Jean Monnet
Lifelong Learning Programme
‘Cross-Border Litigation in Europe’
Workshop Report
5th October 2012
"This project has been funded with support from the European Commission. This publication reflects
the views only of the authos, and the Commission cannot be held responsible for any use which may be
made of the information contained therein."
BACKGROUND
On Friday 5th October 2012, policy makers from the EU and academics
connected with the Centre for Private International Law met at the first of
seven workshops dedicated to promoting the debate on how cross-border
litigation functions across Europe, in particular in the targeted countries (i.e.
Belgium, Croatia, Italy, Spain, Sweden, Turkey and the United Kingdom).
The purpose of the first workshop was to offer the opportunity for a free and
frank exchange of ideas about the institutional architecture in Europe and its
suitability to promote cross-border litigation and uniform application of the
harmonised private international law instruments.
This report intends to provide a brief overview of the ideas that emerged
from the workshop without attributing any views to any particular
individual.
Part I
THE EFFECTIVENESS
INTERNATIONAL LAW
OF THE
EU
INSTITUTIONS IN DEVELOPING
PRIVATE
a. EU Commission
Six key areas were assessed for their effectiveness in developing private
international law. It was considered that the Commission was in a good
position to overview the problems within Member States due to the quantity
and quality of the information it receives and therefore should be able to
highlight the areas of concern within the EU for policy development.
However, the lack of long-term policy aims with respect to private
international law and policy development being influenced by short-term
political interests significantly weakens its effectiveness to develop private
international law.
The aim of the Commission to strive for a European system, having
good financial means at their disposal and research facilities were identified
as valuable when preparing legislation. A mobility policy, which requires
staff to move role every few years, was strongly criticised as it meant that the
Commission lacked sufficient highly qualified staff with expertise in private
international law. This fact, together with political pressure to come forward
with certain legislative proposals, has the effect of hindering the effectiveness
of the development of private international law.
The role that the Commission plays during negotiation with the
Council and Parliament was considered crucial. Its neutrality during the
legislative process was seen as beneficial. The risk is that the Commission
may hold on too strongly to its own proposal rather than facilitate the best
possible result in the Council and Parliament. However the short-term nature
of the Council Presidencies was considered to hamper the development of
private international law, putting pressure on finalising a project rather than
focussing fully on the quality of the legislation.
The independence of the Commission puts it in a good position to
make sure that EU private international laws are being complied with. The
task was considered relatively straightforward when assessing whether a
Member State had complied with the notification of an instrument, but it is
more difficult to see whether it has been applied in the courts of the Member
States. The Commission needs to devote more resources to tackling this role.
The Commission’s aim to be detached and objective when submitting
its view to the ECJ when there is a private international law case referred to
the ECJ for a preliminary ruling meant that it generally leads to a solution
which is in the best interests of private international law. This role was also
identified as being not always free from political interest that can lead to
results that are not in the best interests of private international law but that
such cases were relatively rare.
There is also the potential for the Commission to present a coordinated
voice when negotiating international agreements. This requires investment.
Private International law does not attract sufficient internal political attention
in the Commission to get that investment.
b. Council of the European Union
The depth of available legal expertise among the Council Working Groups
was cited as a significant strength within the Council of Ministers. Given the
technical complexity of the subject matter being considered by this institution,
it was thought that the combination of the wealth of experience and expertise
of the legal advisers, enhanced by that of academic experts, mirroring the
negotiations at The Hague Conference, was considered to be extremely
valuable. The involvement by Member States was also highlighted as
beneficial, not only because it allowed the views of the judges, practitioners
and academics to be taken into account, but also because it could force
Governments to account for their handling of the negotiations and the
outcomes reached by the Council. An additional relevant benefit was
considered to be the role played by the Working Groups when dealing with
general questions. The ability to advise other Working Groups within the EU
on private international law issues was seen as procedurally unusual, but
useful in supporting the development of private international law.
The weakness identified within the Council of Ministers was attributed to
the current political nature of the decision making hierarchy above the
Working Group, namely COREPER and the Justice and Home Affairs
Council. The main issue surrounds their lack of legal expertise and the
tendency to focus on a political agenda, which pushes out the less politically
high profile private international law issues. It was stated that this structure
demonstrated an inherent weakness in the way it treated subjects suitable for
law reform as an aspect of foreign policy to the detriment of the final
legislative result. Another procedural weakness was attributed to the shortterm nature of the Presidencies. The six month rotating Presidency was
highlighted as creating unnecessary disruption to the process and contributed
to a lack of consistency, not to mention the problems associated with the
artificial goals set by Presidents to ‘achieve’ something within their term
leading to rushed legislation.
Another issue that can prove difficult is finalising an agreement on
dossiers where the UK (and Ireland) have not opted in at the initial stage
(within the first 3 months after the Commission makes the Proposal) but are
trying to reach an agreement which they could opt in to after the Regulation
has been adopted. This worked satisfactorily in relation to Maintenance, well
in relation to Rome I (thanks to the Portuguese Presidency) but very badly in
relation to Succession. Much depends on the ability and willingness of the
Commission, Council Presidency and Secretariat to find solutions that really
do bridge the gap to the common law world.
c. Court of Justice
The Court of Justice was criticised for taking a too literal and rigid approach
to private international law issues and for not taking the time to consider the
rationale behind the law, resulting in contradiction. It was pointed out that
this was not as apparent in early case law but that it was a more recent
concern. The court’s strict construction of the text in order to ensure legal
certainty, predictability and mutual trust unwittingly risked what it was
seeking to protect.
The main explanation for this approach by the court was put down to a
lack of expertise in the area of private international law amongst the judges.
They predominantly come from public law or European Law backgrounds,
with only four out of the twenty-seven having any private international law
background. This lack of private international law expertise in the Court has
given rise to controversial judgments such as Case C-116/02 Erich Gasser
GmbH v Misat Srl [2003] ECR I-14693 and Case C-159/02 Gregory Paul Turner v
Felix Fareed Ismail Grovit and Others [2004] ECR I-3565. It was put forward that
it was not unreasonable to expect that the judges should have this knowledge.
The length of time it took for preliminary rulings to be considered was
also put forward as a criticism of the Court of Justice, although it was
recognised that there had been improvements in the average length of time
taken for a preliminary ruling and that in urgent cases (in particular child
abduction cases) the ECJ had dealt with cases in under 3 months.
Overall the Court of Justice plays an important role in developing
private international law through interpreting them and by affecting the
legislative activity in the review of the Private International Law Instruments.
However this is significantly weakened by the lack of expertise amongst the
judges giving rise to unpredictability in their judgments.
d. European Parliament
The European Parliament considers itself as playing a crucial role in the
development of private international law. However it was argued that the
evidence for how successful it had been was mixed. It was recognised that
there had been some success in amending private international law
instruments such as the inclusion of time limits for the return of the child in
Brussels II although that is not without criticism. However failures were also
identified such as those found in Rome II: exclusion of defamation or the
rejection of special jurisdiction for online consumers in Brussels I.
Constitutional problems such as the lack of legislative initiative and
legitimacy problems were highlighted as areas of concern. It was argued that
Habermas’s theory that post-international governance disempowers states in
favour of liberalised supranational governance supports the idea of giving the
European Parliament more power. Providing the European Parliament with a
clear political direction could enable it to exercise a more meaningful function
in the lawmaking process even in private international law. But in this area
the primary lack is expertise on the part of MEPs and a fairly small secretariat
with limited expertise to support the MEPs.
Part II
THE
EFFECTIVENESS
OF
THE
EU
INSTRUMENTS
AFFECTING
FAMILY
RELATIONSHIPS
a. Brussels IIbis Regulation
Discussion was focussed on the child abduction provisions of the Brussels
IIbis Regulation. It was noted that the Regulation deserved credit as it was
designed to discourage intra-EU parental child abduction reinforcing the first
principle of the Hague Abduction Convention. Empirical research was put
forward demonstrating that the initial practical effect of the introduction of
the Regulation resulted in a reduction in the number of cases of judicial
refusal to return. This was attributed to the restriction of Article 13(b) of the
Hague Abduction Convention found in Article 11(4) of the Brussels IIbis
Regulation requiring the courts to return the child “if it is established that
adequate arrangements have been made to secure the protection of the child
after his or her return.” However current statistics highlight a large increase
in the number of judicial refusals to return the child that threatens to
undermine the return principle.
The Regulation was criticised for the obligatory nature of Article 11(3)
that the court must issue a decision within six weeks from being seized of the
matter. Doubts were expressed about the ability of Member States to comply
with the six-week rule. Factors such as the right of the child to be heard and
other procedural requirements within the Regulation were cited as possible
reasons for the delays. Criticism of Article 11(3) was that it risked violating
the right to a fair trial as the desire for speed reduced the substantive quality
of the case. The Regulation has been criticised for the absolute nature of the
right of the courts of the habitual residence of the child to insist on the return
of the child from the point of view of the rights of the child and the
practicality of enforcing the return.
b. Maintenance Regulation
Political interest was considered to be a negative factor during the
negotiations of the Regulation. It was suggested that the pressure to finalise
the Regulation meant that there were areas that were left in a condition,
which would have benefited from further discussion.
It was noted that the parallel project at The Hague contributed to the
first concern. During the negotiations of the Regulation some Member States
argued that as no one knew when the Hague Convention was going to come
in that they wanted to incorporate the administrative cooperation provisions.
This was fundamentally unworkable, as it means using all languages within
the EU. Under the Hague Convention, Central Authorities must be able to
communicate with each other in either English or French whereas
communication under the Regulation is much less efficient requiring a lot of
translation as Central Authorities can use their own languages.
A second concern related to the relationship of the new Regulation
with the previous legal situation. It was decided during negotiations that
decisions, which had taken place prior to the start of the Regulation or started
before the start of the Regulation would be submitted to the second regime of
the Regulation created for the UK and Denmark. This created a problem in
many Member States where they had two regimes in place, one for the
Convention and one for the Regulation.
The Regulation is also considered to be unclear as how it relates to the
new European enforcement order, creating further problems with
administrative cooperation.
There is also concern about the choice of connecting factor for
jurisdiction. Habitual residence has the potential to be problematic where it is
not possible to be identified. It was suggested that the addition of domicile or
residence as subsidiary connecting factors would have removed uncertainty
in this area.
It was also noted that during meetings with the central authorities a
lack of basic knowledge about the Regulation was recognised. It was
recommended that workshops should be formed to pass knowledge of the
reasoning behind the negotiations of the Regulation to the Central Authorities
in order to give them the understanding they need for the practical
application of the Regulation in the courts.
c. Succession Regulation
As this Regulation doesn’t come into force until 2015, discussion was limited
to theoretical rather than empirical analysis. The abolition of scission in the
Regulation was considered a success, as was party autonomy. However it was
argued that the narrow approach to party autonomy restricted to choice of the
law of nationality could have been widened by allowing the choice of
habitual residence at the time the choice was made and possibly the law of
domicile at the time at which the choice was made.
In the absence of party autonomy the main connecting factor is the
habitual residence of the deceased at the time of his or her death. The
Regulation made some attempt to define habitual residence, with an
emphasis on the need for the deceased to have a close and stable connection
with the State concerned. However the Regulation was criticised for assuming
that everyone has a habitual residence and not offering a fall back rule where
a person has no habitual residence or more than one.
The mechanisms surrounding jurisdiction were also criticised for
lacking clarity over when a court would decline jurisdiction. A major defect
was identified in that conflicts of jurisdiction outside the EU were not
resolved.
Focus on political concerns during the drafting of the Regulation rather
than technical concerns for private international law were put forward as a
major cause of the defects within the Regulation. Article 29 regarding the
administration of estates was put forward as an example of a political
compromise that didn’t achieve what it set out to do. It was also argued that
clawback did not support the aim of the Regulation which is estate planning
as there can be no way of knowing where you will be habitually resident
when you die at the time you make a gift and therefore you have no idea
which law will govern the question of clawback. It was agreed that if
emphasis had been put on gaining a technical understanding of the private
international law issues then it should have been possible to avoid these
major defects.
Part III
THE EFFECTIVENESS OF
OBLIGATIONS
THE
EU
INSTRUMENTS CONCERNING CHOICE OF LAW IN
a. Rome I
The main focus of the discussion was whether this was an improvement on
the Rome Convention. As there is very little available case law, analysing its
effectiveness was restricted to theoretical rather than empirical analysis.
Beginning with the positive aspects, Article 3 was considered to be clearer on
the requirement for an implied choice of law than in the Rome Convention. It
provided a clearer distinction between implied and inferred choice.
Article 4 was seen as an improvement on the Rome Convention, which
was criticised due to problems arising from its circularity. Article 4 of the
Regulation was thought to be potentially easier to apply due to the exception
when the other law is manifestly more closely connected being clearly an
escape clause to be applied restrictively. However Article 4(1) was considered
to be a cause for concern regarding classification of different types of contract.
Article 9(3) regarding the provision on overriding mandatory rules of a
third country was considered to be a good compromise and more compatible
with legal certainty.
Areas in the Rome Regulation that were identified as needing further
clarification were arbitration and agency. General concerns were raised over
the entry into force of the Regulation against the application of the Rome
Convention to long-standing contracts that change slightly over time such as
delivery contracts. This was identified as an area in need of analysis.
Further work is needed on assignment and insurance.
b. Rome II
The main concerns surrounding Rome II were based on the complexity of the
law. Characterisation issues were highlighted as a problem between actions in
contract and actions in tort.
The treatment of traffic accidents, the exclusion from scope of the
violations of privacy and defamation, and the provisions on product liability,
were all identified as areas of unfinished business.
A problem was identified in that victims were not always being
adequately compensated. A case from Estonia was cited where a Norwegian
applicant could not be given more than an Estonian citizen, as this would be
in violation of the Estonian Constitution. This raises very real concerns that
need to be addressed.
The rule on product liability was criticised for creating the possibility
of forum shopping. Overall this Regulation was regarded as an effective
instrument, which had been accepted. The relationship between Rome II and
the Hague Conventions on Traffic Accidents and Product Liability requires
further work.
Part IV
THE EFFECTIVENESS OF THE EU INSTRUMENT ON JURISDICTION AND
RECOGNITION AND ENFORCEMENT OF JUDGEMENTS IN CIVIL AND COMMERCIAL
MATTERS AND SOME SPECIALIST TOPICS
a. Brussels I
The discussion on this Regulation was based on the original Commission
proposal for the recast of Brussels I and has been overtaken by events with
the adoption of the final version of the recast in Regulation 1215/2012 OJ 2012
L351/1.
b. Private International Law Aspects of Intellectual Property
The case law from the ECJ surrounding the issue of jurisdiction in crossborder intellectual property litigation in the EU was discussed, in particular
Case C-4/03 GAT v Luk [2006] ECR I-6509 and Case C-539/03 Roche and
Nederland BV and Others v Frederick Primus Vincent Goldenberg [2006] ECR I6535. The primary concern that by focussing on the territoriality of IP rights,
even where the rights are in substance identical, the court has been criticised
for closing the door to cross-border relief.
Provisional measures and their effect on the jurisdiction of a court were
then considered. The ECJ’s judgment in Case C-616/10 Solvay SA v Honeywell
Fluorine Products Europe BV and Others, judgment of 12 July 2012, held that
raising a defence of invalidity would not affect such jurisdiction, although it
was argued that this seems at odds with Case C-99/96 Hans-Hermann Mietz v
Intership Yachting Sneek BV [1999] ECR I-2277 or the situation after the revised
Brussels I Regulation comes into force.
c. Private International Law Aspects of Competition Law
It was noted that the harmonisation of private international law in the area of
competition law is not the harmonisation of a long-developed and fully
worked out body of competition law. There are significant variations in the
development of competition law within Member States. In order to create
effective Private International Law provisions in competition law it was
demonstrated that it is necessary to first decide what sort of claims were
being dealt with as consumers and multinational corporations do not litigate
in the same way. The way these points are decided will affect how private
international law is developed.
Making a decision as to whether we want the litigation to promote
only compensation or compensation plus deterrence was also deemed to be
necessary. Flexibility in private international law was also considered
beneficial in order to avoid unhelpful national concepts.
With regards to jurisdiction, Brussels I was considered unhelpful for
competition law as there was no special rule differentiating this area from any
other form of civil and commercial litigation.
With regards to choice of law Rome I was considered to work well.
Article 9(3), allowing the court to consider the foreign mandatory rules, was
considered a sensible provision.
Rome II was considered to be a different story, requiring reform. It
was suggested that it needs to take into account transitional provisions, to
allow a choice of law via Article 6(4), to remove Mosiaikbetrachtung from
Article 6(3) for intra EU cases and finally to tighten up the drafting in Article
6(3)(b).
d. Private International Law Aspects of Collective Redress
Collective redress is a topic that is attracting attention from both UK and EU
legislators. It is featured in the Commission’s work programme 2012 with the
aim to establish an EU framework to determine whether collective redress
will be a legislative or non-legislative measure. It has been defined by the
Commission as any mechanism that may accomplish the cessation or
prevention of unlawful business practices, which affect a multitude of
claimants or the compensation for the harm caused by such practices.
This discussion focussed on collective redress for breach of competition
law in the area of antitrust within the EU. This illegal conduct causes
scattered damage to many individuals where the value of the damage to the
individual is so negligible that redress is not proportionate. It was argued that
private international law has a key role to play in the development of this area
of law.
It was noted that a comparative report by the European Parliament in
2012 suggested that of the collective redress actions, which had taken place in
six Member States, damages had been awarded in only two cases highlighting
an enforcement gap. The question of how this enforcement gap could be
closed was then discussed. It was suggested that aggregate claims would
work for both opt in and opt out bases and that collective settlements could
also be considered.
A major difference in the way collective redress is handled in Member
States was identified. Although it was thought that EU harmonisation would
lead to uncertainty. National measures were considered better suited to deal
with damages.