European Scrutiny Committee Contents

4   Recognition and enforcement of judgments in civil and commercial matters



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COM(10) 748

Draft Regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast)

Commission staff working paper — Impact Assessment

Commission staff working paper — Summary of Impact Assessment

Legal baseArticles 67(4) and 81(2)(a),(c) and (e) TFEU; co-decision; QMV
Document originated14 December 2010
Deposited in Parliament22 December 2010
DepartmentMinistry of Justice
Basis of considerationEM of 21 December
Previous Committee ReportNone; but see (30610) 9149/09 and (30569) 9150/09: HC 19-xviii (2008-09), chapter 12 (3 June 2009)
To be discussed in CouncilNo date set
Committee's assessmentLegally important
Committee's decisionFor debate in European Committee B; further information requested


4.1  This proposal concerns the repeal and replacement of Regulation (EC) No 44/2001 of 22 December 2001 (known as the Brussels I Regulation) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. The proposal is accompanied by an impact assessment, together with a summary of that assessment.

4.2  The Brussels I Regulation replaced the Brussels Convention. It came into force on 1 March 2002 and applies to all Member States of the European Union with the exception of Denmark, which does not participate in measures adopted under Title IV of the Treaty establishing the European Community.[20] Denmark has concluded a separate agreement with the European Community, the effect of which is to extend the Regulation's rules to Denmark.

4.3  The Regulation lays down uniform rules to settle conflicts of jurisdiction and facilitate the mutual recognition and enforcement of judgments, court settlements and authentic instruments within the EU in civil and commercial matters. It also includes rules to assist courts in settling jurisdictional matters.

4.4  The preamble to the Regulation states many of its policy aims and objectives. It is designed to contribute to the continued development of an area of freedom, security and justice and to the "sound operation of the internal market". The regime aims at facilitating the mutual recognition of judgments in civil and commercial matters through a system of highly predictable jurisdictional rules which are generally based on the defendant's domicile. The regime established by the Regulation is founded upon a principle of "mutual trust in the administration of justice" between Member States.

4.5  Article 73 of the Regulation places an obligation on the European Commission to present a report on the application of the Regulation within five years. In May 2009, the European Commission published this report, which was accompanied by a Green Paper. [21] In overall terms, the report concluded that the Regulation had generally been a success, facilitating cross-border litigation through the application of uniform jurisdiction rules, including rules to regulate parallel proceedings, and rules to ensure the circulation of judgments. However, the report also concluded that there was a need for improvement in certain specific areas. These included the following:

  • the abolition of exequatur in the context of the international recognition and enforcement of judgments;
  • the operation of the Regulation in the broader international legal order;
  • the operation of choice of court clauses;
  • intellectual property;
  • rules governing lis pendens and related actions;
  • provisional measures;
  • the interface between the Regulation and arbitration proceedings; and
  • other issues, covering scope, jurisdiction, recognition and enforcement.

4.6  The Green Paper sought views on ways to improve the operation of the Regulation in these areas by the end of June 2009. It is as a result of this report and responses to the Green Paper that this proposal is made.

Legal basis and opt-in

4.7  The legal basis for this proposed Regulation is Article 67(4) in conjunction with Article 81(2)(a), (c) and (e) of the Treaty on the Functioning of the European Union (TFEU). This concerns measures in the field of judicial co-operation in civil matters having cross border implications under Title V TFEU. Under the United Kingdom's opt-in Protocol, it need not participate in the adoption of the proposed Regulation unless it elects to do so. The Government has launched a consultation on whether the UK should opt into the proposal, with a deadline for responses of 11 February. The Minister says of the decision to opt-in:

"In deciding whether to opt in to the proposal, the Government's position will be informed by the results of its consultation. Without prejudice to that consultation, the Government recognises the importance to both businesses and citizens of the current Brussels I Regulation. It also recognises that some of the Commission's proposals would constitute significant improvements to it, notwithstanding that there are some issues of concern that will need to be resolved during the negotiations."[22]

The document

4.8  Chapter I of the proposed Regulation deals primarily with the scope of the instrument in its general application in "civil and commercial matters", subject to various specific exclusions in areas which in general either are, or will fall, within the scope of other EU Regulations, such as insolvency and wills and succession.

4.9  Chapter II contains the Regulation's rules of jurisdiction with Section 1 setting out the general jurisdictional rules. The main rule in Section 1 is Article 2 which reflects the principle that jurisdiction should generally be based on the domicile of the defendant in a Member State. Section 2 provides additional special grounds of jurisdiction. Those set out in Articles 5 and 6 reflect either the subject matter of the dispute (e.g. whether the claim is in contract or tort) or some other special characteristic of the dispute (e.g. jurisdiction in relation to counterclaims or co-defendants).

4.10  Sections 3, 4 and 5 of Chapter II provide alternative jurisdictional regimes in relation to certain categories of contract where it is considered that the rules of jurisdiction need to favour the weaker party (i.e. certain insurance, consumer or employment contracts). In such cases the weaker party, for example a consumer, is generally entitled to sue in the Member State where he or she is domiciled and the possibility for the parties to select a jurisdiction to resolve their dispute is severely limited. Section 6 provides certain grounds of exclusive jurisdiction (with the result that, where these apply, no other ground of jurisdiction is generally available). These grounds reflect the special subject matter of the dispute which makes it desirable that the courts of one Member State alone should be entitled to hear the dispute. They are mainly designed to cover certain issues arising out of disputes in the following areas: immoveable property, company law; or intellectual property law issues.

4.11  Section 7 provides for commercial parties in certain circumstances to agree on a jurisdiction which should be exclusively competent to determine future disputes between them. The commercial importance of this jurisdiction is clear in view of the need for legal certainty for both parties in the event of any such dispute. Section 8 is new and results from the Commission's analysis of the Brussels I Regulation. On the basis of that analysis, the Commission proposes that the rules of jurisdiction in the proposed Regulation should be extended to apply to a defendant where he or she may be domiciled outside the EU. The consequence of this extension of EU jurisdiction will be to exclude the application of the grounds of jurisdiction currently available under the national laws of the Member States. The grounds proposed under this Section relate to the location of moveable property in a Member State and a forum necessitatis for cases where it would not be reasonable to require a claimant to sue in a third State.

4.12  Section 9 contains rules imposing certain obligations on national courts when determining jurisdiction under the Regulation, in addition to cases where the defendant fails to enter an appearance. Section 10 provides rules to deal with situations involving concurrent court proceedings which have been brought either in different Member States or in a Member State and a third State. There is also a rule to regulate cases where there are competing proceedings before a court and an arbitral tribunal. Section 11 creates jurisdiction in relation to provisional, including protective, measures.

4.13  Chapter III sets out the procedures for the international recognition, enforceability and enforcement of judgments. Section 1 provides for the recognition, throughout the EU, of judgments obtained in a Member State. In doing so, this generally abolishes the requirement for exequatur (the need to obtain a declaration of enforceability in the Member State where recognition is sought). Section 2 provides the rules for the enforcement, throughout the EU, of judgments obtained in a Member State. The applicant, seeking enforcement, is required to supply various documents to the enforcement authorities and those authorities are required to refuse enforcement in certain circumstances. Provision is also made for enforcement to be made conditional in certain cases, for example on the provision of security by the applicant. Section 3 contains certain common provisions. In particular provision is made, in certain circumstances, for a review of a judgment given in default of the appearance of the defendant in the Member State of origin (Article 44) and in other cases in the Member State of enforcement where enforcement would be denied on the basis of a breach of the fundamental principles underlying the right to a fair trial (Article 45).

4.14  Chapter IV provides for the enforcement of authentic instruments and court settlements whilst Chapter V contains general provisions which cover a variety of matters: for example, the place of domicile of individuals (Article 54) and the place of domicile of companies and other legal persons (Article 55). Chapter VI contains transitional provisions. Of particular note here is the continued application of the exequatur requirement established under the Regulation as a precondition to recognition in two types of case: first, judgments arising out of violations of privacy and rights relating to personality, including defamation; and secondly, certain judgments obtained by or on behalf of multiple claimants on the basis of unlawful business practices. There are also provisions dealing with conventions to which the Member States are parties (Articles 63, 64, 65, 66 and 67). Chapter VIII contains the proposed Regulation's final provisions.

The Government's view

4.15  The Secretary of State for Justice (Mr Kenneth Clarke) deposited an Explanatory Memorandum dated 21 December 2010, which sets out in detail the Government's current thinking on this proposal.


4.16  The Government is satisfied that the proposed Regulation in broad terms complies with the principle of subsidiarity. This reflects the fact that its subject matter is generally already covered by the Brussels I Regulation. However the Government is reflecting further as to whether there is a subsidiarity issue in relation to the proposed extension of the scope of the Regulation to cover parties who are not domiciled in the EU.


4.17  The Minister says that impact of the proposed Regulation on the current law in the United Kingdom would be significant. Not only would it have a considerable impact to the extent that the law currently reflects the Brussels I Regulation, but the addition of the proposed extension of the rules of EU jurisdiction to defendants domiciled outside the EU would preclude the operation of the current rules of jurisdiction in this area as they currently apply in the UK. The most significant aspects of the proposed Regulation's impact are discussed in outline in the section below dealing with the proposal's policy implications.


4.18  The Minister says that the many detailed policy implications of the proposed Regulation are the subject of a consultation exercise by the Government. Accordingly, the Government's assessments of the implications of the amendments being suggested to the Regulation are necessarily preliminary in nature: they are subject to the results of that consultation and further detailed consideration of the text of the provisions proposed by the Commission.

4.19  The following are the principal changes envisaged in the proposed Regulation, together with the Government's preliminary assessment in relation to each of them:

Provisions to abolish in general the intermediate procedure for the recognition and enforcement of judgments (exequatur), with the exception of judgments in defamation and related cases and certain judgments given in collective proceedings

4.20  The Government supports, in principle, the abolition of exequatur as it has the potential to reduce unnecessary delay and costs for litigants. However, such abolition should not simply remove the existing protections for defendants which exist under the current Brussels I Regulation in relation to the international enforcement of judgments. In this context the Government welcomes in principle the remedies proposed by the Commission which should remain available to defendants, in particular as regards the following cases:

  • where the defendant was not properly informed about the original proceedings,
  • where there were procedural defects in the original proceedings which may have infringed a defendant's right to a fair trial; and
  • where the judgment is irreconcilable with another judgment issued either in the Member State where enforcement is sought or, in certain circumstances, in another country.

4.21  Whether these proposed remedies for defendants are fully adequate is an issue which the Government will continue to assess, together with the proposed retention of exequatur for defamation cases and certain multi-claimant cases. In this context the Government is reflecting on three specific issues. The first is the appropriateness of requiring defendants to litigate only in the Member State of origin on those issues which concern the failure to provide them with information about the proceedings, rather than enabling those issues, along with all the other alleged breaches of the safeguards, to be determined by courts in the Member State of enforcement. The second issue concerns the proposed deletion of the current safeguard of public policy in so far as that safeguard relates to substantive as opposed to procedural issues. The Government questions whether such a deletion is appropriate in cases where the issue relates to substantive public policy as expressed in national or EU legislation, for example in a case involving the interests of consumers. The third issue is whether the proposed Regulation's different approach to defamation and related claims is justified and, on the basis that such a justification reflects the absence of harmonised EU choice of law rules in relation to such claims, whether further exceptions should perhaps also be made for other matters where such harmonised rules do not currently exist (for example in the field of real property).

Provisions to extend the jurisdiction rules of the Brussels I Regulation to disputes involving defendants domiciled outside the EU, including regulating situations where the same issue is pending before a court inside and outside the EU

4.22  In principle, the Government remains to be persuaded of the need to extend the current jurisdiction rules to cover disputes involving defendants domiciled outside the EU. It continues to believe that, as opposed to unilateral harmonisation in this area at the EU level, such issues would be better resolved through multilateral negotiations at the Hague Conference on Private International Law.

4.23  The Government is also carefully considering whether the legal base in Article 81 TFEU allows for such regulation of defendants not domiciled in the EU.

4.24  A possible compromise solution, which the Government could support, would be to allow the Member States to retain their current national grounds of jurisdiction, notwithstanding that this would be accompanied by some partial harmonisation of jurisdiction at EU level in respect of defendants domiciled outside the EU.

4.25  If as a result of the forthcoming negotiations on the Regulation, it is agreed that the Commission's proposal to extend the jurisdiction to defendants domiciled outside the EU is accepted, the Government would support the proposed Articles 25 and 26 which create new grounds of jurisdiction in relation to moveable property and, in the interests of justice, a forum necessitatis for claimants who would otherwise be deprived of an adequate forum outside the EU in which to litigate their disputes.

4.26  An important consequence of the proposed uniform extension of jurisdiction to cases involving "third country domiciliaries" is that the many national grounds of jurisdiction currently established under the laws of the United Kingdom would no longer be available. The Government is giving careful consideration to which, if any, of these national grounds should in some form be retained under the revised Regulation. This is essential in order to ensure that the interests of claimants are protected and that no jurisdictional lacuna is created as a result of the Commission's proposed extension of jurisdiction.

4.27  Another consequence of this approach is that the ambit of the protective rules of jurisdiction relating to insurance (contained in Articles 8 to 14 of the proposed Regulation) would be extended to situations where a defendant is domiciled outside the EU. In line with the current Brussels I Regulation, these provisions would apply in certain cases to insured parties acting in a commercial capacity. This would mean that the possibilities for commercial parties to make valid choice of court agreements, already restricted for cases falling under the Brussels I Regulation, would now be further restricted in cases where the defendant in the case is domiciled outside the EU. The Commission's approach on this issue is inconsistent with the 2005 Hague Convention on Choice of Court Agreements and the principle of party autonomy which underpins that instrument. The Government will want to ensure that whatever is agreed in the adopted Regulation is in the best interests of the United Kingdom's insurance industry and its world-wide interests or in the interests of the UK as a forum of choice for litigating international commercial disputes.

4.28  A further consequence of the Commission's approach to jurisdiction is that, in the absence of any provision to the contrary, it would be likely to preclude entirely the operation of the procedural discretion known as forum non conveniens, a valuable mechanism deployed by courts in the United Kingdom to ensure the transfer of cases which would be more appropriately dealt with by the courts in another jurisdiction. The European Court of Justice's (ECJ's) decision in Owusu v. Jackson[23] has already achieved this result for cases falling within the scope of the current Brussels Regulation and the proposed comprehensive scheme of EU jurisdiction would complete that process of exclusion.

4.29  In this context the Government welcomes in principle Article 34 which establishes a discretionary lis pendens rule where there are concurrent proceedings in the court of a Member State and the court of a non-Member State. However, in view of the fact that the courts of a non-Member State will not be operating a jurisdictional regime equivalent to that which operates within the EU, this provision needs to be reformulated in more flexible terms by analogy with Article 30, on related actions, and without the requirement that a court in a non-Member State must necessarily have been seized first.

4.30  The Government welcomes the Commission's decision not to propose uniform rules to regulate, within the EU, the recognition and enforcement of judgments coming from non-Member States. This matter will continue to be regulated by national law.

Provisions to enhance the effectiveness of choice agreements

4.31  The Government welcomes the proposal that a court in a Member State, chosen by the parties to resolve their dispute, should always have priority to do so regardless of whether that court was first or second seized. This addresses the problems of cost, delay and legal uncertainty caused by the ECJ's decision in Gasser.[24] The resolution of this issue is an important priority for the Government. It is also supported by the European Parliament.

4.32  The Government also welcomes the Commission's proposal for a harmonised conflict of law rule on the substantive validity of choice of court agreements. Such a rule is to be welcomed as it reflects the rule in the 2005 Hague Convention on Choice of Court Agreements, the ratification of which the Government supports. This will also have the benefit of removing an issue of legal uncertainty which exists under the current Brussels I Regulation.

Provisions regulating the interface between the Regulation and arbitration

4.33  The Government shares the stated objectives of the Commission in the area of arbitration, namely the need to enhance the effectiveness of arbitration agreements within the EU, to prevent parallel court and arbitration proceedings and to eliminate the incentive for abusive litigation tactics. These objectives reflect the commercial importance of arbitration and the problems generated by the ECJ's decision in West Tankers.[25]

4.34  However, in seeking to achieve these objectives, the Government notes that the Commission has not adopted the approach which the UK advocated at the Commission's Green Paper stage, namely the reinforcement of the current exclusion of arbitration from the scope of the Brussels I Regulation in order to remove the entirety of the arbitral process from the scope of the Regulation.

4.35  The Commission proposes that a court seized of a dispute should be obliged to stay its proceedings on the basis that certain conditions are fulfilled:

  • where such proceedings contravene an arbitration agreement, and
  • where either an arbitral tribunal has already been seized of the dispute or that court proceedings have commenced in the Member State where the arbitration has its seat.

4.36  At this stage the Government wishes to reserve its position on this proposal. It intends to consult extensively among the arbitration community before expressing a view. One factor which the Government will weigh carefully is the extent to which the Commission's proposal would be likely to create problems by reference to the scope of EU competence in this area.

Provisions relating to the co-ordination of proceedings before the courts of Member States

4.37  Various proposals are put forward under this heading. Whilst the Government is sympathetic to the proposal to improve the general lis pendens rule by prescribing a time limit within which the court first seized must decide on its jurisdiction, it is not supportive of the proposal that there should be an exchange of information by the courts seized of the same matter. Such a mechanism is unlikely to have any significant value in practice and could well lead to additional delay and expense for the parties. The Government is supportive of the proposal that in relation to the consolidation of related actions the technical and unduly restrictive requirement that consolidation must be possible under national law should be abolished.

4.38  On provisional measures, the Government notes in particular the proposal that provisional measures ordered by a court without jurisdiction under the Regulation as to the substance of the dispute should not circulate such measures within the EU for recognition and enforcement purposes. This is contrary to the position under the current Brussels I Regulation and, pending consultation on its practical implications, the Government reserves its position at this stage.

Provisions relating to access to justice

4.39  The Government supports many of the proposals made under this heading. In particular it supports the creation of a jurisdiction for claims relating to rights in rem at the place where moveable assets are located. This would be an appropriate jurisdiction as the courts in that jurisdiction should in principle have control over that property. This might be particularly useful in relation to claims for the recovery of leased moveable assets, such as aircraft. The Government also supports the proposal to permit the possibility of bringing actions against multiple defendants in the employment area, thus remedying the situation which arose in ECJ case of Glaxosmithkline[26] (as the weaker parties in such litigation employees should be able to consolidate their claims in this situation). Finally, the Government is also supportive of the proposal to enable commercial parties to conclude choice of court agreements for disputes concerning the tenancy of office space (which is currently prohibited under the Brussels I Regulation because of the exclusive jurisdiction in relation to disputes involving real property). Such agreements should be permitted in accordance with the general principle of party autonomy between commercial entities.


4.40  The Government is currently preparing an impact assessment on the proposed Regulation to accompany its consultation with stakeholders. This seeks input from interest groups on whether it would be in the national interest for the Government to seek to opt in to the Regulation.


4.41  The Government's impact assessment seeks input from interest groups in determining the potential costs and benefits of opting in or, as the case may be, not opting in to the Regulation. The Government's initial assessment is that any costs associated with the Regulation are likely to be merely those associated with its implementation. A final assessment will be made of these costs and benefits at the conclusion of the negotiations.


4.42  The Government intends to consult widely among interest groups from various sectors, including the judiciary, practitioners and academics. This consultation will relate both to the United Kingdom's opt in decision and thereafter throughout the negotiations on the proposed measure. The Government aim to publish their consultation document shortly.


4.43  The Government anticipates that the Hungarian Presidency will arrange regular Council working group meetings in order to start negotiations on this proposal. It is expected that, in view of the importance of the subject matter, the subsequent Polish Presidency will take forward negotiations through the working group as a matter of priority in the second half of 2011. The proposal is not expected to be agreed before the end of 2012 at the earliest.


4.44  We thank the Minister for his extremely helpful Explanatory Memorandum on the proposal to repeal and replace the Brussels I Regulation. We note that, in relation to the decision whether to opt-in, the Government recognises the importance to both businesses and citizens of the current Brussels I Regulation; that it also recognises that some of the Commission's proposals would constitute significant improvements to it, notwithstanding that there are some issues of concern that will need to be resolved during the negotiations; but that this view is subject to the conclusions the Government draws from the consultation exercise it is carrying out.

4.45  We think this proposal is legally very significant, and so, in line with the Government's Written Ministerial Statement of 20 January 2011, we recommend that the decision whether to opt into it be debated in European Committee B.

4.46  Before this debate takes place we would be grateful if the Minister could send us an overview of the responses to the consultation his Department has received. Meanwhile the document remains under scrutiny.

20   Pre-Lisbon Treaty terminology. Back

21   See headnote: (30610) 9149/09 and (30569) 9150/09: HC 19-xviii (2008-09), chapter 12 (3 June 2009) Back

22   See paragraph 26(7) of the Explanatory Memorandum. Back

23   C-281/02. Back

24   C-116/02. Back

25   C-185/07. Back

26   C-462/06. Back

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