Second Standing Committee on Delegated Legislation
Wednesday 21 June 2000
[Mrs Irene Adams in the Chair]
Draft Civil Jurisdiction and Judgments Act 1982 (Amendment) Order 2000
The Parliamentary Secretary of State, Lord Chancellor's Department (Mr. David Lock) I beg to move,
That the Committee has considered the draft Civil Jurisdiction and Judgments Act 1982 (Amendment) Order 2000.
The Chairman: With this it will be convenient to consider the draft Contracts (Applicable Law) Act 1990 (Amendment) Order 2000.
Mr. Lock: I welcome you to the Chair of the Committee this afternoon, Mrs Adams, which I hope will be relatively brief in considering two fairly technical, but none the less important statutory instruments.
The main purpose of the Civil Jurisdiction and Judgments Act 1982 (Amendment) Order 2000 is to make some minor modifications to the 1982 Act to reflect the accession of Austria, Finland and Sweden to the 1968 Brussels convention on jurisdiction and the enforcement of judgments in civil and commercial matters.
The 1968 Brussels convention, to which all member states of the European Union are parties, was brought into United Kingdom law by the Civil Jurisdiction and Judgments Act 1982. It harmonises throughout the European Union the law on the civil jurisdiction of national courts and facilitates the enforcement of their judgments in other member states. The agreement is important and it has generally been seen as operating satisfactorily in practice. Its underlying purpose is to promote mutual recognition and enforcement of judgments throughout the European Union, thereby inspiring business confidence and generally encouraging the right conditions for international trade.
On becoming member states of the European Union Austria, Finland and Sweden undertook to accede to this convention. An accession convention to this effect was agreed at the end of 1996. It makes no changes of substance to the convention, but only the technical amendments necessary to ensure that the convention contains, where appropriate, the references to the relevant national courts in these countries, their procedural rules and existing bilateral agreements between these countries and other member states covering the same subject matter as the convention. The practical and legal consequences of these accessions to the convention are limited because the new member states are already parties to the 1988 Lugano convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, which is modelled on, and is in very similar terms to, the Brussels convention. All the member states of the European Union are parties to that agreement. Articles 3 to 8 of this order make the necessary amendments to the Civil Jurisdiction and Judgments Act 1982.
The other purpose of this order is to make the necessary changes to the 1988 Lugano convention, for the purposes of the law in the United Kingdom, which will reflect the accession of Poland to this agreement on 1 February 2000. The Lugano convention is an agreement between the member states of the European Union and other countries that belong to the European Free Trade Area such as Poland, or are prospective members of the European Union. I have already mentioned its close resemblance to the 1968 Brussels convention. It was given legal effect in the United Kingdom by the Civil Jurisdiction and Judgments Act 1991, which amended the Civil Jurisdiction and Judgments Act 1982.
Mrs Adams, I realise that I have slightly misled the Committee. Poland is an aspirant member of the European Union, not a member of EFTA. In order for Poland to be allowed to accede, the consent of all the member states to the Lugano convention was required, and it has been given. It was agreed that the Polish legal system could be trusted to produce civil judgments worthy of recognition and enforcement in other member states and that its procedures for the enforcement of civil judgments justified confidence that judgments from other member states would be properly enforced in accordance with the principles of the convention. The Government were able to give their consent to Poland's accession after consulting widely, particularly among British lawyers practising in Poland. We are grateful for the work that they have undertaken in assisting the Government.
Articles 9 to 12 of the order amend the 1982 Act to include appropriate references to Poland and the relevant provisions of Polish law, its appeal courts and procedures.
The second order before the Committee is the Contracts (Applicable Law) Act 1990 (Amendment) Order 2000. The purpose of this order is to make some minor modifications to the Contracts (Applicable Law) Act 1990 to reflect the accession of Austria, Finland and Sweden to the 1980 Rome convention on the law applicable to contractual obligations.
I propose to say a few words about the background to the 1980 Rome convention. This is a convention made between member states of the European Union, the purpose of which is to harmonise their private international law rules on contract law. It lays down rules to determine which law is to apply to a contract that has connections with more than one country. It does not affect the substantive law of contract, but merely enables courts to decide which country's law governs a contract. This harmonisation is designed to make it easier for people to do business in the Community, since the rules on the applicable law of contract will no longer vary according to which member states' courts have jurisdiction.
The two basic principles of the convention accord with the previous law in the United Kingdom. First, the parties to a contract may choose which country's law is to apply to it; this enshrines freedom of choice and is central to the convention. Secondly, in the absence of any express choice that the contract is to be governed by the law of a particular country, the law of the contract is the country with which the contract is most closely connected, the convention lays down various rebuttable presumptions for determining this connection.
Certain matters are excluded from the scope of the convention, including contracts more closely related to family law, trusts, wills and succession, certain insurance contracts and questions governed by company law. There are special provisions on employment contracts and consumer contracts, which are intended to benefit the party in the weaker bargaining position. Although the convention is made between member states of the European Union, it will apply to all contracts with a foreign element which come before the courts in those states. It was implemented in the United Kingdom by the Contracts (Applicable Law) Act 1990.
As with the 1968 Brussels convention, Austria, Finland and Sweden undertook to accede to the Rome convention on becoming member states of the European Union. The accession convention was signed at the end of 1996; it makes no changes of substance to the Rome convention and contains only technical adjustments designed to ensure that the convention contains, where appropriate, the necessary references to the national courts and laws of the the new member states.
Article 5 of the order amends the protocol annexed to the Rome convention which, pursuant to article 21 of that convention, allows member states to retain diverging national provisions if they are based on an international convention to which the state in question is a party. The protocol already makes special provision for the Danish choice of law rules on the carriage of goods by sea; these diverge from the rules in the convention and accord with the legislation in other Nordic countries. As Sweden and Finland took part in the Nordic countries' agreement to establish uniform rules on this subject, they have accordingly been treated in the same manner as Denmark and the protocol is amended accordingly.
Finally, article 6 of the order amends the first protocol to the convention which deals with the jurisdiction of the European Court of Justice in relation to the Rome convention, and adds to the list of the supreme courts of the member states those of Austria, Finland and Sweden. The schedule to the order sets out the 1996 accession convention and adds it as a new schedule, schedule 3B, to the Contracts (Applicable Law) Act 1990.
In conclusion, the changes to the 1982 Act and the 1990 Act contained in these two orders are minor and uncontroversial and are necessary for Britain to be able to ratify the conventions whereby Austria, Finland and Sweden have acceded to the 1968 Brussels convention and the 1980 Rome convention. The proposed amendments to the 1982 Act are also necessary to reflect the accession of Poland to the 1988 Lugano convention. The orders therefore facilitate useful developments in these important areas of private international law and I commend them to the Committee.
Mr. Peter Atkinson (Hexham): I am grateful, and I am sure that the Committee is grateful, to the Minister for his explanation of the orders, which as he said are unexceptional. I wonder if he can satisfy a certain amount of curiosity about the first order and the accession of Poland to the agreement. Is it a bilateral agreement with the United Kingdom or an agreement with all the other members of the convention? Did Poland, being just one of the aspirant countries, join because it was judged to have qualified for it. Does Poland stand out in front of the Baltic states, Hungary, the Czech Republic, or Cyprus-other countries that propose to join? Do countries have to pass a test? Who examines the legal system of a country? The Minister talked about British lawyers working in Poland, but is it the Minister who has to be satisfied that the reciprocal arrangements will work, or is it the Secretary-General of the Council of the European Union, who seems to be the guardian of quite a lot of these provisions?
My question is a matter of curiosity. If the Minister can help, I shall be grateful.