Category Archives: Judicial Cooperation in Civil Matters

Judicial cooperation in civil matters aims to establish closer cooperation between the authorities of Member States. It seeks to eliminate obstacles deriving from incompatibilities between the various legal and administrative systems, and thus facilitate access to justice. Its cornerstone is the principle of mutual recognition and enforcement of judgements and of decisions resulting from extrajudicial cases. Judicial cooperation in civil matters contributes to the area of justice, freedom and security, as governed by the Treaty on the Functioning of the European Union (Title V).

European small claims procedure

European small claims procedure

Outline of the Community (European Union) legislation about European small claims procedure

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Justice freedom and security > Judicial cooperation in civil matters

European small claims procedure

Document or Iniciative

Regulation (EC) No 861/2007 of the European Parliament and of the Council of 11 July 2007 establishing a European small claims procedure.

Summary

The European Small Claims Procedure established by this Regulation is intended to improve access to justice by simplifying cross-border small claims litigation in civil and commercial matters and reducing costs. “Small claims” are cases concerning sums under EUR 2 000, excluding interest, expenses and disbursements (at the time when the claim form is received by the competent court). Judgments delivered under this procedure are recognised and enforceable in the other Member States without the need for a declaration of enforceability. The procedure is optional, offered as an alternative to the possibilities existing under the national laws of the Member States. It will be applicable from 1 January 2009 in all EU Member States except Denmark.

STARTING THE PROCEDURE

The European Small Claims Procedure, for which no lawyer is necessary, follows a series of steps:

Filing the claim. To file a claim for a sum less than EUR 2 000, the claimant fills in a standard claim form (Form A, provided in Annex I to the Regulation), giving details of the claim, the sum demanded, etc., and lodges it with the competent court by any means of communication acceptable to the Member State in which the action is taken. If the claim is outside the scope of the Regulation (see below), the court will notify the claimant to that effect; if the claim is not withdrawn, the court will proceed with it in accordance with the relevant applicable procedural law in that Member State.

Correcting and/or completing the claim form. If the claimant has not provided enough information, the court will send him a Form B (Annex II) asking for the missing information. The claim will be rejected if the claimant fails to complete or correct the claim in the time specified, or if it is manifestly unfounded or inadmissible.

Notifying the defendant. Once the court has received the properly filled in claim form, it prepares a standard answer form (Form C, Annex III). This, together with a copy of the claim and, where applicable, the supporting documents, is served on the defendant by post with dated acknowledgement of receipt within 14 days.

The defendant replies within 30 days. The defendant then has 30 days to prepare and return his response, counting from the date of service of the answer form.

The defendant’s response is forwarded to the claimant. Within 14 days of receiving the defendant’s response, the court forwards a copy of it to the claimant, with any relevant supporting documents.

Any counterclaim submitted by the defendant (using Form A) is served on the claimant in the same way as the original claim was served on the defendant (see above). The claimant has 30 days to respond. If the sum of the counterclaim is more than EUR 2 000, both claim and counterclaim will be dealt with in accordance with the relevant procedural law applicable in the Member State in which the action is taken (and not in accordance with the European Small Claims Procedure).

Judgment is given in 30 days. The court must give judgment within 30 days of receipt of the response from the defendant (or claimant, if there is a counterclaim). It can, however, decide to ask for further information (the parties have 30 days to reply) or to take evidence in the matter or to summon the parties to an oral hearing (within 30 days: see also below); in these cases, the court gives its judgment within 30 days of receiving the information or holding the hearing. If the parties do not reply in time, the court will still give its judgment. Judgments are recognised and enforced in the other Member States, and cannot be reviewed as to substance in the Member State of enforcement. At the request of one party the court will issue a certificate of judgment (without further cost), using Form D (Annex IV).

Taking evidence. The court determines the extent of the evidence necessary for its judgment and the means of taking it, using the simplest and least burdensome method.

Enforcement of the judgment. This is governed by the law of the Member State in which the judgment is enforced. The party seeking enforcement produces an original copy of the judgment, and of the certificate (Form D) translated by a qualified person into the language, or one of the languages, of the Member State of enforcement. The party is not required to have an authorised representative or a postal address in the Member State of enforcement, other than with agents competent to carry out the enforcement procedure. The authorities cannot require any security, bond or deposit on the grounds that the claimant is a foreign national or is not domiciled or resident in the Member State of enforcement.

REFUSAL OF ENFORCEMENT AND APPEALS

The court in the Member State of enforcement can, at the request of the defendant, refuse to enforce the judgment when:

  • the judgment is irreconcilable with an earlier judgment between the same parties in the same cause of action;
  • the earlier judgment was given in the Member State of enforcement or fulfils the conditions necessary for its recognition there;
  • the irreconcilability of the judgments was not and could not have been raised as an objection in the proceedings in the court where the judgment in the European Small Claims Procedure was given.

When a party has challenged or applied for a review of a judgment given in the European Small Claims Procedure, the competent authority in the Member State of enforcement can limit the enforcement procedure to protective measures, make enforcement conditional on some security, or, in exceptional circumstances, stay the enforcement proceedings.

Appeals against a judgment given in the European Small Claims Procedure are governed by the procedural law of the Member States, which must by 1 January 2008 inform the Commission whether an appeal is available under their procedural law and in what court. The Commission will make that information publicly available through the Official Journal of the European Union and any other appropriate channel.

The defendant can apply to the court that gave a judgment for a review when:

  • the claim form or summons to an oral hearing was not served by a method with proof of receipt by him personally;
  • service was not effected in time for him to prepare his defence, without any fault on his part;
  • he was prevented from objecting to the claim by reasons of force majeure or due to extraordinary circumstances, without any fault on his part.

In any of these cases, the defendant is expected to act promptly. When a review is justified, the original judgment becomes null and void.

Role of the courts and provisions relating to languages, hearings and costs

The court does not require the parties to make any legal assessment of the claim. If necessary, it informs the parties about procedural questions, and whenever appropriate it seeks to reach a settlement between them.

Languages and translations. The claim must be submitted in the language, or one of the languages, of the court, as must the response, any counterclaim, the description of supporting documents, etc. The court can require a translation of a document received in another language only if that document seems to be necessary for giving the judgment. If a party refuses to accept a document because it is in a language he does not understand or a language other than one of the official languages of the Member State addressed, the court will notify the other party so that he can supply a translation.

Oral hearings. The court will hold an oral hearing only if this appears to be necessary or if requested by one of the parties. The request may be refused if an oral hearing is obviously not necessary for the fair conduct of the proceedings. The hearing may be conducted through videoconference or other communication technology.

Costs. The costs of the proceedings are borne by the unsuccessful party.

SCOPE OF THE REGULATION

The European Small Claims Procedure applies to cross-border cases, that is, cases in which at least one of the parties is domiciled or habitually resident in a Member State other than the Member State of the court where the action is brought. Domicile is determined in accordance with Articles 59 and 60 of EC Regulation No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. In order to determine whether a party is domiciled in the Member State of the court, it applies its internal law; if the party is not domiciled in that Member State, the court determines whether he is domiciled in another Member State by applying the law of that Member State (Article 59). Companies and legal persons are domiciled in the place of their statutory seat, their central administration or their principal place of business (Article 60).

The Regulation does not apply to revenue, customs or administrative matters, to the liability of the State (acta jure imperii), or to:

  • the status or legal capacity of natural persons;
  • matrimonial regimes, maintenance obligations, wills and successions;
  • bankruptcy, compositions and similar proceedings;
  • social security;
  • arbitration;
  • employment law;
  • tenancies of immovable property, except for monetary claims;
  • violations of privacy and of rights relating to personality, including defamation.

Final provisions

The European Commission will report to the European Parliament, the Council and the Economic and Social Committee on the application of the Regulation by 1 January 2014. It is assisted by a committee.

The Regulation applies from 1 January 2009 in all Member States except Denmark. Article 25, which requires the Member States to communicate certain information (relating to jurisdiction, means of communication, appeals etc.) to the Commission, applies from 1 January 2008.

Context

The Regulation is based on the Green Paper on a European order for payment procedure and on measures to simplify and speed up small claims litigation. The European Commission presented the proposal (COD/2005/0020) that led to the adoption of this Regulation on 15 March 2005.

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal
Regulation (EC) No 861/2007 1.8.2007
Applicable from 1.1.2009 (Art. 25: 1.1.2008)
OJ L 199 of 31.7.2007

Strengthening cooperation with Switzerland, Norway and Iceland: the Lugano Convention

Strengthening cooperation with Switzerland, Norway and Iceland: the Lugano Convention

Outline of the Community (European Union) legislation about Strengthening cooperation with Switzerland, Norway and Iceland: the Lugano Convention

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Justice freedom and security > Judicial cooperation in civil matters

Strengthening cooperation with Switzerland, Norway and Iceland: the Lugano Convention (2007)

Document or Iniciative

Council Decision 2007/712/EC of 15 October 2007 on the signing, on behalf of the Community, of the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.

Summary

The “new Lugano Convention” will apply to jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. It will not apply to tax, customs and administrative matters or to the status and legal capacity of natural persons, rights in property arising from matrimonial relationships, wills and succession, bankruptcy or composition, social security or arbitration.

With this decision, the Council of the European Union (EU) authorises the President of the Council to designate the persons empowered to sign the convention on behalf of the Community. The text of the convention is attached to the decision.

Achieving a high level of circulation of judgments

The convention, signed on 30 October 2007 by the European Community, along with Denmark, Iceland, Norway and Switzerland, will come into force as soon as it is ratified by the signatories. It will replace the Lugano Convention of 16 September 1988. The contracting parties must deposit their instruments of ratification with the Swiss Federal Council, which will serve as depositary of the convention. Once it has come into force, the convention will be open to:

  • future members of the European Free Trade Association (EFTA);
  • Member States of the European Community acting on behalf of certain non-European territories that are part of their territory or for whose external relations they are responsible;
  • any other state, subject to the unanimous agreement of all the contracting parties.

Based on the rules applicable between EU Member States

The convention follows the present legal framework of the Community, namely the “Brussels I” regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters between Member States. The rules will therefore be similar in the EU and in Switzerland, Norway and Iceland. The convention will also facilitate the mutual recognition and enforcement of judgments handed down by the national courts of these countries.

The convention provides that, in general, persons domiciled in a state bound by the convention are sued in that state, whatever their nationality. However, it also provides for special rules of jurisdiction in certain matters, such as with regard to:

  • contracts: jurisdiction resides with the courts of the place of performance of the obligation;
  • maintenance: jurisdiction resides with the courts of the place where the maintenance creditor is domiciled or habitually resident;
  • tort, delict or quasi-delict: jurisdiction resides with the courts of the place where the harmful event occurred or may occur.

The convention also provides for specific jurisdictions in matters relating to insurance, consumer contracts and individual contracts of employment. Jurisdiction in matters relating to tenancies and real property rights resides exclusively with the courts of the contracting state in which the property is situated.

A number of protocols are annexed to the convention, among other things to ensure that it is interpreted as uniformly as possible.

Signing of the convention marks a major institutional development

The European Court of Justice confirms in its Opinion 1/03 that the European Community is exclusively competent to conclude the new Lugano Convention.

Signed on behalf of the Community on 30 October 2007, the convention is a key part of Community law. It runs for an unlimited period.

Council Decision 2009/430/EC of 27 November 2008 approved the conclusion of the convention on behalf of the Community. It also established the declarations to be made at the time of depositing the Community instrument of ratification (annexed to the decision).

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Decision 2007/712/EC

15.10.2007

OJ L 339 of 21.12.2007

Service of judicial and extrajudicial documents

Service of judicial and extrajudicial documents

Outline of the Community (European Union) legislation about Service of judicial and extrajudicial documents

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Justice freedom and security > Judicial cooperation in civil matters

Service of judicial and extrajudicial documents

Document or Iniciative

Regulation (EC) No 1393/2007 of the European Parliament and of the Council of 13 November 2007 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (service of documents), and repealing Council Regulation (EC) No 1348/2000.

Summary

This Regulation applies to civil or commercial matters where it is necessary to transmit judicial or extrajudicial documents for service from one Member State to another. Revenue, customs, administrative affairs or cases of state liability for actions or omissions in the exercise of state authority are not concerned, nor does it apply where the address of the person to be served is unknown.

Further improving the service of judicial and extrajudicial documents

This Regulation aims to improve the application of Regulation (EC) No 1348/2000 (see Report COM(2004) 603). The main modifications concern the introduction of:

  • a rule stipulating that the receiving agency shall take all necessary steps to serve the document as soon as possible, and in any event within one month of receipt;
  • a new standard form to inform the addressee of their right to refuse to accept the document to be served at the time of service or by returning the document to the receiving agency within a week;
  • a rule stipulating that costs occasioned by recourse to a judicial officer or to a person competent under the law of the Member State addressed shall correspond to a single fixed fee laid down by that Member State in advance, respecting the principles of proportionality and nondiscrimination;
  • uniform conditions for service by postal services (registered letter with acknowledgement of receipt or equivalent).

Agencies within the Member States ensure transmission

Agencies designated by the Member States are responsible for transmitting and receiving documents. The Member States must provide the Commission with their names and addresses, the geographical areas to which they apply, and their accepted languages and means of receipt of documents. Each Member State also has a central body for supplying information to the agencies, resolving any difficulties that may arise and forwarding requests for service by the transmitting agency to the relevant receiving agency in exceptional circumstances. A federal state, one where there are several legal systems or which has autonomous territorial units may name more than one such agency or central body. The designation is valid five years and maybe be renewed at five-year intervals.

Speeding up the service of judicial and extrajudicial documents

It is the applicant who forwards documents to the transmitting agency who bears any costs of translation prior to transmitting the document. The transmitting agency has to advise the applicant that, in case the document is not in a language which the addressee understands or in the official language of the Member State where service is to be effected, the latter can refuse to accept the document.

Documents must be transmitted directly and as soon as possible between the agencies by any appropriate means of transmission, as long as they are legible and faithful to the original. A request using the standard form as annexed to the Regulation must be attached in one of the accepted languages that the Member States indicate. The documents are exempt from legalisation or any equivalent formality. A receipt must be sent within seven days by the receiving agency. The latter has to contact the transmitting agency as soon as possible in case of missing information.

Serving documents according to the law of the receiving Member States within one month

The receiving agency should either serve the document itself or have it served within one month. If this is not possible, the receiving agency must inform the transmitting agency and continue to try to serve the document. Serving is done according to the law of the receiving Member State, or by a particular method if this is requested by the transmitting agency and it conforms to the national law. When service has been carried out, a certificate of completion of the formalities involved must be completed in a language accepted by the Member State of origin and sent to the transmitting agency.

The date of service will be the date on which the document is served, according to the law of the Member State addressed, except where it must be addressed within a particular period according to the law of that State. The service must not incur costs or taxes in the Member State addressed, except if there has been a particular method of service or recourse to a judicial officer there. In that case, it is up to the applicant to bear the costs. The Member States have to fix a single fee in advance, and communicate it to the Commission.

Documents may also be served directly by using registered post with a receipt or via the judicial officers, officials or other competent persons of the Member State addressed, if this is permitted by the Member State in question. In exceptional circumstances, documents may be forwarded to agencies of another Member State via consular or diplomatic channels.

Informing the addressee about the right to refuse the document to be served

The receiving agency informs the addressee of their right to refuse the document, if it is not written in a language that he or she understands nor in the official language of the Member State where service takes place. The refusal shall take place at the time of service or by returning the document to the receiving agency within a week.

If the document is a writ of summons or equivalent and the defendant does not appear, a judgment may not be pronounced until it is sure that the document was served according to the Member State’s domestic law, it was delivered and the defendant had sufficient time to submit a defence. However, judgment may be delivered if the document was transmitted by one of the methods laid down in the Regulation, and if more than six months have elapsed and no certificate of any kind has been obtained in spite of every reasonable effort by the competent authorities of the Member State addressed. If the defendant did not know about the document in time to appear, it is still possible to apply for relief within a reasonable time after finding out about the judgment.

The Commission should provide and regularly update a manual containing the information provided by the Member States. By 2011 and every 5 years subsequently, it shall further present a report on the application of this Regulation, focusing on the agencies’ effectiveness.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 1393/2007 [adoption: codecision COD/2005/0126]

30.12.2007
applies from 13.11.2008, except Article 23, from 13.8.2008

OJ L 324 of 10.12.2007

Enforcing judgments: the transparency of debtors' assets

Enforcing judgments: the transparency of debtors’ assets

Outline of the Community (European Union) legislation about Enforcing judgments: the transparency of debtors’ assets

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Justice freedom and security > Judicial cooperation in civil matters

Enforcing judgments: the transparency of debtors’ assets

Even with a court judgment obtained, recovering cross-border debts may be difficult for creditors in practice if no information on the debtors’ assets or whereabouts is available. Because of this, the European Commission has adopted a Green Paper launching a public consultation on how to improve the recovery of debts through possible measures such as registers and debtor declarations.

Document or Iniciative

Green Paper of 6 March 2008 on the effective enforcement of judgments in the European Union: the transparency of debtors’ assets [COM(2008) 128 final – Not published in the Official Journal].

Summary

The late and non-payment of debts is detrimental to business and customers alike, particularly when no information is available on the debtor’s assets or whereabouts. This is a particular cross-border issue in debt recovery and has the potential to affect the smooth running of the internal market. In launching a public consultation, the European Commission has outlined the problems of the current situation and possible solutions in this Green Paper. Interested parties can submit their comments by 30 September 2008.

State of play

The search for a debtor’s address and information on his financial situation is often the starting point for enforcement proceedings. At national level, most Member States mainly use two different systems for obtaining information, either:

  • systems of declaration of the debtor’s entire assets or at least a part of it to satisfy the claim;
  • search systems with specific information (registers).

In this Green Paper, the European Commission focuses more on a series of measures instead of one single European measure to allow the creditor to obtain reliable information on the debtor’s assets and whereabouts within a reasonable period of time. Possible measures include:

  • drawing up a manual of national enforcement laws and practices: at present, there is very little information on the different enforcement systems in the 27 European Union Member States. Such a manual could contain all sources of information on a person’s assets, which could be accessed in each country; contact addresses, costs, etc.
  • increasing the information available and improving access to registers: the main sources of information on the debtor are public registers, such as commercial or population registers. However, these vary from one Member State to the next. The Commission is asking whether to increase information available in and access to commercial registers and in what way access to existing population registers should be enhanced. Furthermore, access to social security and tax registers by enforcement authorities may be increased, while respecting rules of data protection and social and fiscal privacy.
  • exchange of information between enforcement authorities: currently, enforcement bodies are not able to directly access the (non-public) registers of other Member States which are open to national enforcement bodies. In addition, there are no international instruments dealing with the exchange of information between national enforcement bodies. In the absence of a Europe-wide register, enhancing cooperation between national enforcement authorities and direct exchange of information between them may a possible solution.
  • measures relating to the debtor’s declaration: enforcement bodies have in several Member States the option to question the debtor directly regarding his assets, whereas in some Member States the debtor’s declaration is made in the form of a testimony before the enforcement court. In some Member States, the debtor has to fill out mandatory forms, and in others a debtor’s declaration does not exist at all. The European Commission is considering introducing a European Assets declaration, obliging the debtors to disclose all assets in the European judicial area. In this way, the transparency of the debtor’s assets would not be limited by the territoriality of the enforcement proceedings.

Facilitating judicial cooperation in civil matters

Facilitating judicial cooperation in civil matters

Outline of the Community (European Union) legislation about Facilitating judicial cooperation in civil matters

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Justice freedom and security > Judicial cooperation in civil matters

Facilitating judicial cooperation in civil matters

Document or Iniciative

Council Regulation (EC) No 743/2002 of 25 April 2002 establishing a general Community framework of activities to facilitate the implementation of judicial cooperation in civil matters.

Summary

This regulation aims to establish a general framework for Community activities for the period from 1 January 2002 to 31 December 2006 to facilitate judicial cooperation in civil matters. The European Commission put forward a proposal on 6 April 2005 to establish for the period 2007-13 the specific “Civil justice” programme as part of the general “Fundamental Rights and Justice” programme (see “related acts”).

This regulation is not applicable in Denmark. The United Kingdom and Ireland, on the other hand, expressed their wish to participate in the adoption and application of this regulation (in accordance with the Protocols on the position of the United Kingdom and Ireland annexed to the EU and EC Treaties).

Providing grants, working towards the programme’s objectives

The programme’s objectives are to:

  • promote judicial cooperation in civil matters with a view to ensuring legal certainty and improving access to justice;
  • improve mutual knowledge of legal and judicial systems between European Union (EU) countries;
  • ensure the sound implementation and application of Community instruments in the area of judicial cooperation in civil matters;
  • improve information to the public on access to justice, judicial cooperation and the legal systems of EU countries.

As regards the activities supported, the general framework is to provide:

  • grants for co-financed projects that meet at least one of the objectives;
  • grants to cover the running costs of European non-governmental organisations;
  • funding for actions set up by the Commission of its own motion.

Providing grants for private and public institutions

This regulation provides for grants for the activities of non-governmental organisations and for specific projects submitted by institutions and public or private organisations.

Non-governmental organisations may be granted financial support if they meet specified criteria:

  • they must be non-profit-making organisations, established under the law of one of the EU countries;
  • they must pursue activities with a European dimension, involving, as a general rule, at least half of the EU countries;
  • they must pursue activities with a view to promoting judicial cooperation in civil matters.

Specific projects may be submitted by institutions and public or private organisations, including professional organisations, research institutes, etc. They must consist of training, exchanges and work experience placements, studies and research, meetings and seminars or dissemination of information.

Article 4 of the regulation provides for this general framework to be opened up to include the participation of the candidate countries of central and eastern Europe, Cyprus, Malta and Turkey, and other countries, subject to various conditions and if the relevant agreements and procedures permit. This article is no longer applicable to the ten new EU countries that joined the Union on 1 May 2004.

Ensuring implementation of the Community activity framework

To ensure implementation of the framework for activities, the Commission, if possible before 30 June each year, is to publish an annual work programme setting out the priorities in terms of objectives and types of activities for the following year.

The Commission is responsible for the evaluation and selection of projects, having regard to a series of priority criteria (the European dimension, ability to contribute to the objectives set, complementarity with other activities, etc.).

All financing decisions are subject to financial control by the Commission and to audits by the Court of Auditors. The proportion of financial support from the general budget of the EU should in principle not exceed 60% of the total cost of the actions undertaken. However, under exceptional circumstances, financial support may amount to 80%.

The Commission is to ensure the yearly publication of a list of recipients and actions financed to ensure transparency. Recipients are to report to the Commission on each action. The Commission may reduce, suspend or recover financial support granted for an activity if it detects irregularities.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 743/2002

1.5.2002

OJ L 115 of 1.5.2002

Related Acts

Decision No 1149/2007/EC of the European Parliament and of the Council of 25 September 2007 establishing for the period 2007-2013 the Specific Programme “Civil Justice” as part of the General Programme “Fundamental Rights and Justice” [Official Journal L 257 of 3.10.2007].

Report from the Commission to the European Parliament and the Council of 9 February 2005 on the implementation of the framework programme for judicial cooperation in civil matters (2002-2006) [COM(2005) 34 – Not published in the Official Journal].
This report documents the programme’s progress from its adoption in 2002 to 30 June 2004. The Commission’s actions, which aimed to inform legal practitioners and the general public of progress made in the field of cooperation in civil matters (e.g. the European Judicial Atlas in Civil Matters, the case-law database under the “Brussels I” and “Brussels II” and an information campaign aimed at legal practitioners), have been very well received. However, the 2002, 2003 and 2004 calls for proposals for specific civil-society projects attracted a limited amount of interest, probably owing to the available budget. 51 of the 106 proposals were accepted.

Service of documents in civil or commercial matters

Service of documents in civil or commercial matters

Outline of the Community (European Union) legislation about Service of documents in civil or commercial matters

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Justice freedom and security > Judicial cooperation in civil matters

Service of documents in civil or commercial matters

This Regulation is designed to improve and expedite the transmission of judicial and extrajudicial documents in civil or commercial matters for service between the Member States.

Document or Iniciative

Council Regulation (EC) No 1348/2000 of 29 May 2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters.

Summary

1. This Regulation applies in civil and commercial matters when a judicial or extrajudicial document must be transmitted from one Member State of the European Union to another for service. It does not apply when the address of the recipient of the document is unknown.

Expediting the transmission of judicial or extrajudicial documents

2. To speed up the transmission of judicial and extrajudicial documents, more direct channels are established between the persons or authorities responsible for transmitting the documents and those in charge of serving them. To this end, each Member State must designate “transmitting agencies” and “receiving agencies”, responsible respectively for the transmission and receipt of the documents in question. Moreover, each Member State must designate a central agency responsible inter alia for supplying information and resolving problems connected with the transmission of documents. A federal State, a State in which several legal systems apply or a State with autonomous territorial units is free to designate more than one central agency.

3. All appropriate means of transmission are permitted, provided the content is legible. To facilitate exchanges, documents must be accompanied by a standard form as shown in the annex to the Regulation. The Regulation also provides for transmission through consular or diplomatic channels.

4. The country to which the document is addressed must receive the form in the language decided upon in advance. Any translation costs are borne by the applicant. The addressee may refuse to accept the document if it is drawn up in a language other than the official language of the Member State concerned or a language that he or she understands.

5. The receiving agency must send an acknowledgment of receipt to the transmitting agency within seven days and, if necessary, should contact the transmitting agency in connection with any missing information and/or documents. If the mode of transmission is inappropriate (outside the scope of the Regulation or not in the specified form), the documents are to be returned.

6. Documents must be served in accordance with the legislation of the Member State addressed or in the way requested by the transmitting agency if that is possible.
In the event of the receiving agency being unable to effect service within one month, it must inform the transmitting agency accordingly, using a standard form. Once the formalities concerning service of a document have been completed, the transmitting agency receives a certificate of completion.

7. When a document initiating proceedings or an equivalent document has had to be served and the defendant does not appear in court, the judge will not return any decision until it has been determined that:

  • the document was served in accordance with the national law of the receiving Member State;
  • or that the document was served by another method provided for by this Regulation.

In any event, the document must be served in good time for the defendant to be able to defend him or herself.

8. The costs associated with serving legal documents originating in another Member State may not result in the payment or reimbursement of taxes or expenses for the services of the receiving Member State.

Application of the Regulation

9. The Commission is required to draw up and update a manual containing information including the agencies’ addresses and the languages that may be used for the transmission of documents, together with a glossary in the official languages of the European Union. The manual is updated on a regular basis.

10. To this end, the Commission is assisted by an advisory committee composed of representatives of the Member States and chaired by the representative of the Commission.

11. The Regulation takes precedence over the international conventions concluded by the Member States (notably the 1965 Hague Convention).

12. The Regulation requires the Commission to present a report on its application to the European Parliament, the Council and the European Economic and Social Committee three years after its entry into force, and every five years thereafter.

13. The provisions of Title IV of the EC Treaty (visas, asylum, immigration and other policies related to free movement of persons) are not applicable to Ireland, the United Kingdom or Denmark. However, Ireland and the United Kingdom have decided to opt into the Regulation. Moreover, the Commission has negotiated an agreement [PDF ] between the European Community and the Kingdom of Denmark that extends the provisions of the Regulation to Denmark. This agreement was signed on 19 October 2005 and will enter into force on 1 July 2007 [Official Journal L 94 of 4 April 2007].

Background

14. On 26 May 1997, on the basis of the Treaty on European Union (EU), the Council adopted the Convention on the service in the Member States of the European Union of judicial and extrajudicial documents in civil or commercial matters. It also recommended that the Member States adopt the Convention in accordance with their respective constitutional requirements. The Convention has not entered into force.

15. The Treaty of Amsterdam, signed on 2 October 1997, altered the legal basis for judicial cooperation in civil matters, which is now incorporated in the EC Treaty (Article 65) and is subject to different legal instruments and procedures. The Commission therefore proposed that the Convention be transposed into a Community instrument with a view to ensuring that it was speedily implemented and that practical difficulties encountered by citizens in their daily life were resolved.

16. The substance of the Convention has been taken over by and incorporated in this Regulation. Like the 1997 Convention, the Regulation is based on the Hague Convention of 1965, but with some improvements.

References

Act Entry into force and expiry date Deadline for transposition in the Member States Official Journal
Regulation 1348/2000/EC 31.05.2001 OJ L 160 of 30.06.2000

Related Acts

Proposal of 11 July 2005 for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1348/2000 of 29 May 2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters [COM(2005) 305 final – Not published in the Official Journal].

The proposal is designed to improve and expedite the service of documents, to simplify application of some of the provisions of the Regulation and to reinforce legal certainty for the claimant and for the addressee.
The main amendments proposed involve the introduction of:

  • a provision requiring the receiving agency to proceed with serving the document within one month of receipt;
  • a new form designed to inform the addressee that he has the right to refuse to accept a given document within one week of its being served;
  • a provision that the costs occasioned by the employment of a judicial officer or a person competent under the law of the Member State addressed must correspond to a fixed fee laid down by the Member State in advance which respects the principles of proportionality and non-discrimination;
  • uniform rules for the service of judicial documents by the postal services (registered letter with acknowledgment of receipt or equivalent).

Codecision procedure (COD/2005/0126)

Amended by:

Amended proposal of 1 December 2006 for a Regulation of the European Parliament and of the Council on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (“Service of documents”) [COM(2006) 751 final – Not published in the Official Journal].

This amended proposal recommends adapting the original Commission proposal to the general agreement of the Council and to the opinion of the European Parliament in a codified version.

The Council reached a general agreement on the text of the Regulation at its meeting on 1 June 2006 and suggested that a coordinated version of the text be presented. At its plenary session on 4 July 2006, the European Parliament adopted an opinion approving the Commission proposal subject to a number of amendments. The latter correspond to the text previously approved by the Council.

Commission Decision 2001/781/EC of 25 September 2001 adopting a manual of receiving agencies and a glossary of documents that may be served under Council Regulation (EC) No 1348/2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters [Official Journal L 298 of 15.11.2001].
This decision was amended in part by Commission Decision 2002/350/EC of 3 April 2002 [Official Journal L 125 of 13.05.2002].

The Decision has two annexes:

  • a manual containing full details of receiving agencies (competent to receive judicial and extrajudicial documents), as referred to in Article 2 of Regulation (EC) No 1348/2000;
  • a glossary of documents which may be served, as referred to in Regulation (EC) No 1348/2000.

Reports

Report from the Commission to the Council, the European Parliament and the European Economic and Social Committee on the application of Council Regulation (EC) 1348/2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters [COM(2004) 603 final – Not published in the Official Journal].
In this report the Commission analyses the application of the Regulation on the basis of the information provided and the results of a study prepared by a contractor covering 14 Member States.

Information

Information communicated by the Member States under Article 23 of Council Regulation (EC) No 1348/2000 of 29 May 2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters. [Official Journal C 151 of 22.05.2001].
First update of the information communicated by Member States pursuant to Article 23 of Council Regulation (EC) No 1348/2000 of 29 May 2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters [Official Journal C 202 of 18.07.2001].

The manual and glossary can be found on the web site of the European Judicial Atlas in Civil Matters of the European Commission’s Directorate-General for Justice, Freedom and Security.
The Commission ensures the regular updating of the manual based on modifications communicated by Member States.

Jurisdiction, recognition and enforcement of judgments in civil and commercial matters

Jurisdiction, recognition and enforcement of judgments in civil and commercial matters

Outline of the Community (European Union) legislation about Jurisdiction, recognition and enforcement of judgments in civil and commercial matters

Topics

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Justice freedom and security > Judicial cooperation in civil matters

Jurisdiction, recognition and enforcement of judgments in civil and commercial matters (“Brussels I”)

Document or Iniciative

Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [See amending act(s)].

Summary

The regulation lays down rules governing the jurisdiction of courts in civil and commercial matters. A judgment given in an European Union (EU) country is to be recognised without special proceedings, unless the recognition is contested. A declaration that a foreign judgment is enforceable is to be issued following purely formal checks of the documents supplied. The regulation lists grounds for non-enforcement; however, courts are not to raise these of their own motion. The regulation does not cover revenue, customs or administrative matters. Neither does it apply to:

  • the status or legal capacity of natural persons, matrimonial matters, wills and succession;
  • bankruptcy;
  • social security;
  • arbitration.

Rules of jurisdiction

The basic principle is that jurisdiction is to be exercised by the EU country in which the defendant is domiciled, regardless of his/her nationality. Domicile is determined in accordance with the domestic law of the EU country where the matter is brought before a court. If a party is not domiciled in the EU country of the court considering the matter, the court is to apply the law of another EU country to determine whether the party is domiciled in said state. In the case of legal persons or firms, domicile is determined by the country where they have their statutory seat, central administration or principal place of business. In the case of trusts, domicile is defined by the court that is considering the case by applying its own rules of private international law *.

Suing the defendant in another EU country

Apart from the basic principle on jurisdiction, in certain circumstances a defendant may be sued in the courts of another EU country. The regulation lists areas of jurisdiction where this is so: special or exclusive jurisdiction, as well as jurisdiction on matters relating to insurance, consumer contracts and individual contracts of employment.

The courts’ special jurisdiction includes the following:

  • matters relating to a contract: as a general rule, these will be dealt with by the courts for the place of performance of the obligation in question;
  • matters relating to maintenance: as a general rule, these are to be brought before the courts for the place where the maintenance creditor is resident;
  • matters relating to liability for wrongful acts – tort, delict or quasi-delict: these will be decided by the courts for the place where the harmful event occurred or may occur.

In matters relating to insurance, an insurer may be sued in the courts of the EU country where s/he is domiciled or of the EU country where the plaintiff is domiciled if the actions are brought by the policy holder, the insured or a beneficiary. In respect of liability insurance or insurance of immovable property, the insurer may, in addition, be sued in the courts for the place where the harmful event occurred.

The regulation also lays down rules on jurisdiction in matters relating to contracts concluded by consumers. “Consumers” are defined as persons who conclude a contract with a professional for a purpose outside of their own trade or profession. All contracts concluded with a person who pursues commercial or professional activities in the EU are covered, with the exception of contracts of transport, other than those providing for a combination of travel and accommodation for an inclusive price. The consumer is protected in the way described here if the contract concluded on the sale of goods is financed on instalment credit terms or through a loan repayable by instalments or any other form of credit. In order for the consumer to enjoy this protection in other cases, the contract must have been concluded with a person who pursues commercial or professional activities in the EU country in which the consumer is domiciled or directs such activities to that country. A consumer may bring proceedings either in the courts of the EU country in which the defendant is domiciled or in the courts for the place where the consumer (the plaintiff) is domiciled. Proceedings may be brought against a consumer by the other party to the contract only in the courts of the EU country in which the consumer is domiciled.

In matters relating to individual contracts of employment, employees may either sue their employer in the courts of the EU country where the employer is domiciled or in the courts of the EU country where the employee habitually works. An employee who does not habitually work in any one country may sue the employer in the courts for the place where the business that engaged the employee has its seat. An employer who is not domiciled in any EU country, but has a branch, agency or other establishment in one of the EU countries, is deemed to be domiciled in that country. An employer may bring proceedings against an employee only in the courts for the place where the employee is domiciled.

Regardless of domicile, the following courts have exclusive jurisdiction in proceedings concerning:

  • rights in rem in immovable property or tenancies of immovable property: the courts of the EU country in which the property is situated;
  • the validity of the constitution, the nullity or the dissolution of companies or other legal persons or of the validity of the decisions of their organs: the courts of the EU country in which the legal person has its seat;
  • the validity of entries in public registers: the courts of the EU country in which the register is kept;
  • the registration or validity of patents, trade marks, designs or other similar rights: the courts of the EU country in which the deposit or registration has been applied for, has taken place or is under the terms of an Union instrument or an international convention deemed to have taken place;
  • the enforcement of judgments: the courts of the EU country in which the judgment has been or is to be enforced.

If the parties, one or more of whom is domiciled in the EU, have concluded a choice of jurisdiction * clause, the agreed court will have jurisdiction. The regulation lays down a number of formalities that must be observed in such choice of jurisdiction agreements: the agreement must be in writing or in a form that respects practices the parties have established between themselves or, in international trade or commerce, in a form that accords with a usage of which the parties are aware.

Similarly, there are provisions for rules regarding co-defendants, actions on a warranty, guarantee or other third-party proceedings, counterclaims and matters relating to a contract if the action may be combined with an action relating to rights in immovable property.

The regulation also provides a mechanism to handle cases pending elsewhere (lis pendens) and related actions.

Recognition and enforcement

A judgment given in an EU country is to be recognised in the other EU countries without any special procedure being required. “Judgment” means any judgment given by a court or tribunal of an EU country, whatever the judgment may be called, including a decree, order, decision or writ of execution. Under no circumstances may a foreign judgment be reviewed as to its substance.

A judgment will not be recognised if:

  • such recognition is manifestly contrary to public policy in the EU country in which recognition is sought;
  • the defendant was not served with the document that instituted the proceedings in sufficient time and in such a way as to enable the defendant to arrange for his/her defence;
  • it is irreconcilable with a judgment given in a dispute between the same parties in the EU country in which recognition is sought;
  • it is irreconcilable with an earlier judgment given in another EU or non-EU country involving the same cause of action and the same parties.

A court in which recognition is sought of a judgment given in another EU country may stay the proceedings, if an ordinary appeal against the judgment has been lodged.

A judgment is to be enforced in another EU country when, on the application of any interested party, it has been declared enforceable there. The parties may appeal against a decision on an application for a declaration of enforceability.

Superseding the Brussels Convention of 1968

The regulation supersedes the Brussels Convention of 1968, which was applicable between the EU countries before the regulation entered into force. The convention continues to apply with respect to those territories of EU countries that fall within its territorial scope and that are excluded from the regulation pursuant to Article 299 of the Treaty establishing the European Community (now Article 355 of the Treaty on the Funtioning of the European Union). The regulation also lists a number of other conventions, treaties and agreements between EU countries that it supersedes.

Even after the regulation entered into force, questions of jurisdiction between Denmark and the other EU countries continued to be governed by the Brussels Convention of 1968. This Danish opt-out was based on the 1997 Protocol No 5 on the position of Denmark annexed to the Treaties (now Protocol No 22). On 19 October 2005, the EU concluded an agreement with Denmark on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters that extended the provisions of the regulation to that country. On 27 April 2006, the agreement was approved on behalf of the EU by Council Decision 2006/325/EC. It entered into force on 1 July 2007.

As provided for in the Protocol on the position of the United Kingdom and Ireland annexed to the Treaties, these two countries have indicated their wish to take part in the adoption and application of the regulation.

Key terms used in the act
  • “Private international law” governs the international element in matters of private law, i.e. family law, law of contract, etc. It is the branch of the domestic law of states that indicates which law, domestic or foreign, is to be applied in a particular case.
  • “Choice of jurisdiction” is a general principle of private international law under which the parties to a contract are free to designate a court to rule on any dispute even though that court might not have jurisdiction on the basis of the factors objectively connecting the contract with a particular place.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 44/2001

1.3.2002

OJ L 12, 16.1.2001

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 1791/2006

1.1.2007

OJ L 363, 20.12.2006

Regulation (EC) No 1103/2008

4.12.2008

OJ L 304, 14.11.2008

Successive amendments and corrections to Regulation (EC) No 44/2001 have been incorporated in the basic text. This consolidated versionis for reference purposes only.

Related Acts

Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee of 21 April 2009 on the application of Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters [COM(2009) 174 final – Not published in the Official Journal].

Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility [Official Journal L 338 of 23.12.2003].
This regulation applies in civil matters relating to divorce, legal separation and the annulment of marriage, as well as to all aspects of parental responsibility. It does not apply in civil matters relating to maintenance obligations, which are covered by Regulation (EC) No 4/2009.

Convention on the law applicable to contractual obligations

Convention on the law applicable to contractual obligations

Outline of the Community (European Union) legislation about Convention on the law applicable to contractual obligations

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Justice freedom and security > Judicial cooperation in civil matters

Convention on the law applicable to contractual obligations (Rome Convention)

The Convention establishes uniform rules concerning the law applicable to contractual obligations in the European Union (EU).

Document or Iniciative

Convention 80/934/ECC on the law applicable to contractual obligations opened for signature in Rome on 19 June 1980.

Summary

The Convention on the law applicable to contractual obligations was opened for signature in Rome on 19 June 1980 for the then nine European Community (EC) Member States. It entered into force on 1 April 1991. In due course, all the new members of the EC signed the Convention. When the Convention was signed by Austria, Finland and Sweden, a consolidated version was drawn up and published in the Official Journal in 1998. A further consolidated version was published in the Official Journal in 2005, following the accession of 10 new Member States to the Convention.

The Convention applies to contractual obligations in situations involving a choice of laws – even where the law it designates is that of a non-contracting State – with the exception of:

  • questions involving the status or legal capacity of natural persons;
  • contractual obligations relating to wills, matrimonial property rights or other family relationships;
  • obligations arising under negotiable instruments (bills of exchange, cheques, promissory notes, etc.);
  • arbitration agreements and agreements on the choice of court;
  • questions governed by the law of companies and other corporate and unincorporated bodies;
  • the question of whether an agent is able to bind a principal to a third party (or an organ to bind a company, or a corporate or unincorporated body);
  • the constitution of trusts and questions relating to their organisation;
  • evidence and procedure;
  • contracts of insurance that cover risks situated in the territories of the Member States (excluding reinsurance contracts).

The signatories to a contract may choose the law applicable to the whole or a part of the contract, and select the court that will have jurisdiction over disputes. By mutual agreement they may change the law applicable to the contract at any time (principle of freedom of choice).

If the parties have not made an explicit choice of applicable law, the contract is governed by the law of the country with which it is most closely connected, according to the principle of the proper law (place of habitual residence or place of central administration of the party performing the contract, principal place of business or other place of business of the party responsible for performing the contract). However, specific rules apply in two cases:

  • where the contract concerns immovable property, the law applicable by default is that of the country in which the property is situated;
  • where the contract concerns the transport of goods, the applicable law is determined according to the place of loading or unloading, or the principal place of business of the consignor.

To protect the rights of the consumer, the supply of goods or services to a person is covered by special provisions, according to the principle of the protection of the weaker party. Unless the parties decide otherwise, such contracts are governed by the law of the country in which the consumer has his habitual residence. In no circumstances may the choice of law work to the disadvantage of the consumer or deprive him of the protection afforded by the law of his country of residence where it is more favourable. These rules do not apply to contracts of carriage or contracts for the supply of services in a country other than that in which the consumer has his habitual residence.

In the case of employment contracts, one of the following will apply:

  • the law of the country in which the employee habitually carries out his work;
  • the law of the country in which the company that employed the worker has its place of business;
  • the law of the country with which the employment contract is most closely associated.

If the parties decide to select another law to apply to the contract, this choice may not be at the expense of the protection of the worker.

Present or future provisions of Community law will take precedence over the terms of the Convention, in particular as regards the choice of law relating to contractual obligations concerning particular matters.

If, once the Convention has entered into force, any Member State wishes to adopt new rules on the choice of law for a particular category of contracts within the scope of the Convention, or become a party to an international convention in this field, it must inform the other signatories. Each of these States has six months to respond and, if it so wishes, ask for consultations. If no reply has been received within six months or if no agreement has been reached in consultations within two years (one year in the case of a multilateral convention), the requesting State may amend its law or accede to the Convention.

The Convention will remain in force for 10 years. It will then be tacitly renewed every five years, and may be denounced by one of the signatory States.

Two Protocols on the interpretation of the Convention by the Court of Justice of the European Communities were signed in 1988. A third Protocol, signed in 1980 and supplemented in 1996, authorises Denmark, Sweden and Finland to retain their national provisions concerning the law applicable to the carriage of goods by sea.

Four joint declarations were appended to the Convention:

  • in 1980, a number of Member States stressed the importance of measures adopted by the Community on choice-of-law rules being consistent with the terms of the Convention;
  • they also raised the possibility of conferring jurisdiction for interpreting the Convention on the Court of Justice;
  • in 1988, after the two Protocols had been signed, an exchange of information between the Member States and the Court of Justice on judgments relating to contractual obligations was proposed.

A call was also made for all new Member States of the Community when signing the Rome Convention, to accede to the Protocol on the interpretation of the Convention by the Court of Justice.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Convention 80/934/EEC

1.4.1991

OJ L 266 of 9.10.1980

Related Acts

Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) [Official Journal L 177 of 4.7.2008].
This Regulation replaces the Rome Convention, transforming it into a Community instrument and, at the same time, modernising it. Thus, together with Brussels I and Rome II it establishes a set of binding rules of private international law for contractual and non-contractual obligations in civil and commercial matters.

Green Paper on the conversion of the Rome Convention of 1980 on the law applicable to contractual obligations into a Community instrument and its modernisation [COM(2002) 654 final – not published in the Official Journal].
Through this Green Paper, formulated as a questionnaire, the European Commission was looking at the possibility of converting the Convention into a Community instrument and modernising it.
Converting the Rome Convention into a Community instrument would, by establishing uniform private international law within the Member States, accord the Court of Justice jurisdiction over interpretation, and facilitate the application of standardised conflict rules in the new Member States. The instrument chosen by the Commission is the regulation, which is binding and directly applicable, and does not tolerate the uncertainties and delays inherent in the transposition of directives.
The question of modernising the Convention applies in particular to the protection of consumers and workers (known as the “weaker parties”). One solution proposed by the Commission was the introduction of a general clause guaranteeing the application of a minimum standard of Community protection when all, or just some particularly significant, elements of the contract are located within the Community. This solution would remedy the current lack of protection for the “mobile consumer” (i.e. someone who has gone to a country other than his or her country of habitual residence to make a purchase or obtain a service).

Insolvency proceedings

Insolvency proceedings

Outline of the Community (European Union) legislation about Insolvency proceedings

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Justice freedom and security > Judicial cooperation in civil matters

Insolvency proceedings

Document or Iniciative

Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings.

Summary

This regulation establishes a common framework for insolvency proceedings in the European Union (EU). The purpose of harmonised arrangements regarding insolvency proceedings is to avoid assets or judicial proceedings from being transferred from one EU country to another in order to obtain a more favourable legal position to the detriment of creditors (“forum shopping”).

It should be noted that one quarter of cases of insolvency in the EU are associated with late payments.

Avoiding the transfer of assets or judicial proceedings from one EU country to another

Cases of insolvency with cross-border implications affect the proper functioning of the internal market. With a view to developing more uniform procedures that will discourage the parties from transferring assets or judicial proceedings from one EU country to another in order to obtain a more favourable legal position, the proposed solutions rely on the principle of proceedings with universal scope. At the same time, they retain the possibility of opening secondary proceedings within the territory of the EU country concerned.

The regulation applies to “collective insolvency proceedings that entail the partial or total divestment of a debtor and the appointment of a liquidator”. It applies equally to all proceedings, whether the debtor is a natural or a legal person, a trader, or an individual. A “liquidator” is a person or body that administers or liquidates the assets of which the debtor has been divested or supervises the administration of his/her affairs. Annex C of the regulation lists the persons or bodies who are authorised to exercise this function in each EU country.

However, the regulation does not apply to insolvency proceedings concerning:

  • insurance undertakings;
  • credit institutions;
  • investment undertakings that provide services involving the holding of funds or securities for third parties;
  • collective investment undertakings.

Determining the courts with jurisdiction and the applicable law

The regulation defines the concept of “court” as a judicial or other competent body that is authorised in national law to open proceedings. The courts with jurisdiction to open the main proceedings are those of the EU country where the debtor has his/her centre of main interests. This should be the place where the debtor usually administers his/her interests and that is verifiable by third parties. In the case of a company or legal person, this is the place of the registered office, in the absence of proof to the contrary. In the case of a natural person, in principle it is the place where his/her work is domiciled or the place of his/her usual residence.

Secondary proceedings (listed in Annex B) may be opened subsequently in another EU country if the debtor has an establishment in its territory. “Establishment” means any place of operations where the debtor carries out a non-transitory economic activity with human resources and goods. The effects of the winding-up proceedings must be limited to the assets of the debtor located in that territory. The opening of such proceedings may be requested by the liquidator of the main proceedings or by other persons or authorities according to the law of the country in which the opening of the proceedings is requested. In some cases, such territorial proceedings may be opened independently before the main proceedings, if the local creditors and the creditors of the local establishment request it or where main proceedings cannot be opened under the law of the EU country where the debtor has his/her centre of interests. However, these proceedings will become secondary proceedings once the main proceedings are opened.

The law of the EU country in which insolvency proceedings are opened determines all the terms of those proceedings: the conditions for their opening, conduct and closure. It also determines practical rules such as the definition of debtors and assets, the respective powers of the debtor and the liquidator, the effects of proceedings on contracts, individual creditors, claims, etc.

There are provisions throughout the EU guaranteeing the rights in rem of third parties, the right of a creditor to demand a set-off and the right of a seller based on reservation of title, such that these rights are not affected by the opening of the proceedings. Rights to immovable property are governed solely by the law of the EU country where the property is situated. Similarly, employment contracts and relationships, as well as the rights and obligations of parties to a payment or settlement system or to a financial market are governed solely by the law of the EU country that is applicable to them (for further details, see the directive on settlement finality in payment and securities settlement systems).

Recognition of insolvency proceedings

Decisions by the court with jurisdiction for the main proceedings are to be recognised immediately in other EU countries without further scrutiny, except:

  • where the effects of such recognition would be contrary to the country’s public policy;
  • in the case of judgments that might result in a limitation of personal freedom or postal secrecy.

However, restrictions on creditors’ rights (a stay or discharge) are possible only if they have given their consent.

If a court of an EU country decides to open insolvency proceedings, the decision is to be recognised in all other EU countries, even if the debtor could not be the subject of such proceedings in the other countries. The effects of the decision are those provided for by the law of the country in which proceedings are opened and they come to an end in the event of secondary proceedings being opened in another EU country.

The liquidator appointed by a court with jurisdiction may act in the other EU countries in accordance with his powers provided for by the law of the EU country where the proceedings are opened, but respecting the law of the country on whose territory s/he is acting. In particular, s/he may have the debtor’s assets removed and may bring any action to set aside that is in the interests of the creditors if assets were removed from the country of the main proceedings after the opening of the proceedings, subject to rights in rem of third parties or reservation of title.

A creditor domiciled in the EU who obtains total or partial satisfaction of his/her claim on the assets belonging to the debtor must return what s/he has obtained to the liquidator (subject to rights in rem or reservation of title). A consolidated account of dividends for the Union is drawn up to ensure that creditors receive equivalent dividends.

Publication measures may be taken in any other EU country at the request of the liquidator (publication of the decision opening the insolvency proceedings and/or registration in a public register). Publication may be mandatory, but in any event it is not a prior condition for recognition of the foreign proceedings.

If a person concerned is not aware of the opening of proceedings, s/he may be considered to act in good faith when making a payment to the debtor instead of the liquidator in another EU country. If such a payment is made before publication of the decision opening the proceedings, the person concerned is considered to have been unaware of the opening of proceedings. On the other hand, if a payment is made after publication of the decision, the person concerned is assumed to have been aware unless there is proof to the contrary.

Limitation of the applicability of the regulation

The regulation does not apply to:

  • Denmark;
  • any EU country where it is irreconcilable with obligations in respect of winding-up resulting from a convention concluded prior to its entry into force by this country and one or more third countries;
  • the United Kingdom, to the extent that it is irreconcilable with existing arrangements with the Commonwealth.

The regulation applies to insolvency proceedings opened after its entry into force on 31 May 2002. It replaces existing bilateral and multilateral conventions between two or more EU countries.

Background

The winding-up of insolvent companies, compositions and analogous proceedings are excluded from the scope of the 1968 Brussels Convention. Work has been carried out at various levels since 1963 with a view to formulating a Community instrument in the field. A convention on insolvency proceedings was concluded on 23 November 1995. However, this convention could not enter into force because one EU country failed to sign it within the time limit.

The Amsterdam Treaty, signed on 2 October 1997, lays down new provisions for judicial cooperation in civil matters. It was on this basis that this regulation on insolvency proceedings was adopted.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1346/2000

31.5.2002

OJ L 160 of 30.6.2000

Successive amendments and corrections to Regulation (EC) No 1346/2000 have been incorporated in the basic text. This consolidated versionis for reference purposes only.

Green Paper: The problems confronting the cross-border litigant

Green Paper: The problems confronting the cross-border litigant

Outline of the Community (European Union) legislation about Green Paper: The problems confronting the cross-border litigant

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Justice freedom and security > Judicial cooperation in civil matters

Green Paper: The problems confronting the cross-border litigant

1) Objective

To analyse the existing obstacles to effective access to legal aid for European citizens involved in legal proceedings in a Member State other than their own. To make some suggestions for reform.

2) Document or Iniciative

Commission Green Paper of 9 February 2000: Legal aid in civil matters: The problems confronting the cross-border litigant [COM(2000) 51 final – Not published in the Official Journal].

3) Summary

1. One concomitant of increasing use of the treaty rights by firms and individuals (in particular the right of free movement of persons, goods and services) is an increase in the potential number of cross-border disputes within the European Union.

2. Firms or individuals threatened with proceedings or wishing to bring proceedings in another Member State may need legal aid in the form of:

  • free or low-cost legal advice or court representation by a lawyer;
  • partial or total exemption from other costs, such as court fees;
  • direct financial assistance to defray the costs associated with litigation.

3. It is a corollary of the freedoms guaranteed by the EC Treaty that citizens must be able to bring or defend actions in the courts of another Member State in the same way as nationals of that Member State.

4. However, the fundamental differences in the legal aid systems in the Member States constitute an obstacle to exercising these rights in practice.

5. In some cases, persons involved in litigation in a Member State other than their own have to meet nationality or residence requirements in order to qualify for legal aid in that Member State or their own. In other cases, the extra costs of cross-border litigation may restrict access to justice in another Member State.

6. With a view to improving this state of affairs, the Tampere European Council on 15 and 16 October 1999 invited the Commission to put forward proposals for minimum standards ensuring an adequate level of legal aid in cross-border cases throughout the Union.

7. The Green Paper on legal aid in civil matters represents the first step towards the achievement of that goal. In it, the Commission analyses the existing obstacles to effective access to legal aid for European citizens involved in legal proceedings in a Member State other than their own, and explores various possible avenues of reform. Interested parties are invited to submit their comments in writing on the various sections of the Green Paper by 31 May 2000.

8. The obstacles identified by the Commission concern:

  • Eligibility ratione personae (whether or not litigants fall within one of the categories of potential recipients of legal aid);
  • Substantive eligibility (the extent to which the conditions of eligibility envisaged in the law of a Member State are met in a specific case);
  • the extra costs engendered by cross-border litigation;
  • effective access to an appropriately qualified lawyer;
  • technical procedures;
  • information and training;
  • reform of the national legal aid systems.

Eligibility ratione personae

8. In general, the Member States grant legal aid only in respect of proceedings on their own territory. Persons involved in a dispute in a Member State other than their own, therefore have to look to that Member State for legal aid.

9. However, some Member States attach nationality or residence requirements to legal aid, or require applicants to be present on their territory. In other words, cross-border litigants may find themselves in a situation in which they are entitled to legal aid in neither their home nor host state.

10. This situation appears to be at odds with Court of Justice case-law, which suggests that any beneficiary of a Community law right (including a cross-border recipient of services or purchaser of goods) is entitled to equal treatment with nationals of the host country as regards both formal entitlement to bring actions and also the practical conditions in which such actions can be brought.
Rules requiring foreign nationals to be resident or present on the territory of a Member State in order to exercise their rights would be contrary to Article 12 EC, which prohibits nationality discrimination.

11. Apart from Court judgments, there are no texts which clearly spell out the Member States’ obligations under Article 12 EC.
Some international or regional conventions contain provisions on legal aid, but either their scope is unclear (as in the case of the European Convention on Human Rights) or their application is not guaranteed because they have not been ratified by most Member States (as in the case of the Hague Convention of 1980 on international access to justice).

12. With a view to filling this legal vacuum, the Commission considers that it might be useful to produce easily understandable texts clarifying the Member States’ obligation to guarantee access to legal aid for Community nationals. This obligation could, if appropriate, be extended to cover third-country nationals habitually resident in a Member State.

Substantive eligibility

13. It is not sufficient merely for litigants to fall within one of the categories of potential recipients of legal aid (eligibility ratione personae), in order to obtain legal aid in another Member State.

14. Applicants must also prove that they are substantively eligible, namely that:

  • they meet the specific conditions of eligibility envisaged by that state’s legislation, in particular with regard to their financial circumstances and the merits of the case for which legal aid is required;
  • legal aid is available for the type of procedure in which they are involved.

15. The financial thresholds applied by certain Member States to determine whether applicants qualify for legal aid do not take account of differences in income levels between the Member States.
Consequently, an applicant residing in a Member State in which the cost of living is higher than in the state where the procedure is to take place may be deterred from instituting cross-border litigation for fear that he will not be eligible for legal aid in the host country.
The Commission takes the view that discrimination of this type could be avoided by applying a weighting to the financial criteria used by the country of litigation to take account of the differences in the cost of living in the two countries involved.

16. Another problem concerns the merits of the procedure for which legal aid is required. In most Member States, merits tests are based on criteria which allow for a broad subjective margin of appraisal. The Commission calls for greater transparency in this area.

17. With regard to the second aspect of substantive eligibility – conditions relating to the type of procedure for which legal aid is sought – the Commission notes that some Member States exclude legal aid before certain courts (such as administrative tribunals) or in respect of certain types of action (such as defamation).

Extra costs engendered by cross-border litigation

18. Cross-border litigants may be confronted by various extra expenses resulting specifically from the fact that the case has a cross-border element, such as:

  • costs relating to the necessity of hiring two lawyers;
  • translation and interpreting costs;
  • miscellaneous factors, such as extra travel costs of litigants, witnesses, lawyers, etc.

Measures should be taken to ensure that these extra costs do not impede access to justice.

Effective access to an appropriately qualified lawyer

19. Cross-border litigants may have difficulty in finding a lawyer in the country of litigation who is qualified to plead in the courts which have jurisdiction to hear the case, who has experience in the relevant field and who shares a common language with them.

20. The Commission sees the creation of databases of legal professionals as a possible solution.
National lawyers forming part of this “network of lawyers” could be appointed as correspondents for one or more other Member States.

Technical procedures

21. Apart from the issues discussed above, the mechanics of applying for legal aid in another Member State can also constitute an impediment to justice for cross-border litigants.

22. Although most Member States have ratified the 1977 Agreement of the Council of Europe on the Transmission of Applications for Legal Aid (“the Strasbourg agreement”), it is comparatively underused. This is due to a lack of knowledge in the Member States of the existence of a right to legal aid abroad and of the mechanism set up by the agreement.

23. There are two possible solutions:

  • adopting a recommendation that all Member States ratify and apply the Strasbourg agreement, or
  • adopting a new mechanism for transmitting legal aid applications at Union level, based on the Convention on the service of judicial and extrajudicial documents in civil or commercial matters of 26 May 1997.

Information and training

24. Information on legal aid rights and procedures has so far mainly been targeted on national authorities rather than ordinary people.

25. Since the start of 2000, the “Dialogue with Citizens” website, comprising a guide entitled “Enforcing Your Rights in the Single European Market”, has provided individuals with information on how to seek redress if they encounter difficulties when exercising their single market rights. There is also a Guide to Legal Aid and Advice in the European Economic Area, which was drawn up in 1995 and is mainly targeted on the legal professions.

26. These two guides should be more widely promoted by national authorities. This could be complemented by actions to promote training and information campaigns for the public bodies and professions involved in legal aid (lawyers, judges, police officers, immigration services, etc.) and by support measures for lawyers who agree to work under the legal aid system.

Reform of the national legal aid systems and alternative means of ensuring access to justice

27. Several Member States are discussing ways of reforming their legal aid systems. The Commission would point out that reforms should not jeopardise the goal of establishing minimum standards for legal aid at Union level.

Act

Date
of entry into force

Final date for implementation in the Member States

Commission Green Paper
COM(2000) 51 final

4) Implementing Measures

5) Follow-Up Work