On May 4th, 2021, the European Commission issued a Communication offering its Assessment on the application of the United Kingdom of Great Britain and Northern Ireland to accede to the 2007 Lugano Convention.
The Communication offers the Commission’s analysis on the application and explains why it considers that the EU should not give its consent to the accession of the United Kingdom to the Lugano Convention.
Nature of the Lugano Convention
The Communication explains that the Lugano Convention represents an essential feature of a common area of justice and is a flanking measure for the EU’s economic relations with the EFTA/EEA countries. Thus, the Lugano Convention supports the EU’s relationship with third countries which have a particularly close regulatory integration with the EU, including by aligning with (parts of) the EU acquis. Though the Convention is, in principle, open to accession of “any other State” upon invitation from the Depositary upon unanimous agreement of the Contracting Parties, it is not the appropriate general framework for judicial cooperation with any given third country. The Convention is based on a high level of mutual trust among the Contracting Parties and represents an essential feature of a common area of justice commensurate to the high degree of economic interconnection based on the applicability of the four freedoms.
International framework for the EU’s civil justice cooperation with third countries
As a consequence, the European Commission argues that the appropriate framework for cooperation with third countries in the field of civil judicial cooperation is provided by the multilateral Hague Conventions, i.e. the 2005 Hague Choice of Court Convention and the 2019 Hague Judgments Convention.
Conclusion
The Commission concludes:
In view of the above, the Commission takes the view that the European Union should not give its consent to the accession of the United Kingdom to the 2007 Lugano Convention. For the European Union, the Lugano Convention is a flanking measure of the internal market and relates to the EU-EFTA/EEA context. In relation to all other third countries the consistent policy of the European Union is to promote cooperation within the framework of the multilateral Hague Conventions. The United Kingdom is a third country without a special link to the internal market. Therefore, there is no reason for the European Union to depart from its general approach in relation to the United Kingdom. Consequently, the Hague Conventions should provide the framework for future cooperation between the European Union and the United Kingdom in the field of civil judicial cooperation.
The Commission then advises:
Stakeholders concerned, and in particular practitioners engaged in cross-border contractual matters involving the European Union, should take this into account when making a choice of international jurisdiction.
Pretty interesting stuff! When I saw this news yesterday I had the following questions: does it mean UK has to join the EFTA/EEA in order to be part of Lugano Convention? Is it likely that the EU will follow the EC’s advise? If the EU follows the EC’s advice, is it likely to generate problems between the UK and EU in matters of civil judicial cooperation?
De jure: the see Art. 207 and 218 TFEU. If you consider the area of justice as a flanking measure of the internal market, then the EC’s opinion will have to be followed (Art. 207). Under Art. 218 the issue is that the Commission will lead negotiations on behalf of the EU.
De facto: more than 95 percent of legislation in the EU follows the EC’s opinion and view.
If the UK were to join EFTA, then in the Commission’s opinion it should be allowed in the Lugano scheme.But my understanding is that EFTA is excluded politically, because it would bring consequences which appear to be unacceptable for brexiters.