What’s that noise? You might not be able to hear it – yet. But London law firms can – and so can Boris Johnson. It’s the sound of chickens coming home to roost.
Our populist Prime Minister has spent decades baiting the EU. Most recently, he announced Britain’s plan to rip up the Brexit deal it signed. But having done his best to alienate EU leaders, Boris Johnson needs a favour from them.
We need permission from France, Germany et al to rejoin an international treaty, the Lugano Convention, or risk hamstringing a large part of Britain’s valuable legal services industry.
The UK dropped out of the treaty because of Brexit. It applied to rejoin in April 2020. But EU members torpedoed the application. And the chances of them changing their minds is looking increasingly unlikely.
The Convention establishes the jurisdiction of national courts in settling various civil and commercial cross-border disputes. And London established itself as the global capital for dispute resolution, dealing with everything from family disputes to business operations.
Dominic Grieve, the former Solicitor General, says being cast out is bad news for an industry that added nearly £60bn to the UK economy in 2018, according to the Law Society.
“This is one very negative consequence of Brexit. And the recent announcement on going back on the Northern Ireland protocol will only have made things worse. Until we get the trust back, there’s not going to be any change,” he says.
Alternative mechanisms – such as Britain’s re-entry into the Hague Convention – might help UK firms. But experts say Britain’s absence from the Lugano Convention harms those locked in disputes.
“The big losers will be ordinary citizens or small businesses,” says Scott Devine, head of legal services at TheCityUK, a professional services advocacy group.
An Italian who’s bought a dodgy kettle in Britain will not be able to settle his dispute at lower cost in an Italian court. A Briton in dispute with an Italian company over a non-functioning coffee maker cannot hear his case in a British court.
Mr Devine says it has “just created more inconvenience and difficulty for smaller parties”.
And we have enough of that in our lives already.
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