Debt Collection-Enforcement of foreign Judgements

The Judgements of foreign courts in countries which are not party to any international Convention for the mutual recognition of court judgements, to which Ireland is also a party, are not automatically enforceable under Irish law. In many cases new proceedings before the competent Irish court will have to be issued and served by the claimant on the respondent and the claim will have to be proven. The Convention within the European Union dating from 1968, known as the Brussels Convention, provides for the jurisdiction, recognition and enforcement of Judgements in civil and commercial matters. The new Brussels I Regulation (Council Regulation (EC) No 44/2001 of 22/12/00 has been implemented into Irish law with effect from 01/03/02.

The Brussels I Regulation (Council Regulation (EC) No 44/2001 of 22/12/00 continues to facilitate the enforcement of Judgments of courts of the EU and the Annex V certification procedure is simplifying the application to the Master of the Irish High Court. However, it is still more cost effective and quicker to commence proceedings in Ireland rather than to enforce a foreign court Judgment here.

Below are set out some FAQ’s in relation to debt collection procedures in Ireland and the enforcement in Ireland of foreign Judgements using the Brussels convention procedure:

A. Does your country recognise Judgements rendered by foreign courts and does it permit the enforcement of such Judgements?
Yes. The Brussels Convention of 1968 was implemented in Ireland by the Enforcement of Judgements (European Communities) Act 1988. This was replaced by the Enforcement of Judgements (European Communities) Act 1998, which is now replaced by The European Communities (Civil & Commercial Judgements) Regulation 2002.

B. How does the foreign creditor pursue enforcement proceedings in Ireland? What documents does the creditor submit?
The best practice is for the creditor’s lawyers to consult lawyers in Ireland. The principal issue of proof which has to be established is that all documents have been properly served upon the debtor. These would include the Originating Summons and all Court Orders including Orders for Costs which are the subject matter of the enforcement procedures. Proper service of documents is regarded very closely by the Irish courts. Proper service is service according to the law of the country in which the foreign court is located. Sometimes the Irish courts will have an involvement in arranging for the service of the foreign court documents upon the debtor resident in Ireland. This will arise where the foreign creditor decides to effect service using the procedures of the Hague Convention on the service abroad of judicial and extra-judicial documents. The list of documents which the creditor will have to submit will differ from case to case. In general terms they will include the foreign Court Orders and an English translation. The Orders will normally have to be marked as being valid and enforceable. The fact that the Orders have been served together with the details of service will normally be endorsed on the documents.

C. How high are court costs and solicitors’ fees for principal proceedings and enforcement proceedings in Ireland?
Solicitors’ fees are a matter of contract. They are not determined by legislation. Usually a solicitor will measure his fees by reference to the time expended on the matter, the skill and responsibility involved and any specialised knowledge given or implied, the complexity, importance or difficulty and urgency of the questions raised, the amount of value of any money or property involved, the number and importance of documents perused and the place where and the circumstances and language in which the business or any part of it is transacted. These are all matters which we refer to when agreeing our fees with our client. They are the matters to which the court will have regard when deciding invoice disputes between solicitor and client. The court fees are fixed and determined by public law and there is stamp duty payable on the court documents which changes frequently.

D. Who is charged with the solicitors’ fees and court costs? Is the party which loses the case obliged to pay the costs?
The foreign court will have decided all issues of fees incurred by the creditor in bringing his claim in the foreign court against the debtor who is now resident in Ireland. It is possible as part of the Enforcement Order application to include an Enforcement Order to recover the foreign costs incurred. Interest on those costs can also be secured by way of Enforcement Order. The costs which the creditor will incur in appointing a solicitor in Ireland to obtain an Enforcement Order in Ireland will normally be sought by way of Order for Costs by the Irish solicitor from the court. The court has discretion on all questions of costs. Normally the court will order the debtor to pay the costs of the application to the court. Applications to the Irish High Court for an Order of Enforcement are made ex parte, that is, without any notice to the debtor. There is therefore no issue as to whether or not the debtor will lose the case. The debtor has already lost the case when the proceedings before the foreign court were taken and the foreign court made its Order.

E. Who is in charge of the enforcement costs?
The costs of enforcement in practice will normally be paid by the creditor although the creditor has an entitlement to recover those costs from the debtor. Certain costs, such as Sheriff’s costs, can be recovered from the Judgement debtor as a matter of law.

F. How long do the principal proceedings take?
The application for an Order of Enforcement of a foreign Judgement will take generally about two months to process from the date of first being instructed to the date of taking up the Order. The length of time will differ from case to case.

G. Is there any possibility for summary proceedings to collect debts?
Debt collection generally is by way of court proceedings. If those proceedings are not defended then a Judgement can be obtained by summary application.

H. How long do recognition and enforcement proceedings take?
The creditor should budget two months from the date of instructing the Irish solicitor to the date of taking up the Judgement. The creditor should budget a further 2 – 3 months for the enforcement procedures bearing in mind that the debtor has one month within which to file an appeal from the date of service of the Enforcement Order upon him, pending which the enforceability of the Order will normally be stayed.

I. What kinds of enforcement methods exist? What types of enforcement methods are preferred?
The method of enforcement chosen will depend on the circumstances of each case. It will be dependent, for example, upon whether the debtor is an individual or a company. The range of enforcement options include:

* the bankruptcy of the individual debtor
* the liquidation of the corporation debtor
* the execution of the Judgement by the court appointed Sheriff
* the publication of the Judgement in trade journals
* the registration of the Judgement as a Judgement Mortgage

J. How long do the enforcement proceedings take?
This will depend on the enforcement procedure selected. Liquidation may take many months, bankruptcy may take years.

K. What can the creditor do if enforcement remains fruitless?
In most cases the creditor will write the debt off. The Judgement will remain valid for twelve years and it can be renewed.

L. What can be done in the case of the debtor’s bankruptcy?
If the debtor is an individual and is made a bankrupt then the creditor’s claim will have no priority to any other unsecured creditor’s claim. The creditor’s claim should nevertheless be filed with the trustee in bankruptcy. If the debtor is a company and is placed in liquidation, the unsecured creditor should also file its claim with the liquidator.