UK Accession to the Lugano Convention 2007 – an “oven ready” option?

30 Jan 2020 By Ben Rayment

The future of Civil Judicial Cooperation between the EU-27 and the UK after Brexit is an important issue. Once the UK ceases to be subject to common EU rules in the sphere of Civil Judicial Cooperation such as the Re-Cast Brussels Regulation it will lose the benefits of those rules, which provide certainty on which country’s courts may hear a civil or commercial cross-border disputes and ensure that the resulting judgment can be recognised and enforced across borders. The rules also help to prevent multiple court cases taking place on the same subject matter in different countries and reduce the costs and expenses for the parties involved. The rules in the area of Civil Judicial Cooperation are significant for UK businesses, the legal services sector, individuals and families (in relation to family maintenance arrangements).

Post-Brexit the UK Government’s intention is to accede to the Lugano Convention 2007, although it has given some consideration to a bespoke bi-lateral agreement: see the White Paper to Parliament on 12 July 2018 setting out its proposals to develop and agree the framework for the future relationship with the EU. The proposals in the White Paper on civil judicial cooperation built on the Framework for the UK-EU Partnership: Civil Judicial Co-operation published by the UK government in June 2018. Lugano provides a regime that is largely equivalent to the EU rules as between the EU, Denmark, Iceland, Norway and Switzerland. Attention has been re-focussed on the potential accession by the UK to Lugano because of the recent statements of support from Norway, Iceland and Switzerland for the UK’s intent to accede to the Lugano Convention.

Common rules generally pre-suppose that a common interpretation and a mechanism for resolving disputes is desirable. The EU Court of Justice performs this role for the EU-27 in relation to the EU rules in this sphere, including in relation to the interpretation of the Lugano Convention. Any continuing role for the EU Court of Justice so far as the UK is concerned post-Brexit remains a politically difficult issue.

The position under Protocol No 2 to the Lugano Convention provides greater flexibility to those state signatories outside the EU as it only requires the courts of non-EU Member States (of which the UK would be one) to “pay due account” to the case-law of the EU Court of Justice on the Brussels Regulation. Hence, Protocol No 2 appears to provide an acceptable way for UK courts to respect the case-law of the ECJ – without being bound by it – in the post-Brexit scenario.

Now that Switzerland and the EFTA States position in favour of the UK’s accession to Lugano has been clarified the EU’s position is awaited. While the looser interpretive obligation in Protocol No2 that would apply and the lack of EU Court of Justice jurisdiction will be less conducive in the EU’s eyes to ensuring a uniform approach than is currently the case, the fact remains that that is the position already for the existing non-EU signatories to the Lugano Convention. Moreover, despite any perceived disadvantages of this sort the Lugano Convention would still deliver a greater degree of harmonisation between the EU-27 and the UK than if the UK reverted to applying the common law rules on jurisdiction at the end of the transition period. In addition the Lugano Convention offers (dare one say it) a relatively “oven ready” option. While negotiating other bi-lateral options may be perceived to be healthier “time-poor” negotiators may conclude that the costs of doing so outweigh the benefits.