16 April 2021

City AM: Enforcement of judgments: Brussels opposes UK entry to the Lugano Convention legal pact

Brussels is pushing for the UK to not be able to join the Lugano Convention, an international legal pact, after officials held a crunch meeting yesterday.

The EU is reportedly against allowing the UK to join the convention on the grounds that it is not a member of the European Economic Area or the European Free Trade Association.

The final decision will be taken collectively by EU nations in the coming weeks, with all countries needing to unanimously approve an application.

Brussels’ push to oppose the UK’s entry to the Lugano Convention is out of step with the wishes of several EU countries, the Financial Times reports.

One EU diplomat reportedly said that national governments were expecting Brussels to be more supportive of the UK’s entry to the pact.

The Baltic nations along with the Netherlands are said to support the UK joining, with France more aligned with the EU’s position.

Enforcement of judgments

The convention allows legal judgements to be enforced across borders, with all EU countries plus Norway, Switzerland and Iceland members of the pact.

It means that consumers are able to take companies based in different countries to court domestically if they are unhappy with a product, for example.

The UK applied to join the Lugano Convention in order to maintain stability on previous legal judgements on cross-border disputes.

Litigator Sara Chisholm-Batten from Michelmores LLP said not joining the pact would be “a real set-back for UK businesses and individuals”.

“If the UK is accepted into Lugano, it would result in judgments being recognised and enforced across UK and EU / EFTA borders much more swiftly and cost effectively – which would be welcome news for UK businesses trading in those areas – and EU businesses trading in the UK,” she said.

“It would also provide a more predictable and settled framework for individuals who hold assets in those jurisdictions. Without that certainty, cross-border cases become much more difficult to resolve efficiently.”

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Natasha Harrison, managing partner of global law firm Boies Schiller Flexner, told City A.M. earlier this year: “A significant consideration for future litigants will be whether parties can continue to enforce with a relative degree of uniformity and at low cost a judgment of the English court across EU Member States in order to execute against high value assets in different jurisdictions.

“It also remains possible that in due course the UK will receive consent from the necessary contracting States to fully accede as a party to the 2007 Lugano Convention, which provides reciprocal enforcement access across the EEA similar to the EU’s current regime.”

City AM

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