Brexit has redrawn the legal map for cross-border commercial disputes, creating new uncertainties around jurisdiction, applicable law, and—critically—the recognition and enforcement of English court judgments across the European Union. For litigation funders and claimants considering UK-based proceedings against EU defendants (or vice versa), these changes add a layer of complexity that can materially affect both the economic viability of funding and the strategic calculus of pursuing cross-border claims.

The End of Automatic Recognition: What Changed

Before Brexit, the UK was part of the Brussels Recast regime (Brussels Ia Regulation), which provided a streamlined system for recognising and enforcing civil and commercial judgments across EU member states. English judgments were automatically recognised in the EU, subject to limited grounds for refusal, and enforcement was largely a formality. This made the UK an attractive forum for international commercial litigation, particularly for disputes involving parties or assets in multiple jurisdictions.

Since the UK's departure from the EU, that automatic recognition no longer applies. English judgments are now treated as "third-country" judgments in the EU, meaning they must be recognised and enforced according to the domestic rules of each individual member state—rules that vary significantly and can involve more complex, time-consuming, and uncertain procedures.

The Hague Convention: A Partial Safety Net

The UK and most EU member states are signatories to the 2005 Hague Convention on Choice of Court Agreements, which provides some continuity. Under the Convention, where parties have validly agreed in writing that English courts have exclusive jurisdiction, a resulting English judgment should generally be recognised and enforced in Convention states (including most EU members).

However, the Convention's scope is narrower than the Brussels regime. It applies only where there is a valid exclusive jurisdiction clause—not to cases based on other jurisdictional grounds. It also excludes certain types of disputes (such as consumer contracts and some insurance matters). For funders, this means that enforcement predictability now depends heavily on whether the underlying contract includes a properly drafted English jurisdiction clause.

Implications for Litigation Funders

From a funder's perspective, Brexit introduces two main concerns:

1. Enforcement Risk: If a claim succeeds in an English court but the defendant's assets are located in the EU, the process of enforcing the judgment is now less predictable and potentially more expensive. Funders must assess whether the defendant has sufficient UK-based assets or whether enforcement will require navigating the domestic legal systems of EU member states—each with its own procedural requirements and potential defences.

2. Strategic Forum Selection: Claimants and funders must now think more carefully about where to bring proceedings. If assets are primarily located in the EU and there is no Hague-compliant jurisdiction clause, it may be more efficient to litigate in an EU member state rather than in England, or to negotiate settlement terms that include UK assets for enforcement.

These considerations do not make English courts unviable—far from it. London remains a global hub for commercial dispute resolution, with highly regarded judges, sophisticated legal infrastructure, and a strong track record. However, funders must factor enforcement strategy into their due diligence and pricing models more explicitly than they did pre-Brexit.

Practical Steps for Claimants and Funders

Given these changes, claimants and their funders should:

- Review jurisdiction clauses: Ensure that commercial contracts include clear, Hague-compliant exclusive jurisdiction clauses in favour of English courts if UK litigation is contemplated.

- Assess asset location early: During due diligence, identify where the defendant's assets are located and whether enforcement in those jurisdictions is straightforward.

- Engage local counsel: For cross-border cases, early engagement with enforcement specialists in the relevant EU jurisdictions can clarify the pathway to recovery and help build realistic budgets.

- Consider alternative dispute resolution: In some cases, arbitration (with enforcement under the New York Convention) may offer greater certainty than litigation, particularly if assets are spread across multiple jurisdictions.

Looking Ahead: Stability and Adaptation

While Brexit has undoubtedly added complexity to cross-border litigation funding, the fundamentals remain strong. English courts continue to attract high-value international disputes, and the litigation funding market has adapted to the new landscape by refining risk assessment and working closely with enforcement experts across Europe.

For claimants with strong cases but concerns about cross-border enforcement, professional litigation funding remains a viable and valuable option—but success now requires more careful planning, strategic thinking, and a clear-eyed view of the post-Brexit legal framework.