Brussels Office report (February 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:

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(EAW); or superseded, and thus harmless.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 optback-
in. It is also unclear what provisions could be
put in place to fill the gaps, particularly at state-tostate
level. For more detail on the HoL inquiry, see:

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:

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:

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:

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:

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 EUwide
databases etc. See:

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)

and the regulation defining the applicable language
regime (Regulation 1260/2012)

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:

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 codifi cation of
all major company law directives into a single
instrument – expect a proposal this year. See:

The Commission will provide updates on:

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 fi rm fulfi ls the criteria without having to send
in documentation every time they make a bid.
They also simplifi ed the proposed rules enabling
public authorities to subdivide contracts into
lots, so as to enable small fi rms 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:

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:

and can be viewed in full at:

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:

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 fi nal 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:

Developments on these and other current issues
are reported in Brussels News, the regular
newsletter of the Brussels Offi ce for members
of the Bar of England and Wales. Please e-mail:
evanna.fruithof@barcouncil.be for further
information.


Evanna Fruithof
Consultant Director, Bar Council of England and Wales, Brussels Office


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