January 2013

HMG's Balance of Competences Review 2013 - 2014
Every quarter over the next two years or so, individual Government Departments will prepare reports drawing on evidence submitted to them in response to individual calls regarding the balance of competence between the UK and the EU, across the range of EU activity. The EU Law Committee of the Bar Council is considering the first batch of calls, and will coordinate any positions taken by the Bar over the next two years, in tandem with relevant practice areas and Specialist Bar Associations. Further information is on FCO website: http://bit.ly/LhYRyz.

Protocol 36 to the Lisbon Treaty - the 2014 Opt-out - update
You will be aware that HMG is to take a decision, before 1 June 2014, on whether or not the UK should opt-out of a block of pre-Lisbon Treaty criminal justice measures; and if it does, whether and how it could opt back in to some of them. The House of Lords EU Select Committee is conducting an inquiry into the decision. In December 2012, the Bar Council submitted a written response, and by the time of reading, will also have given oral evidence to their Lordships.

Our position is clear - it would not be in the UK's interest to exercise the opt-out, even if it were swiftly to be followed by individual opts-back-in to certain measures. In our view, the measures it affects are either vital (e.g. those facilitating police co-operation); useful, and better than the alternatives (e.g. the European Arrest Warrant (EAW); or superseded, and thus harmless. Beyond that, the Bar is amongst many concerned at the likely loss of influence and goodwill among other Member States and with the EU Institutions; the very real likely cost to the UK in cash terms; not to mention the potential practical chaos of interim measures during any period awaiting a partial opt back-in. It is also unclear what provisions could be put in place to fill the gaps, particularly at state-to state level. For more detail on the HoL inquiry, see: http://bit.ly/Zx8KPR

Bar Chair at the Fundamental Rights Conference 2012
The Fundamental Rights Agency (FRA) co-hosted a conference in Brussels in December last, on Justice in Austerity, a conference title echoing the Bar's own successful event of June 2011. Maura McGowan QC, Bar Chairman for 2013, gave a contribution on the challenges on the ground as a result of major cuts to legal aid budgets, which was very well received. For conference highlights, go to: http://bit.ly/Xerz5Z and http://bit.ly/Wo9G1W

Revised Brussels I regulation adopted and in force
After several years of work, the recast Brussels I regulation (Regulation 1215/2012) was formally adopted in Council in December 2012, and entered into force 20 days following its publication in the Official Journal of the EU (20 December - OL L 351/1 - see: http://bit.ly/USN6j4

The new regulation replaces regulation 44/2001 on recognition and enforcement of judgments in civil and commercial matters, and applies to both the UK and the Republic of Ireland.

The key change is the abolition, with safeguards, of the "exequatur" procedure, which had been a pre-requisite to having a judgment in civil and commercial matters recognized in another EU country. Two other issues that were of particular concern to us were the rules on 'lis pendens' and the application of the regulation to arbitration. The latter is excluded from scope, and the former has been clarified.

Common European Sales Law (contract) - work continues
The Bar has been engaged in the more than decade-long debate on this file, which led to the adoption in October 2011 of the Commission proposal for a regulation creating the Common European Sales Law ("CESL", Procedure reference COD(2011)0284) an optional instrument to be used for cross-border B2C sales, and B2B ones involving at least one SME. The Council of Ministers and the European Parliament (EP) are now working on their own versions of the text. As I write, the Bar should be finalising a detailed position paper intended to assist in that process. The key EP committee has hinted that it may narrow the scope of the instrument, in the first instance, to internet-based sales. Its draft report should be out in February / March 2013. HMG has also presented its formal position paper on the proposal, which sets out its ongoing concerns about lack of need, legal uncertainty and cost. See: http://bit.ly/yusECS

Breakthrough agreement on ADR and ODR for B2C disputes
Just before Christmas, the European Parliament and the Bar Council reached agreement on the texts of two key legislative proposals which together will make available, throughout the EU, alternative means of dispute resolution (including online - hence the "O" in ODR) for contractual disputes between consumers and traders, arising from the sale of goods or the provision of services. Formal adoption of the texts should follow swiftly. For more details, go to: http://bit.ly/VKd1d0

E-Justice progress reports
In early December, the JHA Council examined a couple of reports that provide an overview of the current status of the myriad projects under the European e-Justice action plan. Examples include the use of e-signatures, ID cards; electronic submission of court documents; searchable EU wide databases etc. See: http://bit.ly/Xesgfw and http://bit.ly/XesnrC

EU Unitary Patent System becoming a reality
After more than 30 years of effort, the EU is close to creating a Unitary Patent system. It has adopted two of the three necessary elements: the regulation creating a unitary patent (Regulation 1257/2012) http://bit.ly/UILY3y and the regulation defining the applicable language regime (Regulation 1260/2012) http://bit.ly/VKdjk8

The third element, the draft intergovernmental agreement setting up a Unified Patent Court, should be signed off this month (February). You will recall that its seat has already been agreed - Paris, with specialist offices in London and Munich.

Advantage: The unitary patent will be obtained by filing a single application at the Munich-based European Patent Office (EPO). Once granted, a unitary patent will be valid and effective in all participating Member States (all but Spain and Italy), without any further steps being required. The new Unified Patent Court will have exclusive competence in cases relating to the validity or infringement of classic European patents and patents with unitary effect, thus eliminating the risk of multiple patent lawsuits in different Member States for the same patent.

EU consultation on the protection of non-patentable trade secrets
The European Commission is consulting the public on how to go about protecting valuable business data in the Internal Market that is not patentable, such as incremental technological improvements, or marketing data. They are concerned that the lack of such protection, or adequate redress which might deter theft, is hampering the sharing of valuable information across borders between business partners, which in turn is hampering business development. The deadline for responses is 8 March 2013. The Intellectual Bar Association may respond. See: http://bit.ly/Ug5guC

Commission's Action Plan on the Modernisation of Company law
In December 2012, the Commission published an Action Plan (AP) outlining future initiatives in the areas of company law and corporate governance. Its annex contains a useful table setting out a timeline of the main initiatives foreseen. There are three main categories of initiative, respectively intended to:

1. Encourage and facilitate long-term shareholder engagement
2. Increase the level of transparency between companies and their shareholders, and
3. Simplify cross-border operations of European undertakings.

In addition, the AP foresees the codification of all major company law directives into a single instrument - expect a proposal this year. See: http://bit.ly/XtSBri

The Commission will provide updates on: http://bit.ly/fpPXt

Proposals to modernise the EU public procurement rules
Regular readers will know of the ongoing negotiations on an important package of measures aimed at overhauling the EU public procurement rules, among them the proposal for a directive on Public Procurement (COD(2011)0438. In December, the lead EP committee adopted its report and the Council of Ministers reached its own general approach. These respective texts will inform the positions taken by both co-legislators as they try to reach formal agreement. The EP's guiding principle is that public procurement contracts should go to the "most economically advantageous tender", assessed on environmental or social criteria. To cut red tape, MEPs propose to establish a "procurement passport" to show that a firm fulfils the criteria without having to send in documentation every time they make a bid. They also simplified the proposed rules enabling public authorities to subdivide contracts into lots, so as to enable small firms to bid for them. On the key issue of the directive's application to legal services, it appears that both the EP and the Council are minded to exclude certain categories from scope (Article 10). See: http://bit.ly/UCOur7 and http://bit.ly/TGwM7b

Reform of the EU banking sector
The European Commission recently conducted a public consultation on the recommendations of the High-Level expert group on the Reform of the Banking Sector. The results of the consultation are summarised at: http://bit.ly/XDtLb3
and can be viewed in full at: http://bit.ly/URhcWd

Banking Union moves closer
In mid-December, the EU Heads of State reached a general approach on two proposals aimed at establishing a single supervisory mechanism (SSM) for the oversight of banks and credit institutions in the Eurozone, and potentially beyond. The two regulations respectively confer supervisory tasks on the European Central Bank, and modify regulation 1093/2010 establishing the European Banking Authority. See: http://bit.ly/UvIL4O and http://bit.ly/TGwRb0

If formally adopted the combination will create a two-tier structure with major Eurozone banks falling under the direct supervisory control of the European Central Bank (ECB), and a second tier remaining under the supervision of national regulators, which in turn would be answerable to the ECB. The legal niceties of these arrangements have been the subject of criticism in recent weeks and are likely to take many months to iron out. For those interested, note also that on the eve of the Council breakthrough, the House of Lords EU Sub-Committee on Economic and Financial Affairs published its final report, with full recommendations on the reform of the EU Banking sector, entitled European Banking Union: Key issues and challenges.

European Judicial Training network online courses
I thought I'd draw your attention to the website of the European Judicial Training Network, which does as the name suggests. There are currently links to three free e-learning courses, respectively on: Parental Responsibility and the Brussels II regulation; the European Order for Payment Procedure; and Creating a European Order for uncontested claims. See: http://bit.ly/WoczzY