Brexit LIVE: EU blocks UK from rejoining international treaty worth £5billion to economy

Brexit: Ann Widdecombe tells Nigel Farage that he 'won'

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The Lugano Convention is an international treaty negotiated by the EU on behalf of its member states and attempts to clarify which national courts have jurisdiction in cross-border civil and commercial disputes and ensure that judgments taken in such disputes can be enforced across borders. Brexit has seen the UK drop out of the treaty and although it reapplied to join in April 2020, the European Commission has recommended the EU deny the request, stating the bloc is “not in a position” to give its consent to UK accession. This is proving to be a major headache for the Prime Minister as failure to rejoin the Lugano Convention could deal a hammer blow to the UK’s world-beating legal services sector.

According to the law society, legal services contributed nearly £60billion to the UK in 2018, while a year earlier exports of legal services amounted to £5billion.

The legal services sector employs over 350,000 people, with two-thirds of those jobs outside of London, according to Scott Devine from The City UK, a body representing UK-based financial and professional services.

But there are now growing fears failure to rejoin the international treaty and the continued diminishing relations between the UK and EU following Brexit could make a major dent in this crucial sector.

Former Attorney General Dominic Grieve said his concern is the long-term “viability of London as a centre for dispute resolution.”

He added the longer this continues, “the more potentially damaging it may become because there’s no doubt that the UK when it was in the EU, was seen as the place of dispute resolution of choice for EU litigation of every conceivable kind.”

Mr Johnson will also be concerned by the fact that with the UK outside of the convention, EU nations can directly compete with London for business in the sector.

Former Spanish judge Josep Galvez said: “The alternatives are slowly becoming clear for international companies that want to operate in the EU and don’t want any blockages.

“This Lugano limbo the UK finds itself in is the worst situation possible as lawyers on both sides have no clarity on what will happen in the long term.

“I think the EU wants to make the UK suffer and give EU jurisdictions the opportunity to take business from England.”


8.36am update: Take gloves off! Boris urged stop ‘playing nice’ and finally free City from ‘sclerotic’ EU

Boris Johnson must stop trying to keep the EU happy in the hope of securing a deal for financial services – and instead take the tough decisions necessary to secure the City of London’s status as a global financial powerhouse, a campaigner has said.

Jayne Adye, director of the pro-Brexit campaign group Get Britain Out, believes the UK is in a fantastic position to realise Chancellor Rishi Sunak’s lofty ambitions – provided it can free itself from the “vindictive and sclerotic” bloc’s stifling rules and regulations.

Ms Adye said since the end of the transition period at the end of 2020, there had been an “almost universal focus” on the Northern Ireland Protocol, as well as the problems faced by the UK fishing industry.

By contrast, the Financial Services industry has been “entirely ignored”, she said, despite being the UK’s single biggest export to both the EU and the rest of the world.

Nevertheless, in the last month the Chancellor, Rishi Sunak, Lord David Frost, and Andrew Bailey, the Governor of the Bank of England, had all indicated a deal with the EU appeared to be unlikely, she pointed out.

The EU had sought to justify its intransigence by citing the UK’s refusal to commit to “dynamic alignment with EU regulatory changes” for years to come – in other words constantly updating the rules to mirror those of the EU.

Despite this, London has so far been reluctant to take any real action, Ms Adye said, with the result that businesses and investors had been unable adequately to plan for the future.

8.15am update: Von der Leyen bottles it! EU stops legal action against UK – Brexit talks hit ‘standstill’

Brussels has paused its legal proceedings against Britain in the hope of easing tensions over Brexit trade checks in Northern Ireland.

The European Commission announced that it would freeze the infringement process against the UK over its move to defy EU red tape in the region.

Eurocrats had accused Downing Street of breaching international law by temporarily suspending EU-ordered checks between mainland Britain and Northern Ireland.

Brussels’ decision to pause the legal action comes amid rising tensions over the Brexit deal’s protocol to avoid a hard border.

In a statement the Commission said the standstill would “provide the necessary space on these issues and find durable solutions to the implementation of the protocol”.

It comes after the Government last week demanded the renegotiation of the post-Brexit border fix because of instabilities in the region, but EU officials have rejected reopening the protocol.

The Commission said: “While the EU will not renegotiate the Protocol, we stand ready to address all the issues arising in the practical implementation of the Protocol in a spirit of good faith and cooperation.

“It is essential that we continue constructive discussions in the weeks ahead.

“With regards to the request for a standstill, the Commission will carefully assess the new proposals made by the UK, in accordance with the necessary consultation procedures, both internally, and with the European Parliament.

“In order to provide the necessary space to reflect on these issues and find durable solutions to the implementation of the Protocol, we have decided, at this stage, not to move to the next stage of the infringement procedure, started in March.”

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