SUCCESSION AND WILLS (7027/05)
Letter from Rt Hon Baroness Ashton of
Upholland, Parliamentary Under Secretary of State, Department
for Constitutional Affairs to the Chairman
I refer to your letter of 13 October 2005.
I am grateful to you and your Committee for your comments on the
I am pleased to enclose a copy of the Government's
reply to the European Commission's Green Paper on succession and
wills. The response was agreed with the Scottish Executive. It
was delivered to the Commission on 30 August. This was later than
I had hoped but my officials kept the Commission informed of the
progress of the preparation of the reply.
I also enclose a translation purchased by my
Department of the Commission's Working Paper Annex to the Green
Paper (not printed) referred to in the response in case it is
of assistance to you or the other members of the Committee. The
original Commission text is in French.
I understand that the Commission is now considering
the responses to the Green Paper, many of which are available
on the Commission's website, and that there is to be a public
hearing on the Green Paper on 30 November.
In your letter you said that the Committee would
be pleased to see the outcome of the consultation that my Department
carried out with stakeholders and looked forward to seeing a summary
of the result. We received 11 responses. I have been able to obtain
agreement from most of the consultees to make their replies available
to you. These include the principal professional organisations
involved in this area. My officials are still seeking permissions
from the remainder and, if this is forthcoming, I will arrange
for the relevant replies to be forwarded to you or your Clerk.
Where a permission cannot be obtained in the next two weeks a
summary will be prepared and sent instead.
Finally, you may be interested to know that
on 12 September the European Parliament's JURI Committee is to
consider a motion to seek a resolution of the Parliament calling
on the Commission to submit a legislative proposal to deal with
succession and wills in accordance with certain detailed recommendations
(Provisional 2005/2148(INI)). Several of these recommendations
seem prematurely prescriptive of the solution to be adopted and
are inconsistent with the line taken in the UK response. Several
amendments have been tabled and we will be watching developments
4 September 2006
RESPONSE OF THE GOVERNMENT OF THE UNITED
1. The Government of the United Kingdom
welcomes the opportunity to respond to the Green Paper on Succession
and Wills (the Green Paper)
published by the European Commission on 1 March 2005. The Government
thanks the Commission for publishing the helpful Staff Working
Paper Annex to the Green Paper (the Annex).
2. The United Kingdom consists of three
jurisdictions. The law of England and Wales and the law of Northern
Ireland on matters relating to succession and wills are broadly
similar. Scots succession law has many similar features but is
somewhat different. The principal differences between Scots law
and the laws of England, Wales and Northern Ireland, in this area
are described in Appendix A. The Government is accordingly familiar
with the practical issues arising in relation to cross-jurisdiction
succession and wills.
3. The Green Paper is extremely wide ranging
and asks a large number of questions. Many of these raise difficult
and controversial issues, particularly for a common law jurisdiction.
The Government has been greatly assisted in formulating its views
by the comments and advice of several academics and legal practitioners.
The Government's replies are summarised in this document and set
out in full in Appendix B. A short summary of the private international
law of England and Wales in relation to succession is set out
at Appendix C.
4. For brevity, references in this response
to "the law of succession" include the law relating
5. The UK Government agrees with the Commission
that the diversity of the laws of succession in operation across
Member States makes full harmonisation of these laws inconceivable.
The Government considers that such harmonisation would be a fundamental
interference in the domestic affairs of Member States, which could
have unpredictable social and cultural outcomes. It would be undesirable
6. It is the UK Government's view that the
diversity of legal traditions in Member States must be fully respected.
This is essential because the differences in the approaches taken
by Member States to the transfer of property on death are fundamental.
Some Member States, such as the UK, favour freedom of testamentary
disposition, whilst others provide for reserved heirship. Some
allow property to pass direct to the heirs, but the UK and others
operate a court based system, which, on the death of the deceased,
gives ownership of the deceased's property to a third party. This
third party is entrusted with the administration of the estate
of the deceased and its distribution to his or her beneficiaries.
Some, including the UK, define the estate as the property of the
deceased at the date of death, others include gifts made by the
deceased during his or her life. This diversity is entirely legitimate.
It reflects the differing approaches adopted by different societies
within the European Union to questions about the nature of ownership
and about family obligations. It limits the extent to which any
harmonisation proposed in a European instrument could be acceptable.
However, although the UK Government would, in principle, be able
to support measures of limited harmonisation that would bring
real benefits to citizens, it considers that there is very little
scope for creating them in the field of succession.
7. The UK Government strongly believes that
any European legislation on cross-border succession cases must
not adversely affect the working of important aspects of the domestic
succession laws of the UK. Therefore, any European instrument
limit the operation of the principle
of freedom of testamentary disposition or affect the operation
of the rules of intestacy;
change the court based system of
probate and the associated office of executor;
interfere with the use of trusts,
joint tenancies or life policies; or
adversely affect the working of the
national land registration or tax law systems.
8. The UK Government notes that differences
between Member States are not limited to matters of substantive
succession law. There are also fundamental differences between
their private international laws in relation to succession. Of
particular significance in this respect to the UK are three matters:
the principle of scission (that is
the rule that the law of the country where the immovable property
is situated is the law applicable to the succession for the immovable
the distinction between matters of
succession (determining who gets what) and matters of the administration
and distribution of the estate (determining what is the net estate
and the procedures and formalities for collecting in and then
distributing the net estate to those entitled under the law of
the succession); and,
the basic principle that the law
of succession applies only to property comprised in the deceased's
estate at death, with property effectively given away by the deceased
in his or her lifetime not being part of the estate. Any proposal
to change these rules would require strong justification. The
UK Government is not aware that such justification exists.
9. The potential effect of European legislation
on the different national systems of property ownership and transfer
must therefore be carefully considered as part of the assessment
of any proposals. The effect of any proposed European instrument
in the field of succession must be proportionate to the degree
of change required to implement it. The principle of subsidiarity
must be fully applied.
10. Subject to these significant concerns,
the UK Government supports, in principle, the concept of attempting
to develop proposals to improve the administration of the estates
of deceased persons with a cross-border element, in so far as
the diversity of laws and practice creates real problems in the
field of succession.
11. In general terms, the UK Government
would approach such proposals from the standpoint that European
measures in the civil law field should be based on mutual recognition
and enforcement of judgments, judicial co-operation and the harmonisation
of conflict of laws rules. However, any proposals must be restricted
to cases with a cross-border element. They must also be demonstrably
necessary for the proper functioning of the internal market to
ensure that they fall within the competence of the European Union.
12. The UK Government is strongly of the
view that the first stage in the development of any proposals
should be a thorough analysis of problems with current law and
practice. Any proposals for action at European level must flow
from this analysis and be justified by clear evidence that the
measures proposed offer proportionate solutions to real problems,
which could not adequately be addressed at national level. The
Green Paper and the Annex do not contain such evidence. The assertion
that European action is essential because there appear to be around
50,000 transnational succession cases each year among Member States
is not an adequate evidence base to justify legislation. The Commission
must identify the real problems that exist and demonstrate their
scale. It must develop persuasive impact assessments to justify
proposed change. The UK Government does not accept the Commission's
view that there is an established need for reform.
13. Finally, the UK Government stresses
the importance of an accurate understanding of technical legal
language and concepts used in different Member States. For example,
words such as "domicile", "deed" and "heirs"
appear to have a different meaning in the English language version
of the Green Paper than normally applies in the United Kingdom.
Similarly, as already mentioned at paragraph 8, "estate"
may mean different things in different countries and is not synonymous
with "patrimony". It will be very important to ensure
that linguistic and conceptual accuracy is maintained during the
development of any proposals.
14. Turning now to the topics addressed
in each Part of the Green Paper, the UK Government has the following
15. The UK Government considers that the
assertion in Part 2 of the Green Paper that the universal nature
of future rules should not be in dispute is premature. In view
of the practical importance of the United Kingdom's strong relationships
with the Commonwealth and the USA, the UK Government will give
careful consideration to the impact of any proposals arising from
the Green Paper on dealings with non-EU countries.
16. On the question of the proper scope
of the law applicable to the succession the UK Government considers
that the applicable law should not extend to matters of the administration
and distribution of the estate, or to the definition of the property
comprised in the estate. This will prevent disruption of well
functioning national administrative systems, such as the probate
and land registries. It will also avoid interference with the
operation of national property law by incompatible rules of another
Member State as to reserved heirship or freedom of testamentary
disposition. It would be totally unacceptable to the Government
of the UK if the law applicable to the succession undermined perfectly
valid lifetime gifts, including trusts, or interfered with the
operation of testamentary trusts. In the UK Government's view
no further choice of law rules are necessary in relation to trusts.
17. In relation to the determination of
the applicable law, the UK Government agrees that there are advantages
and disadvantages to each of the likely connecting factors, but
is not convinced that one solution is yet demonstrably superior
to the others. Nor has the UK Government a finally concluded view
on permitting a testator to be able to choose an applicable law.
An unlimited choice would present some obvious difficulties but
a limited choice might provide greater certainty for testators.
18. Turning to issues relating to jurisdiction,
the UK Government considers that a single exclusive jurisdiction
would have considerable disadvantages and would be undesirable.
For example, it might require a foreign court to exercise a discretion
under English law. The foreign court could find this impossible
due to its lack of familiarity with the common law concepts involved
(for example, proprietary estoppel or the operation of the court's
discretion under the Inheritance (Provision for Family and Dependants)
19. The UK Government also considers that
the courts of the territory in which immovable property is situated
should have jurisdiction over that property. This supports the
proper and efficient administration of the transfer of property,
which is correctly a matter of domestic law. The Government is
unaware that the present systems in operation in the UK create
any significant problems for nationals of other Member States
or that UK nationals, properly advised, have to make disproportionately
burdensome arrangements in relation to property in other Member
States in relation to succession.
20. Subject to these considerations, the
UK Government is open to discussion about the precise rules that
would govern the primary choice of jurisdiction and the transfer
of jurisdiction in whole or in part in an individual case.
21. The UK Government notes the proposals
in Part 3 of the Green Paper that non judicial authorities of
one Member State might have jurisdiction instead of the court
designated under the choice of court rule. The Government considers
that this possibility is fraught with difficulties and very unlikely
to be acceptable.
22. The UK Government considers new rules
of jurisdiction are unnecessary in relation to testamentary trusts,
because they, like lifetime trusts, are within Regulation 44/2001.
23. Part 4 of the Green Paper addresses
issues of mutual recognition and enforcement on the assumption
that harmonised choice of law and choice of court rules have been
established. This assumption is unnecessary and premature.
24. As a general rule, the UK Government
supports mutual recognition and enforcement measures as effective
and efficient ways to make procedures in cross-border cases simpler,
cheaper and more certain. However, it acknowledges that the differences
in legal systems across Member States in matters of succession
appear to create significant obstacles even to the creation of
such measures. These obstacles would be particularly acute in
relation to the suggestion that judgments from one Member State
should automatically form the basis for an amendment of land registers
in another. These obstacles would require very careful consideration.
25. For similar reasons, the UK Government
has strong reservations about the proposals in Part 4 that the
same status should be given to succession related deeds as to
judgments. This proposal appears to be based on mutual recognition
of notarised documents. This would present problems in jurisdictions
that do not have a notarial tradition. Essentially the same problems
arise in relation to the proposals for the automatic recognition
26. The UK Government has no overriding
conceptual objection to the creation of a European Certificate
of Inheritance. However, the certificate proposed would have to
be compatible with systems of administration and distribution
of estates that are fundamentally different. A certificate designating
an heir (in the civil law sense) would not be effective to entitle
that person to possession of property in UK jurisdictions where
a grant of representation, or equivalent, in favour of an executor
is required so that the executor can administer and distribute
the estate. Unless a means can be found to overcome the differences,
the certificate would have to perform different functions in different
systems. This might make it confusing and cumbersome.
27. The UK Government does not have any
overriding objection in principle to the possible creation of
a scheme for registering wills in all Member States, including
the possibility of a central European register. However, the Government
considers that any registry of wills should be voluntary and that
it should not preclude informal and deathbed wills, both of which
are regularly made in UK jurisdictions. Any proposals for the
creation of such registries would have to be carefully evaluated.
28. In response to the Commission's request
for suggestions as to how the project might be carried forward,
the UK Government strongly believes that the Commission would
be unwise to attempt to carry forward an immense single project
covering the whole of the subject matter of the Green Paper in
a single stage. The Government strongly recommends that the Commission
should divide the work both by subject and chronologically into
separate and manageable areas. Priority should be given to those
parts that are likely to be achievable and to bring demonstrable
benefits to citizens.
29. In carrying out this exercise the Commission
should take into account the successes and failures of the previous
attempts to create international conventions in this field. Whilst
not ruling out the possibility of commencing work in another area,
the UK Government strongly recommends that serious consideration
be given to the exploration of the need for, and the possibility
of achieving, an instrument harmonising choice of law rules in
matters of succession (excluding administration and distribution
of estates). If progress can be made in this area, it may well
be possible to build on that achievement in other areas covered
by the Green Paper. The suggested European Certificate of Inheritance
might also provide a starting point provided that it applied to
both heirs (in the civil law sense) and executors (in the common
law sense). There are, however, significant practical problems
in identifying and creating an effective and cost-efficient procedure
of this kind. All proposals must however be developed in accordance
with Better Regulation principles.
177 Correspondence with Ministers, 45th Report of
Session 2004-05, HL Paper 243. p483. Back
COM(2005) 65. Back
SEC (2005) 270. Back