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Heavy agenda for the UK

20 June 05

Briefings from the "Brussels Agenda" on EU legal issues current as the UK takes up the Presidency

Commission still pursuing competition

The Luxembourg Presidency of the EU recently hosted a conference on competition and the liberal professions, following up on the Commission report of February 2004 on the matter. The Law Societies and a number of other European bars were represented at the event. The Commission’s Director General for competition and his deputy both gave their thoughts on the state of play. They noted the significant developments that had occurred in some member states in reforming their regulatory environments, citing the UK as a prime example.

Discussions centred on how reducing unnecessarily restrictive regulation and improving competition could meet the needs of the public interest and of access to justice. There was some disagreement as to whether these goals were complementary. The Commission expressed its willingness to work constructively with professional bodies to achieve the goals sought. A progress report is to be published by the Commission before the summer break and the UK is planning to hold its own conference on the subject as part of its Presidency programme.

Don’t overlook SOLVIT

SOLVIT has reported that the number of complaints it had received about the way public authorities in EU member states apply EU law rose in 2004 by 72%. It also claimed to have resolved 80% of these complaints. The record sounds impressive, but the fact that SOLVIT only received 289 complaints from across the EU indicates its low profile.

So what is it? SOLVIT is a network of government offices established in all Internal Market states (all EU member states, plus Iceland, Liechtenstein and Norway). Its object is to deal with failures by member state authorities to apply EU law properly, and anyone affected by such a failure may complain directly to SOLVIT. The most frequent cases concern recognition of professional qualifications, market access for products, social security and taxation. SOLVIT’s reported successes include getting Belgian authorities to take account of a teacher’s experience in Holland for the purposes of pay, getting the UK General Medical Council to recognise an Icelandic doctor’s medical qualifications, and helping a Spaniard get access to welfare in Ireland. Complaints can be made on a form available in English and local languages on the SOLVIT website

What next for EU level justice?

The European Commission launched its five-year action plan on justice and home affairs in April, setting out strategic objectives and an indicative legislative timetable. It follows on from last year’s Hague Programme, which set out the policy priorities of EU heads of state and government. Matters addressed include civil litigation, family law, asylum and immigration, serious crime, terrorism and police co-operation.

The Hague Programme Action Plan is billed by the European Commission as a cornerstone of its strategic objectives for the period up to 2010, which are built around achieving prosperity, solidarity and security. Security, bolstering police co-operation and improving information sharing are therefore all top priority and subject to tight legislative timetables. There is also a strong emphasis on building confidence and developing mutual trust among member states to ensure high quality justice. A long overdue commitment is given to creating minimum procedural standards as regards fairness and respect for the rights of defence, and it is accompanied by a commitment to monitoring and promoting fundamental rights. But is this bold rhetoric enough? Will the Action Plan be followed by concrete developments?

The Action Plan again rehearses the idea of a European judicial area, taking EU justice policy much further than just co-operation. The principle of mutual recognition is developed and presented not just as an administrative process whereby judgments obtained in one member state are recognised and enforced in other member states, but rather as the foundation on which effective access to justice is guaranteed. Indeed, one of the aims of the Hague Programme is to get rid of administrative formalities that hinder mutual recognition. The question is whether eliminating obstacles also means eliminating protections. A recent Commission communication on mutual recognition discusses these issues.

Once the Action Plan has been endorsed by EU Justice Ministers in June, it will be up to the UK Presidency starting in July to take the lead on some key dossiers and set the Action Plan in motion.

A European small claims procedure?

Pursuing a low-value claim against a party in another member state can be a complex, costly process. To address these problems the European Commission proposed a draft regulation for a European small claims procedure in March 2005 ( The procedure would be available for the pursuit of claims worth less than 2,000 euro and would be a largely written procedure, intended to be simple enough for individuals to raise and contest claims in other countries without representation. Considerable responsibility is therefore placed on the court to check that claims are properly filled out, to serve documents and to meet deadlines. As this is designed to be a swift, simple procedure, a six-month deadline from lodging to final judgment has been set.

This proposal ties in with two others on cross-border litigation: first, the European Enforcement Order, which is an order attached to a default judgment in one member state so that it can be enforced with minimum procedural obligations in another. This should be available in the UK from 21 October 2005. Second is the European Payment Order Procedure for bringing uncontested claims. While the European Commission considers that the procedure should be available in both domestic and cross-border EU cases, most member states want to limit the mechanism to the latter situation. A similar discussion will take place over the small claims procedure. 

Tackling cross-border succession issues

EU citizens increasingly work or own property in another member state or have a partner from another member state. There is therefore a perceived need for new EU legislation to deal with cross-border legal difficulties that arise. The future EU legislative package on succession will radically change the rules of private international law in Europe. Proposals for consideration include new conflict of laws regulations, new rules on jurisdiction, an EU inheritance certificate and an EU wills register. The recently published green paper invites responses by 30 September 2005. See

Working time opt-out under threat

As widely predicted, the European Parliament decided on 11 May to put an end to the opt-out in the Working Time Directive, which has allowed individuals to choose to work more than 48 hours per week. If adopted, this would come into effect three years after the new amended directive is implemented. The Parliament also decided that all time spent on call at the workplace should be considered working time. The periods during which a worker is not actively “working” could, however, be counted differently for the purposes of calculating the hours worked per week. Currently, such time is counted as normal working time, which has caused many problems, for instance with doctors and health sector workers.

The proposal now passes to the Council of Ministers. During previous discussions, there appeared not to be a sufficient majority of member states either for or against scrapping the opt-out. The forthcoming UK Presidency may be required to manage some tricky discussions on this dossier.

Prisoner transfers to home country proposed

A proposal before the Council of Ministers would allow one member state to require another member state to accept the return of nationals and residents sentenced to a prison term by the courts of the first. Returned prisoners would then serve out their sentences at home.

The proposers say this would improve on the present system for transfer of prisoners, governed by the 1983 Council of Europe Convention on the Transfer of Sentenced Persons, which is slow and bureaucratic. The proposal is also designed to complement the legislation on the European Arrest Warrant (EAW), which allows member states to require that anyone surrendered to another country through an EAW must be returned home to serve their sentence.

Unlike the present system, prisoners would not have the right to object to the new EU order for transfer (to be known as a European Enforcement Order), though they would have a right to be informed and give their opinion. The UK Government has welcomed the initiative, though the House of Commons EU Scrutiny Committee has expressed doubts as to the need for such an order.

Enhancing shareholders’ rights

As part of the 2003 Action Plan to modernise company law and enhance corporate governance, the European Commission launched a consultation in September 2004 on shareholders’ rights and cross-border voting. It sought views from the public regarding obstacles to cross-border voting, the exercise of shareholders’ rights in general meetings of listed companies and the desirability of EU minimum standards in those areas. The results are said to show support for EU-wide measures.

The Commission has now launched a second consultation focusing on more specific measures to deal with issues identified in the first consultation. Questions include whether to grant “ultimate investors” legal rights over how votes are cast, the effect of stock lending on voting rights, the status of depositary receipts, methods for voting at distance and other rights concerning participation in general meetings, as well as the availability of agenda, documentation and voting results. The consultation closes on 15 July 2005. The consultation document is at

Less regulation in financial services?

The Commission has launched a green paper on financial services policy for the period 2005 to 2010. The green paper ( is open for public consultation until 1 August and the Commission’s final programme will follow in November 2005. As was promised by Commissioner McCreevy over the last few months, the emphasis of the paper is on the implementation and consolidation of existing measures adopted under the previous Financial Services Action Plan, and on enforcement. The paper highlights the importance of supervisory convergence in the financial services sector and the need for effective enforcement on the part of all market players (member states, national supervisory authorities, European institutions and market participants).

The paper also has a strong emphasis throughout on better regulation, noting that all legislative proposals will have to be shown to be necessary (putting into question current proposals) and that pieces of legislation failing to meet their objectives may be repealed. The Commission identified two areas for new initiatives: the retail financial services sector, which remains fragmented, and the field of asset management. A green paper on the latter will be published in July 2005.