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Brussels News February 2008

Impact Of The Lisbon Treaty In The Justice Field
The final text of the Lisbon (or "Reform ") Treaty ("LT") was made available just before its formal signature and adoption on 13 December 2007 in Lisbon. The LT amends the Treaty establishing the European Community ("TEC") and renames it the "Treaty on the Functioning of the Union" ("TFEU"). Much of what is currently in the Treaty on European Union ("TEU") of interest to the Bar will be repealed, but the TEU will survive in reduced form as it contains the provisions on Common Foreign and Security Policy, the competence for which remains intergovernmental. The formal version of the LT can be seen at: http://europa.eu/lisbon_treaty/full_text/index_en.htm. There is also an unofficial consolidated version of the Treaties available at: http://www.iiea.com/images/managed/publications_attachments/consolidated_treaties_draft.pdf.

Several Committees of the House of Lords are currently holding inquiries on the impact of the LT, to inform their debate to be held later in 2008 on the Treaty's ratification. In December, the Bar gave formal evidence in this context, specifically on the LT's impact in the field of justice, liberty and security ("JLS").

Some key features of the Treaty in the JLS context:

• Member State national Parliaments are to be sent consultation documents, proposals, etc (in all fields) as soon as they are proposed by the relevant EU institutions. A national Parliament will then have an 8-week period during which to raise any objections it may have based on the principles of subsidiarity or proportionality.
• The competence of the European Court of Justice in the JLS field will be extended. Under the current Treaty arrangements, preliminary references for Title IV TEC matters can only be made by the national court of final appeal. This will extend to lower courts once the LT comes into force, and will eventually apply to criminal as well as civil justice matters.
• The UK (and Ireland) have negotiated to retain their right to not opt-in-to a proposal, now across the full range of JLS activity (including on measures in the field of police and judicial cooperation in criminal matters, which will be part of the new title IV TFEU)
• If they do not, then they no longer have a vote in Council, and at least in theory, do not take part in Council negotiations. Again, as before, the UK retains the right, at any time, to change its mind and opt in to the measure.
• If the UK (or Ireland) chooses to not opt-in to a measure amending an instrument by which it is already bound, then a qualified majority of the other Member States, through a prescribed and timetabled process, may decide to take the UK out of the original measure altogether.

Some key Reform Treaty changes in Judicial Cooperation in civil matters
Procedurally, there are no real changes. Civil justice proposals have been subject to co-decision by both the European Parliament and the Council since 2000, with qualified majority voting in Council ("QMV") except in the family law field. This continues. The substantive tests for competence have been widened under new Article 65 TFEU:

• Arguably the only real limitation on the Union's competence will be the requirement of "cross-border implications" a phrase which has historically been interpreted very strictly by the Council.
• Note that 65(1) now permits the adoption of measures approximating the law and regulations of the Member States and not just procedural rules as before.
• The list of objectives of possible measures is longer than before, and notably now includes the very wide aim of ensuring "effective access to justice".
• Note that family law remains a special case, with Council unanimity required to adopt a measure, or to introduce an other form of legislative procedure. It is not thought likely that the required unanimity could ever be secured.

Some key Reform Treaty changes in judicial cooperation in criminal matters
All police and judicial cooperation in criminal matters, which were contained in Title VI of the TEU now move across to new Title IV TFEU and what has been known, to date, as "Community", rather than intergovernmental, competence.  Procedurally, this brings in three major changes:

(i) Broadly speaking, the Commission will have the full range of binding legislative options available to it when issuing a proposal in this field;

(ii) Judicial cooperation in criminal matters will now be subject to the co-decision procedure, with the European Parliament as full co-legislator.

(iii) The Council will have to vote by qualified majority to adopt a measure. There is thus no longer a right of veto. Article 69A3 & B3 both provide for a Member State to apply the so-called "emergency brake" to suspend certain categories of proposal in the criminal justice field if it believes that it "would affect fundamental aspects of its criminal justice system".  If no consensus is reached, but at least 9 Member States wish to proceed, then "enhanced cooperation" (Article 280(A - I) TFEU ) may be invoked.

Substantive changes : Article 61(3) et seq and Article 69 (A - E) TFEU

• Article 69(2) d) new catch-all, allowing Council (albeit unanimously) to add to list of objectives at a later date;
• Article 69B(2) New power to establish minimum rules with regard to the definition of criminal offences and sanctions in pursuit of a Union Policy area which "has been the subject of harmonisation measures" (e.g. environmental protection);
• Article 69C creates a new broad power to adopt measures, including harmonising ones, in the field of crime prevention;
• Article 69E - the old chestnut - creation of a European Public Prosecutor - legal basis, procedure for creation, powers and responsibilities are all set out.
• Another key feature of the LT which will impact in the criminal justice field is the accession by the EU to the European Convention on Human Rights. In practice, this will mean that the Commission will have to assess all future EU criminal justice legislation for its compatibility with the Convention.

Other news:

European  Supervision Order  ("ESO")
transfer to their home Member State of suspects awaiting trial, (Ref. 2006/0158/CNS) - a new draft has been agreed by a group of Member States, and is expected to be agreed in Council, which should lead to its adoption in the first half of 2008, and subsequent entry into force in 2009/10.

Probation Proposal
This proposal on the recognition and supervision of suspended sentences, alternative sanctions and conditional sentences was reported previously in this column.  The Council reached agreement on what should be the definitive text on 6 & 7 December 2007. See: http://register.consilium.europa.eu/pdf/en/07/st16/st16374.en07.pdf.  This should be adopted soon, and enter into force approximately 18 months later.

Mutual Recognition Of “In Absentia” Judgments
By the time of reading, a group of countries, including the next two Presidency holders, Slovenia and France, should have tabled a proposal in early January 2008 on the mutual recognition of judgments issued in the Defendant's absence.

Urgent Procedure For References To The European Court Of Justice In The Justice Field
The Court of Justice has been working with the Council on changing its procedural rules to allow for the introduction of an urgent preliminary ruling procedure in the area of freedom, security and justice, specifically for (current) Title IV TEC matters (including family law).  December 2007 saw the informal agreement on the draft Council decision which would bring the necessary procedural changes about (Procedure reference 2007/0812(CNS). Formal adoption should follow shortly. See: http://register.consilium.europa.eu/pdf/en/07/st16/st16305.en07.pdf).

Rome I – Applicable Law In Contracts
The European Parliament and the Council have managed to agree a text which should be adopted in February or March 2008, formally bringing an updated version of the Rome Convention of 1980 into EU law: http://register.consilium.europa.eu/pdf/en/07/st15/st15832 .en07.pdf. The agreed text resolves most of the key problems that the UK had with the original Commission proposal, and thus the UK is expected to opt back in. HMG is currently undertaking a stakeholder consultation to confirm this position.

Mediation In Civil And Commercial Matters
The 2004 proposal for a directive should be formally adopted by Easter 2008

Wills And Succession
The Commission is planning to adopt a proposal following on from its 2005 consultation (see contemporaneous Bar News Brussels reports), during the course of 2008.

European Contract Law
Meetings on this important file held during the November 2007 visit to Brussels by the Chairman of the Bar were used very productively to fix in the minds of key Brussels players the Bar's short and long term goals. A detailed note of the visit has been circulated within relevant Bar bodies. Other interested members of the Bar should contact Evanna Fruithof at the address given at the end of this report.

New Rules For VAT On Services
On 4 December, the Council reached political agreement on two draft directives and a draft regulation aimed at changing the rules on value-added taxation (VAT) so as to ensure that VAT on services accrues to the country where consumption occurs, and to prevent distortions of competition between Member States operating different VAT rates.  The measures are expected to be adopted soon and enter into force on 1 January 2010. See ECOFIN Council conclusions: http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/ecofin/97420.pdf

Company Law
The Competitiveness Council, meeting towards the end of November, called upon the Commission to deliver during 2008 on the follow-up to its mid-2007 Communication on the simplification of the administrative and legislative environment in company law and accounting.  The Council expressly undertook to prioritise any proposals adopted by the Commission next year in this context.

European Patent Litigation System
The Competitiveness Council, meeting towards the end of 2007, held a discussion about a possible future integrated European Patent Litigation system. The debate resulted in some agreement on the parameters of a possible way forward. See page 25 of: www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/intm/97225.pdf

Transparency Initiative – Commission Consultation
In the context of its implementation of this 2005 initiative, the Commission is consulting the public on the Code of Conduct it intends to apply as of 2008 to Interest Representatives engaged in lobbying activities directed at the EU institutions. The deadline for responses is 15 February 2008. See: http://ec.europa.eu/transparency/consultation_code/index_en.htm.