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  • Print publication year: 2021
  • Online publication date: May 2021

Making Cross-Border Enforcement More Effective for Creditors

Summary

INTRODUCTION

The European Union (EU) has worked on making cross-border enforcement more effective for more than 50 years. The process initially focused on the circulation of foreign judgments rendered in civil and commercial matters within the European Communities and the European Free Trade Association. At the turn of the century, as the EU received a broader competence in the field, the EU lawmaker extended the scope of this initial policy to other subject matters, in particular in family law, but also endorsed a new policy of establishing harmonised EU procedures for the purpose of facilitating cross-border recovery of certain categories of claims (uncontested claims and small claims).

The purpose of this contribution is to assess these policies and explore whether cross-border enforcement of monetary judgments could be made (even) more effective for creditors. Obviously, the other side of the coin should not be neglected, and another contribution will discuss whether the rights of debtors are adequately preserved under the current EU regulations.

REGULATIONS FACILITATING THE CIRCULATION OF JUDGMENTS

The enforcement of foreign judgments has traditionally been more difficult than the enforcement of local judgments for four reasons.

The first reason is that states do not allow giving effect to foreign norms without first verifying that these norms meet certain special requirements. For foreign judgments, these requirements have traditionally included verifying the jurisdiction of the foreign court and that the judgment comports with public policy. Federal ensembles typically work on simplifying those requirements in order to ensure that judgments can circulate as easily as possible between the various states belonging to the federal ensemble. In the United States (US), the public policy exception was considered incompatible with the Full Faith and Credit Clause of the US Constitution, but the verification of the jurisdiction of the foreign court remains. In the EU, it was an early achievement of the 1968 Brussels Convention to suppress the verification of the jurisdiction of the foreign court in most cases, but three requirements remain: the public policy exception, a special rule for default judgments and two rules concerned with irreconcilable judgments.

The second reason why the enforcement of foreign judgments has traditionally been more difficult than the enforcement of local judgments is that not only do states verify that foreign judgments meet certain requirements, but they also typically impose that this is to be done in a preliminary procedure.

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