No legal basis for Lugano rebuff, says lord chancellor

The European Commission have sent communication to the European Parliament and the European Council recommending that the UK be denied entry to the Lugano convention.

No legal basis for Lugano rebuff

What just happened?

The European Commission have sent communication to the European Parliament and the European Council recommending that the UK be denied entry to the Lugano convention.[1]

What does this mean?

The Lugano convention is an international treaty that the EU has negotiated on behalf of its member states with Iceland, Norway and Switzerland, who are members of the European Free Trade Association. The Convention clarifies which courts have jurisdiction in cross-border disputes between the EU member states and the Free trade states and governs the enforcement of decided judgements.[2] 

Since Britain's exit from the European Union at the end of January 2020, the UK has lost its subscription to the Lugano Convention and had to re-apply in April 2020 for membership as an independent state.[3] However, accession to the Convention must be unanimously agreed by each of the contracting parties. Whilst Norway and the UK have agreed to a mutual recognition of the enforcement of judgements from each jurisdiction, there are some who are fighting the UK’s application. Therefore, the European Commission’s comments may hinder the UKs application. 

How does this impact the law? 

The commission reported that their recommendation to deny the UK access to the convention is based on a ‘stated view that participation is linked to the internal market, and that the UK as a third party should have a different arrangement to that of the EU and EFTA’. This is a notion that Robert Buckland QC has rebuked as having no legal basis, stating that ‘The Lugano Convention is an international agreement specifically open to third parties with no requirement for single market membership, and the UK meets all the criteria for accession.’[4] 

Speaking in an event at the London International Disputes Week Mr Buckland advised that blocking the UK’s accession to the 2007 Lugano Convention will ‘harm our joint communities, particularly consumers, SMEs and financially vulnerable families’.[5]

Without membership to the agreement the UK is without guidance as to which court will take precedent in a cross-border dispute. This may then lead to parties’ representatives facing conflicting judgements as courts compete to provide judgements, with the issue then being the time and funds taken to establish which judgement takes precedent, delaying access to justice for the parties involved. 

As it stands without membership to the Convention there will be a great deal of complexity and uncertainty to cross-border disputes. Although the UK can apply the Hague Convention rights, for those cases which are not covered under this Convention resolution will be complex, lengthy and expensive. Likely parties will have to seek advice in the country taking their claim and it may not be as simple as receiving a judgement in their favour. As this could lead to appeals and further delays, costs and burdens.[6]

Ultimately it will be for each of the EU Member States to present their vote on the UKs accession and it is hoped that they will unanimously agree to the UK's accession due to the clear benefits to businesses of all the states privy to the convention.

 

The Legists Content Team

Written by Gabriella Cinotti

 

[1] Jemma Slingo, ‘‘No legal basis’ for Lugano rebuff, says lord chancellor’ (The Law society Gazette, 13 May 20201) <www.lawgazette.co.uk/news/no-legal-basis-for-lugano-rebuff-says-lord-chancellor-/5108494.article> Accessed 26 May 2021

[2]Convention on jurisdiction and the recognition and enforcement of judgement in civil and commercial matters (Lugano Convention, as amended) (art 72)

[3] Shane McVeigh, ‘EU rejects UK re-entry to Lugano Convention’ (Carson McDowell, 13 May 2021) < www.carson-mcdowell.com/news-and-events/insights/eu-rejects-uk-re-entry-to-lugano-convention> accessed 26 May 2021

[4] Ibid (n1)

[5] Ibid (n1)

[6] Ibid (n3)

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