Monday

4th Jul 2022

Opinion

Brexit: what is the 'Lugano Convention' and does it matter?

  • The Lugano Convention - seemingly a technical and bureaucratic issue which has the potential to be resolved in the best interests of citizens, membership is instead embroiled in political machinations (Photo: European Commission)

Many of the trading barriers that now exist post-Brexit between the EU and the UK will inevitably continue for the foreseeable future. Such friction is an unavoidable consequence of Britain leaving the EU - vividly demonstrated by the attempted implementation of the Northern Ireland protocol.

Logic therefore demands that additional cross-Channel barriers are minimised while the new EU-UK relationship evolves.

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Following its exit from the European Union, the UK ceased to be a member of the Lugano Convention, an international treaty which governs cross-border civil and commercial legal disputes.

In May, the European Commission published an opinion calling for the UK's re-application to be rejected. Last week, the commission announced it had told the administrators of the convention, the Swiss Federal Council, that the bloc was not in a position to consent to UK accession. The issue now ultimately rests with member states to decide through a Council vote.

The EU has argued that Lugano membership is a "flanking measure" of the Single Market, and that the UK has become a third-country, without the necessary link to justify re-admission into the Convention. While technically the case, this position does not take into account the continuing special relationship between the EU and the UK.

Lugano in many ways embodies the complexities and challenges of the post-Brexit reality.

Seemingly a technical and bureaucratic issue which has the potential to be resolved in the best interests of citizens, membership is instead embroiled in political machinations.

Pre-Brexit, London and Brussels negotiated hard. Post-Brexit, they must now repair the wounds and nurture a new relationship - one which cannot ignore people, geography, history, culture, or economic reality.

A good relationship with continental Europe will make the UK stronger in the world, essential for a global Britain, particularly as the new US administration looks to rebuild the defence and security relationship with Europe.

The UK government should now focus on how best to work with the EU to tackle the challenges they share by virtue of their proximity - from the Russian threat or the Chinese rise, to climate change and Covid-19.

The EU's pretence that the UK is a third-country like any other is a misrepresentation of reality.

It is not geographically nor historically and it is certainly not after 40 years of EU membership providing decades of judicial and security cooperation. Nato is the living proof that the EU's and the UK's safety are interlinked. Cross-Channel rivalry is a self-defeating luxury Europeans cannot afford. Their true rivals – there are plenty around - will take advantage of it.

Access to UK courts?

The questionable motivations behind denying UK's re-accession to Lugano need to be weighed against the dire consequences of its exclusion which would cause EU member states to lose access to UK courts.

The UK's legal system is renowned worldwide for its integrity, efficiency, case law, and language, historically making it the preferred setting for resolution of EU cross-borders disputes. If the authority of the British courts is no longer automatically recognised in EU commercial matters, EU businesses will inevitably be impeded in their ability to seek relief as efficiently as they were with the UK a Lugano signatory.

Developing another EU court system which is capable of efficiently handling a commercial dispute, for example between a Spanish company and a Hungarian consumer - who do not speak the same language and are regulated by two distinct commercial codes in their respective countries - is a decades-long process.

Currently, there is no clear contender in sight for a seat of cross-national litigation.

Meanwhile, time is of the essence in all commercial disputes, and especially in the aftermath of the Covid-19 crisis, which will likely to lead to an increased volume of litigation. Refusing the UK access to the Lugano Convention will hinder the very legal certainty both EU and UK businesses rely upon.

The UK's relationship with the EU Single Market is still very much a work in progress. Covid has effectively put a hold on formulating the future UK-EU relationship.

But talks will resume. As the process of post-Brexit normalisation plays out, the EU may find it expedient to have the UK included in the Lugano Convention.

To reject the UK's application now would only serve to crystallise a situation that is not in the best interests of either party. Effective political and judicial cooperation between the EU and its closest neighbour will, of necessity, always be advantageous for both sides.

Author bio

Mary Honeyball was a British Labour MEP for London from 2000 to 2019. During her 19 years in Brussels, she serves on various delegations and committees, including the European Parliament's Committee on Legal Affairs. Stefano Stefanini is a former Italian diplomat who served as deputy diplomatic advisor to the Italian president, deputy chief of mission at the Embassy of Italy in Washington, and Italian permanent representative to Nato in Brussels from 2007 to 2010.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

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