Documents considered by the Committee on 19 November 2014 - European Scrutiny Committee Contents


7 European Small Claims Procedure

Committee's assessment Legally important
Committee's decisionNot cleared from scrutiny; scrutiny waiver granted for the agreement of a general approach at the forthcoming Council meeting; further information requested
Document detailsDraft Regulation amending Regulation 861/2007 establishing a European Small Claims Procedure and Regulation 1896/2006 creating a European Order for Payment Procedure
Legal baseArticle 81 TFEU; QMV; ordinary legislative procedure
Department

Document number

Ministry of Justice

(35576), 16749/13 + ADDs 1-2, COM(13) 794

Summary and Committee's conclusions

7.1 This is a proposal to revise the current Regulation establishing a European Small Claims Procedure (ESCP) which can be used for making small claims where there is a cross-border dimension, and facilitating the enforcement of judgments obtained by this procedure. Our previous report sets out the background in more detail. The essence of the Commission's proposal is: to increase the availability of the procedure; to promote electronic service of documents and other communications; to increase the use of distance communications for oral proceedings; to limit court fees and facilitate electronic payment; and to limit translation requirements.

7.2 The Government has been generally supportive of the intentions of the proposals but had concerns about extending the procedure to third country residents, the level of the financial upper limit of claims, the possibility that Courts would have to provide legal advice, and the use of the delegated legislation procedure for amending standard forms. This Committee has raised no separate concerns with the proposal.

7.3 The Government has opted into the negotiations on this measure. In his letter the Lord Chancellor and Justice Secretary (Chris Grayling) updates the Committee on the progress of negotiations in the Council, which he considers satisfactory. These are set out in detail below. He seeks clearance from scrutiny in anticipation of supporting, at the December Justice and Home Affairs Council, the adoption of a general approach to the forthcoming negotiations with the European Parliament, with a view to early securing early agreement to this measure. He indicates that any further negotiations are likely to result in only technical changes.

7.4 We are grateful to the Minister for a full update on the progress of negotiations despite the absence of a publicly available text. This is a good example of the Committee being kept informed of the progress of negotiations by the use of Ministerial correspondence, helpfully backed up by sight of the latest text, albeit that remains Limité and therefore not in the public domain. However, as a general observation, the continued use by the EU institutions at this stage of the legislative procedure of the Limité classification remains unsatisfactory.

7.5 We note that the negotiations on this matter have progressed in a manner which mostly meet the concerns expressed by the Government. The upper financial limit for making a claim under the European Small Claims Procedure is likely to end up lower than the Government originally wanted, but nevertheless at a level it can accept.

7.6 We are content to grant a scrutiny waiver to enable the Minister to agree a general approach at the forthcoming Council. In the meantime the proposal remains under scrutiny pending the outcome of negotiations with the European Parliament and we should be grateful for an update, in due course, on the outcome of these negotiations.

Full details of the documents: Draft Regulation amending Regulation (EC) No. 861/2007 of 11 July 2007 establishing a European Small Claims Procedure and Regulation (EC) No. 1896/2006 of 12 December 2006 creating a European Order for Payment Procedure: (35576), 16749/13 + ADDs 1-2, COM(13) 794.

The Minister's letter of 6 November 2014

7.7 In his letter the Minister explains the main changes to the Commission's proposal and the Governments approach.

The limit for using the ESCP

7.8 Although the Government could originally support the Commission's proposal to limit use of the ESCP to cases below €10,000, there proved to be very little support within the Council. The Presidency suggested two options — €4,000 or €5,000. On the basis of an agreement reached with the Devolved Administrations the Government has supported an increase up to €6,000. Of the two options the Government prefers €5,000 but could accept €4,000 if that proves to be the agreed compromise as it would still be a significant increase over the current level.

The definition of cross-border cases

7.9 There has been majority support, including the UK, to retain the current definition of a cross-border case which is narrower than the Commission's proposal.

Commencement procedure

7.10 Courts would now be obliged to inform the claimant of a dismissal of a claim which is clearly unfounded, inadmissible or based on incomplete documentation and would have to say whether an appeal against that dismissal is available. There would no longer be a requirement to have stocks of paper versions of the ESCP forms, but they would have to be accessible through national websites. The Government supports these changes.

Conduct of the ESCP

7.11 The Commission's suggestion that parties should be able to have an oral hearing for cases over the value of €2,000 has been rejected. The Government welcomes this change as it believes that a party could abuse that right by calling for a hearing to delay proceedings or to put pressure on or cause problems to the other party. The previous reference to a hearing being held where parties sought a court settlement has also been removed as unnecessary.

Oral proceedings

7.12 The text now clarifies that distance communication technology should be used for oral hearings where it is available unless the court believes its use would not be appropriate for the fair conduct of the proceedings. The automatic entitlement for parties to appear in person has been removed, instead allowing more discretion for courts in such decisions. Provision is also now made which would enable a party which has been invited to be physically present at a hearing to request instead the use of distance communication technology on the grounds of proportionate cost. In addition, it would be clearer that postal service and electronic service are equally valid but electronic service could be used only where the laws of both the sending and receiving Member States allow it, where the means are available, and where the parties have agreed to such service, unless the law of the Member State of receipt requires electronic service to be used. Similar conditions would apply to all other written communications. A party requesting to be physically present may not be able to recover the costs incurred if they are considered unnecessarily incurred or disproportionate to the claim. The Government believes such changes are sensible and supports them.

Assistance for parties

7.13 This text now clarifies that courts would not be required to provide legal advice to parties. The Government welcomes the fact that only practical assistance in completing the forms and general information about use of the procedure or the courts where it is available would now need to be provided.

Service of documents

7.14 The text has clarified that postal service and electronic service are equally valid but electronic service can be used only where the laws of both the sending and receiving Member States allow it, where the means are available, and where the parties have agreed to such service, unless the law of the Member State of receipt requires electronic service to be used. Similar conditions should apply to all other written communications. The Government supports these changes.

Court fees and payment

7.15 Both the proposed 10% cap on court fees and the minimum fee of €35 have been removed. Instead the recitals state that Member States should ensure that the fees they charge are not disproportionate and should not be higher than those charged for similar domestic procedures. Regarding the methods of payment, there is now more flexibility on what Member States can do.

Language and translations

7.16 The text now clarifies that parties may request the version of the certificate for enforcement in the language version of the court of enforcement and that only the section outlining the substance of the judgment need be translated by a qualified translator (as opposed to the use of electronic translation). A court would not be required to accept the forms in any language other than an official language of its Member State. The Government supports these provisions.

Information requirements

7.17 In addition to the information to be supplied to the Commission under the current proposal, Member States would also have to provide information on their laws and procedures regarding electronic service, but would have an extra six months to do so compared to the Commission's proposal.

Amendment of standard forms

7.18 This would be done using the implementing legislation procedure rather than the delegated legislation procedure. The Government welcomes this change.

Previous Committee Reports

Thirty-third Report HC 83-xxx (2013-14) chapter 11 (29 January 2014).





 
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