Enforcing consumer rights threatened unless UK can join Lugano Convention
Why the EU allowing the UK to accede to the Lugano Convention in the spirit of civil judicial co-operation will help both parties, as well as businesses and consumers operating across borders.
What is civil judicial co-operation?
Imagine a scenario where you have bought a Christmas present for a friend, and it’s being shipped from a company in Europe. It arrives and is not what you ordered, and you end up in a dispute with the company that sold it to you.
Civil judicial cooperation allows you to enforce your rights across the differing legal jurisdictions.
Agreed rules on jurisdiction and recognition and enforcement of judgments in civil commercial matters ensure that those involved in cross-border trade and transactions are protected and have access to justice regardless of their financial resources.
These rules benefit individuals, consumers and small and medium-sized enterprises (SMEs) most, and the effects of not having access to efficient mechanisms on enforcement of judgments is felt on both sides of the arising EU – UK border.
Coming to an agreement in this area ensures clarity over which court should be used by individuals seeking redress and provides reassurance for all involved that the ruling has wider effect and not just in their own country.
Without such an agreement the enforcement of foreign judgments is a matter of national law. This raises procedural obstacles for the parties and significantly inflates the costs of litigation.
This can prevent access to justice, for individuals such as consumers or families, or SMEs, who are not able to carry the costs of this more complex litigation.
What is the Lugano Convention?
The Lugano Convention provides for the recognition and enforcement of a wide range of civil and commercial judgments between the EU and EFTA states.
It’s an international agreement and other states may join subject to approval of the present parties to the agreement.
On 8 April 2020, the UK government formally made an application to accede to the Lugano Convention and continue its participation after the end of the transitional period following its withdrawal from the EU.
The non-EU EFTA states have already said they are willing to support the UK’s application, but the EU regards the question as linked to negotiations on the future relationship.
Why is it important?
The commercial, cultural and social ties between the EU and UK are here to stay, and the continuation of a deep and meaningful relationship is in the interest of both.
Whatever our relationship is with the EU moving forward, UK consumers will still want to buy from EU businesses, and likewise EU consumers will want to buy from British businesses.
Procedural obstacles apply both to UK and EU parties equally: if there is no commonly agreed framework on the enforcement of judgments, it is felt in both sides of the border as recovery of assets or courts awards becomes more complicated and costly for the parties involved.
The Lugano Convention is the obvious model for continued cooperation in enforcement of judgments: it’s a stand-alone Convention, which does not give access to a wider range of EU instruments on private international law nor is it linked with the EEA or Swiss arrangements with the EU.
Furthermore, as it’s already in operation between the EU and the EFTA, it provides an existing and known solution on how to enforce judgments.
What needs to be done?
Time is now running short to implement the Lugano Convention in the UK’s own right ahead of the end of transition.
We're concerned that unless otherwise agreed by the UK, EU and EFTA states, there will be a gap between the current Brussels I regulation and Lugano arrangements.
During this gap national law is applied which will severely complicate the enforcement of judgments, placing a burden on courts and businesses’ and consumers’ ability to access justice.
This will leave UK and EU consumers and businesses worse off.
Any measure to ensure the Lugano Convention is in place as soon as possible would be of benefit not just to lawyers, firms and the legal sector, but all businesses and consumers across the UK and EU who wish to enter into agreements across borders.