Select Committee on European Union Fortieth Report


EUROPEAN SMALL CLAIMS PROCEDURE (10160/06)

Letter from the Chairman to Rt Hon Baroness Ashton of Upholland, Parliamentary Under  Secretary of State, Department for Constitutional Affairs

  Thank you for your letter of 5 July[156] and for submitting a copy of the latest text of the Regulation under cover of an Explanatory Memorandum. The latter is brief in explaining the main changes that have been made since the Committee last examined the proposal. However, in light of the more detailed explanation given in the Government's Response we have proceeded to examine the new text. There are a number of points on which we would welcome clarification.

  First, we note that the new procedure will not apply to "the liability of the State for acts and omissions in the exercise of State authority (`acta iure imperii')" (Article 2(1)). What is the purpose of this exclusion? What would be covered by the term "acta iure imperii"? We would be grateful if you would give examples.

  We note that a new article (Article 4(a)) has been included to deal with the question of languages. The practical effect of this would seen to be that if, for example, a party is suing in England and the documents have to be served on a Lithuanian in Lithuania, then the defendant can require the documentation to be translated into Lithuanian even if he fully understands English. In the Government's Response, you say that you are continuing to explore possible solutions to the problem of languages and that the forms could be designed to reduce the need for translation eg by the use of tick boxes. But we find very little, if any, evidence of the latter in the forms you have submitted for scrutiny. Further the extent of the obligation in Article 4(a)(2) remains unclear. What progress is being made in relation to this most important aspect of the procedure?

  In several instances express reference is made to national law in order to overcome the absence of common definitions or procedures (see eg Recital 8(b)). Further, as a general rule national law will apply to the procedure (Article 17). However, it is not clear from Article 7 that national law will govern the admissibility of evidence. The reference in the first sentence of Article 7(1), in contrast with a number of other provisions, makes no reference to national law.

  As you will recall, we have questioned the effect of Article 9 on established rules of English and Scottish law relating to the determination and proof of applicable law. Article 9(2) now provides that the court shall not require the parties "to make any legal assessment of the claim". A footnote says that legal assessment shall be translated into French as "qualification juridique". It is our understanding that under the French civil system various courses of action are set out, contract of sale, contract of services etc in specific articles of the Civil Code. Identifying the "qualification juridique" is the process of attaching a particular label to a set of facts, for example when it is decided on the facts presented that the case is concerned with the contract of sale. It would be helpful if you could provide a detailed note on what you believe Article 9(2) means in the context of English and Scottish procedures. We are mindful that the ESCP will be contained in a Regulation, not a Directive. Therefore, ultimately it will be the European Court of Justice who will determine what obligations lie on the court pursuant to Article 9. It would also be helpful if in your note you could explain in more detail the nature of the obligation under Article 9(3), "the duty to inform parties about procedural questions".

  As regards the forms, we have already noted the absence of tick boxes. We also note the absence of any explanatory information relating to Form C (contrast the guidelines, such as they are, relating to Form A). Article 4(2) and (3) refer to standard Form D. Should this not be Form C? You will also recall that the Committee recommended that the claim form include a reference to ADR. The Government agreed to consider this suggestion. Have you raised it in your discussions with other Member States? What have been their reactions? Finally, we look forward to receiving a copy of Form E.

  The Committee decided to retain the proposal under scrutiny.

25 July 2006

Letter from Rt Hon Baroness Ashton of Upholland to the Chairman

  Thank you for your letter of 25 July 2006 in response to my letter of 5 July updating the Committee on the progress of negotiations on the European Small Claims Procedure. Having considered the revised text you have indicated that there are a number of points on which you would welcome clarification.

  The amendment under Article 2(1) specifies that the Regulation should not apply to the liability of the State for acts and omissions in the exercise of State authority (acta iure imperii). Some States were keen to ensure that default judgments should not apply to these acts. Further, as such a provision had been included in the European Order for Payment Regulation it was argued that there was no reason why it should not be included in this Regulation.

  As I have explained to the Committee in the contect of other proposals the Government is of the view that the effect of this exclusion is very limited as most, if not all, acts this wording would cover do not fall within the meaning of civil and commercial matters—and, what is more, it is improbable that they would be the subject of small claims. Its inclusion, however, is a matter of political importance to several Member States.

  I now turn to your observations on the application of Article 4(a) in respect of languages. The clear understanding and intent of the negotiations on Article 4(a) 3 was that it would apply in the same way as Article 8 of the Service Regulation. The purpose of the word "either" is to indicate that a party can only refuse to accept a document if the document is not either in a language he understands or the language of the State addressed.

  Article 4a(2) should ensure that any additional exposure to costs is limited to where a court is of the view that the translation of a particular document is required, so only necessary documents will be translated. This is important in facilitating access to justice in the cross border context, ensuring a level playing field for all parties involved, and, in this instance, allowing parties to ask for evidence that they do not understand to be translated.

  On Article 7, you say that the text makes no explicit reference to the national law as being the law governing admissibility of evidence. We think it is nonetheless clear: the instrument itself makes no rules as to admissibility of evidence, and, as you rightly point out, Article 17 has the effect of making clear that national law will apply where the instrument is silent.

  You have asked me for a detailed note on my interpretation of Article 9(2) in the context of English and Scottish procedures. When a legal claim is formulated, one begins with the facts, and then one applies legal analysis to those facts. This analysis fits the facts into a legal framework, from which it can be decided whether or not the facts rise to legal liability and, if so, what remedies might be available. That process is similar to the one you describe in your observations concerning the French expression qualification juridique. The meaning of article 9(2) is therefore that, when starting proceedings under the ESCP, the claimant will be required only to state the facts, not the legal analysis of those facts.

  On the nature of the obligation under Article 9(3), the objective is to ensure that parties, especially ones which are unrepresented, have sufficient knowledge of the procedures involved in order to participate in the proceedings on an equal basis. We do not foresee this giving rise to difficulties in the UK, where judges are used to giving rise to difficulties in the UK, where judges are used to giving appropriate guidance to unrepresentated parties as to the procedure.

  With regards to the forms within the revised text, the July meeting was the first occasion at which the forms had been discussed in detail. The Presidency had produced draft forms for that meeting based on those for the European Order for Payment. We, in conjunction with other Member States, have argued that such forms are unsuitable to be completed by litigants in person and small businesses and others. Nor did we consider the guidance for the claimant or defendant adequate.

  The forms were subject to considerable amendment following discussions within the Council Working Group. I enclose a copy of the Finnish Presidency's revised text that incorporates these changes. We take the view that, although the new drafts are a significant advance on the originals, there remains room for improvement when the forms and guidance notes are revisited in September to ensure that they are consistent with the aims of a simplified procedure. To this end the UK will be submitting a paper to the Working Group together with new draft forms for consideration including improved guidance and more use of tick boxes to avoid the need for translation. We will also raise the Committee's suggestion that there should be a reference to ADR. The error in relation to the letters ascribed to the forms in Articles 4(2) and (3) to form D has been identified will be rectified to reach form C and there has been agreement to delete form D altogther.

30 August 2006



156   Government Responses, Session 2005-06, HL Paper 182, p 89. Back


 
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