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From the Brussels office

15 May 06

Updates on draft services directive; motor insurance; transfer of prisoners; working time; limitation periods

Motor Insurance Directive consultation

The fifth Motor Insurance Directive has been published in the Official Journal and will come into force in June 2007. It has two main aims: to simplify the insurance of motor vehicles outside the country of residence of the owner of the vehicle, and to increase minimum insurance levels for victims. The overall policy behind the Directive is to make it easier for victims of road accidents to claim compensation. Before the Directive comes into force, the European Commission has launched a public online consultation on two issues: to gauge the effectiveness of claims representatives, introduced in the fourth Motor Insurance Directive, in settling claims; and to consult with legal practitioners and the public on insurance cover for legal expenses. The consultation closes on 5 June 2006. See

Transferring prisoners abroad

At the beginning of last year, Austria, Finland and Sweden proposed a new piece of legislation to speed up the process of transferring prisoners between member states. This is now being debated by the European Parliament’s Civil Liberties Committee and the Austrian Presidency is keen to finalise the text before the end of its term in June. The committee is currently preparing a working paper to be adopted in mid-May which will set out its concerns with the present proposal. Although the prisoner must be allowed to give an opinion on the transfer, consent will not be necessary and this opinion can be ignored. In certain situations, this could mean a transfer away from family and is a departure from the current system set up in 1983. Furthermore, a crime in one country is not always classified as such in another and it would be anomalous for a person to be imprisoned for a crime that did not exist in the member state to which they had been transferred. Issues such as these must be addressed before agreement can be reached.

UK takes hit on working time

Two cases that will affect the UK’s rules on working time were dealt with by the European Court of Justice (ECJ) in March. In Robinson-Steele and J C Caulfield the court found that “rolled-up holiday pay”, allowed by the UK Working Time Regulations 1998, was not compatible with Directive 93/104. Holiday pay should be paid at the time of taking annual leave, rather than on an ongoing basis with wages as a proportion thereof. The UK legislation will have to be brought in line with this ruling. A week before, Advocate-General Kokott agreed with the European Commission that the same regulations (as amended in 1999) and Department of Trade and Industry guidelines contravened the Working Time Directive. Rules that allowed employers not to count additional periods of work that were not measured, predetermined or could be determined by the worker went beyond the derogations of the directive. Although the DTI guidelines are not legally binding, their publication by the UK was held to constitute a failure to indicate to employers that they must do more than act passively to ensure that employees do, rather than can, take rest breaks and annual leave.

Limitation periods in cross-border cases

The Legal Affairs Committee of the European Parliament is to call on the European Commission to take action on limitation periods in cross-border disputes involving certain personal injury claims. The report, by Diana Wallis MEP, notes the differences throughout the European Union in limitation periods in personal injury claims. It recommends to the Commission that a legislative proposal on limitation periods in respect of personal injury and fatal accident claims in cross-border litigation be brought forward. The report includes a detailed recommendation and draft regulation as an annex. The proposal seeks to overcome the differences throughout Europe in relation to limitation periods by setting out a general limitation period of four years, although certain exceptions are possible. Detailed provisions are also set out in relation to: commencement of time running; suspension; interruption; and pleading defence based on the expiry of limitation period. It is expected that the report will be adopted in the plenary session in September 2006. The European Commission will then have to decide what steps to take.