Justice 1 Committee, 13 Sep 2005

Meeting date: Tuesday, September 13, 2005

Official Report 131KB pdf

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European Commission Green Papers

Good afternoon, Brussels. I am Pauline McNeill, the convener of the Justice 1 Committee. My colleagues will introduce themselves when they ask a question. We thank you for allowing us to hold a videoconference with you this afternoon. Claire Newton of the Scottish Executive Justice Department is with us. I think that she wants to say hello.

Hello and good afternoon, everyone.

I am not sure whether you wish to say anything by way of introduction. We have a number of questions to put to you.

Good afternoon. I am Olivier Tell. My colleagues will introduce themselves.

Hello. My name is Inga Schmid.

I am Monika Ekström.

Monika Ekström is in charge of the green paper on divorce. I am in charge of succession. Perhaps the committee knows our other colleague.

I am Ian Duncan. In a sense, I am one of you; I have just been sent across the channel.

Hello. Monika Ekström has met most committee members. It is good to talk to you again, Monika. We will begin with the first question, which comes from Margaret Mitchell.

Good afternoon. I want to explore some of the issues that surround the justification for harmonisation. I understand that under the current legal system a number of states are adversely affected by harmonisation. Are they experiencing difficulties or incurring additional expense because of it?

I guess that the question is based on the first question that the committee sent to us.

Yes.

I think that you want to know about the basis of the proposal and whether there is a demand from citizens for harmonisation.

Yes. The question is whether there are problems with the current system that would justify harmonisation.

We do not have detailed statistics on the number of international divorces. I think that I mentioned that when I met you. We asked the member states to provide us with figures to see whether we could quantify the problem and they told us that they were not able to do so. We have therefore entrusted an external contractor to do what we call an impact assessment before we make any legislative proposal. One of the important parts of the impact assessment is getting statistical evidence on the number of international divorces, defined quite broadly. We definitely need that. In broad terms, we know that there is increasing mobility and a sustained high level of divorces, so the issue affects many people. However, we cannot quantify it specifically.

We also carried out a study in 2002, when we had a specific question on forum shopping. The question was whether the lack of harmonisation raised any practical problems. That study is now available on our website. It was based on interviews with legal practitioners, lawyers and citizens, but it was difficult to get a clear-cut reply. Basically, we found that forum shopping as such is not really an issue when it comes to the grounds for divorce. It is more of an issue when it comes to the financial—

I am sorry to interrupt you, but my question is specifically on the issue of wills and succession.

I am sorry. I thought—

We will be dealing with divorce in the second part of the meeting. The first question is specifically on wills and succession and the need for harmonisation under the current legal position, because there is a perceived difficulty. We are looking for evidence. We know, for example, that there are 50,000 transnational successions a year, but we need to know what percentage of those experience difficulty, to justify the move towards harmonisation.

I am sorry. We thought that you would like to start with divorce. I shall try to give you an answer. Your figures come from the study that the Commission has published on its website. The study contains a lot of statistics relating to citizens of one member state who live in another member state. We have to be able to rely on the figures. As you know, thousands of British and Scottish citizens are buying houses in the south of France, so I guess that there could be some problems with their estates. The figures are not so important; we are at the beginning of our work.

Why does the European Union want to intervene in the matter? First, the Commission has a clear political mandate from the Council to work on the matter, which is currently excluded from the scope of all European instruments. As Monika Ekström said, we shall probably carry out an impact assessment before launching a legislative initiative, but that is not the most important thing. What is important is that, even if it applies to only 1,000 cross-border estates every year, it may be useful to have European legislation.

Let us take cross-border child abduction as an example. How many cases of cross-border child abduction do we face in the EU? Perhaps between 500 and 1,000; we do not know. We should not decide not to adopt a regulation because of the numbers involved. Indeed, we did adopt a regulation to try to resolve those dramatic situations.

According to the study that we launched, thousands of European citizens are facing problems with succession. The Commission believes that the fact that there are numerous administrative and practical obstacles is important. We need to give those citizens an answer. That is why we have started in this way.

As I say, we are just at the beginning. The next step after the green paper is the formation of a working group of academics, experts, lawyers, solicitors and so on to help the Commission to prepare its work and, probably, to produce an impact assessment before any initiatives are taken.

Good afternoon. I would like to ask about succession and wills. Do you have a feel, even at this early stage, for how you will ensure that all member states sign up to the proposals that you develop? In the past, not all member states signed up to the agreement on successions in moveables, for example. How will you ensure that each state signs up to whatever comes out of your deliberations?

I think that you are referring to the Hague conventions. It is not only in the field of successions that many of the Hague conventions have been ratified by very few states. However, in this case, the timing and framework are not the same; we are in a European Community framework. There is a political will to go ahead. That is the second reason.

I have a third reason. I do not wish to criticise the Hague conference, but the Hague conventions are very complex. The Hague convention of 1989 has two, three, perhaps four grounds for a rule of conflict of law. I cannot tell you today what the proposed rule for conflict of law will be. However, when I was in London I said that it should be as simple as possible.

We are trying in the internal market to build rules for citizens and businesses. These rules should be as simple as possible: everybody should be able to understand the regulations, not just notaries. I hope that I have answered your question.

Yes, you have. Thank you.

I have been a member of the Scottish Parliament for five years. Other members may have different experiences, but no constituent of mine has ever told me that I need to change European law because it has held them back in some way. That is my first point. I genuinely do not believe that there is a demand in Scotland to change our rules. Has any committee member had such an inquiry?

One.

We have one here. It is important to understand where the demand, if it exists, is coming from. Olivier Tell says that there is a political will to go ahead. There may be such a will in some member states, but I do not know that I am willing to accept that it exists in all member states.

Our witnesses may be aware—Ian Duncan certainly will be—that the Scottish Law Commission, which takes a long-term view of laws that we want to form, is currently looking at succession and wills. You can see some of the difficulties that we will face: we are doing our own family law reform at the moment; there are the EU law reforms; and there is the work of the Scottish Law Commission. The situation will not be simple.

Yes, but any organisation of substantive law now or in the future is, to a great extent, hard to imagine. Our intention is not to harmonise substantive law; we will not change the Scots law or the French law of succession. You are not alone in being in the process of changing or revising your substantive law. That is also the case in France, where a new bill has just been published. That is why we want to work only on the cross-border elements and to harmonise conflict of law rules in that respect; we do not want to touch substantive law.

I am aware that there might be some interference with or consequences for substantive law. However, we are trying to avoid that as much as possible. As far as I understand, in Scotland, you have a kind of reserve for rights of the children, for instance. That also applies in other countries, although not all. In principle, such provisions should remain as they are. It is important to understand that conflict of law rules are neutral; they do not affect the substantive law in itself.

Our point of departure is to try to make life simpler for citizens; it is also a question of political will. It is not, as the media have said, about harmonising the substantive law. Rather, it is about trying to regulate transnational situations in a way that makes things easier and better for the citizen. I do not think that citizens are aware that the European Union is doing that. Perhaps that is why your constituents are not yet informed.

On the subject of political will, when the European Council adopts its conclusions, those are signed by all heads of state. Some member states will of course be more interested in certain matters than other member states will be.

The Commission has proposed the creation of an expert group to help it in its work on the subject for the months that follow. It would be nice if Scottish experts or lawyers could apply to participate in that group.

That is an invitation that the Scottish Executive might take up for us.

Monika Ekström mentioned forum shopping. What are the implications of forum shopping for Scots law? In Scotland, if someone has immoveable property and gets divorced, Scots law is applied to that property. I am sorry: this should be the other way around. We are talking about moveable property and succession. What will forum shopping do in relation to Scots law? Do you envisage the situation changing? The information before us indicates that there is no political will to make a change and we do not see there being a problem with forum shopping.

I saw from the mail that was sent to us by Claire Newton that you have the same joint system as that which applies in France, for example, which means that any conflict of laws for estates, succession and moveables relates to the location of the place of habitual residence or of the domicile—although habitual residence may be different from domicile, especially if the common-law meaning of domicile applies.

On immoveables, you refer to the lex situs—the law of the place where the immoveables are situated. That situation is not uncommon: it applies in France, Belgium and Luxembourg, for instance. To an extent, it also applies in all EU member states. Any new instruments on conflict of law rules and on jurisdiction would have to take that into account. At this stage, we do not know whether a single conflict of law rule might apply to all the estate or all the goods concerned, or whether we will develop exceptions or a joint system such as that which exists in Scotland.

In any case, there are technical issues to address. The Commission is perfectly aware that any text that we put on the table at the Council will have to address those matters. Otherwise, it will not be accepted that a court or administrator in one member state can rule on the succession of immoveable property in another country. I do not know whether I am making myself clear. For the moment, I cannot tell you what solution we are going to find, other than that of the dualist system.

I offer a comparison with insolvency and the insolvency regulation that we have adopted. To some extent, the instrument is close to the situation with succession. We have decided that the insolvency will be created at the location where the debtor has their principal place of business. We also have the potential to create a secondary insolvency where the debtor has establishments, assets and so on. That is something that we can perhaps adapt for succession—I do not know at this stage. In any case, we will take seriously into account the question of moveables.

I want to talk about the proposals relating to the registration of wills. Once someone is dead, there is already a process for registering wills, although it applies only to people who leave sufficient assets. Many people will be dealt with without ever going to court and without registering wills. Scotland probably has most of what we require in that respect.

The proposal is that, prior to death, when a will is made, the will has to be registered. I have a couple of questions. First, do you envisage that the details of the will will have to be published? There are serious privacy concerns about that idea. Secondly, do you envisage that everyone will have to register their will? At the moment, people with little in the way of assets avoid all the costs of going to lawyers and registering a will, so we have a cost-effective system. What would be the advantages of making changes for the citizens of Scotland?

I am sorry to disappoint you, but I have no answers to those two questions at this stage. We have created the expert group to discuss precisely those kinds of issues.

The idea of the register of wills comes from political will. It harks back to the Hague programme, which was adopted last November by the heads of state and Government, to see whether it would be possible to have a register of wills. In Scotland, you want to preserve your informal system of wills. However, there is a convention—the Basle convention of 1972—which is applicable in some member states, although not a lot of member states. A process is also going on in France, Belgium and perhaps Slovenia to interconnect different registers of wills. At this stage, the Commission will examine all of that and will see whether such a system is feasible. At this stage, I cannot tell you whether it is feasible.

I suggest that the absence of a prescription in law of how a will must be expressed, written and registered—which is the situation in Scotland—does not mean that the system is informal. The law is perfectly prepared to recognise, and is able to deal with, a will that is expressed in any form that makes clear the person's intention. If, for example, in the last hour of my life I write my intentions with a pen on the back of my hand, in Scots law that is likely to be a perfectly legal and formal expression of my wishes. It would take a hard sell to persuade the people of Scotland that they should spend much more money to achieve something that does not appear to cause any practical difficulties for the overwhelming majority of people. On that basis, we should probably move on.

I understand your concern. I refer to the opinion that was sent to you by Dr Elizabeth Crawford and Dr Janeen Carruthers on that question. First, I can tell you clearly that the registration of a will would have a binding effect on the will, so we would have to be careful to avoid the kind of situation that you described. If a person changed their will in the last hour of their life, the registered will would prevail—erga omnes, so to speak.

Secondly, we do not know whether the register will be mandatory, but we have been told that some member states need such a register. If it is useful in some circumstances to register a will for legal safety, legal certainty and so on, why should we not try to do that for all? With regard to the observations from Scotland about this, a Scottish citizen living in the south of France, for example, could register their will in France and in Scotland at the same time. We are flexible on that issue, but the legal issue is very important for us.

Before we move on, I want to be clear about what you said to Stewart Stevenson. When I told you earlier that the Scottish Law Commission was looking at the issue of wills and succession, you seemed to indicate that what you are doing does not interfere with that. However, you said to Stewart Stevenson that you are considering the possibility of asking all member states to register wills. Surely that would cut across what we are doing here.

Yes, you are right. There are different types of issue in the green paper and in the Hague programme. There are the so-called private international law issues: the conflict of laws, jurisdiction and the enforcement of decisions. They are completely neutral in principle, with exceptions with regard to the substantive group. The other issue is the register of certificates of inheritance. Those are different types of issues, which touch on substantive laws. That is why we must be careful.

Thank you. I will move on to the issue that Monika Ekström originally touched on, which was applicable law and jurisdiction in divorce. Are any themes emerging from the consultation responses that you have received?

No. It is difficult to see one theme clearly emerging from the consultation replies. We have not received many replies yet, but I hope that we will receive more and that they will be as detailed and constructive as the one that we received from you, which was extremely useful. That is the kind of reply that we would like to receive but which we do not always get.

Most of the replies so far have come from Germany, because for some reason German lawyers take a great interest in this matter. Most of those lawyers are favourable towards the idea of harmonisation. The German system is different from the Scottish one.

Does that mean that the German lawyers favour changing the German system, or do they want to impose their own system on everyone else?

In Germany, the courts are used to applying foreign law; they do so in divorce proceedings. Common nationality is the first criterion, which means that for a Belgian couple living in Germany, the German court would, in principle, apply Belgian law. Harmonisation is not in itself a novel thing for the courts in Germany.

My questions are on applicable law. Given the differences between member states—you gave the example of the differences between Germany and Scotland—is it feasible to harmonise the rules across the European Union?

Let me put it this way. It will be extremely difficult to find a unanimous decision on conflict-of-law rules in divorce matters. Not only are the conflict-of-law rules different but the substantive divorce rules are also very different. If the substantive divorce law were fairly similar, it would not matter what law applied, but that is not yet the case. It is a matter of fact that, for political, historical and religious reasons, the substantive law on divorce is divergent. It therefore matters which law applies. That is perhaps why the member states apply such different criteria when determining cases. In the green paper, we said that finding one uniform set of connecting factors will not be an easy task.

If members look at the paper, they will see that applicable law is only one of several options. We know that the issue is difficult, which is why we have tried to put forward other options that could lead to the same result. We do not care too much about the method; for us, what matters is the result.

You said that many different systems are in operation. I apologise for returning to the subject of forum shopping, as you spoke about the subject earlier in answer to another question. What evidence is there that forum shopping is happening? Is it an issue that is more theoretical than actual?

First, let me apologise for answering a question earlier that I was not asked—I misunderstood. In 1998, the heads of state said in Vienna that we should look at the question. Everyone had forum shopping in mind and we were asked to find out whether anything could be done about it under the applicable law for divorce.

We commissioned a study on whether the lack of harmonisation would lead to practical problems and particularly the problem of forum shopping. Basically, the study said that when it comes to the grounds for divorce, forum shopping is not the main issue. It might be an issue in countries such as Italy and Ireland, where the divorce laws are quite strict and there may be an incentive to circumvent the law by going to another country. However, it is on financial matters that people are keen on forum shopping, which makes sense. We have read the study and taken note of its findings. Members will see that the green paper on divorce does not mention the term "forum shopping", because we do not think that it is an issue.

In the current situation, it is extremely difficult for couples to know which law applies to international divorces. Sometimes, couples can end up in situations that they do not expect to be in at all. In most cases, couples are not able to influence decisions because there is no party autonomy. The focus has changed; we are not at all interested in forum shopping, as everyone now says that it is not an issue. We are looking into the issue more in terms of legal certainty and predictability. We are also trying to increase party autonomy a little, but with strict safeguards, of course. That is our perspective on the issue at the moment.

Another linked issue is what we call the rush to court. You might know that under the Brussels 2 regulation the one who strikes first defines which will be the competent court. That has been criticised because, unfortunately, a spouse might ask for divorce before asking for mediation. They might not go for mediation because the other spouse might seek another court. That is what we want to avoid, as it is not a desirable result. We want to see how we can prevent spouses from rushing to court.

That is very helpful in letting people know what is likely to follow. It helps to avoid uncertainty about what might arise.

May I make a general point? Of course, our work will have an effect beyond this year, as more and more people are living in other EU member states and more and more people are marrying people who are residents of other EU member states.

The green papers on divorce and on succession and wills raise the important issue of the modernisation of the law. People want more and more freedom, and more and more party autonomy. It is strange that we have a regulation on divorce that contains six or seven grounds of jurisdiction, but there are no grounds of jurisdiction in the choice of the court in the applicable law. I find that strange because in most EU countries there is divorce by mutual consent. Under substantive law, couples can divorce by mutual consent, and the EU cannot interfere with substantive law. Consider the rules of conflict of jurisdiction: if two Finns or Scots living in Italy want to divorce, they cannot go back to Edinburgh to divorce because that is not possible according to the Brussels 2 regulation. Is that not correct?

I want to ask about the implications for Scottish law. I realise that you probably do not have the answers up front, but I would like to put forward some concerns. For instance, the proposals might have implications for the position in Scotland. Scotland has no tradition of applying the law of other jurisdictions in divorce proceedings. Have you considered the additional costs and delays to individual citizens and families caused by applying foreign law?

That is definitely something that we are taking into account. I assure you that Scotland is not the only member state to apply its own national law, the lex fori, to divorce proceedings. Seven member states do the same.

Those member states have made their views known to the Commission. We are very much aware of that situation. It is necessary not to cause delays or costs. Again, the national laws are different. In some member states, it is for the parties to adduce evidence of the provisions and existence of foreign law, which will entail costs. However, in others, it is for the courts to do that on their own initiative, which does not necessarily entail costs for the citizens. However, we are aware that in certain member states there are costs for the citizens.

The green paper outlines the possibility of buying in different options. It should be possible to reach a solution that would not entail the application of foreign law. We have tried to produce a document that outlines such a possibility, and I ask the committee to study it carefully. We know that that is a major problem for certain courts.

Thank you. That is helpful.

Further to Marlyn Glen's question, I have another question on that subject, to which Monika Ekström has demonstrated that she is very sensitive. If two European foreign nationals who are living in Scotland want to divorce, what is the problem with applying Scots law to their divorce? Going back to basic principles, I wonder what is so wrong with applying the law of the country—whether that happens to be Scotland or France—in which the couple live. What detriment would arise, and how would that compare with the detriment that would result, as Marlyn Glen mentioned, from the inevitable costs and delays that would be involved in requiring the judiciary to understand which national law applies?

In those cases, there might be no problem because, although member states have differing divorce laws, there are also convergences among them. For example, most member states allow divorce by mutual consent after a year or so of separation, so people who ask for a divorce in those member states will not have a problem. However, if someone who happens to live in Poland or Italy seeks a divorce, there may well be some serious consequences. Although it is true that the position in Scotland might not present a major difficulty, those member states whose divorce laws are more severe could think that there is a problem. Vice versa, if two Irish nationals move to another member state and one spouse immediately files for divorce in that member state, it is arguable that the legitimate expectations of the other spouse might be violated.

One must always try to keep a European perspective on the issue. We need to bear in mind the fact that there might be conflicting interests between the spouses and that the interests of the citizens and the interests of the judiciary might also conflict. Those interests sometimes coincide, but that is not always the case. We need to keep all of that in mind in preparing our proposals, which will need to be very carefully thought through.

We need to take account of the two issues—the issue of jurisdiction and the issue of applicable law—at the same time. The two issues are connected, which is why they are both dealt with in the green paper.

In answer to your question, of course it is considered normal in Scotland for a judge to apply Scottish law to a French couple living in Edinburgh who want to divorce. Similarly, it is considered natural in France for a judge to apply French law to two Scots living in Paris. However, as the green paper suggests, the issue of applicable law and the issue of jurisdiction of the courts are linked. For instance, as Monika Ekström mentioned, two Swedes—or two Italians or two Danes—who are living in Ireland might not want to wait four years for a divorce. Although it might be said that Irish law should simply apply, the issue might be solved if the couple could choose a Swedish court, which would apply Swedish law. That is why the green paper suggests that we could solve the issue of conflict of law by providing rules on jurisdiction.

I understand that logic, but let me make a simple point in answer to the rather complex application of law that has been suggested. It is arguable that if someone chooses to live in Ireland or Scotland or any other EU country—which is, in part, the point of having the European Union—they should abide by the jurisdiction rules in that country. What is so wrong with that? If someone chooses to live in a particular country, what is so wrong with the idea that they should simply abide by the decisions of the court in that country? If they do not want to live there, they can go to another country the rules of which they approve. That is another perspective on the issue.

Yet another perspective arises in relation to citizens of the continental states—of which there are several—that are not subject to the lex fori, who are subject to the law of their nationality, even if they would prefer not to be. I understand the Scottish perspective perfectly well because I am Swedish and we, too, apply the lex fori. The green paper gave an example of an Italian couple who lived in Germany. The conflict-of-law rules would mean that, regardless of whether they went to a court in Germany or in Italy, the result would be the same: the law of the couple's nationality would apply. In other words, Italian law would apply, even if the couple did not feel Italian any more and would much prefer to be governed by German law. It is important that we keep all the different legal traditions in mind when we consider a future regulation. That is what makes the process rather complex. We are very much aware of what you say and, in substance, I do not disagree with it.

I suppose that the issue boils down to whether there is a problem of jurisdiction that needs to be fixed and whether there are many individual citizens of the European Union who feel disadvantaged by the present arrangements. I go back to a previous observation when I say that I have not yet met any such citizens. There have been a number of international divorces in my family and I note that the next marriage in my family is between a Scot and Dane, who of course will not be governed by the proposals. No one seems to be terribly worried about the situation, so why are we spending so much time and effort on the matter, especially when we introduced the Brussels 2 regulation, which appears to touch on the issue, only some six months ago?

You are right about the new regulation, but it dealt not with applicable law but with jurisdiction and recognition in divorce matters. However, as it turned out, divorce matters were not discussed at all; the negotiations focused on parental responsibility.

Everyone agrees that we should at least consider the issue. If everyone tells us that there is not a problem and that our exercise is merely academic, so be it. We have launched a consultation and we will look at what the consultees and practitioners tell us. We are well aware that we need more statistics and we will get those from the consultant.

Does Claire Newton want to ask anything?

No—I have no questions.

We have no more questions. We are grateful for the time that you have given us. The meeting has been a valuable opportunity for us to engage with you. I know that, for Monika Ekström, the process feels long but, for us, it feels very short. We are determined to stay involved in developments. You have made helpful offers of involvement for Scottish lawyers in the expert group. At some point in the future—perhaps next year rather than this year—we hope to join you in Brussels to discuss where we have got to with the green papers. Thank you very much.

Thank you. The videoconference was a pleasure for us. Goodbye. We will maybe see you another time, in Brussels or in Scotland.

Au revoir.

Meeting closed at 16:25.