Documents considered by the Committee on 9 September 2015 - European Scrutiny Contents

43 European Small Claims Procedure

Committee's assessment Legally important
Committee's decisionCleared from scrutiny; drawn to the attention of the Business, Innovation and Skills Committee
Document detailsProposal for a Regulation amending Regulation (EC) No. 861/2007 establishing a European Small Claims Procedure and Regulation (EC) No. 1896/2006 creating a European order for payment procedure
Legal baseArticle 81 TFEU; ordinary legislative procedure; QMV
DepartmentMinistry of Justice
Document Numbers(35576), 16749/13 + ADDs 1-2, COM(13) 794

Summary and Committee's conclusions

43.1 This is a proposal to revise the current Regulation establishing a European Small Claims Procedure (ESCP) which can be used for making small court claims where there is a cross-border dimension, and facilitating the enforcement of judgments obtained by this procedure. Our first 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.

43.2 The Government has been generally supportive of the intentions of the proposals but had concerns about extending the availability of the procedure including 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[ 223] for EU subordinate legislation to amend standard forms. Our predecessor Committee raised no separate concerns with the proposal.

43.3 The UK opted into this measure at the negotiation stage. In November 2014 our predecessor Committee granted a scrutiny waiver to enable the UK to support a general approach in the Council. The Parliamentary Under-Secretary of State for Justice (Dominic Raab) now reports on the outcome of the trilogue negotiations with the European Parliament and seeks scrutiny clearance in advance of a formal first reading adoption of the proposal.

43.4 We are grateful to the Minister for the full update which has continued the admirable practice set by his predecessors in this matter. It is particularly useful that he has provided a text which is in the public domain.

43.5 Whist the trilogue resulted in compromises, these are acceptable to the Government and appear to be of minor significance. The scope for dispute and compromise on the use of the delegated legislation procedure could be limited in future by suitable drafting of the guidelines on the use of this procedure in the proposed Common Understanding on Delegated Legislation annexed to a proposed Interinstitutional Agreement on Better Regulation. However, as we Report at Chapter 1 the Government wishes to retain flexibility.

43.6 We now clear this matter from scrutiny and draw it to the attention of the Business, Innovation and Skills Committee in view of its imminent adoption.

Full details of the documents: Proposal for a 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 16 July 2015

43.7 In his letter the Minister explains the main changes to the Commission's proposal and the Government's approach and provides the latest text.[ 224]

The financial upper limit for using the ESCP

43.8 Although the Commission originally proposed, and the Government and the European Parliament supported, a maximum threshold for a claim to qualify for the procedure of €10,000 (£7,190), the Council general approach fixed this threshold at €4,000 (£2,876). This has been increased to €5,000 (£3,595) with a commitment to review this level after five years.

The definition of cross-border cases

43.9 The Commission originally proposed to broaden the scope of proceedings qualifying for the ESCP by including cases where just one of the following elements was not in the Member State of the court having jurisdiction: (a) the domicile or habitual residence of a party, (b) the performance of the contract, (c) the facts giving rise to the dispute, (d) the enforcement of any judgement or (e) another court with jurisdiction. The trilogue outcome is that the existing position remains, namely that the procedure is only available where at least one of the parties is domiciled or has their habitual residence in a different Member States to the court with jurisdiction.

Oral proceedings

43.10 The Commission originally proposed that a party should have the right to appear in person and made the use of distance communication technology obligatory. The trilogue outcome is that the court retains discretion whether to have an oral hearing and there is a new recital saying that Member States should promote the use of distance communication technology, that courts should have access to it and that regard should be had to the recently adopted Council Recommendation on the use of videoconferencing.

Court fees and payment

43.11 The Commission originally proposed a limit on court fees of 10% of the value of the claim, which the European Parliament was inclined to reduce to 5%. The outcome of the trilogue is a new Article requiring fees to be proportionate and set at the same level as equivalent domestic claims, plus a recital that legal aid should be provided in accordance with the Legal Aid Directive. The Minister indicates that this legal aid requirement would not place an additional burden on Member States.

Amendment of standard forms

43.12 The Minister indicates that as part of the overall compromise it was conceded to the European Parliament that amendment of standard forms should be achieved using the delegated legislation procedure[ 225] for EU subordinate legislation rather than the implementing legislation procedure,[ 226] despite the fact that the former gives the European Parliament a greater input and Member States less influence. This is balanced by a recital stressing the importance of appropriate consultation on the content of the changes.

Previous Committee Reports

Twentieth Report HC 219-xix (2014-15), chapter 7 (19 November 2014); Thirty-third Report HC 83-xxx (2013-14), chapter 11 (29 January 2014).

223   Article 290 TFEU. Back

224   See item 5 in the list of documents for this matter provided by the Cabinet Office. Back

225   Article 290 TFEU. Back

226   Article 291 TFEU. Back

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Prepared 23 September 2015