LONDON (Within the Law) - The UK legal sector was dealt a surprising blow this week when Brussels signalled it would oppose Britain joining the Lugano convention. A full decision is yet to be made and EU states are said to be split. However, the prospect of losing such access sent jitters throughout the legal profession.
The Lugano Convention provides for the recognition and enforcement of commercial judgements across borders. It’s mainly between EU and EFTA states but other states can join if there is unanimous agreement between all members.
The UK had applied to join and believed the European Commission was leaning in their favour. At the start of the week, headlines reflected a strong sense of optimism. ‘UK accession to Lugano Convention imminent’, said the Scottish Legal News website in a news piece which aged about as well as a pint of milk left on the radiator during a hot day.
A day later, City Am was carrying the disappointing reality. At a closed meeting, Europe’s bureaucrats decided to line up against the UK’s bid. In doing so they were consistent with statements made during the negotiations although recent signals had been more favourable.
A final decision will be made by the bloc’s national governments over the coming weeks and the EU seems to be split. So far, the non-EU states have already given their blessing, but the EU is divided. In Britain’s corner are some Baltic nations and the Netherlands, but France is firmly against it. Germany is said to be trying to make up its mind. The Commission’s stance will do nothing to tip the balance.
In order to be admitted, the UK would need unanimous support from all parties who signed up to the declaration: The EU, together with the non-EU states, Denmark, Switzerland, Iceland and Norway. France is said to be strongly in the Commission’s camp while Baltic countries and the Netherlands have spoken in the UK’s favour. A number of countries are said to be wavering in between. A weighted majority of member states will be needed to secure the EU’s approval.
The decision is one of politics. Currently, every member of the Lugano Convention is either a member of the EU or the EFTA. Were they to change things, the Commission argues that third parties would have grounds to demand entrance. It’s an argument based on politics, but it will be ordinary people who miss out.
The UK is a global hub for the international legal sector. If it exits Lugano, UK judgements could lose some of their weight overseas. It could cause the cost of litigation to increase and make it more difficult for people to get justice.
For example, if you’re a consumer in the UK and you are let down by someone supplying a product from the EU you would no longer be able to seek redress with UK courts. If the application fails they would have to raise cases in different legal jurisdictions, something most people would not have the funds to do.
(Written by Tom Cropper, edited by Klaudia Fior)