EU award the United Kingdom “Nul Points” and take Lugano off the table….

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EU award the United Kingdom “Nul Points” and take Lugano off the table….

Published 25 June 2021

As the United Kingdom strives to find its feet following its departure from the EU and the end of the transition period, it has been dealt a further blow in its bid to restore some sort of equal footing with its European cousins on the issues of jurisdiction and the recognition and enforcement of judgments.

As we wrote back in January last year, it was hoped that the United Kingdom would accede to the Lugano Convention, the wording of which broadly mirrors the original incarnation of the Brussels Convention.  The rights and privileges conveyed by Brussels were lost to the UK at the end of the transition period, and the hope was that accession to Lugano would, at least in this small area, somewhat restore the status quo.  At the time of last writing, the UK had received statements of support from Norway, Iceland and Switzerland, and things were looking up.

It was, sadly, a false dawn, no doubt occasioned in large part by the continued deterioration of the entente cordiale between the United Kingdom and the EU.  In early May of this year, the European Commission published its recommendation to the remaining Member States that the UK’s accession to Lugano should be rejected.  The given reasoning was lengthy, but can be boiled down to the suggestion that the UK cannot have its cake and eat it – the UK chose a sufficiently ‘hard Brexit’ such that it did not wish to participate in the Internal Market, or the Customs Union, or EFTA, or the EEA.  The UK is thus a fully third country, no different to Australia, or the USA and why, it was asked, should the UK get special treatment in the field of civil judicial cooperation?

Notwithstanding the recommendation made by the Commission, it remains open to individual Member States to vote on the issue.  Article 72 of the Lugano Convention itself requires the unanimous consent of the Contracting Parties to allow the accession of another State.  The existing Contracting Parties are Denmark, Switzerland, Iceland, Norway and, crucially, the European Union.  For a positive vote to be case by the EU, it required a qualified majority of Member States (55%) to vote in favour.  However, in a note verbale delivered on Wednesday 23rd June 2021 to the Swiss Federal Council (which acts as a depository for the Convention), the European Commission formally stated that the European Union was not in a position to consent to the United Kingdom’s accession to the Lugano Convention.

The decision will be a blow for English Claimants who suffer injury overseas and who were unable to bring proceedings before the end of the transition period.  It will, by contrast, be seen as a significant boon by overseas insurers who have, since Odenbreit, endured the cost of English litigation – a cost which, of course, is rarely factored into the risk underwritten.  Whether there will be a revisiting of the position, in the event that the UK were to regain some degree of political capital, remains to be seen.  Until then, the question of jurisdiction will continue to be determined at common law, and as the UK’s own post-Brexit jurisprudence continues to be set, this will continue to be a busy time for those of us practising in this niche area.

For more information or advice, please contact a member of our Travel & Tourism team.

Authors

Jasminka O'Hora

Jasminka O'Hora

Birmingham

+44 (0)121 698 5217

Kieran Mitchell

Kieran Mitchell

Birmingham

+44(0)121 698 5033

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