Anticipation of a positive result for the UK was rising ahead of a meeting this week between the Commission and member states. According to the FT, however, the Commission has said it will not back the UK’s application to join.
A final decision, expected in the next few weeks, requires the unanimous approval of all member states.
The 2007 Convention clarifies which national courts have jurisdiction in cross-border civil and commercial disputes and ensures judgments are enforceable across borders. It means consumers and suppliers can seek redress in their local court rather than raising multiple cases in different jurisdictions.
David Greene, senior partner, Edwin Coe, said: ‘This was predicted, so it was a surprise when the indications earlier this week were to the contrary.
‘Unfortunately, some within the EU have seen Lugano as an instrument in the competition for global dispute resolution and this seems to have influenced events. In fact, it’s a vital instrument for businesses of all sizes in the EU and UK and for consumers and citizens. All will lose out.
‘In the event, however, delay in or no accession will not affect London as a global legal centre in the long run. To the contrary the consequent development of English law may indeed enhance the jurisdiction.’
Sara Chisholm-Batten, partner at Michelmores, said the news was ‘a real setback’ 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.
Lauren Cormack, associate at Russell-Cooke, said: ‘Cross-border disputes may become difficult to resolve efficiently.
‘This may create a barrier preventing access to justice for those who cannot meet the increased costs of what will be much more complex litigation. This will be felt most acutely by individuals, consumers and small and medium-sized enterprises involved in cross-border trade and transactions.’
