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Europe

1 December 02

EU update on legal aid; trade in services; Single Market; employment law; company law; and a note on the Convention on the Future of Europe

Legal Aid

Agreement in principle on draft Directive

At the October Justice and Home Affairs Council, Member States reached political agreement on the draft Directive on legal aid in cross-border disputes. The UK opted in to the proposal which covers civil and commercial matters and is due to receive final approval before the end of the year.  The purpose of the Directive is to facilitate legal aid applications in cross-border cases, defined as cases where the legal aid applicant is domiciled or habitually resident in a Member State other than the Member State where the courts have jurisdiction or the decision is to be enforced. The Directive contains a number of exceptions, notably for defamation cases and for cases arising out of or relating to the applicant’s business activities. Member States will have two years to transpose the provisions into national law.

Trade in Services

Commission consultation on greater market access for services

At the beginning of November, the Trade Directorate-General of the European Commission launched a consultation document entitled “WTO members’ requests to the EC and its Member States for improved market access for services” http://europa.eu.int/comm/trade/services/index_en.htm.  The purpose of the consultation is to elicit views from stakeholders on the requests for liberalisation received by the Commission from its trading partners. The document lists the various service sectors, such as professional services (which includes legal services), and gives an analysis of the current EC commitments and the requests to the EC.  The deadline for responses is 10 January 2002.

Single Market

Conference highlights success of ‘solvit’

On 30 October 2002, a Conference was held in Brussels to assess the role of “SOLVIT”, a network established by the European Commission to solve problems relating to the misapplication of the laws of the Internal Market, without the need for recourse to legal proceedings. SOLVIT is a free service and has offices in the public authorities of each Member State (the DTI in the UK). It has the power to deal with complaints relating to breaches of European legislation in a Member State other than the home Member State, so as to improve the functioning of the Internal Market. The local SOLVIT centre in the citizen’s Member State processes details of a complaint and forwards it automatically to the Member State where the problem has occurred. The two SOLVIT centres liaise during the investigation period, and then the local SOLVIT centre informs the citizen of the proposed solution. Speakers at the Conference referred to many examples where SOLVIT had been of assistance, including cases involving the recognition of qualifications. Details of the Conference and SOLVIT can also be found on the Commission’s website:  http://www.europa.eu.int/comm/internal_market/solvit/conference2002/report_en.htm

Employment Law

Consultation on the protection of workers’ personal data

On 30 October, the Commission unveiled a consultation document on the rules governing the treatment of employees’ personal data   http://www.europa.eu.int/comm/employment_social/news/2002/oct/data_prot_en.html. Although the processing of personal data is already covered by two existing Directives, these are of general application and do not address in detail the protection of employees’ data. The consultation therefore seeks to build on existing principles and offer clear guidance where none exists. The consultation also deals with a number of recent practices such as genetic testing for promotional purposes and the use of data on employees’ health.  The consultation also puts forward guidance on the monitoring of employees’ use of e-mail and the Internet as the current practice varies throughout the EU. This can lead to difficulties for organisations with operations in more than one Member State.  The consultation is addressed to the social partners, that is, representatives from employers’ and employees’ organisations.

Company Law –
Commission to react to recommendations on EU corporate governance rules

In 2003, the Internal Market Directorate-General hopes to bring forward a Communication containing its response to the recommendations proposed by the High Level Group of Company Law experts (“The Winter Group”), led by Jaap Winter. The advisory group of experts was selected by the Commission to make proposals for the new Directive on take-over bids and more generally to develop plans for a new regulatory framework for EU company law. The Winter Group undertook wide-ranging consultations which drew responses from a range of organisations, including the Law Society of England and Wales, and the Law Society of Scotland. The keenly-awaited Report was published on 5 November http://www.europa.eu.int/comm/internal_market/en/company/company/modern/consult/report_en.pdf. It makes recommendations for the improvement of corporate governance in five core areas: disclosure, shareholders, company boards, auditing practices and European regulation. The Report urges the Commission to revamp the 2nd Company Law Directive and to accelerate work on the adoption of new rules on cross-border mergers (10th Company Law Directive) and on the transfer of company headquarters between EU Member States (14th Company Law Directive). The Winter Group would like to see new rules aimed at creating a European Private Company but expressed doubts about the need for EU involvement in the creation of other legal forms of enterprises such as the European Association, the European Mutual Society and the European Foundation. Following the publication of the Winter Group’s Report, the Commission is engaging in consultations with national experts in the Member States to gauge their reaction to the recommendations.

Convention on the future of Europe

No one familiar with the USA Constitution would use it as an analogy for what the European Union is currently trying to produce.  The phrase “United States of Europe” thus hinders rather than helps clarity of thought about our European future. We have a “Union” of its own particular kind that needs a clearly articulated formal constitution.  This will simplify and greatly clarify the existing thicket of governing treaties with attached protocols.

The Convention on the Future of Europe is hard on the job.  It took two big steps forward on 28/29 October. The Executive Committee (“Praesidium”) of the Convention, in response to earlier debates, has drawn up a “Preliminary Draft” constitutional Treaty. The Convention has welcomed this, though with sharp comments about the “U.S.E.” phrase and about ideas concerning a European Council Presidency and a “European Congress” of state and European parliamentarians with deliberative and ceremonial functions.

On Subsidiarity and Proportionality, it is agreed that there should be better political control at the start of and during the legislative process, with judicial control through the Court of Justice operating ex post.  Ex ante control is to involve Member State parliaments, which will receive notice of legislative proposals directly from the Commission. Each of them may raise a preliminary objection, a kind of “yellow card”, where something proposed appears more appropriately a task for member states acting either centrally or more locally than for Union institutions. 

If a sufficient number (eg, one third) of parliaments lodges such objections, the Commission must formally respond (withdraw, amend, or state reasons why it considers its proposals legitimate). If in the end a measure is carried despite objections laid in this way, a fast track judicial control will be available.

On the Charter of Fundamental Rights approved at Nice in 2001, there is very broad consensus in favour of its incorporation into the body of the constitution with legally binding effect on the Union institutions, and on Member States only when and to the extent that they are implementing Union law. (In other cases, each state’s own constitutional or other guarantees in favour of human rights hold sway). This will operate in tandem with the European Convention, and the Union will be put in position to accede in its own right to the ECHR, so that the ultimate control of human rights both for the Union and for the Member States will remain the Strasbourg Human Rights Court.

One serious disappointment so far concerns “constitutional regions”.  They find no place in the Preliminary Draft, despite many representations by myself and others concerning the urgency of their concerns about subsidiarity and proportionality.  The Scottish First Minister’s idea about a “subsidiarity champion” has fallen on deaf ears. But where devolutionists will regret this, independentists will find compensatory comfort in draft Article 43: “in principle ... the Union is open to all European States which share its values and wish to pursue them jointly, which strictly respect fundamental rights, and which accept the Union’s rules of operation”.

Professor Neil MacCormick