Select Committee on European Scrutiny Thirty-Eighth Report













Draft Council Directive to improve access to justice in cross-border disputes by establishing minimum common rules relating to legal aid and other financial aspects of legal proceedings.


Draft Council Directive to improve access to justice in cross-border disputes by establishing minimum common rules relating to legal aid and other financial aspects of civil proceedings.

Legal base:

Article 61(c) EC; consultation; unanimity


Document originated:

(b) 26 July 2002

Deposited in Parliament:

(b) 4 September 2002


Lord Chancellor's Department

Basis of consideration:

(b) EM of 1 September 2002

Previous Committee Report:

(a) HC 152 -xxii (2001-02), paragraph 10 (20 March 20020)

To be discussed in Council:

Justice and Home Affairs Council 14-15 October

Committee's assessment:

Legally and politically important

Committee's decision:

(Both) Cleared


    1. We considered an earlier version of this proposal on 20 March 2002. We noted that the purpose of the proposed Directive was to improve access to justice in cross-border disputes by establishing minimum common rules relating to legal aid and other financial aspects of civil proceedings. The Directive was to apply to 'civil disputes of all types, irrespective of the type of court' and concerning all litigation in matters of civil law, including commercial law, employment law and consumer protection law.
    2. We noted that the Government had not then decided whether to opt into this measure, but that it supported measures to deal with the particular problems of the cross-border litigant.
    3. We raised a number of issues on the draft proposal. First, we asked the Minister what view she took of the reference in Article 6 to 'Union citizens' and of the apparent extension of rights attaching to such citizenship. Secondly, we were concerned by the scope of Article 15, which provided for legal aid to be granted to 'not-for-profit' legal persons where the proceedings were designed to protect 'legally- recognised general interests'. Thirdly, we had two concerns with the provisions of Article 17 (which related to the reimbursement of costs). In the first place, these seemed to require a 'fair reimbursement' in all cases, thus limiting the discretion of the national court to make no order for costs. In the second, the provisions were not limited to cross-border cases and did not therefore seem to us to be properly based on Article 65 EC[54].
    4. The revised draft Directive

    5. The revised proposal makes a number of significant changes, which meet our concerns. The revised Article 1 makes it clear that the proposal is limited to cross-border cases. As is clear from the two options for a revised Article 1A, Member States are still considering whether the proposal should apply to any case where one of the parties is domiciled or habitually resident in a Member State different from the one which has jurisdiction or whether it should apply only where such a party is the one applying for legal aid.
    6. Article 3 has been amended to make clear that legal aid need not be provided in proceedings (such as small claims proceedings or proceedings before certain tribunals) which are designed to enable litigants to make their claims in person. The Article also provides that a reasonable contribution towards the costs of proceedings may be required.
    7. Article 14 (which originally provided that legal aid might be refused where the action appeared 'manifestly unfounded') has been amended to provide that, in cases where pre-litigation advice was offered, legal aid may also be refused or cancelled on grounds related to the merits of the case.
    8. Article 15 has been amended to remove the reference to 'not-for-profit' legal persons. This has been replaced by a reference to private organisations in the field of consumer protection and which are referred to in Article 3b of Directive 98/27/EC of the European Parliament and of the Council[55].
    9. Article 17 has now been entirely deleted.
    10. The Government's view

    11. In her Explanatory Memorandum of 1 September, the Parliamentary Secretary at the Lord Chancellor's Department (Baroness Scotland) explains that the Government opted into the negotiations on 2 May. The Minister explains that the Government's main concerns relating to the merits test, the proceedings for which legal aid should be made available, and the operation of the financial eligibility criteria, had all largely been answered in the amendments included in the present text. The Minister further explains that such concerns as remain are considerably mitigated by the fact that the proposal is now to be limited to cross-border cases.
    12. In response to the points we raised on 20 March, the Minister replies, in relation to her views on Article 6 and its reference to citizens of the Union, that the provision is one which is concerned with non-discrimination and that, since all nationals of Member States are also citizens of the Union, there was no need to challenge the reference to citizens of the Union.
    13. In relation to our points on the lack of clarity of Article 15, the Minister comments as follows:
    14.       "That provision has now been much more tightly drawn and limited to the qualified entries specified under the Consumer Injunctions Directive. Legal aid granted under this provision is also made subject to conditions relating to the substance of the dispute (i.e. the merits) and such bodies will be eligible only if they are unable to pay the costs of the proceedings. The Government is considering whether in the limited circumstances envisaged by the revised proposal actions aimed at promoting the collective interests of consumers under the Consumer Injunctions Directive could be funded."

    15. Finally, with regard to Article 17, the Minister comments that our concerns have 'fallen away' with the deletion of that Article from the proposal.
    16. As far as the likely impact of the proposal is concerned, the Minister explains that the United Kingdom already provides legal aid in civil matters to non-nationals on an equal basis to UK nationals and that in 2000-01 there were around 75-85 applications received from within the EU, as against 174,000 cases in which full legal aid was granted, and 804,000 in which legal help[56] was granted. The Minister further explains that the revised version is much less extensive in scope, since it no longer applies to purely domestic cases, and that if the proposal is adopted in more or less its present form the size of any increase in the number of cases brought by means of civil legal aid is likely to be very small.
    17. In her letter of 2 October the Minister indicates that negotiations have progressed more quickly than had been expected and that significant and beneficial changes have been achieved. The Minister indicates that she intends to give political agreement, should it be necessary to do so, at the Justice and Home Affairs Council on 14-15 October.
    18. Conclusion

    19. We note that our concerns about the scope of this proposal have now been met. We welcome the limitation of the proposal to cross-border cases, and the deletion of Article 17, which we did not consider was properly based on Article 65 EC, and which might have interfered with the discretion of the court to make no order for costs.
    20. In the light of the Minister's further explanations, we are content to clear the documents.


54  Article 65 EC provides for the taking of measures in the field of judicial cooperation in 'civil matters having cross-border implications....insofar as is necessary for the proper functioning of the internal market.'  Back

55   OJ No L 166, 11.6.1998, pp. 51-54. The Minister points out in her EM of 1 September that in the UK only the Consumers Association has been so specified. Back

56  i.e. advice and assistance short of representation in proceedings. Back

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