Examination of Witnesses (Questions 20-39)
Professor Jonathan Harris and Mr Paul Hughes
10 OCTOBER 2007
Q20 Lord Burnett: What did come second
then?
Professor Harris: I am not so sure that I would
rate the issue of ability to choose beneficiaries so highly. Under
the existing system we would apply the law of domicile at death
to movables. If that law has rules of compulsory heirship we would
be willing to give effect to them. Scotland has such rules in
any event. I personally do not think that is an overriding objection.
Q21 Lord Burnett: It would be an
objection in this country if it were foisted upon us.
Mr Hughes: If that were to come within the scope
of private international law instruments, it would have very strong
objections.
Q22 Lord Burnett: I would hope so
too.
Mr Hughes: Freedom of testamentary disposition
is not to be interfered with by the instrument.
Q23 Lord Burnett: How strong is that?
Has the Government laid that down in other countries and made
it absolutely clear?
Mr Hughes: It has said any European instrument
must not limit the operation of the principle of the freedom of
testamentary disposition. That was the line that we put in our
response to the Green Paper.
Q24 Lord Burnett: How likely are
we to be able to preserve that position?
Mr Hughes: I would not expect us not to be able
to preserve it.
Professor Harris: I quite agree with what Mr
Hughes says but I think it would be most surprising and most unacceptable
if the proposal were to deal with what essentially would be harmonising
a matter of uniform law as to whether substantive law allowed
one to leave one's estate to whomsoever one chose. I do not think
it would be at all appropriate or within the scope of jurisdictional
competence to harmonise the uniform substantive law of different
legal systems but I think if the choice of law rules of this regulation
point to French law, say, and French substantive law happens to
say that you have to leave a fixed percentage to your spouse,
I personally (a) do not think there is an overriding objection
and (b), if we do have an overriding objection, we have no possibility
of reaching common ground with other Member States, almost all
of which, including—though not a Member State—the
Scottish legal system, have some form of compulsory heirship.
Q25 Chairman: I see. So we must continue
to have freedom of testamentary disposition. We can leave property
to whom we wish but we would recognize other EU jurisdictions
which limit that freedom?
Professor Harris: What I am saying is yes, if
the governing law according to the choice of law rules in this
regulation points to English law, then English succession law
must be completely unaffected; the freedom that we have to leave
to whomsoever we choose must be unaltered; but if according to
these choice of law rules we end up applying French succession
law, then subject to any overriding public policy concerns—and
I imagine there would be a public policy derogation in the regulation—I
think we would be expected to give effect to that law.
Lord Bowness: Just to
clarify, taking this very firm stance that we must have our right
to leave everything, for the record, we are only talking about
movables, are we not? Immovables we do not have the right to leave
to whomsoever we choose. That is why we have to advise people
to make wills in Spain. You cannot leave your French house to
whom you choose, or your Belgian house.
Lord Burnett: You can
certainly do so with your English house.
Q26 Lord Bowness: Precisely, but
my point is that the advantage of preserving sanctity and doing
everything the way we always do it is not necessarily to everybody's
advantage. There could in certain circumstances—I am not
saying there should—be benefit to a British citizen who
may wish to leave his house in France or Belgium or Spain to somebody
other than where French, Belgian or Spanish law would otherwise
take it. So we do not have a totally free choice. What I was seeking
to establish was that we are only talking about movables; we are
not talking about immovables when we talk about a complete freedom
of testamentary choice. If I am wrong, please say so.
Professor Harris: My Lord Chairman, there are
two issues we need to distinguish. One is the question of which
choice of law rules we should go for, to which legal system the
rules of the regulation should point; and the other question is,
having identified the particular legal system, whether this regulation
should override it with any rules of uniform law. The question
you have asked me has choice of law implications. Certainly under
the current system that we have, it would be almost inconceivable
to avoid the law of the place where the immovable property is
situated; but one advantage of moving to a unitary choice of law
rule, if that turns out to be the law of the residence of the
testator and it is an English resident, is that now one will be
able to apply English law even to those foreign immovables and
leave it to whomsoever one wishes. The role of English Law will
be enhanced. What is totally unacceptable is, once we have identified
what our choice of law rules are, and when they point to English
Law, I think that the regulation must absolutely not overlay rules
of uniform law which say that you cannot now leave your property
to whomsoever you choose.
Q27 Lord Jay of Ewelme: Can you see
circumstances in which the French would accept that a British
citizen with a property in France could leave it to somebody other
than the nearest relative?
Professor Harris: My Lord Chairman, I find that
very difficult to answer. One of the problems with this regulation
is that England—and I would not even say the UK—but
England on the one hand and other Member States and Scotland on
the other do have a different view about freedom of testamentary
disposition. If we cannot reconcile that by at least saying we
will accept each other's laws when the choice of law rules points
to them, then the regulation has no chance.
Q28 Lord Mance: That, I thought,
was the great advantage that you were identifying in paragraph
43, that English law would be recognized in precisely that situation.
Can I come to a different point in paragraph 33, application of
the regulation to non-Member States? Can you just explain how
you contemplate a regulation might operate which purports to have
worldwide effect? If one takes the example of someone domiciled
and resident within a country of the European Community who has
immovable property in Colombia or the United States, this regulation
apparently says that the United States property must be distributed
in a court in Europe in accordance with the law of, say, the domicile
or habitual residence or whatever the test adopted is, yet Colombian
law may say something completely different and the parties involved
may achieve in litigation completely opposite results. It just
seems to me that, if it is really suggested that the regulation
is going to apply to non-Member States, as you appear to be accepting,
it will not just be very difficult to enforce; there will be an
intolerable system of potentially completely different legal results
in different jurisdictions.
Professor Harris: I essentially agree with the
point that Lord Mance makes.
The Committee suspended from 5.02 pm to 5.12
pm for a division in the House
Q29Chairman: Professor Harris, you were
part-way through your response to Lord Mance's question on the
possibility of universal application of this proposed new instrument.
Professor Harris: I do think the issue here
is not straightforward. In part, it is bound up with which choice
of law rule one goes for. If one keeps the scission system and
has the law of the place of the property for immovables, that
removes one of the objections to Lord Mance's point because we
would be applying the same law as the Colombian court or whatever
court it might be. If one has a unitary system and it is the law
of residence, I absolutely accept that, whatever an English court
does, there may be real difficulties of enforcement in a non-Member
State if we are not applying the law of the situs of the
property. However, I reached the conclusion that firstly, the
regulation is concerned with what we in the United Kingdom are
going to do with these particular situations rather than purporting
to affect the law of any other jurisdiction and it is very much
consistent with other regulations—Rome I and Rome II, for
example—that their scope in an English court or for English
practitioners is universal. The reason for that is that one of
the fundamental points of having this regulation is to try and
ease the position for English residents, to make it easier to
advise them as to the devolution of their estate. I think we will
end up with something that is probably more complicated than we
started with if we try to have one regime under a regulation for
devolution of property, immovables, located within Member States
and one for property outside those states. I am not sure that
will actually improve the position for English residents. So on
balance I took the view that it would be better to have a universal
scope. If one looks in a book like Dicey, Morris and Collins,
although normally English courts do not assert jurisdiction over
foreign immovables, there are recognized exceptions, such as the
possibility of in personam orders directing a party to
transfer land in a foreign state, which are already recognized.
I took the view that there is no straightforward solution but
that it would be too convoluted and would not improve the internal
market to have two different regimes.
Q30 Lord Mance: That was exactly
the sort of thought I had in mind, but if you really do contemplate
an English court issuing an in personam order, an injunction
or something that is enforceable by contempt and a Colombian authority
taking the exact opposite view as to entitlement, we have a very
odd situation.
Professor Harris: Indeed. Another possibility
if one went for a unitary choice of law rule is to recognize it
for property within Member States but to have a derogation in
relation to immovable property in non-Member States so that the
law of the situs will nonetheless still apply to immovables
in non-Member States. Personally, I think that is preferable to
being left with two different legal regimes, the regulation and
common law principles.
Q31 Chairman: Do think that is a
feasible solution to all this? Get rid of scission and have a
unitary scheme with an exception for immovable foreign property?
Professor Harris: It is a feasible solution
for immovable property in non-Member States. Indeed, I think it
is. Even within Member States, if the United Kingdom could not
accept a unitary system in its entirety, what one might consider
is some sort of hybrid between a unitary system and scission which
looked something along the lines of all succession to movables
and immovables being governed by the law of residence at death
but with some sort of mandatory rule provision allowing the overriding
mandatory rules of the situs nonetheless to be applied.
That might be a compromise solution. It may, however, not be as
simple as either a unitary approach or a scission system.
Mr Hughes: Something along those lines is referred
to in the summary of responses to the Green Paper, so the Commission
is considering that kind of derogation.
Q32 Lord Burnett: Could I go back
to this choice of law business or settlor or testator autonomy,
as you have called it? If the testator has a connection with two
countries, for example, a Frenchman who comes to live in England,
should there therefore be an opportunity for that testator, that
Frenchman, when he dies in the United Kingdom to opt for French
law rather than British in the administration of his estate? Do
you think there is any compelling ground against advancing that
thesis for movables and immovables?
Professor Harris: My Lord Chairman, I do not
think there is any compelling ground. I am anxious to ensure that
freedom to choose the governing law is not taken to its extremes.
I do not think that would be acceptable to other Member States
precisely because they do have rules of compulsory heirship and
they will not want their testators to be able to evade it by choosing
English law. It might be good for us that they continually choose
English law but I do not think it will be politically realistic.
I am anxious to ensure that the law that is identified on basic
choice of law principles means that the testator could be said
to have some significant connection with that country and its
legal system either at the time of making the will or at the time
of death. If that means a choice between two countries with which
he has a close connection, it seems to me that that would be an
entirely reasonable situation where choice would be entirely legitimate.
Q33 Lord Burnett: With respect to
both movable and immovable property?
Professor Harris: I think so, if one accepts
a unitary system.
Q34 Lord Burnett: The election would
be made in a will or in a letter.
Professor Harris: Yes, I think the election
would have to be made in a will.
Q35 Chairman: Professor Harris, one
has the impression that the one thing you are not in any sense
set upon is our own last domicile aspect of the scission approach
and you would settle for habitual residence pretty readily. Is
that right?
Professor Harris: Yes, in part because I do
not think domicile always leads to a particularly good result.
There are many cases one can study in the textbooks of those whose
domicile revives in odd circumstances or domicile which one never
loses. One wonders why one's estate should be devolved according
to that law. I think there is much more of a likelihood of a material
connection with a system where one dies resident, where one's
estate is probably going to be administered, where one's assets
and one's heirs may well be; but I also think in part it is a
pragmatic view that it is very unlikely we will get anything close
to domicile in the English sense of the word, and it seems to
me there is not any overriding objection to residence. The challenge
will be to try and get some kind of definition of residence, otherwise
we are in a more uncertain situation than ever. At least an advantage
of the law of situs is that everybody knows what it is.
There is no point in moving to a test of residence to improve
certainty and then find each Member State disagreeing about what
residence is. That is the challenge.
Q36 Chairman: Do think there is room
between the red lines of all the various states and schemes involved
to actually hatch out a satisfactory Brussels IV regulation?
Professor Harris: As to the whole regulation?
Q37 Chairman: Yes.
Professor Harris: My sense on that is that we
start from extremely different legal traditions. The phenomenon
of clawback seems to be as important in most Member States as
it is important to us not to have widespread clawback. The freedom
to leave to whoever one chooses within very broad scope in England
seems to be as important to us as it is to almost every other
place, including Scotland, that there be some form of compulsory
heirship. If one tries to get into the panoply of property rights
that might arise on death—trust, tontine, usufruct—I
think it is an exceedingly audacious project. I think it is unrealistic
and also unjustified to create a difference in regime between
lifetime and testamentary transfers. That is why I have reached
the conclusion that subject matter scope is absolutely crucial,
and that does mean excluding administration of estates, it does
mean excluding trust and property rights and recognizing the very
distinction that the Hague Succession Convention and the Hague
Trust Convention draw between succession on the one hand and what
happens afterwards, so that the raw question we are really each
asking under the regulation is who is entitled to this estate,
A or B, and the particular rights that arise are not harmonised
under this regulation. The scope must be kept narrow, and I think
the best way to deal with succession is not to define it positively,
which I think will be politically difficult, but to push for a
list of exclusions from the regulation, and that list might include
administration of estates, trusts and other property rights arising
on death. If one pushes for a list that looks like that and if
one pushes for a statement that nothing in this regulation shall
affect the validity of dispositions disposed of inter vivos
by their governing law or permit compensation claims in relation
to that disposition, then I think you have the basis for a workable
regulation. That is why I said at the start that I was very clear
that subject matter scope is crucial because I do not think the
Commission has been clear enough on what succession is and what
it is not. The proposals suggest succession is something very
much broader than I have in mind.
Q38 Chairman: So if it is not over-ambitious,
it could actually be useful.
Professor Harris: Indeed.
Q39 Lord Bowness: Professor Harris,
you have listed the exclusions. I was going to ask you, rather
than red lines and exclusions, what would be your order of priorities
to put into the regulation if you were going to adopt a step-by-step
approach? You have answered it to some extent in the negative.
Professor Harris: I would answer it in the negative
because I think pushing for exclusion of anything other than pure
succession law is absolutely critical. Politically, one is more
likely to get that agreement about what it is not than trying
to define it positively. If one can get a very tightly construed
regulation that really answers the bald question of who is the
heir according to the governing law, is it X or Y, I think I would
be less concerned about the range of the regulation in terms of
the private international law issues it might cover. I think it
would be desirable to lay down a choice of law rule. I personally
think that, within those narrow bounds, a unitary choice of law
rule would be perfectly acceptable and actually would be quite
advantageous in advising English residents and would improve legal
certainty for them. I think some rules on jurisdiction would be
advantageous and I think some form of limited recognition of each
others' judgments would be advantageous once one has limited the
subject matter and excluded, for example, administration of estates.
What I think will be more difficult is European certificates of
inheritance or a compulsory system of registration of wills. Even
if we get a narrow subject matter scope, that might be too much
too soon.
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