Recovering Money from Foreign debtors, is it really worth it?

August 2014

Recovering Money from Foreign debtors, is it really worth it?

The process for recovering money from obstructive or uncooperative foreign debtors is not as difficult as it may first appear. Together with Pierre Haincourt from Credit Limits International we explain the options available.

Globalisation increasingly means more cross-border trade and more movement of people. With that comes the increased internationalisation of personal and commercial debt, which creates potentially more situations where a creditor faces the task of recovering money from a consumer or business based abroad (or, indeed, a foreign creditor recovering money in the UK). What are the options for UK-based creditors if a foreign debtor refuses to pay? Home advantage?

The key question is should legal proceedings be launched in the UK or abroad? Proceedings have to be commenced in a debtors local court if the debtor is a consumer based in another EU state. In other cases there is a decision to be made – does the creditor launch an action in the UK or the country where the debtor is based?

The UK route would only be feasible if it was possible to take a UK judgment and enforce it in the foreign country. This should be relatively straightforward where the debtor is based in an EU state or commonwealth country. Other jurisdictions present much more of an issue and need to be considered on a country-by-country basis.

Assuming it is feasible to issue in the UK then there are advantages and drawbacks to doing so:

Legal action in England


  • You know and trust the lawyer
  • You know the legal system
  • You understand the fee structure
  • Your lawyer can handle everything
  • No communication issues


  • Further away from the debtor/action
  • Additional steps will need to be taken to convert the UK judgment into a judgment that can be enforced
  • Will need to involve another law firm to deal with enforcement?
  • Service may be more problematic
  • It usually takes longer

Should a UK judgment prove successful, the most effective means of initiating enforcement if a debtor is in another EU state is with a European Enforcement Order (EE0). This involves an application for the EEO to the UK courts. It is a straightforward process, but it is not applicable where the judgment was obtained following a contested hearing. The EEO can be enforced in all other member states once it is obtained.

If the UK judgment followed from a contested hearing then the EEO route is not available. Instead it is necessary to make an application to the court in the state where enforcement is proposed. The court will then look at the circumstances that led to the judgment being granted before determining whether to grant a certificate permitting enforcement. The scope for not granting an application is limited.

Applying to enforce in Commonwealth countries (and some others such as Israel as well as the Isle of Man, Jersey and Guernsey) relies on reciprocal treaties and necessitates an application to the court in the state where enforcement is intended. The court will be primarily concerned to check the UK court had jurisdiction, although there is often a dislike for cases where judgment has been obtained by default and in such cases the court may refuse to allow enforcement based on the UK judgment.

Away day?

The second enforcement option – commencing proceedings in the country where the debtor resides or is based – can sound daunting. The legal landscape may appear treacherous to negotiate at first but the key thing for creditors to remember is that there is almost always a viable legal solution to overseas debt found through the courts. There are both advantages and disadvantages and it should be considered as an option in all cases:

Legal Action in the debtor’s country


  • Proximity between court and debtor
  • Only one lawyer so one fee
  • No risk of judgment not being recognised
  • No judgment registration
  • Immediate enforcement
  • Translations often cheaper


  • Lack of familiarity with legal system
  • Lawyers can charge overseas clients more
  • Cultural differences
  • Language differences
  • Trusting the legal advice received
  • Lack of proximity between client and lawyer