The City has resigned itself to being locked out of the EU. The hauliers are adjusting to all the extra paperwork. Now it looks as if the lawyers will have to get used to no deal as well — and while that won’t do any serious long term damage to the profession’s booming global status, it now looks as if a lot of divorcing families will be collateral damage.
Over the last month, it has become clear the EU plans to block the UK from joining the Lugano Convention, which helps settle in which jurisdiction disputes should be resolved. The reason is no great mystery to anyone. Brussels wants to make it harder for London’s firms to sell their services globally, and take some of that business for competitors in Paris, Amsterdam and Frankfurt. Much like financial services, Brussels believes that locking out the British will help its own players.
Many divorces between people from different countries may now be virtually impossible
That matters. Over the last couple of decades, London has turned itself into a major player in global legal services. It is estimated Britain exports £6.9 billion of legal services a year, and imports only £1.1 billion, making it one of the few industries where we have a whopping surplus. While the Germans make cars and the French wine, we argue about sub-clauses. It may not be as exciting, but the economic impact is much the same. It is a growing industry and one where the UK has a clear competitive advantage.
In truth, however, the EU won’t be able to do much about that, no matter how hard it tries. The reason people use British law is because they trust it, there is plenty of expertise on tap, the language is familiar, and the common law has a capacity to evolve that few other systems can match. At the margin, getting locked out of the market in mainland Europe will make a difference but it won’t significantly slow down our law firms.
The trouble is, there is a lot of collateral damage. Many divorces between people from different countries may now be virtually impossible to settle because no one will be able to agree on which court gets to make the decision. The same may be true of any commercial disputes between UK and EU based companies. Brussels can play hardball with the UK if it wants to. In the medium term it won’t make much difference — it is just a shame many families will remain locked in painful litigation for years longer than necessary.
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