EU bars Britain from cross-border pact on civil courts

By Huw Jones

LONDON (Reuters) - The European Union has barred Britain from joining a European accord for recognising civil court rulings, a move that could bump up costs for individuals and small companies seeking legal redress abroad.

Britain's membership of the accord, known as the Lugano Convention, ended in December last year when it fully left the EU, and bloc officials said an application to rejoin had been rejected.

The Law Society has said Lugano makes litigation more accessible for an employee with a grievance or a consumer let down by goods, or a parent trying to enforce a maintenance order.

The European Commission, on behalf of the EU, told the administrators of the convention, the Swiss Federal Council, last month that the bloc was "not in a position" to give its consent to UK accession, a commission spokesperson said on Friday.

Lugano determines which countries' civil and commercial courts may hear cross-border disputes between the 27 European Union states, Iceland, Norway and Switzerland.

It also ensures enforcement of rulings to avoid the costly exercise of going through courts in each country linked to a dispute.

The City of London Corporation stressed last year the importance of rejoining Lugano to maintain the British capital's role in global legal services. It said a big increase in cross-border disputes was expected after the COVID-19 pandemic as people sought to recover their losses.

Lugano members participate to some extent in the EU’s internal market of free movement of goods, services, capital and people, which Britain no longer does, the commission said in May.

Iceland, Norway and Switzerland backed UK accession, but unanimous agreement is needed to admit a new member. A working group of EU member states on UK issues shared the commission's stance and no further steps are planned, it said.

An alternative convention, the Hague Judgments Convention from 2019, also governs cross-border recognition of civil and commercial judgments, but it has yet to enter into force.

(Reporting by Huw Jones; Editing by Toby Chopra)