In a rather unexpected turn of events, it has recently been reported that the European Commission is no longer in favour of the UK acceding to the Lugano Convention 2007.
The Lugano Convention is an important European centric international treaty which provides for a standard set of rules relating to cross-border jurisdiction, in civil and commercial cases, and also ensures reciprocal enforcement of judgments amongst all contracting states, including the EU member states, Denmark, Norway, Switzerland and Iceland.
Thus in cross-border civil or commercial disputes, contracting states (and clients) have certainty as to which national court should hear the case in question and ensure that the judgment reached is enforceable in other Lugano countries. For example, a judgment delivered in Iceland can be enforced in Greece and vice versa.
As a consequence of Brexit, and following the end of the transition period on 1 January 2021, the UK is no longer a contracting member of the Lugano Convention.
The UK did apply, in April 2020, to re-accede to the Convention in an attempt to ensure legal continuity for cross-border disputes following the Brexit process. However, despite initially positive signs that the UK would be re-accepted to the Convention by contracting states, these latest reports from the European Commission will come as a setback to UK businesses hoping for some legal continuity.
It is suggested that certain EU states may wish to compete with the perceived success of the UK’s international commercial litigation courts by opposing the UK’s accession.
So what now?
Whilst we await an official decision from the EU commission and the other Lugano Convention states expected in the next few weeks, the UK is currently relying on a complex mixture of common law national rules and the Hague Convention 2005 to determine points of jurisdiction and enforcement in Private International Law.
For more information on The Hague Convention and the UK’s default position, please click here.
How can we help?
If you have any queries in relation to jurisdiction rules and enforcement of judgments, please contact our Commercial Dispute Resolution team.
This article was co-written by Calum Lavery, Trainee Solicitor.