Select Committee on European Scrutiny Twenty-Second Report


ACCESS TO JUSTICE


(23181)

5513/02

COM(02) 13


Draft Council Directive to improve access to justice in cross-border disputes by establishing minimum common rules relating to legal aid and other financial aspects of legal proceedings.

Legal base:Article 61(c) EC; consultation; unanimity
Document originated:18 January 2002
Forwarded to the Council:21 January 2002
Deposited in Parliament:14 February 2002
Department:Lord Chancellor's Department
Basis of consideration:EM of 22 February 2002
Previous Committee Report:None
To be discussed in Council:No date fixed
Committee's assessment:Legally and politically important
Committee's decision:Not cleared; further information requested



Background

  10.1  The European Council agreed at Tampere in October 1999 to establish minimum standards ensuring an adequate level of legal aid in cross-border civil cases throughout the European Union. In May 2000 the Commission published a Green Paper on legal aid in civil matters, and the present proposal for a Directive reflects responses to that Green Paper.

  10.2  The Council of Europe and the Hague Conference on Private International Law have adopted conventions in this area (see the 1977 Strasbourg Agreement on the Transmission of Legal Aid Applications, and the 1980 Hague Convention on International Access to Justice), but these have not been ratified by all Member States[28]. The 1977 Strasbourg Agreement provides that applications for legal aid may be made in the home State, for the purposes of legal proceedings in another State, but the conditions of eligibility remain those of the State where the proceedings are to be brought. The 1980 Hague Convention requires nationals and persons resident in another Contracting State to be treated for the purposes of entitlement to legal aid in a Contracting State as if they were nationals of or resident in that Contracting State. Neither instrument provides for any minimum standards of eligibility for legal aid.

The proposed Directive

  10.3  Article 1 of the draft Directive indicates that its purpose is to improve access to justice in cross-border disputes by establishing minimum common rules relating to legal aid and other financial aspects of civil proceedings. It also states that the Directive is to apply to "civil disputes of all types, irrespective of the type of court". Further definitions are provided by Article 2 where "litigation in civil matters" is defined as "all litigation in matters of civil law, including commercial law, employment law and consumer protection law"[29].

  10.4  The right to legal aid is set out in Article 3. Accordingly all persons involved in a civil dispute, as either claimant or defendant, shall be entitled to receive "appropriate legal aid if they do not have sufficient resources". Legal aid is to include the services of a lawyer, or of any other person entitled to represent a party in court, providing advice and representation, as well as exemption from, or assistance with, the cost of proceedings[30]. Member States are to be free to provide for reimbursement by the aided party if his financial status "has substantially improved meanwhile".

  10.5  The basic right to legal aid conferred by Article 3 is subject to the conditions of Articles 13 and 14. Under Article 13, Member States may define income thresholds above which applicants are to be presumed to be able to bear the costs associated with disputes. Applicants whose income exceeds such thresholds must nevertheless be granted legal aid if they can prove they are unable to pay the costs of proceedings, "in particular as a result of differences in the cost of living between the Member State of residence and of the forum". It is further provided that applicants shall be presumed to be able to bear the costs of proceedings if they "enjoy actual access to a private mechanism involving a no-win no-fee agreement with the lawyer and providing that court costs will be paid by a third party". Article 14 provides that legal aid applications may be rejected for actions "which appear to be manifestly unfounded".[31]

  10.6  Article 4 provides for legal aid to be granted by the Member State before whose court the proceedings are instituted. By virtue of Article 5 such legal aid is also to cover the costs directly related to the cross-border nature of the dispute, such as interpretation, translation and travel costs. The Member State in which the applicant resides is to grant legal aid to cover costs incurred by the recipient in that State, including in particular the costs of consulting a local lawyer. By virtue of Article 6, legal aid is to be granted without discrimination to Union citizens and third country nationals residing lawfully in a Member State.

  10.7  Articles 8 and 9 concern the processing and transmission of applications. The intention is that the provisions of the Directive should replace the 1977 Strasbourg Agreement in relations between Member States. Article 11 provides for a standard form for applications to be drawn up by the Commission assisted by the Committee established by Council Regulation No 1348/2000 on the service in the Member States of judicial and extra-judicial documents in civil and commercial matters[32].

  10.8  Article 15 makes specific provision for legal aid to be granted to "not-for-profit" legal persons based in a Member State where proceedings are "designed to protect legally-recognised general interests" and the legal persons do not have sufficient resources to bear the costs of proceedings.

  10.9  Article 17 requires Member States to provide that the winning party shall be entitled to "fair reimbursement" from the losing party of all or part of the costs of proceedings. Member States may provide for exceptions to this principle "to ensure appropriate protection of weaker parties". The Commission's Explanatory Memorandum makes it clear that this is intended to be a general rule applying to all civil proceedings, whether or not legal aid has been awarded. (It would also seem to apply whether or not the proceedings have any cross-border element).[33] In cases where legal aid has been awarded, Member States may provide that reimbursement is not due or "is dealt with by the State" where the losing party is legally-aided.

The Government's view

  10.10  In her Explanatory Memorandum of 22 February, the Parliamentary Secretary at the Lord Chancellor's Department (Baroness Scotland) explains that the Government is of the view that establishing minimum standards ensuring an adequate level of legal aid in cross-border cases can best be achieved at the European level and would comply with the principle of subsidiarity. The Minister adds that the Government is also considering whether the effect of the proposal as currently drafted goes too far in prescribing where legal aid should and should not be given in domestic cases.

  10.11  On the policy implications of the proposal, the Minister comments as follows:

"The Government supports action at European level to promote access to justice across European borders, and supports measures to deal with the particular problems of the cross-border litigant. However, the Government will wish to examine carefully the effect of the Commission's proposal as currently drafted in three main areas: the merits test, the scope of the proposal (i.e. the categories of cases for which legal aid would have to be made available), and the operation of the proposals concerning financial eligibility criteria."

  10.12  The Minister further explains that the Government is assessing the costs and benefits of the proposal as currently drafted, that it will be exploring the extent to which amendments might be agreed and that these questions will be the key factors in deciding whether or not to opt in to this measure.

Conclusion

  10.13  We recognise that this proposal is at an early stage, and that it may be amended significantly. Nevertheless, we have a number of concerns.

  10.14  First, we ask the Minister what view she takes of the reference to "Union citizens" in Article 6 and of the apparent extension of the rights attaching to such citizenship, and if she agrees that the reference ought more correctly to be to "nationals of other Member States".

  10.15  Secondly, the scope of Article 15 is not expressed at all clearly. In particular, no guidance is given as to what is meant by "legally- recognised general interests". We ask the Minister if she agrees that public funds, in the form of legal aid, should be made available to the legal persons concerned.

  10.16  Thirdly, we have concerns over Article 17, which appears to introduce a general rule relating to the costs of civil proceedings, requiring a "fair reimbursement" from the losing party regardless of whether legal aid has been granted. There seems to us to be no justification for limiting the discretion of the national courts to make no order for costs, and we ask the Minister if she agrees.

  10.17  Our other concern with Article 17 is that it does not appear to be limited to cases having cross-border implications. If it is not so limited, it is not properly based on Article 65 EC, and should be deleted from the proposal. Again, we ask the Minister if she agrees.

  10.18  We shall hold the document under scrutiny pending the Minister's reply.


28  The 1977 Strasbourg Agreement has been ratified by all Member States except Germany and the Netherlands. The 1980 Hague Convention has been ratified by nine EU Member States: Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Spain and Sweden. Back

29  This would appear to exclude litigation before administrative courts, or, in England and Wales, proceedings by way of judicial review. The Commission Explanatory Memorandum remarks that disputes concerning administrative law do not fall within the scope of Article 61 EC, on which this proposal is based. Back

30  The Commission Explanatory Memorandum indicates that 'costs' in this sense are confined to court costs and do not include other costs connected with the dispute.  Back

31  The Commission indicates that the proposal does not refer to concepts such as 'reasonable prospects of success', since this 'would introduce a subjective element whereby the analysis of the legal aid application would become a kind of 'pre-judgment'.' Back

32  OJ No L160, 30.6.2000, p.37. Back

33  If this is the case, Article 65 EC does not appear to provide an adequate legal base, since it is limited to judicial cooperation in civil matters 'having cross-border implications'. Back


 
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