PART 3: EVIDENCE|
General reactions to the
26. Witnesses generally supported the proposal. The
Government described it as "a sensible rearrangement of the
respective jurisdictions of the ECJ and the CFI" (p 24).
The CCBE welcomed it, calling it "an important step in favour
of a more coherent allocation of jurisdiction between the two
Courts". Practitioners pointed to the benefits of the "two
tier jurisdiction" of the Community Courts (QQ 65-67, p 12).
They acknowledged, however, the time factors involved if a case
has to go to the CFI and then on appeal to the ECJ to determine
a question of law. But a considerable time could be taken up under
the present regime in sorting out which Court should act in parallel
actions, and even then all the issues might not necessarily be
resolved. This was time wasted, in contrast to that taken by an
appeal (QQ 72-75, 79, 80).
27. The proposal would require Member States to forgo
the "privilege" of being able to go direct to the ECJ
for decisions. One Member State had suggested that Member
States should not as a question of principle be required to bring
actions in the CFI. The United Kingdom did not share that view
(Q 100). The CCBE considered that Member States should
see a positive benefit from having factually complex cases heard
first by the CFI. If unhappy with any point of law that emerged,
they would have the right to have it reviewed by the ECJ. In practice
about 25 per cent of decisions of the CFI are appealed. Appeals
could sometimes be dealt with briefly, without an oral hearing
(QQ 63, 76, 77). The Government acknowledged that there might
be advantage in cases becoming subject to appeal on points of
law. It accepted that the effect of Member States having to start
proceedings in the CFI might lead to further delays in the determination
of the cases they bring (p 24). Mr Paul Lasok QC said that obtaining
a definitive ruling at the earliest opportunity might be more
beneficial than having a right of appeal, particularly where the
outcome is important for future conduct (such as the grant of
aid by a Member State) (Q 18). The Government thought that overall
the advantages to be had from the proposal outweighed any additional
delay (Q 102).
28. Mr Nicholas Forwood QC, for the CCBE, said that
there should be no difficulty with the proposal from the point
of view of principle because the decision had been taken in 1992
in the amendments made by the Maastricht Treaty to remove the
limitation which would have prevented cases brought by Member
States being heard by the CFI. Rather, the CCBE objected to the
principle that in respect of a challenge to the same act the identity
of the Court having jurisdiction should be determined by the identity
of the applicant. The CCBE considered that the proposal should,
in the interests of consistency and simplicity, be enlarged to
cover all actions of Member States against Community acts.
They believed that in the longer term it might be necessary also
to transfer to the CFI direct actions brought by the Community
institutions (Q 63, p 13).
29. Witnesses were agreed on the desirability of
limiting, in the interests of the efficient administration of
justice, the scope for parallel actions. The Government considered
that there would be advantages in reducing the number of parallel
actions before both Courts. In this regard the proposal would
be likely to have its greatest impact in relation to state aid
cases (Q 105, p 24). The CCBE said that the proposal would duly
preserve the rights of private litigants (p 12).
30. Witnesses pointed out that parallel actions would
remain possible. This is a result of the limited nature of the
proposal. It does not, for example, cover all areas of Community
law or acts of general application. Mr Brouwer, for the CCBE,
gave as an example the current litigation challenging the Tobacco
Advertising Directive (Q 75). There have also been cases where
a direct action has been brought before the CFI at the same time
as litigation in a national court in which a reference for a preliminary
ruling is made to the ECJ. An example can be seen in the BSE litigation.
31. The proposal concentrates on one type of direct
action, the application for annulment. The CCBE did not accept
the arguments advanced for excluding actions for failure to act.
The action for annulment and the action for failure to act are
closely related and parties often filed both types of action.
Maître Waelbroeck, for the CCBE, said that the two were
in essence the same action and both should logically be brought
in the same Court. The CCBE contended that the proposal should
also cover actions for failure to act where the act requested
is one which, if taken, would be subject to challenge in the CFI
(Q 81, p 12). The Government had not had time to consider the
CCBE's suggestion. Mr Collins, Treasury Solicitor's Department,
drew attention to the grounds on which the ECJ had excluded from
its proposal actions for failure to act (they were infrequent
and had not given rise to parallel actions) (Q 122).
The nature of the acts
32. The Explanatory Note to the proposal seeks to
make a distinction between actions against "normative acts
of general application"
(which would continue to be commenced before the ECJ) and actions
concerning "the application of Community law to specific
situations" (to be commenced before the CFI). The proposal
itself refers to "decisions" and "acts" adopted
by Community institutions. Mr Lasok noted that the proposal only
involved a partial transfer to the CFI of jurisdiction over actions
brought by Member States. In his view the proposal drew no proper
distinction between jurisdiction over matters that are general
or legislative in nature and jurisdiction over individual decisions
(Q 10). The Government, however, considered that the distinction
was workable and logical and that for the most part the drafting
was clear as to what decisions were covered (QQ 109, 125).
33. The CCBE was critical of the approach taken in
the proposal. The distinction was not clear-cut in practice. An
increasing number of normative acts (eg anti-dumping regulations)
also specifically referred to or affected individuals. The ECJ
had become more receptive to challenges brought by private parties.
The exclusion from the proposal of actions against normative acts
would not achieve the stated desire to avoid the transfer of cases
raising institutional questions. In the view of the CCBE excluding
normative acts from the proposal was not justified or in the interests
of the Member States. Removing the limitation would not lead to
a major increase in the number of cases transferred. The total
number of direct actions by Member States in the six years 1993-98
was 147. Of these, 76 would have been transferred under the Court's
proposed criteria (QQ 69-70, pp 12, 21). But in the Government's
mind there was a distinction between challenging an individual
decision, for example, on a state aids proposal and a major directive
such as the Working Time Directive or the Tobacco Advertising
Directive. Mr Hendry, Foreign and Commonwealth Office (FCO), said
that the latter involved "big political issues", ie
constitutional issues, which the Government considered right
for the ECJ to continue to deal with. He thought that the ECJ
also increasingly saw itself as a constitutional court rather
than a court reviewing individual administrative decisions (QQ
The fields of Community
34. The Government considered that most of the types
of action covered by the proposal would be likely to require factual
findings and assessments or give rise to parallel actions. The
CFI was well suited to deal with cases involving complex facts.
The Government saw no disadvantage in cases brought by Member
States in the areas covered by the proposal starting in the CFI.
With the exception of the category relating to international trade
protection, it was content that the categories had been adequately
defined. (QQ 107, 117, p 24). The CCBE questioned the restriction
of the proposal to certain fields of law only. There did not seem
to be any reason to exclude other areas, such as pharmaceuticals,
medicines and veterinary law. The risk of parallel actions existed
there also, though it had not materialised significantly. The
CCBE did not believe that extending the scope of the proposal
in this way would add substantially to the CFI's workload (Q 83,
p 12). The Government respected the ECJ's judgement
in this matter. Mr Hendry (FCO) thought the CCBE proposal would
introduce a risk of overloading the CFI (Q 123).
35. There was general agreement that the jurisdiction
of the CFI over actions based on arbitration clauses should be
extended to include actions brought by Community institutions
(QQ 24, 95). Mr Lasok thought that the real point was whether
such cases, typically contractual disputes, needed a collegiate
decision. One judge, experienced in the applicable (national)
law, should suffice (Q 24).
for the CFI's workload
36. According to the CCBE, both the ECJ and CFI were
in a critical position. While the present proposal would to a
limited extent partly relieve the pressure on the ECJ it would
do so at the price of increasing still further the pressures on
the CFI (p 11). Mr Lasok said: "Cases are being transferred
from one Court that is not particularly best placed to deal with
complex matters of fact to another Court that is equally badly
placed" (Q 22). The Court supplied a table setting out the
numbers of cases that the change would have affected in the last
six years (1993-98). The total number is 92, of which there were
18 in 1998. The CFI estimates that about 25 per cent of cases
subject to the change would be appealed to the ECJ. The Government
said that the CFI had been involved in the formulation of the
proposal and was content to take on the additional work (p 23).
The CFI's contentedness appears, however, to be conditional upon
existing budgetary requests being met (p 37).
The Courts' other initiatives
37. The CCBE said that the present proposal had to
be seen as part of a wider package of measures that needed to
be adopted immediately. It referred to the Courts' recent proposal
to deal with Community trade mark cases. In the view of the CCBE,
the proposed transfer of jurisdiction should be made only together
with the increase in the number of judges in the CFI and the other
measures contained in that further proposal (p 11). Mr Hendry
(FCO) thought it significant that the two proposals had been brought
forward separately. The trade mark proposal was likely to be more
controversial because it essentially concerned resources. Its
negotiation was consequently likely to take longer (Q 128).
38. When she met the Select Committee on 15 June
the Rt Hon Joyce Quin, Minister of State, Foreign and Commonwealth
Office, acknowledged the need for the Community Courts to be able
to work effectively: "It is in our interests to have a strong
European Court of Justice and a strong Court of First Instance".
As regards the changes being proposed by the Courts, the first
question was to see how progress could be made without the need
for Treaty amendment. (Mr Hendry (FCO) said that the number of
changes requiring Treaty amendment was quite limited (Q 99)).
But the Minister believed that Member States' Governments would
be prepared to consider Treaty changes in the context of the forthcoming
Inter-Governmental Conference if the Courts felt them necessary.
She acknowledged that the implications of enlargement had to be
kept in mind. 
PART 4: OPINION
39. It is only a year since the Committee last looked
in detail at the role and work of the CFI. On that occasion we
examined the proposal that certain types of case, principally
those not raising complex legal issues, should be able to be heard
by a single judge. That matter proved to be somewhat controversial
and it is only recently,
following two years negotiation, that the proposal has been adopted.
The current proposal would appear to be less controversial, though
it would require Member States for the first time to commence
proceedings in the CFI rather than the ECJ.
The issue of principle
40. Member States should not, as a matter of principle,
have any objection to the proposal. It was agreed in the context
of the Maastricht Treaty that the CFI should have the capability
of hearing all types of action which can be brought before the
Community Courts with one exception, namely the preliminary reference
from a national court under Article 234 (ex 177) EC. The CFI is
experienced and well regarded. Practitioners told us that Member
States had nothing to fear, but much to gain, from having their
cases dealt with by that Court. It is true that in some cases
the effect of the proposal will be that it will take longer to
obtain a definitive ruling from the ECJ, because it will be necessary
to go through the procedures of the CFI and then an appeal to
the ECJ. But we do not believe that this will be a major problem.
We have no hesitation in supporting the proposal.
The scope of the proposal
41. The proposal is a limited one and though its
introduction has, in the ECJ's own words, been "prompted
solely by a concern to ensure the proper administration of justice"
the precise definition of its extent and terms seems to be based
more on pragmatism than on principle. In this regard the CCBE's
approach, which is aimed at bringing coherence and simplicity
to the proposal, is more attractive if not, as we shall explain,
totally compelling. The CCBE advocates that the proposal should
be widened to include all direct actions brought by Member
States. Whether this is politically acceptable at the present
time is, we believe, extremely doubtful.
42. Turning to the detail of the ECJ's proposal,
the CCBE argues that the proposal should not be limited to challenges
against specific acts, such as decisions addressed to a particular
Member State (relating, for example, to a State aid or the clearance
of an account under the EAGGF) or a firm (as in competition cases).
Actions brought by Member States challenging measures having general
application, such as regulations and directives, should, in the
CCBE's view, also begin in the CFI. But we can readily appreciate
why the ECJ has not suggested that such cases should be dealt
with by the CFI. Such challenges tend, as the Government's witnesses
indicated, to be "political" or constitutional in nature.
43. There is no dispute as to the appropriateness
of the six fields of Community law chosen by the ECJ, though certain
clarification is necessary as to the precise scope of the reference
to acts taken under international trade regulations. Overall the
anticipated effect is to transfer about 18 cases a year to the
CFI. The CCBE proposes that there should be no limitation by reference
to particular fields of Community law. This would inevitably increase
the number of cases involved. On the basis of the figures supplied
by the CCBE, the number of direct actions transferred might double.
Although the total number would still be relatively small in terms
of the numbers of cases coming before the two Courts, there is,
we believe, a real risk that the debate on the proposal would
then turn into one about resources which, by limiting its proposal,
the ECJ may incidentally have sought to avoid.
44. At present the proposal is limited to one type
of direct action, the action for annulment. The CCBE believes
it should also cover the action for failure to act. The ECJ's
grounds for excluding such actions are that they are infrequent
and have not given rise to parallel action problems. But the two
actions are, as is often said, two sides of the same coin. It
seems to us that extending the scope of the proposal to include
actions for failure to act would remove an unnecessary and potentially
artificial distinction. There is much force in the CCBE's arguments.
We believe that the issue merits further consideration.
45. Finally, as regards actions based on arbitration
clauses, the Committee agrees that the CFI's jurisdiction should
be extended so that it can hear all such actions including those
brought by a Community institution. The question of which Court,
the ECJ or the CFI, hears the case should no longer depend on
the status of the applicant.
The workload of
the Community Courts
46. Both Community Courts have heavy workloads. The
number of cases continues to rise. In 1998, 485 cases (of which
264 were references for preliminary rulings) were brought before
the ECJ and 238 before the CFI. The effect of recent developments,
including the commencement of the third stage of European Monetary
Union (EMU) and the entry into force of the Amsterdam Treaty,
has been to increase the jurisdiction of both Courts. This will
add further to the number of cases coming before them.
47. In our 1998 Report we noted that the backlog
of undecided cases had reached alarming proportions. We said that
the CFI needed more Judges, possibly six, of whom some should
have experience in intellectual property. The figures supplied
to the Committee during the course of its enquiry and the descriptions
and predictions given in the Courts' recent proposal on intellectual
property cases and its discussion paper do not give us any comfort.
It is significant that the Courts speak of "the existence
of a dangerous trend towards a structural imbalance between the
volume of incoming cases and the capacity of the institution to
dispose of them". Would the current proposal tip the balance?
As mentioned above the number of additional cases that would in
future have to be begun in the CFI would not be great, though
it should be recalled that they could be factually complex and
difficult ones. But the view of witnesses and of the CFI itself
was that the caseload should be manageable. Nevertheless it is,
we believe, necessary to draw attention once again to the position
of the two Courts and the need, in our view, for urgent remedial
48. The two Courts have put forward a proposal for
six more judges (and supporting resources) to deal with the expected
influx of Community trade mark cases. But that proposal (which
is restricted to the CFI) will not address the problems of the
existing backlog, the impact of the Amsterdam Treaty and, looking
not far into the future, the increased demand on the Courts which
enlargement of the Union will inevitably bring.
49. We therefore welcome the Courts' discussion paper,
which contains a number of practical proposals and also presents
some quite radical ideas on the future role of the ECJ, particularly
as regards references from national courts for preliminary rulings
on points of Community law.
We note that following the debate on the paper at the recent Justice
and Home Affairs Council the Presidency indicated that "a
more in-depth examination and reflection would be carried out
by the Council, and that some of these proposed reforms might
be considered by the next Inter-Governmental Conference".
We are pleased to note that our own Government does not exclude
the possibility of reform of the Community's Courts being placed
on the agenda of the next IGC. This Committee urges the Government
to take a positive role in seeking to find solutions to the present
problems and in preparing the Community judicial structure for
an enlarged Union.
50. The Committee considers that the proposal to
enlarge the jurisdiction of the CFI raises important questions
to which the attention of the House should be drawn, and makes
this Report to the House for information.
18 Case C-157/96 R v MAFF, ex parte NFU
 ECR I-2211; Case C-180/96 UK v Commission
 ECR I-2265; Case T-76/96R NFU and Others v Commission
 ECR II-815. Back
Under Article 232 (ex 175) EC an application can be made for the
Court to rule on the legality of a failure to act on the part
of the European Parliament, the Council or the Commission. Back
Normative acts have a rule-making or standard-setting effect.
The classic examples, in Community law, are regulations and directives.
A measure has general application where its scope is not limited
by reference to a particular person or persons. Back
Minutes of Evidence. 15 June 1999 QQ 11, 13. Back
The "single judge" proposal was adopted at the General
Affairs Council on 26April 1999. Back
The discussion paper raises, for example, the possibility of the
creation, in each Member State, of decentralised judicial bodies
responsible for dealing with references for rulings from local
Council Press Release 8654/99 (Presse 168 -G). Back