4 European small claims procedure
| (27688)
10160/06
+ ADDs 1-5
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| Draft Regulation establishing a European small claims procedure
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| Legal base | Articles 61(c) and 65 EC; co-decision; QMV
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| Department | Constitutional Affairs
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| Basis of consideration | Supplementary EM of 7 December 2006
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| Previous Committee Report | HC 34-xxxvi (2005-05), para 5 (19 July 2006)
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| To be discussed in Council | —
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| Committee's assessment | Legally and politically important
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| Committee's decision | Cleared
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Background
4.1 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.
4.2 In 2000 the Council agreed a programme of work including the
abolition of exequatur for uncontested money claims.[14]
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; the second is the creation
of a European Order for Payment, which we cleared on 23 November
2005; the third way is the subject of the current document.
The Document
4.3 The document is the latest depositable text of the Commission's
proposal for a Regulation creating a European Small Claims Procedure
(ESCP).
4.4 The proposal 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, subject to a proportionality proviso
which allows the court to disallow the winning party from recovering
excessive costs. Moreover, where the losing party is an unrepresented
natural person, he will not generally be liable for the fees of
legal professionals of the other party. In certain circumstances,
such as the failure to effect service, the defendant would have
a right to apply for a review of the judgment subject to specific
conditions set by Member States. Finally, the proposal leaves
it to individual Member States to decide whether there will be
a right to appeal.
4.5 Article 18 of the draft Regulation would, where applicable,
abolish the need for intermediate measures (exequatur)
to enable the recognition and enforcement in another Member State
of the judgment given under the ESCP. The application for the
envisaged small claims procedure would be confined to cross-border
cases. The definition of cross-border cases for the European small
claims procedure is the same as that used for the European Order
of Payment.
4.6 Application of the European small claims procedure is confined
to cases with a value of up to €2,000.
This, as all other details of the Proposal, is subject to review
after a period of five years.
The Government's view
4.7 In her Supplementary Explanatory Memorandum of
7 December 2006, the Parliamentary Under-Secretary of State, Department
for Constitutional Affairs (Baroness Ashton) very helpfully summarises
the results of recent negotiations and related developments since
the publication of the latest Commission text. The Minister writes
as follows:
"The last Explanatory Memorandum highlighted
the achievements of the UK Presidency in the second half of 2005.
These together with subsequent further successful negotiations
have achieved the following:
- The ESCP should concern cross-border cases and
not cases that are purely internal to a Member State. The definition
of a cross border case used for the European Order for Payment
has been used for the European Small Claims Procedure, achieving
consistency, where possible and appropriate, between the Regulations.
- The ESCP will primarily be a written procedure.
- There will 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 will not be mandatory.
- Costs will be proportionate to the value of the
claim and the court must not award costs that are unnecessarily
incurred, including legal costs.
- The procedure will be reviewed after 5 years.
- A limit of €2,000 has been agreed; however
the 5 year review will enable us to revisit the limit.
- The forms are now much more user-friendly and
provide guidance for both claimants and defendants.
"The European Parliament published its report
on 7 November approving the Commission's proposal as amended.
Despite the number of amendments tabled by the Parliament, most
of the text follows in substance the Council's proposals of 21
September. Most of the changes are considered insignificant. The
only significant ones are:
- Articles 6 and 7.
References to national law have been deleted from both articles.
The compromise was that the recital will provide that the use
of modern communications technology for hearings will be subject
to national law (see recital (10). The Government is content.
- Article 12. The European
Parliament requested a provision requiring that the Court should
make parties aware of the consequences of missing time limits
or deadlines set. The Government is content.
- Articles 21 and 22
were updated by the EP to reflect the latest comitology agreement.
The Government is content.
"The Government considers that the overall
package now represents a significant achievement in securing better
access to justice for consumers and businesses.
"The European Parliament should deliver
its opinion at first reading during the plenary session from 11
to 14 December 2006. On the assumption that the plenary agrees
the text, it is expected to form the basis of a first reading
deal, which could be agreed by the Council early in the New year
without further discussion."
Conclusion
4.8 We thank the Minister for her helpful comments
and summary of recent events. We are reassured that the recent
amendments proposed by the European Parliament do not affect the
cross-border limitation provision nor the proportionality requirement
for the award of costs. We are further content that the amendments
are not so far-reaching as to cause us to reconsider our conclusion
that, on balance, the proposal no longer adversely affects the
UK's national interests. On this basis we are content to clear
the document.
14 Exequatur Is
the special court procedure for the conversion of a foreign judgment
into an order enforceable in the domestic jurisdiction. Back
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