With the referendum just a week away, there is much discussion on the potential economic impact of remaining and leaving.

The truth of the matter is that no one actually knows exactly what will happen. If the UK does decide to leave, there are a number of questions that will need to be addressed in terms of civil enforcement between the UK and other countries.

Company Law

There is a large body of EU legislation adopted into English Company Law – if there is a Brexit, would we continue to abide by that legislation or would we change it? If we change it, how long would that process of disengagement take? It could easily take a decade, which could cause confusion for UK businesses while that process is ongoing.

UK business owners would need to be vigilant to ensure that their contract terms and conditions were kept up-to-date with changes and be aware of how UK judgments could be enforced in the EU.

Enforcement

In terms of post-Brexit enforcement, it is unlikely that there would be significant changes for creditors whose debtor is based in England and Wales. This may well be quite different for cases where the debtor is based in the EU.

Enforcement of a judgment against a debtor based in the EU is currently very straightforward. Enforcement used to be carried out under a EEO (European Enforcement Order), which allows the court to treat the judgment as if it had been issued in their jurisdiction. Since January 2015, an EEO is no longer required.

If the UK were to leave the EU, we would need to renegotiate agreements for the enforcement of judgments. We might be able to adopt existing agreements such as the Lugano Convention, which is used by non-EU countries such as Norway and Switzerland. Or, we may develop bilateral agreements, as we already have with many other non-EU countries.

In the short term, enforcement of judgments against debtors outside the UK would be likely to take longer than presently.

In conclusion

The Brexit debate is far larger than just the question of judgment enforcement. For those companies trading regularly with other EU nations, this will be a question they may certainly want to take into account.

David Asker

David is an authorised High Court Enforcement Officer and our Director of Corporate Governance

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