As an American successfully doing business in the United Kingdom, you already know how to deal with the nuances of building relationships and the ins & outs of trade in a foreign jurisdiction.
With business going smoothly, all can seem well until someone in the UK doesn’t pay their bill or disputes a part of the contract. Promises get broken and suddenly no one is answering your calls or responding to your emails – Eventually you run out of patience.
You have no option but to sue them in court.
But where do you stand legally? Can you sue a British person in the US or do you have to start a case in the UK?
The answer depends on the type of contract/ agreement that you have: As usual, the devil is in the detail so read on to find out:
Let’s break down the law
Your contract should have what is commonly referred to as a jurisdiction clause or a governing law clause. This determines which country’s legal regime will deal with a breakdown of the contract.
If the clauses specify the UK, then you will have to issue a claim in the UK. Please see https://saracenssolicitors.co.uk/business-clients/commercial-litigation/ for more details on the litigation process or just contact one of our expert litigators on 00442035883500.
If the governing law/ jurisdiction clause says the US, then you can issue a claim in the US and get a judgment there. However, as there is no reciprocal enforcement agreement between the US and the UK, that judgment can’t be enforced in the UK directly, so you won’t automatically be able to recover what you’re owed.
Therefore, you will need to issue enforcement proceedings in the UK to go after the monies that you are owed. New proceedings will begin in the UK, where your US judgement will be treated as contractual debt and the court will look at the payment of this ‘debt’.
Let’s break down the process
However, for the courts in England and Wales to consider your enforcement claim, you must make sure of the following:
- The US court must have had jurisdiction over the debtor. This may be because the debtor elected to submit to its jurisdiction (usually within the contract – see above) or it may even be because the debtor was present in the US when the case was issued.
- The US judgement must be a final judgment and not be subject to any appeal.
- The judgment must be for a definite and ascertainable sum of money involved. You need to specify the exact debt so that the courts in the UK are aware of the exact sums that have to be recovered.
- The judgment must be in line with British public policy and must not contravene the European Convention of Human Rights, otherwise it won’t be recognised in the UK. Similarly, there must be a clean judgment and any evidence of shenanigans in obtaining the US judgment will cause it to fail in the UK.
- The judgement must not be ‘contrary to natural justice’, for instance, where a defendant did not have the chance to file a proper defence.
You can now enforce the US judgement under common law in the UK, where the debtor’s assets will most likely be – BUT remember, it’s always a good idea to do a trace check on the assets of an individual or conduct checks on the status of any company that owes you money. There is always a risk that the company could go into liquidation or an individual could go bankrupt so do the checks, speak to an expert and see if its worth going after them!
Contact our lawyers to get your money back
Here at Saracens, our litigation lawyers have helped many American companies successfully sue companies and businesses in the UK.
So contact us today – We’ll help you get what you are owed!