short, uncomplicated process. Recognising a foreign arbitration award for enforcement can only be refused in special cases (see Art. 103 Arbitration Act). If the English court recognises the enforcement of the arbitration award, enforcement will proceed exactly as with a judgment pronounced and enforceable in England.

Germany, Austria and Switzerland are among the member states of the New York Convention. Arbitration awards made in these countries, as well as arbitration awards from the Court of Arbitration for Sport (CAS) based in Switzerland, are therefore always recognised as enforceable if the formal process is adhered to.

 


 

Enforcement of German judgments in England

German judgments against defendants resident in England can be enforced. Enforcement is carried out with a German judgment registered with the High Court of Justice or a so-called European Enforcement Order (confirmation of a European enforcement order) that is issued at the request of German courts.

 


 

Payment of costs in civil proceedings – England makes an exception here too

While on the European mainland the principle governing costs states that the losing party at least receives reimbursement of the court and lawyer’s costs calculated by means of a table of costs, the amount of reimbursement of costs in England and Wales depends principally on the value of the claim. In “small claims track” proceedings with a value of up to £10,000, involving the enforcement of payments, there is hardly any reimbursement of the solicitor’s costs. In claims for personal injury, this limit is just £1,000. In such abbreviated proceedings English civil procedure is designed to keep the costs as low as possible. For claims valued at more than this, up to £25,000, there is the “fast-track” process. Reimbursement of costs is a mixture of set costs for certain parts of the proceedings and costs set according to expenses, similar to the “multi-track” proceedings (see below).

In cases for claims valued at more than £25,000 the “multi-track” method is applied.  Reimbursement of costs is most complicated in this process. A bill of costs is issued for the reimbursement of costs. This is done by professionals called costs draftsmen. Their work can cost from a few hundred to a few thousand pounds, which in theory are to be paid in full, but in practice only partially, by the losing party. 

The amount of costs to be reimbursed is at the Court’s discretion, based on what is considered fair and reasonable. In general it can be said that even if a claim is granted in full, one will only receive reimbursement of 70% of one’s own solicitor’s costs from the other side, and usually with a delay of 1 to 1½ years.

This is only a summary. The details are contained in a comprehensive code of practice that even sets out details on each section of an invoice.