Select Committee on European Union Thirty-Seventh Report


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?"

    (paras 206 and 207)

  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



 
previous page contents next page

House of Lords home page Parliament home page House of Commons home page search page enquiries index

© Parliamentary copyright 2007