Member Article

While enforcing US judgments in the UK presents several challenges, recent case law offers valuable guidance. By taking proactive steps and seeking expert legal advice, litigants can improve their chances of successfully enforcing US judgments in the UK.

Improving the Chances of Successfully Enforcing US Judgments in England: Insights from Recent Case Law

Enforcing US court judgments over assets in England can be a complex and challenging process due to the lack of a reciprocal enforcement agreement between the two countries. However, recent case law, including Shovlin v Careless and others (2024) EWHC 324 (KB), provides valuable insights into the legal landscape and offers practical guidance for litigants seeking to improve their chances of successful enforcement.

Key Legal Principles from Recent Case Law

Recent case law highlights several critical elements required for the enforcement of US judgments under English common law. The case law emphasises the necessity for the judgment to be:

• Final and Conclusive: The judgment must not be subject to further appeal in the US.
• For a Definite Sum of Money: Only monetary judgments are enforceable; non-monetary relief is not.
• Jurisdictionally Sound: The US court must have had proper jurisdiction over the defendant according to English private international law.
• Free from Fraud: The judgment must not have been obtained by fraud.
• Consistent with Public Policy: The judgment must not be contrary to English public policy.
• Obtained with Natural Justice: The defendant must have had a fair opportunity to present their case.

In Shovlin v Careless and others (2024), the High Court denied enforcement of a US judgment due to concerns about the competency of the foreign court’s jurisdiction.

The key issue was whether the defendants had voluntarily submitted to the jurisdiction of the Californian Court and so whether the judgment met the test of being “jurisdictionally sound”. When the claimant sought to enforce the judgment in England, the defendants contested their ability to do so in the English Court by challenging the jurisdiction of the Californian Court in reaching its judgment. The defendants maintained that they only made a special appearance to contest jurisdiction, not a general appearance that would imply submission. The Court examined whether the defendants' actions, particularly at a "Prove Up Hearing," constituted voluntary submission to the Californian Court's jurisdiction. The claimant argued that the defendants' participation implied submission, but the Court found otherwise. The Court concluded that the defendants did not voluntarily submit to the jurisdiction of the Californian Court. As a result, the Californian judgment could not be enforced in England.

Importance of Recent Case Law

The case law is significant as it provides clarity on the legal requirements and potential challenges involved in enforcing US judgments in England. The case law highlights the importance of jurisdiction, finality, and compliance with public policy and natural justice. By understanding and addressing these factors, litigants can better navigate the enforcement process and increase their chances of success.

Practical Tips for Improving Chances of Enforcement

To navigate the complexities of enforcing US judgments in England and improve the chances of success, litigants can take several proactive steps:

1. Include Clear Jurisdiction Clauses: Ensure that contracts include clear jurisdiction clauses specifying which courts will have authority in case of disputes. This can help avoid jurisdictional challenges when enforcing in the UK Courts later.
2. Seek Expert Legal Advice: Obtain expert legal advice from solicitors experienced in cross-border enforcement. They can guide you through the complexities and help prepare a strong case including ensuring that there is a sound basis for US jurisdiction to then use that US judgment to enforce in England.
3. Maintain Thorough Documentation: Keep thorough and accurate documentation of the original proceedings, including evidence that the US court had proper jurisdiction and that the judgment is final and conclusive.
4. Conduct Asset Tracing: Identify the debtor’s assets in the UK through asset tracing. Knowing where the assets are located can streamline the enforcement process.
5. Apply for Interim Measures: Consider applying for interim measures, such as freezing orders, to prevent the debtor from dissipating assets before enforcement proceedings begin.
6. Monitor Developments in International Law: Stay informed about developments regarding the Hague Convention on the Recognition and Enforcement of Foreign Judgments. Once ratified, it could simplify the enforcement process between the US and the UK.
7. Act Promptly: Delays in initiating enforcement proceedings can complicate the process. It’s important to act promptly to avoid issues related to the statute of limitations.

In conclusion, while enforcing US judgments in England presents several challenges, recent case law offers valuable guidance. By taking proactive steps and seeking expert legal advice, litigants can improve their chances of successfully enforcing US judgments in England.

 

Link to article