Europe

Legal Aid

On 27 January, the Council of Ministers formally adopted the Directive on  legal  aid  for  cross-border  disputes 

http://europa.eu.int/eur-lex/en/dat/2003/l_026/l_02620030131en00410047.pdf.

The Directive applies to cross-border disputes in civil and commercial cases, (excluding revenue, customs, administrative and defamation cases) whatever the nature of the court or tribunal. A cross-border dispute is defined as one where the party applying for legal aid is domiciled or habitually resident in a Member State other than the Member State of jurisdiction. The Directive covers legal aid in the form of pre-litigation advice, legal assistance and representation in court. The Council refused the European Parliament’s request to postpone the adoption of the Directive to allow the Commission to present a fresh proposal under the co-decision procedure (provided for under the Nice Treaty, which entered into force on 1 February). The Directive therefore came into force on 31 January 2003 and Member States have until 30 November 2004 to implement the majority of the provisions into national law. They have until 30 May 2006 to implement Article 3 (2)(a) of the Directive concerning the provision of pre-litigation advice.

Company Law

http://europa.eu.int/eur-lex/en/com/pdf/2002/com2002_0534en01.pdf.

A Public Hearing at the Parliament on 28 January left little doubt that there are several issues that could derail chances of adopting a new Directive. A key issue concerns multiple voting rights (this allows different classes of shares to have different voting weights). The Commission’s proposal bans certain legal restrictions that can be regarded as hindering take-over bids (e.g. restrictions on the transfer of securities and voting rights). However, the proposal does not outlaw securities carrying double or multiple voting rights, on the basis that they form part of the system for financing companies and they do not prevent take-over bids. German industry in particular has voiced concern, as multiple voting rights have long been abolished in Germany and the current proposal restricts a host of defensive measures including so-called poison pills, which are permitted in Germany. The Commission believes that any ban on multiple voting rights could raise complex constitutional issues, which could delay adoption of the Directive. Meanwhile, in the Council of Ministers, the UK has thrown its support behind Germany in the debate on take-overs. The German delegation is looking to ban multiple voting rights or alternatively, allow other forms of defences under the Directive. Many argue that the latter option would defeat the main objective of the Directive, which is the creation of a level playing field for cross-border take-overs in the EU. The Parliament’s draft Report on take-overs is due to be presented to the Legal Affairs Committee in March.

Civil Law

An Action Plan on European Contract Law, adopted on 12 February, marks  the  European  Commission’s  second  phase  in  a wide-ranging  consultation  on  contract  law

http://europa.eu.int/comm/consumers/policy/developments/contract_law/com_2003_68_en.pdf.

The Action Plan, which proposes a combination of non-regulatory and regulatory measures for shaping the future of European contract law, focuses on three key aims: 1) improving the existing body of EC legislation in the field of contract law, 2) the elaboration of EU-wide standard contract terms, 3) consideration of the merits of sector-specific harmonisation. The Action Plan is a follow-up to the Communication on the harmonisation of contract law, published in July 2001 http://europa.eu.int/comm/consumers/policy/developments/contract_law/cont_law_02_en.pdf.

The Communication sought opinions on whether the problems relating to the interpretation and conclusion of contracts, pose an obstacle to the proper functioning of the Internal Market. The results of that consultation showed that the majority of respondents favoured two main approaches relating to the drafting of non-binding principles and a review of existing EC contract law. The Commission is inviting interested parties to send responses to the Action Plan by 16 May. On a related matter, this autumn, the Commission will be reviewing the results of a study on non-contractual liability and property law as they relate to contract law, in order to determine whether differences in Member States’ domestic legislation pose problems for the Internal Market.