1 European Small Claims
Procedure
| (26443)
7388/1/05
COM(05) 87
+ ADDS 1
and 2
| Draft Regulation creating a European Small Claims Procedure
|
| Legal base | Articles 61(c) and 65 EC; co-decision; QMV
|
| Document originated | 15 March 2006
|
| Deposited in Parliament | 23 March 2006
|
| Department | Constitutional Affairs
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| Basis of consideration | Ministers Letter of 18 May 2006
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| Previous Committee Report | HC 34-i (2005-06), para 9 (4 July 2005)
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| To be discussed in Council | "General approach agreement" intended at 1 June 2006 JHA Council
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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
1.1 Articles 61(c) and 65 EC empower the Community to adopt measures
in the field of judicial co-operation 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 co-operation and to enhanced access
to law, such as provisional measures, taking of evidence, orders
for payments and time limits.
1.2 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;[1]
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
1.3 The document contains the Commission's proposal
for a Regulation creating a European Small Claims Procedure (ESCP).
The proposal pursues two broad objectives.
1.4 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.
1.5 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.
1.6 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.
Minister's Letter
In her letter of 18 May 2005 the Parliamentary Under-Secretary
of State, Department for Constitutional Affairs (Baroness Ashton
of Upholland), writes as follows:
"I am writing to bring you up to date with the
progress of negotiations on the proposal for a European Small
Claims procedure (ESCP). Let me apologise straight away for not
having responded earlier to your report of July 2005.
"It will come as no surprise, given the Government's
support for the proposal, that we opted-in to the negotiations
on this proposal.
"During the UK Presidency in the second half
of 2005 we made good progress, completing both the first and second
readings of the proposal in the Council. At the Justice and Home
Affairs Council in December we sought, and obtained, agreement
to six key principles:
- The ESCP should primarily be
a written procedure
- There should be time limits for each stage of
the procedure
- Where hearings are necessary, the best possible
use should be made of information communications technology
- Legal representation should not be mandatory
- Costs should be proportionate to the claim, and
- The procedure should be reviewed after 5 years
"In parallel with that, the UK Presidency obtained
agreement that, in principle, measures under Article 65 should
concern cross-border cases and not cases that are purely internal
to a Member State. This principle has been specifically agreed
in relation to the ESCP.
"Since then, the Austrian Presidency has been
pressing forward seeking to resolve the remaining major issues.
There have been some changes to the text but, in my view, they
are all consistent with the six principles I have listed.
"They now intend to take the proposal to the
Justice and Home Affairs Council on 1 June to establish a 'general
approach'. Although the European Parliament has yet to report
(and its report is
not now expected until the autumn) this is
clearly a key stage in the development of
the negotiations.
"In your report you raised three specific issues.
The first was the question of whether the proposed Regulation
would apply to cross-border cases only or also extend to purely
domestic ones. As I have indicated, this question has now been
resolved in favour of cross-border cases only.
"Next, you raised the proposed €2,000 limit.
This remains controversial, and although a majority of Member
States can live with a €2,000 limit, others, including the
UK, would prefer flexibility (e.g. a range within which Member
States can set their limits) or a higher limit. However others
are asking for the limit to be lowered. My expectation
is that the question is not likely to be resolved in the Council
working group and instead will need to be settled at a JHA Council.
We will continue to press for flexibility, but we are
in a minority. However, we take the view that the limit is of
lesser importance than establishment of the procedure, having
in mind that for some states summary procedures of this kind will
be entirely novel. With time, and as confidence in the procedure
grows, it may be possible to raise the limit.
"Lastly, in the context of award of costs, you
were concerned about the distinction that appeared in the original
proposal between natural and legal persons. This distinction has
now been removed, in favour of a rule that the court or tribunal
dealing with a case under the European Small Claims procedure
would be under a duty to ensure that costs remained proportionate
to the claim.
"Inevitably, compromises have had to be made
in the course of negotiations, but the Government remains of the
view that the ESCP is a welcome proposal which has the potential
to deliver real benefits to citizens in Britain and more widely
throughout Europe."
Conclusion
1.7 We thank the Minister for her detailed review
of recent developments and negotiations regarding the proposal.
We especially welcome the Minister's assurance that a cross-border
limitation provision has now been included in the latest Presidency
text and that the distinction between natural and legal persons
in the costs provisions has also been removed. We note the Government's
continuing concern about the €2,000 maximum limit for the
application of the procedure. We share this concern and hope that
the Government will continue to press for flexibility in relation
to the proposed limit.
1.8 In view of the uncertainties which still attend
this proposal, and the likelihood of further substantial negotiations,
we do not consider that we can properly clear the proposal as
a whole from Scrutiny. We look forward in particular to receiving
confirmation of the exclusion of internal cases from the scope
of this proposal and ask the Minister to keep us informed of ongoing
negotiations and any other relevant developments.
1 OJ No. L 143 of 30.4.2004, p. 15. Back
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