Select Committee on European Union Fifty-Second Report


FOREWORD—What this Report is about


The principles of subsidiarity and proportionality help to define when the EU should act, and when action is better left to the Member States. At the 34th meeting of COSAC (the Conference of Community and European Affairs Committees of Parliaments of the European Union), held in London in October 2005, the Conference agreed that those national parliaments which wished to participate should conduct a subsidiarity and proportionality check on selected EU legislative proposals. The check would serve as a pilot to test national parliaments' systems for reaching decisions on subsidiarity and proportionality.

This Report is concerned with one of two proposals which the national parliaments collectively selected for investigation: the proposal for a Regulation on the applicable law and jurisdiction in divorce matters ('Rome III'). The aim of the proposal is to ensure legal certainty, flexibility and access to court in cases of international divorce, by clarifying which law should apply in such cases. The exercise was carried out by Sub-Committee E (Law and Institutions).

While the Committee concluded that the matter is one for international rather than national action (the objective could not be attained by Member States individually), it had doubts as to whether the Commission had proved that action was necessary, raising questions of both legal base and subsidiarity. The Committee also had concerns about whether the proposal was proportionate, and questioned whether the objective might be achieved by simpler and less prescriptive means.

The Committee has written to the Government expressing its views on Rome III. This Report publishes the Committee's conclusions and is copied to the COSAC Presidency, as well as to the European Commission, the European Parliament, and the Council of the EU.

The Commission's initiatives

1.  In July 2006 the Commission brought forward two measures aimed at improving legal certainty in cross-border divorce proceedings. The first is a draft Regulation to determine the applicable law in such proceedings and to amend existing jurisdictional rules. The proposal is commonly known as Rome III.[1] The second initiative of the Commission is the publication of a Green Paper launching a public consultation on applicable law, jurisdiction and recognition in matters of property rights of married and unmarried couples.[2]

2.  Introducing these initiatives, Franco Frattini, Commissioner for Justice, Freedom and Security said: "These initiatives will simplify life for couples in the EU. They will increase legal certainty and enable couples to know which law will apply to their matrimonial property regime and their divorce. The aim is not to harmonise the national laws on divorce, which are very diverse, but to ensure legal certainty, flexibility and access to court".[3]

Our scrutiny

3.  Both measures have been, and remain, subject to scrutiny by Sub-Committee E (Law and Institutions). The proposed Regulation is of special interest and has required prompt attention for two main reasons. First, as a measure brought under Title IV of the EC Treaty the UK had three months in which to elect whether to opt in to the negotiations.[4] Second, it is one of the measures chosen by COSAC for a pilot exercise to test national parliaments' ability to opine on issues of subsidiarity and proportionality. To these ends we sought views of interested parties (academics and practitioners) and of the Scottish and Welsh Parliaments and took the opportunity to meet officials of the Department for Constitutional Affairs (DCA) to obtain clarification of the proposal and of the Government's position.

4.  This Report describes the Sub-Committee's initial work on the draft Regulation and its response to COSAC. We publish with this Report the written submissions we received, the transcript of the meeting with the DCA and a letter from the Committee to the Government recording the Sub-Committee's conclusions on the application of the principles of subsidiarity and proportionality.

COSAC

5.  The Protocol on the application of the principles of subsidiarity and proportionality attached to the Constitutional Treaty (the Protocol) gives a role to national parliaments in ensuring compliance with these principles and sets out how the Union's institutions should ensure such compliance.[5] In particular the reasons for any proposed Community legislation should be stated and must be substantiated by qualitative or, wherever possible, quantitative indicators.

6.  As part of a pilot exercise being run by COSAC Rome III is being examined by national parliaments to see whether it conforms to the principles of subsidiarity and proportionality. The Sub-Committee had the advantage of seeing the opinions of the parliaments of 13 other Member States[6] as well as that of the Scottish Parliament.[7] Different opinions are emerging, but the large majority of those parliaments have concluded that the Commission's proposal complies with the principles of subsidiarity and proportionality.

The proposal

7.  It is important to make clear at the outset that Rome III would not harmonise the substantive domestic divorce laws of Member States. The Regulation would determine the applicable law in cross-border divorces and other divorces having a foreign element (i.e. should an English court apply its domestic divorce law to a marriage concluded between a German man and French woman?). Rome III would also amend existing jurisdictional rules (i.e. should the English court deal with the case rather than the court of another Member State with which the parties may be connected?). It is the first part of the proposal that is new. The Union already has common rules on jurisdiction in matrimonial causes, the Brussels II Regulation.[8]

Applicable law

8.  Under English and Scots law the lex fori is applied: once jurisdiction is established the courts apply domestic rules to determine whether a divorce should be granted. The UK is not the only Member State to adopt the lex fori.[9] The Commission's research reveals, however, that a majority (14) of Member States determine the applicable law by reference to a number of criteria (mostly by reference to common nationality but also to common domicile and (last) common habitual residence) aimed at identifying the law with which the parties have the closest connection. Three Member States (Belgium, the Netherlands and Germany) include the possibility for the parties to choose the applicable law.

9.  Under the Regulation the primary rule would be that the parties could choose the applicable law in matters of divorce and legal separation[10] (Article 20a). That choice would be limited to countries with which the parties have a close connection by virtue of (a) their last common habitual residence provided one of them still resides there; (b) the nationality[11] of one of the spouses; (c) the law of the State of their previous habitual residence; or (d) the law of the forum.

10.  In the absence of choice by the parties, the applicable law would be determined by reference to a list of connecting factors: (a) the parties' common habitual residence; or failing that, (b) their last common habitual residence if one party still resides there; or failing that, (c) the State of which both are nationals;[12] or failing that, (d) where the application is made (the forum).

11.  This approach would be novel and require a substantial change in the laws of the large majority of, if not all, Member States. In those countries, such as the UK, which currently apply the lex fori, family courts and practitioners would have to adapt to ascertain and apply foreign law. The proposal contemplates some assistance for the judges coming via the European Judicial Network in civil and commercial matters (Article 20c). But practitioners have pointed out this would have shortcomings and be unlikely to relieve the parties of additional costs.[13]

Jurisdiction

12.  The Union already has harmonised rules of jurisdiction in matrimonial causes. They are set out in the so-called Brussels II Regulation.[14] Spouses can choose between several alternative grounds of jurisdiction. Once a court in one Member State is seised of a case courts in other Member States must decline jurisdiction, thus avoiding duplication and possible inconsistency of proceedings.

13.  The main change to the jurisdiction rules being proposed is to give parties the possibility of choosing their court (Article 3a). The parties' choice would not, however, be wholly unrestricted. They must have a "substantial connection" with the Member State concerned: the Member State chosen must be one falling within the current list of possible jurisdictions in Brussels II, the place of the parties' last common habitual residence for a minimum period of three years, or the Member State of nationality of one of the parties.

14.  The Commission sees this change, particularly the ability to take divorce proceedings in the courts of a Member State of which one spouse is a national, as improving access to court for spouses of different nationalities.[15]

Practical need

15.  As mentioned, the Regulation, if adopted in its present form, would require most, if not all, Member States to change their laws. In the case of the UK the change would be substantial and there could be additional costs to be borne by the parties. We were therefore concerned to identify the extent of problems, if any, that would be addressed by the Regulation and whether the solutions being proposed were the most efficient way of dealing with them.

The Commission's case

16.  The Commission argues that the growing mobility of individuals within the EU has led to an increasing number of international couples.[16] The Commission states: "In view of the high divorce rate in the European Union, applicable law and jurisdiction in matrimonial matters concern a significant number of citizens each year".[17]

17.  In respect of the principles of subsidiarity and proportionality, the Commission argues that its proposal, which is restricted to "international divorces" and to rules on international jurisdiction and applicable law, would have no effect on national substantive divorce rules and would increase legal certainty and reinforce the principle of mutual recognition and trust in judicial decisions given in other Member States and the free movement of citizens. Without action at EU level (there are no other international instruments to which Member States could subscribe) certain problems (rush to court, insufficient legal certainty and party autonomy) would remain. The Commission argues that a large and growing number of EU citizens are affected directly or indirectly by international divorces and that no Member State acting alone would be able to solve the problems identified by the Commission. The Commission further contends that failure to take action would significantly damage the legitimate interests of EU citizens, the lack of harmonised rules leading to distress and high costs in international divorce proceedings. Finally, the Commission argues that the proposal would meet the EU obligation to safeguard and ensure protection of citizens' fundamental rights, in particular not to be discriminated against on grounds of nationality and to be able to obtain an effective remedy under the law.[18]

Impact Assessment under attack

18.  The Commission's Impact Assessment seeks to demonstrate a practical need for the Regulation. The number of "international divorces"[19] is estimated to be some 170,000 each year, about 16 per cent of all divorces granted within the EU. The Commission's figures have been criticised. Only 13 Member States could provide the information requested and in five cases not for the full period of time (four years) requested. Significantly only one large Member State (Germany) responded. The UK was unable to do so because it does not keep the sort of statistics requested by the Commission. Whether it is safe to extrapolate for the whole Union on the basis of the Commission's study has been questioned. Practitioners expressed concern that the responses from certain smaller Member States with high numbers of foreign residents (such as Luxembourg and Belgium) may have skewed the statistics.[20] How, in the apparent absence of statistical data from any large Member State save Germany, the Commission can state that "the rates of international marriages and divorces do not vary enormously amongst the larger EU countries"[21] is extraordinary.

19.  Even if there are some 170,000 international divorces each year, doubts have been expressed as to whether this is sufficient to justify the action being proposed: what the Commission's statistics do not reveal is the number or percentage of cases where the question of applicable law has been a problem.

Rush to court

20.  The current rules do not prevent what the Commission terms the "rush to court". One spouse may apply for divorce in one Member State (out of the number listed in Brussels II) to prevent the courts of another Member State from acquiring jurisdiction and to ensure the application of applicable law and other rules (for example, rules of evidence and procedure) thought to be more favourable to the applicant. The Commission, as the DCA noted, does not present any evidence as to the scale of the problem.

21.  The Commission contends that the introduction of harmonised applicable law rules would greatly reduce the risk of "rush to court", since all courts within the Union would apply the law designated on the basis of common rules. Practitioners disagree. The new Regulation would continue to present parties with the opportunity to start proceedings in a variety of jurisdictions. Practitioners considered that Brussels II had intensified the problem of rush to court[22] and frequently leads to the situation where one party does not speak the language of the proceedings and/or is unfamiliar with the legal system and had increased the problem. Rush to court would not be prevented under the new Regulation where there was no agreement between the parties on jurisdiction.[23]

22.  Further, as the Commission acknowledges, the rules of financial provision ancillary to divorce (maintenance and division of property) may play an important role in determining a party's choice of forum. As mentioned, this is the subject of a Green Paper published alongside Rome III.

Subsidiarity

23.  The essence of the principle of subsidiarity is that the Community should only act if the objectives of the proposed action cannot be sufficiently achieved by Member States and can, by reason of the scale or effects of the proposed action, be better achieved by the Community (Article 5 TEC).

24.  Harmonisation of conflict of laws rules (private international law) is expressly contemplated by the Treaty (Article 65(b) TEC) as one means by which the Community will establish an area of freedom, justice and security. There is already a substantial body of Community private international law, including jurisdictional and recognition rules relating to matrimonial causes and child custody. As the Commission states, no Member State acting alone would be able to solve the sorts of problems identified by the Commission. Harmonising jurisdictional and conflicts rules internationally is not something which can be achieved by an individual Member State, at least if it is to be done on the basis of reciprocity and mutual recognition. The appropriate level is the international, not the national, one. The Commission nevertheless is required to make the case for such action.

Subsidiarity and vires

25.  Subsidiarity is concerned with the exercise of powers not their existence (vires). If the Treaty does not give the Community the necessary power to act, no question of subsidiarity arises. As the evidence of DCA officials and other parties has revealed, the present proposal raises both vires and subsidiarity questions.

26.  The Commission's draft Regulation refers to Article 61(c) and 67(1) TEC. Article 61(c) enables the Council to adopt "measures in the field of judicial cooperation in civil matters as provided for in Article 65". Article 65 provides: "Measures in the field of judicial cooperation in civil matters having cross-border implications, to be taken in accordance with Article 67 and insofar as is necessary for the proper functioning of the internal market, shall include … (b) promoting the compatibility of the rules applicable in the Member States concerning the conflict of laws and of jurisdiction". Article 67 deals with voting requirements.

27.  A number of parties, including at least three other parliaments,[24] have queried the "necessity" of the present proposal. The limitations of the Commission's statistical analysis on which it argues the case for legislative action gives rise to both vires and subsidiarity concerns. As regards the former, it is doubtful whether the limitations of the Commission's study and the substantial variations in the figures justify the conclusions drawn for the whole Union and whether the test of necessity in Article 65 has been met.

28.  A second concern is that the rules in Rome III could apply to cases which may have little connection with the Internal Market. Our witnesses referred specifically to the residual jurisdiction rule in Article 7.[25] This provision could fill a gap in a few Member States' laws and therefore improve access to justice in the Union in a most general sense but appears to relate to cases involving persons who have little connection with the internal market or the free movement of persons (Q 5).

Subsidiarity—justification for action at Union level

29.  The criticisms of the Commission's statistical analysis are also relevant when considering whether the Commission has substantiated its reasons for Community legislation by reference to quantitative indicators. The limitations of the study and the substantial variations in the figures would not seem to justify the conclusions drawn for the whole Union. The statistics are not a safe basis on which to act. We agree with the Scottish Parliament that further qualitative research should have been conducted. The requirements of the Protocol are not met in this regard.

Subsidiarity and proportionality

30.  Proportionality requires the form of Community action to be as simple as possible and to leave as much scope for national decision-making as possible. The Impact Assessment annexed to the draft Regulation sets out and evaluates a number of options. This has also met with criticism from practitioners, particularly as to the conclusions drawn by the Commission on the practicalities and costs of implementing the Commission's preferred options. The large majority of, if not all, Member States would be required to change their laws substantially. There may also be substantial costs in ascertaining, and difficulties in applying, foreign law. We are concerned that the Commission may not appreciate the full implications of its proposal and query whether the objective might be achieved by simpler, possibly less prescriptive, means.

31.  It has been suggested that if the jurisdictional rules (Brussels II) were to be improved then it would not be necessary to harmonise applicable law rules. We are impressed by the arguments raised by academics and legal practitioners in this respect and the latter's concern that the Impact Assessment does not adequately address this issue.

32.  The Committee makes this Report for the information of the House.


1   Proposed Council Regulation amending Regulation (EC) No 2201/2003 as regards jurisdiction and introducing rules concerning applicable law in matrimonial matters. The Regulation is the third in a series of conflict of laws measures brought forward by the Commission. Rome I deals with choice of law in contract, Rome II with choice of law in tort. Both have been the subject of scrutiny by Sub-Committee E. Rome II was the subject of a detailed inquiry and Report by the Committee. See The Rome II Regulation (8th Report, 2003-04, HL Paper 66). Back

2   Green Paper on conflict of laws in matters concerning matrimonial property regimes, including the question of jurisdiction and mutual recognition. COM(2006) 400 final. Back

3   Commission Press Release IP/06/997. 17 July 2006. Back

4   Ireland is similarly placed under Title IV and also decided not to opt in to Rome III.  Back

5   The (then draft) Protocol was examined by the Committee-see The Future of Europe: National Parliaments and Subsidiarity-The Proposed Protocols (11th Report, 2002-03, HL Paper 70). Back

6   The opinions of national parliaments of other Member States, together with a summary of the opinions and the procedures followed in the national parliaments for reaching their conclusions on subsidiarity and proportionality, are available on the COSAC website: http://www.cosac.eu/en/info/earlywarning/doc/ Back

7   Justice 1 Committee. Report on the subsidiarity and proportionality of Proposal for a Council Regulation amending Regulation (EC) No 2201/2003 as regards jurisdiction and introducing rules concerning applicable law in matrimonial matters (J1/S2/06/34/1). Back

8   Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000. [2003] OJ L 338/1. Back

9   Cyprus, Denmark, Finland, Ireland, and Sweden also take this approach. Back

10   The Regulation would not apply to annulment of marriage (nullity proceedings). Back

11   Or "domicile" in the case of the UK and Ireland. Back

12   Or have their "domicile" in the case of the UK and Ireland. Back

13   See the submission of family law practitioners: Resolution (p 30). The Law Society of Scotland identified potential public policy issues (p 20). Back

14   Council Regulation (EC) 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and matters of parental responsibility for children of both spouses, repealing Regulation (EC) No 1347/2000. [2003] OJ L 338/1. The revised Brussels II Regulation came into effect on 1 March 2005. Back

15   Commission Explanatory Memorandum, at p 8. Back

16   Spouses of different nationalities, spouses who live in different Member States or who live in a Member State in which one or both of them are not nationals. Back

17   Explanatory Memorandum, p 2.  Back

18   Impact Assessment, pp 28-9. Back

19   Defined as divorces between a national of a Member State and (a) a citizen of another Member State; (b) a citizen of a non-EU State; (c) a citizen of double nationality (d) a non-national of unknown origin (including both EU citizen and non-EU citizens). "International divorces" also includes divorces between two non-nationals (of the same or different nationality) who divorce in a Member State.  Back

20   Resolution (p 31). See also the Law Society of England and Wales (p 16). Back

21   Impact Assessment, p 13. Back

22   Resolution (p 27), Law Society of Scotland (p 20). Back

23   Resolution (p 30). Back

24   The Czech, Dutch and Scottish Parliaments. Back

25   See the submission of Professor Briggs (p 15), and the oral evidence of Professor Beaumont (QQ 5, 41). Back


 
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