9 European Small Claims Procedure
| (26443)
7388/1/05
+ ADDs 1 and 2
COM(05) 87
| Draft Regulation creating a European Small Claims Procedure
|
| Legal base | Articles 61(c) and 65 EC; co-decision; QMV
|
| Document originated | 15 March 2005
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| Deposited in Parliament | 23 March 2005
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| Department | Constitutional Affairs
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| Basis of consideration | EM of 1 June 2005
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| Previous Committee Report | None
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| To be discussed in Council | No date fixed
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| Committee's assessment | Legally and politically important
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| Committee's decision | Not cleared; further information requested
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Background
Section 1.55 9.1 Articles 61(c) and 65 EC empower the Community
to adopt measures in the field of judicial cooperation in civil
matters with cross-border implications, in so far as this is necessary
for the proper functioning of the internal market. The European
Council in Tampere in October 1999 endorsed a programme of work
on mutual recognition of decisions in civil and commercial matters
and on new legislation on procedure for cross-border cases, in
particular those elements which are instrumental to smooth judicial
cooperation and to enhanced access to law, such as provisional
measures, taking of evidence, orders for payments and time limits.
Section 1.56 9.2 In 2000 the Council agreed a programme of
work including the abolition of exequatur for uncontested
money claims. (Exequatur is the special court procedure
for the conversion of a foreign judgment into an order enforceable
in the domestic jurisdiction.) The Commission has decided to
pursue this in three ways. The first was the creation of a European
Enforcement Order (EEO) the Regulation for which was adopted on
21 April 2004;[38] the
second is the creation of a European Order for Payment, the proposal
for which the previous Committee considered in May 2004 and which
we are currently holding under scrutiny. The third way is the
subject of the current document.
The document
Section 1.57 9.3 The document contains the Commission's proposal
for a Regulation creating a European Small Claims Procedure (ESCP).
The proposal pursues two broad objectives.
Section 1.58 9.4 First and foremost, it would provide for
a simplified and speedy procedure for low-value claims as a uniform
alternative to Member States' own schemes. The Commission's proposal
follows the general principle of the small claims procedures which
currently exist in four Member States (although some other Member
States allow their Courts to adapt their procedures as they see
fit). The proposal would allow claimants to pursue a simplified
procedure for obtaining judgment and would facilitate the introduction
of the claim by a specific form. The system would provide for
a purely written procedure, unless the Court considered an oral
hearing was necessary. The nature and extent of evidence, and
the ability to use expert evidence, would be at the Court's discretion.
Parties could be legally represented but such representation
would not be obligatory, and litigants could have unpaid or non-professional
representation. Costs would be payable by the losing party, or
at the Court's discretion. However, where the losing party were
an unrepresented natural person they would not be liable for the
fees of legal professionals of the other party. In certain circumstances,
such as the failure to effect service of process, the defendant
would have a right to apply for review of a judgment subject to
specific conditions set by Member States. Finally the proposal
leaves it to individual Member States to decide whether there
would be a right of appeal.
Section 1.59 9.5 Secondly, Article 18 of the draft regulation
would abolish the need for intermediate measures (exequatur)
to enable the recognition and enforcement in another Member State
of the judgment given under the ESCP.
Section 1.60 9.6 The Commission proposes that the ESCP should
not be confined to cross-border cases. It argues that claimants
should be given the opportunity to use the procedure in internal
cases as an alternative to the current procedures in each Member
State.
The Government's view
Section 1.61 9.7 In her Explanatory Memorandum of 1 June 2005,
the Parliamentary Under-Secretary of State, Department for Constitutional
Affairs (Baroness Ashton) summarises the Government's view of
the proposed measures as follows:
"The Government supports proposed measures, which can, in
practical ways, bring real benefits to ordinary citizens, and
businesses that wish to pursue legal cases across borders. Such
measures will generate consumer confidence and give a boost to
the internal market.
"The Government intends to explore further the
Commission's legal authority to propose a measure that goes further
than cross-border claims.
"The ESCP is one of three EU measures aimed
at making litigation across borders easier and more effective.
The others are the European Enforcement Order and the European
Order for Payment (EOP) procedure. The Government wishes to explore
with other Member States how to clarify and improve the interaction
between the three initiatives and with the national system for
civil litigation. In particular, we will explore the scope for
abolishing exequatur in undefended ESCP claims or facilitating
their seamless transfer to the EOP procedure.
"The Government fully supports the principle
of a simple small claims procedure applying to cross border cases,
but wishes to raise a number of issues aimed at clarifying and
potentially improving the proposal.
The proposed limit for the ESCP raises various
issues, for example in England and Wales the general limit for
small claims is £5,000. We would wish to discuss with Member
States the potential for making the £2,000 limit a minimum
limit, so that where a Member State has a higher limit this can
be applied. We believe that this would provide greater flexibility.
Some low value cases may be exceptionally complex
and the Government will explore with Member States whether the
courts should have the power to transfer such cases to national
procedures of their own motion.
As presently drafted the protection for the
losing party against liability for legal costs is limited to unrepresented
natural persons. We wish to explore whether this could be extended
to all unrepresented parties, including small business. This
should further discourage the use of lawyers, help prevent costs
from escalating, and reduce the scope for small businesses to
be deterred from pursuing larger ones by risk of costs."
Conclusion
Section 1.62 9.8 We thank the Minister for
her detailed outline of the Government's position in relation
to this proposal. We share the Government's general support for
the objectives of the proposed measure. We note, however, the
Government's remaining concerns about the application of the proposed
measure to internal cases, the appropriateness of the proposed
£2,000 limit for the application of the European Small Claims
Procedure and the differential treatment of natural and legal
persons for the purposes of the losing party's liability for costs.
Section 1.63 9.9 We ask the Minister to keep
us informed of the evolution of the Government's thinking in these
respects, as well as the ongoing negotiations on the proposed
regulation. We also ask the Minister to indicate whether the
Government intends to opt in to the proposed regulation and, if
so, whether any UK opt-in would be conditional on changes to the
text that would address the Government's concerns. Pending receipt
of such information we shall keep the document under scrutiny.
In particular we ask the Minister to assure us that she will not
opt into the above measure unless her concerns are met.
38 OJ No. L 143 of 30.4.04, p. 15. Back
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