23rd REPORT: EUROPEAN SMALL CLAIMS PROCEDURE
Letter from Rt Hon Baroness Ashton of
Upholland, Parliamentary Under Secretary of State, Department
for Constitutional Affairs to the Chairman
I am grateful to the Committee for its report
on the European Small Claims Procedure and in particular for its
support for a proposal that was an UK initiative aimed at improving
access to justice for businesses and consumers alike. The Government
believes that this is of growing importance with the ever increasing
cross border trade, holidays and internet shopping etc.
During negotiations I had already secured agreement
that this should be principally a written procedure, with time
limits for each stage of the claim and using modern communications
technology where possible. Legal representation should not be
mandatory and costs are to be proportionate to the value of the
claim.
I am sorry not to have been able to have replied
before but the delay enables me to let you know the outcome of
the latest negotiations that have resulted in further improvements
to the text and to an agreement at the Justice and Home Affairs
Council on 1 June 2006.
This is a groundbreaking procedure which is
why the Government is pleased that a review is to take place five
years after implementation. This will enable the lessons learnt
through experience to be fed into the Regulation to ensure that
it is even more attractive and effective.
In view of the number of recommendations made
by the Committee I am attaching a full response, but I also wanted
to comment separately about some of the main recommendations and
some of the successes we have already achieved.
CROSS BORDER
The Commission's construction of Article
65 TEC would have unacceptably wide implications for national
laws and procedures. The ESCP should be limited to cross-border
cases (para 61).
I am delighted to say that we have obtained
agreement that the procedure should be limited to cross border
cases.
The closest attention needs to be given to
any definition of cross-border case. It may not be appropriate
to have the same definition in every Community instrument. Any
definition of "cross-border" must be suited to the aim
and requirements of the particular proposal (para 70).
Agreement has been reached that the definition
used for the European Order for Payment should apply equally to
the European Small Claims Procedure. The use of the same definition
of "cross border" would not be appropriate for all Regulations,
but in this instance there is no apparent reason why the same
definition should not be adopted and consistency, where possible
and appropriate, is highly desirable.
Rather than a test based on the domicile/habitual
residence of the parties, a "cross-border" case might
be defined as one where the claim in question has arisen directly
from the supply of goods or services out of one Member State into
another, or supply within one Member State to a person resident
in another Member State. This approach would link the ESCP far
more closely with the requirement in Article 65 TEC that the measure
be "necessary for the proper functioning of the internal
market" (paras 71 & 72).
I am sorry that I could not agree with this
recommendation for two reasons, first because such a definition
would exclude a significant number of small claims for example,
personal injury. Secondly because to have different criteria for
defining cross border cases to that for jurisdiction and enforcement
would unduly complicate the procedure.
THE €2,000 LIMIT
The €2,000 limit is acceptable provided
that the ESCP is not mandatory and that claimants will have the
alternative of bringing claims, including cross-border ones, under
domestic procedures (para 102).
You will not be surprised to learn that discussions
over the limit have been central to reaching an agreement. A limit
of €2,000 has been agreed. I would have preferred either
a range which would better suit the situation in England and Wales,
but it became clear that a clear majority of Member States were
unhappy with such a proposal because of the novelty of the procedure
and their substantially lower costs of living compared with those
in the UK and Ireland. The review of the procedure, due to take
place five years after implementation of the procedure will enable
us to revisit the limit.
We share the concern expressed by the House
of Commons Constitutional Affairs Committee that the claiming
of disproportionate costs, which would seem possible under the
regime proposed by the Commission, could undermine the value of
the ESCP (para 152).
If a party in a small claims procedure is
to be exposed to costs it is important that he should know in
advance the likely extent of his costs liability. There would
be great advantage in having a rule which is clear from the outset
and not dependent on elastic words such as "proportionate"
or "unreasonable" or "inequitable". A party
in the ESCP should not be exposed to costs over which he has no
control or the limit of which he cannot calculate before deciding
whether to bring or defend a claim. A party's liability to costs
in the ESCP should therefore be capped (para 154).
A successful party should be able to recover
any court fees he has paid. In addition, he should also be able
to recover his other costs and expenses, including legal fees,
up to a financial limit of 20% of the value of the claim. In determining
what costs to award the judge should have regard to, among other
things, whether a party has had legal representation, the status
of the party (whether or not he is a consumer), and the behaviour
of the parties in the bringing or conduct of the procedure. Where
a party has acted wholly unreasonably, the judge should be able
to disregard the 20% limit (para 154).
We have pursued the issue of costs vigorously,
but there has been little support for costs to be fixed by reference
to a scale or a percentage. However, a new recital is intended
to ensure that legal fees are not disproportionate, and we think
that this is a reasonable result.
12 June 2006
Government Response
INTRODUCTION
The Government appreciates the detailed consideration,
time and effort given by the Lords' European Union Select Committee
(EUSC) and those who gave evidence on the proposed European Small
Claims Procedure (ESCP) Regulation.
1. The Government welcomes the Committee's
recognition of the benefits of this initiative in terms of improved
access to justice and practical benefits for consumers and businesses
alike when dealing with low value, cross border cases. At the
same time we acknowledge the validity of many of the concerns
expressed by the Committee and we address these below.
2. The Government recognises that the ESCP
is an innovative proposal. Unlike other recent initiatives, such
as the European Enforcement Order (EEO) and the European Order
for Payment (EOP), it encompasses defended as well as undefended
claims. Some issues remain to be resolved, eg scope and translation,
but we are looking at ways in which we, together with other Member
States may be able to tackle these.
SUMMARY
3. The Government welcomes the Committee's
recognition that cross border travel, holidays, buying and selling
particularly over the Internet are on the increase. Disputes about
such transactions can and do arise and because the volume of transactions
are increasing the number of disputes is also likely to rise.
4. Many of these are resolved through a
variety of means eg trade organisations. As the Committee's Report
helpfully points out, Citizen's Advice plays a particularly useful
and helpful role and through the European Consumer Centres Network
provides information and advice to consumers as well as assistance
to consumers who face cross border disputes.
5. In some cases, however, alternative dispute
resolution does not work and there is a stark choice to be made,
to litigate or to accept that there will be no redress. Litigation
should always be the last resort, but access to justice should
not be so difficult as to deter someone seeking redress. It can
be intimidating to litigate in one's own country, but having to
do so in another, is inevitably more so.
6. Providing a single, common procedure
is an important initiative, improving access to justice for consumers
and others. It is, however, just one of the first steps along
the road to improving cross border civil litigation. For example,
at present the software to provide translations is generally not
of a sufficiently high standard to be likely to be acceptable
to the courts and at present there is no EU agreement to use such
software. Looking to the future this may be one of the most significant
improvements that can be achieved for dealing with the bulk of
cross border litigation. Our ambitions in this area are great,
but realistically will take time to achieve. With the ESCP we
are nevertheless taking an important step.
RESPONSE TO
RECOMMENDATIONS
Legal base-cross-border cases
The Commission's construction of Article
65 TEC would have unacceptably wide implications for national
laws and procedures. The ESCP should be limited to cross-border
cases (para 61).
Limiting the scope of the ESCP to cross-border
cases would not bring the advantage of providing a domestic small
claims procedure in Member States where no small claims procedures
presently exist. But it is not the role of the Community to reform
Member States' civil judicial procedures where no Community dimension
exists. Even if there were no issue of vires, subsidiarity must
be respected (para 62).
7. The Government welcomes the Committee's
support for the Government's view that the ESCP should not apply
to purely domestic cases. Such an approach would be unacceptable
for a number of reasons identified by those giving evidence to
the Committee and the Committee's own findings. In particular:-
— Article 61(c) together with Article
65 do not provide an adequate base for a domestic application
of the procedure;
— The original proposal would run counter
to the principle of subsidiarity; and
— It would not replace the national
procedures, which would mean that the ESCP would exist in parallel
with the national procedure. This would be complicated and expensive
to administer and would be confusing for both litigants and the
courts' staff.
The closest attention needs to be given to
any definition of cross-border case. It may not be appropriate
to have the same definition in every Community instrument. Any
definition of "cross-border" must be suited to the aim
and requirements of the particular proposal (para 70).
8. The Government believes that common definitions
are desirable in principle, unless there's a compelling reason
for difference. In this instance we see no reason why the definition
for the European Order for Payment should not also be used for
the European Small Claims Procedure.
Rather than a test based on the domicile/habitual
residence of the parties, a "cross-border" case might
be defined as one where the claim in question has arisen directly
from the supply of goods or services out of one Member State into
another, or supply within one Member State to a person resident
in another Member State. This approach would link the ESCP far
more closely with the requirement in Article 65 TEC that the measure
be "necessary for the proper functioning of the internal
market" (paras 71 & 72).
9. The Government considers that the proposed
test would not cover all claims that would be suitable for the
ESCP eg minor torts. To introduce a different test would add complexity
to what is intended to be a simplified procedure. In addition
the domicile/habitual residence test is an important one because
of the application to the ESCP of Regulation (EC) No 44/2001 on
jurisdiction and the recognition and enforcement of judgments
in civil and commercial matters. The concept has been in use in
the field of civil judicial co-operation for some time and rarely
gives rise to difficulties in practice.
ESCP-an alternative procedure
The ESCP should not be mandatory for the
moment. Domestic procedures should remain available for cross-border
cases. Member States should ensure that guidance is available
to consumers faced with a choice of procedures (para 78).
10. The Government agrees with the Committee.
We consider it essential to retain domestic procedures for low
value cross-border cases, because not all such cases will fall
within the scope of the ESCP. The Government appreciates the Committee's
recognition of our commitment to making the procedure a simple
one which people will find easy to use. Nevertheless we recognise
that some litigants may prefer existing procedures, at least initially,
for a number of reasons, including the different regime as to
costs.
11. Her Majesty's Courts Service and Scottish
Court Service will provide litigants with suitable information
about their choice both via leaflets, the website and through
court staff in county courts in England and Wales and in sheriff
courts in Scotland. We would welcome any decision by Citizens
Advice and other voluntary agencies to provide similar information
as we consider it important that the information is as widely
available as possible.
Jurisdiction
A consumer should be able to sue (except
another consumer) in his own Member State and should only be liable
to be sued in that Member State, whatever the cause of action
(para 87).
12. The Government recognises the Committee's
concern about the position of consumers in cross border disputes.
However, the Commission decided to apply Regulation (EC) No 44/2001
(Brussels I) on jurisdiction and the recognition and enforcement
of judgments to the ESCP. This ensures that in many cases a consumer
can sue or be sued in his own Member State. It was neither possible,
nor appropriate to renegotiate Regulation (EC) No 44/2001 as part
of discussions on the ESCP. The Government proposed an alternative
text in the Draft Regulation, during its Presidency, to make a
provision specific to consumers. However, a significant majority
of Member States preferred the direct application of the Brussels
I Regulation to avoid complexity and to maintain a consistent
approach to jurisdiction and enforcement wherever possible.
Applicable law
Article 9(2), apparently removing any obligation
on the parties to provide a "legal assessment" of the
claim, would potentially have a substantial impact on the position
in English and Scots law that conflict of laws rules are only
applied if at least one of the parties has argued that they be
applied and that the content of foreign law is a question of fact,
normally proven by expert evidence with the burden of proof resting
on the party relying on the foreign law. It is not clear to what
extent Article 9(2) would displace our domestic rules in this
respect (paras 94 and 95).
13. The Government understands that Article
9(2) was intended to avoid litigants in person being required
to address the court on the law relating to the case. It is a
realistic and practical approach for low value cases often brought
by litigants in person. A litigant will be expected to prove his
case, but not necessarily to cite law, indeed as the witnesses
made clear many litigants in person would be unable to do so.
The Court will make any legal assessment necessary.
14. The provision is silent on the question
of applicable law. It follows that, except where a contract specifies
the applicable law, national rules for determining applicable
law would apply. In the vast majority of cases this will be the
law applicable in the court in which the case is tried and so
the issue is likely to arise in only a relatively small number
of cases.
15. The Government does not see the current
position in English and Scots law regarding the conflict of law
rules as being disturbed.
The €2,000 limit
The €2,000 limit is acceptable provided
that the ESCP is not mandatory and that claimants will have the
alternative of bringing claims, including cross-border ones, under
domestic procedures (para 102).
16. The Committee is aware of the very different
views among Member States on this issue and that other options
to a fixed limit were discussed; these included a range within
which each Member State would have been able to set its own limit.
At the June Justice and Home Affairs Committee Ministers agreed
to a limit of €2,000 this reflects the lower costs of living
in a majority of other Member States. As we have already indicated
we consider that the domestic procedures should continue to provide
an alternative to the ESCP.
The Regulation should enable the ESCP to
be used fora claim exceeding €2,000 where the court and all
the parties agree, and the judgment to be enforceable in the same
way and with the same effects as a judgment for a sum within the
€2,000 limit (para 106).
17. Whilst we understand the Committee's
reasons for raising this point we do not consider it would be
able to achieve this in negotiations.
If the upper limit of claims in the ESCP
is fixed at €2,000 there is no need for personal injuries
claims to be separately considered. Were the limit to be higher
the question of the inclusion of such claims in the ESCP would
need to be reconsidered (para 111).
18. The Government accepts the Committee's
concern about the particular nature of personal injury claims.
As the limit was fixed at €2,000 during the recent Council
of Ministers we concur that there is no need for this type of
claim to be considered separately.
The issue of counterclaims is something to
which further thought should be given. The final text will need
to strike a balance between ensuring that the ESCP is used only
for straightforward, low-value claims as intended and preventing
abuse of the system through the lodging of counterclaims (para
115).
19. The Government fully accepts the Committee's
concern about counterclaims and believes that the current text
achieves a suitable safeguard against abuse. if a defendant makes
a counterclaim which is outside the scope of the procedure then
the court will inform him that the case will proceed under national
law, with the attendant cost consequences, unless the defendant
withdraws the claim.
Practical aspects of the procedure
Given the very different levels of IT skills
of consumers and the fact that there will be some for whom IT
would present a barrier rather than a gateway to justice, an on-line
service, or even simply commencement of proceedings by e-mail,
should not be mandatory. As an alternative procedure it is, however,
something which should be given serious consideration especially
having regard to the international nature of the proceedings under
the ESCP (para 122).
20. The Government accepts the Committee's
concerns and recommendation regarding the use of IT for the ESCP.
The use of IT in civil litigation has been promoted by this Government
eg in relation to hearings and the taking of evidence. We have
raised the issue of an on-line ESCP system with the Commission
as an appropriate way of dealing with a low value, simplified
procedure.
A written procedure should be the norm in
the ESCP. Resort to an oral hearing, particularly a direct oral
hearing, while always a matter for the discretion of the judge,
should be rare (para 124).
21. The Committee's comments regarding an
oral hearing fully reflects the Government's position.
The use of an audio, video or e-mail conference
in the conduct of the hearing should not be conditional on the
agreement of the parties. The conduct of the hearing should be
a matter for the court and the judge should be able to determine
the particular form it should take if one of the parties is not
co-operative (para 128).
22. The Government recognises the force
of the Committee's arguments in relation to the use of technology
for hearings. This should be the norm and not subject to the wishes
of one party as this could be open to abuse deterring a party
from pursuing a claim because of the costs associated with a hearing
at a court in another Member State. This is the effect of the
latest text. The court can refuse to hold an oral hearing if it
considers that in the circumstances of the case, it is unnecessary
for the fair administration of the case. The method of hearing
is subject to the national law of the Member State where the court
is sitting and if the technical means are available. The parties
have no power to veto a hearing involving modern communications
technology.
Courts must be prepared to act firmly in
refusing oral hearings or any other proceedings that require the
presence of the claimant or defendant where that would put either
party at a personal or financial disadvantage. Only in the most
exceptional circumstances should an out-of-country party be required
to attend (para 130).
23. The Government concurs with the Committee
that an oral hearing in another Member State should be entirely
exceptional. As indicated above the court can refuse an oral hearing,
unless it would be necessary for the fair administration of the
case and we would expect the judges in the UK and other Member
States to act accordingly. It would be bizarre for a case worth
eg, €450 to require an oral hearing, especially where an
out-of-country party would be required to attend. It will be for
the parties to make clear to the court the financial or personal
effect of attending an oral hearing in another Member State. The
costs provisions, in the latest text, require a judge to refuse
to award costs, which are unnecessarily incurred.
The ESCP should include a provision that
the court should have the power to transfer cases to national
procedures. Such a power should only be exercisable very exceptionally
(para 138). The power should be exercisable by the court of its
own motion or on the application of one of the parties. If exercised,
the Court should be able to impose a condition that the party
seeking transfer should indemnify the other party as to costs
(paras 138 & 139).
24. The Committee supported for the Government's
proposal for the court to have a power to transfer cases to national
procedure in exceptional circumstances. Unfortunately the proposed
generic provision allowing courts to transfer cases to the national
procedure on grounds of complexity attracted no support from other
Member States.
Costs
We share the concern expressed by the House
of Commons Constitutional Affairs Committee that the claiming
of disproportionate costs, which would seem possible under the
regime proposed by the Commission, could undermine the value of
the ESCP (para 152).
If a party in a small claims procedure is
to be exposed to costs it is important that he should know in
advance the likely extent of his costs liability. There would
be great advantage in having a rule which is clear from the outset
and not dependent on elastic words such as "proportionate"
or "unreasonable" or "inequitable". A party
in the ESCP should not be exposed to costs over which he has no
control or the limit of which he cannot calculate before deciding
whether to bring or defend a claim. A party's liability to costs
in the ESCP should therefore be capped (para 154).
A successful party should be able to recover
any court fees he has paid. In addition, he should also be able
to recover his other costs and expenses, including legal fees,
up to a financial limit of 20% of the value of the claim. In determining
what costs to award the judge should have regard to, among other
things, whether a party has had legal representation, the status
of the party (whether or not he is a consumer), and the behaviour
of the parties in the bringing or conduct of the procedure. Where
a party has acted wholly unreasonably, the judge should be able
to disregard the 20% limit (para 154).
25. The Government agrees with the Committee
that costs are a crucial issue and that the successful party should
be able to recover his costs and expenses, including court and
legal fees. We have already secured agreement in principle that
costs for the ESCP should be proportionate and the current text
goes further by specifying that a court cannot award costs which
are unnecessarily incurred.
26. However, the Government recognises the
concerns expressed by the Committee that proportionality does
not provide litigants with a clear understanding of their exposure
to costs. A new recital will make clear that an unsuccessful party
should only be obliged to reimburse the fees of a lawyer of the
successful party, to the extent to which those fees are proportionate
to the value of the claim and are reasonably and necessarily incurred.
We believe that this goes some way to addressing the Committee's
concerns.
Detailed points on costs
While we are sympathetic to the view that
the involvement of lawyers in the ESCP is to be discouraged, the
approach taken by the Commission in Article 14(2) is far too simplistic
and could work injustice to those who are particularly vulnerable.
If Article 14(2) remains it will need some refining (para 161).
The benefit of the provision in Article 14(2)
should not be limited to natural persons (para 162).
Article 14(2) needs to make clear that "a
lawyer or another legal professional" refers only to those
who are entitled to appear before the relevant court of the Member
State concerned (pare 166).
27. The Committee's view about discouraging
the involvement of lawyers in the ESCP was shared by many Member
States including the UK Government. With regard to the special
treatment as to costs for natural persons this caused Member States
concern for similar reasons to those raised by the Committee.
As a result Article 14(2) has been deleted in the latest text.
Turning to the issue of who should be entitled to appear before
the court this is left to national law.
If the costs rules in Article 14 stand (a
question which we consider in paras 140-155) then the difference
between "costs" and "expenses" should be clearly
explained (para 68).
28. The Government agrees with the Committee
and the current version of the text does not make this distinction.
There is a case for expanding the remit of
the European Consumer Centres so that they would not only be able
to advise preparatory to any claim but also to assist in the bringing
of any claim under the ESCP (para 172).
29. The Government accepts the point made
by the Committee and will be encouraging the Commission to take
this matter further.
Appeals
The absence of a common rule on appeals is
disappointing. Article 15 will only add to the distortion which
the Commission is keen to remove. It is for consideration whether
the Regulation should make clear that appeals should only be allowed
on grounds of error of law or serious procedural irregularity
and should not permit a rehearing on the merits (para 181).
30. The Government understands the Committee's
disappointment that there is no common rule on appeals, but also
recognised that it would not be possible to reach agreement on
a common rule. In addition, because appeals are a fundamental
part of Member States' domestic legal system any attempt to impose
via the proposed regulation provisions on such domestic systems
would, for some countries raise constitutional issues and would
run counter to the principle of subsidiarity.
On appeal in the ESCP a similar costs regime
should apply as at first instance. As advocated above, a party's
liability to costs should be subject normally to a financial ceiling
fixed by reference to the value of the claim. In the event of
an appeal that rule should be applied afresh (para 84).
31. The Government shares the Committee's
concern about costs on appeal and pressed for the rules that apply
at first instance to apply at the appeal stage. This forms part
of the latest version of the text, where the cost provisions in
Article 14 now also applies to appeals.
Enforcement
Extending the recognition procedure provided
by the Regulation to apply to judgments in all cases, contested
or uncontested, in the ESCP would be a helpful simplification
(para 187).
We support the Commission's objective of
simplifying cross-border enforcement by removing intermediate
measures. We agree that there should be a robust procedure for
enforcement based on certification in the Member State where the
judgment is issued. That there should be limited power to challenge
enforcement is also part of the simplicity and certainty which
the ESCP is intended to have (paras 189 and 190).
32. The Government welcomes the Committee's
support for removing intermediate measures for enforcement, as
contained in the latest draft of the text. The extension of the
abolition of exequatur to undefended cases required certain
new safeguards to ensure that the defendant has some means of
redress if he was unaware of the claim. A suitable safeguard has
now been built in to the text.
However, we are concerned that enforcement
may not be resisted on public policy grounds (such as fraud or
corruption) in the courts where enforcement is sought and that
therefore the scheme for recognition may not provide sufficient
safeguards against abuse of the procedure. This is a matter which
merits further examination and consideration (para 191).
33. The Government recognises the Committee's
concern and can confirm that this issue has been discussed in
the Council Working Group. Where a claim is made or defended fraudulently
or corruptly the national law will apply. So if a determination
is made based on allegedly fraudulent evidence the party alleging
fraud should raise it with the court that made that determination.
Language
The potential difficulty where there is an
absence of a language common to the court and all the parties
should not be underestimated. It is a matter of concern that,
except for provisions in Article 4(7), the issue of language difficulties
is largely ignored in the proposal. Article 4(7) itself is inherently
unsatisfactory in part. Any rule on translations should be both
workable and comply with basic fairness (para 98).
34. The Government concurs with the Committee
that language is a significant issue for the Procedure. We continue
to explore possible solutions with our European partners.
Practical ways must be found to minimise
the problem of language. For example, there may be scope for further
defining the nature of the claim by the inclusion of more questions
in the claim form. As in the case of the European Consumer Complaint
Form the claim form in the ESCP could be accompanied by detailed
notes to guide the user through the form and assist in its completion.
Consideration should also be given to the suggestion of Which?
to create a legal lexicon (para 199).
35. The Government accepts the Committee's
comments about the need for practical ways of minimising language
difficulties. We will work with our partners to ensure there are
well-designed forms and leaflets that help the parties by providing
information about making a claim and suitable sources for further
help. The forms, which are part of the Regulation, will be available
in all official languages and will be designed to reduce the need
for them to be translated eg by the use of tick boxes.
As already mentioned, oral hearings, even
by telephone or video conference, should be very much the exception.
The practical difficulty and cost of an indirect hearing with
simultaneous translation will, we hope, serve to stiffen the resolve
of the judges to deal with the case on a paper only basis (para
200).
36. The Government trusts that judges will
take into account not only that the ESCP should be principally
a written procedure, but also the ramifications of an oral hearing
for litigants, witnesses etc both in terms of costs and time.
ADR
ADR is to be encouraged in relation to small
claims as elsewhere but the ESCP should not be made more prescriptive
in this regard. However, an additional box might be inserted in
the model claim form annexed to the Regulation, as follows:
"Parties are encouraged to settle disputes
arising between them without going to Court wherever possible.
What steps have you taken to resolve your dispute before beginning
this procedure?"
37. The Committee's views on ADR and in
particular that prescription should be avoided in this area are
accepted. The contents of the forms remain to be negotiated but
we will consider whether such a question as suggested by the Committee
should be included.
Motor accident claims
We direct the Government's attention to the
issues raised by the ABI concerning the relationship of the ESCP
with the Council of Bureaux mechanism for handling claims arising
from motor vehicle accidents and the relationship between the
ESCP and the fourth EC Motor Insurance Directive (para 208)
38. The Government takes due notice of the
point made by Committee and the Association of British insurers
about motor accidents and the fourth EC Motor Insurance Directive.
We have raised this as an issue as part of negotiations on the
ESCP.
Letter from the Chairman to Rt Hon Baroness
Ashton of Upholland
Thank you for your letter of 12 June setting
out the Government's Response, which has been considered by Sub-Committee
E (Law and Institutions).
We are pleased to note that there are a number
of points of agreement between the Government and the Committee
and that in a number of areas the proposed Regulation appears
to be moving in the right direction. You mention, for example,
that the procedure will be an essentially written one, using modern
communications technology where possible and that legal representation
will not be mandatory. There are also areas where we are in agreement
but other Member States have not been persuaded of the virtue
and utility of our recommendations, for example for a common rule
on appeals.
On the other hand, there are points where the
Government do not agree with the Committee, for example on the
best way of defining "cross-border", but we take the
view that we must move forward and we note that a general agreement
on the Regulation was reached at the Justice and Home Affairs
Council on 1 June.
We are grateful for your apology for the lateness
in delivering the Government's Response to our Report. But what
concerns us more is the failure to keep us informed of negotiations,
including furnishing new texts of the Regulation. It appears that
there have been substantial changes made to the text and Parliament
has not had an opportunity to examine these prior to an agreement
in the Council. Even if the situation in the negotiations was
fluid this could have been explained in a letter to the Committee.
(Indeed we have only just learnt that you wrote to our sister
Committee in the Commons on 18 May.) Your Department's approach
in this matter has been somewhat surprising given the importance
of the proposal to the citizen and consumer and also having regard
to the excellent service you have provided in other civil law
matters, such as the Rome II Regulation.
It is clear that whilst a "general agreement"
was reached at the recent Justice and Home Affairs Council there
are a number of matters which remain under negotiation including
the important ones of language and of the forms which will be
annexed to the Regulation. We would expect them to be deposited
for scrutiny so that we have an opportunity to examine them in
good time before any further agreement is reached in the Council.
29 June 2006
Letter from Rt Hon Baroness Ashton of
Upholland to the Chairman
Thank you for your letter of the 29 June 2006
about the Government's reply to the Report by Sub-Committee E
(Law and Institutions).
I am extremely sorry that you feel that you
have not been adequately kept informed of negotiations. As you
know I appeared before the Committee at the end of November with
two of my officials involved in the negotiations and updated the
Committee in some detail on the state of the negotiations. On
13 December officials provided the Clerk to the Committee with
information about the outcome of the December Justice and Home
Affairs Committee.
Discussions continued in the Council Working
Group and it became clear that some of the issues subject of the
ongoing negotiations, eg the limit, could only be resolved by
Ministers, during the Justice and Home Affairs Council in June.
For other issues the way negotiations were moving only became
clear at the May Council Working Group meeting and it may have
been appropriate to have provided the Committee with an update
at that time. The discussions culminated in a general agreement
to a text at the Justice and Home Affairs Council at the beginning
of June 2006 and I wrote to you on the 8 June not only to give
you the Government's response to the Committee's Report, but also
to update you of developments. I appreciate that this was only
after Ministers had reached an agreement and l regret both this
oversight and the fact that a letter to the Commons Committee
was not copied to Sub-Committee E.
I had always intended to provide the Committee
with a copy of the latest text and forms, once we had received
them. These were received only last week and for the first time
includes both existing and additional forms as revised by the
Austrian Presidency a copy of which I enclose for your information
(not printed). The forms inevitably have to be amended in the
light of changes to the text of the Regulation and are, together
with the recital to be the basis of the next Working Group meeting
later this month.
Due to the problems encountered by your Committee
I have asked officials to put in place more robust systems to
ensure this situation does not arise again.
I would be happy to appear before the Committee
to discuss the European Small Claims Procedure if this would be
helpful.
5 July 2006
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