The UK should not be allowed to join the Lugano Convention, the European Commission has said, in a potentially major blow to judicial cooperation across Europe.
In a non-binding recommendation, the commission said the EU should block the accession of the UK to the 2007 Lugano Convention, an agreement setting out which country’s courts may hear cross-border disputes and which decisions can be enforced.
Losing the Lugano framework means reverting to the national laws of each individual country to decide which court has jurisdiction over a legal issue and whether a judgment will be recognised.
Explaining its recommendation, the commission said: ‘For the European Union, the Lugano Convention is a flanking measure of the internal market and relates to the EU- European Free Trade Association (EFTA)/European Economic Area context. In relation to all other third countries the consistent policy of the European Union is to promote cooperation within the framework of the multilateral Hague Conventions.
‘The United Kingdom is a third country without a special link to the internal market. Therefore, there is no reason for the European Union to depart from its general approach in relation to the United Kingdom.’
While the final decision on Lugano rests with the European Council, the backing of the commission would have been significant. EFTA states have already said they are willing to support the UK’s application.
Responding to today’s news, Law Society president I. Stephanie Boyce said: ‘Lugano makes litigation more accessible whether you are an employee with a grievance, a consumer let down by a goods or service provider, or a parent trying to enforce a maintenance order.
‘Lugano also provides protection where one of the parties is deemed to be in a weaker position than the other: there are special regimes for employment, insurance and consumer contracts, maintenance orders.’
The Law Society added that without Lugano access to justice will be denied to those with smaller budgets.
Miles Celic, chief executive officer of TheCityUK, added: ‘It’s hard to understand this decision or see how this recommendation helps SMEs and individuals across Europe who benefit most from the clarity and cost savings the Lugano Convention brings to cross-border legal disputes.
‘We now hope that EU Member States will vote to support the UK’s application, as doing so has clear benefits for the citizens of all signatories to the treaty. However, other mechanisms exist which mean UK court judgments will continue to be enforceable throughout EU and EFTA.’