Frances Fitzgerald (Dublin Mid West, Fine Gael)

I thank the Leas-Chathaoirleach for his congratulations, which I appreciate. This amends an existing proposal that sets out jurisdiction rules that apply in international cases involving mainly EU citizens. On behalf of the Minister for Justice and Law Reform, I thank Senators for agreeing to deal with this matter at short notice and within a very tight timeframe. Their co-operation in this matter is very much appreciated and it is to be hoped it will ensure Ireland can play a full part in the negotiations, which have just begun, on this very important instrument.

The Commission has sole right of initiative on legislative proposals in the civil justice area and the timing of the presentation of such proposals is within their hands. This proposal was presented just before Christmas. Its legal basis is to be found in Title V of Part Three of the Treaty on the Functioning of the European Union. In consequence, the terms of the protocol which we share with the United Kingdom, whereby we have three months to exercise our option to take part in the adoption and application of relevant measures, apply. We have been informed that the three month period will expire on 4 April, hence the reason for bringing the matter to the Seanad and the Dáil. Accordingly, if we are to exercise our option within the required timeframe, it is necessary to obtain the prior approval of both Houses of the Oireachtas before that date. Given the intervention of the general election, it was not possible to deal with the matter until now.

Senators will be familiar with the procedure for protocol measures since a large volume of proposals which attract the provisions of the protocol have come before the House in recent years. In the civil area alone more than 20 such proposals have been considered by the House and this is testimony to the volume of activity in this area. It should perhaps be noted that this proposal is the first civil law measure to be presented since the Treaty on the Functioning of the European Union entered into force. However, given that the Commission has very ambitious plans in this area, it is likely to be the first of many such measures in the coming years.

The essence of the proposal is captured by its somewhat unwieldy title which points to the fact that it is concerned with court jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. It is important to note that the proposal is only concerned with international cases which, at its simplest, would be reflected in the fact that the plaintiff and defendant are located in different member states. It is also important to note that the purpose of the proposal is merely to introduce certain amendments into its parent regulation, commonly referred to as Brussels I.

The amendments arise from a process of consultation which was launched by the Commission in April 2009. Arising from that consultation, it became clear that there was scope for improving the operation of the Brussels I regulation which has been in force since March 2002. That proposal was presented in September 1999 and at the time Ireland exercised its right to opt in to its adoption and application. Our timely participation in the parent instrument underlines the vital importance of our participation in its successor. This is especially the case as we have no particular difficulties with the proposal made and it would be unfortunate if our failure to opt in were to be misconstrued as in some sense being a manifestation of hostility to its content. Failure to opt in would also run contrary to the commitment we have given to take part in relevant measures in the justice area to the maximum extent possible.

The original Brussels I regulation is the primary instrument governing the recognition and enforcement of civil and commercial judgments within the European Union. It provides a degree of certainty on which court in which member state will take jurisdiction in an international case. That is important. It also provides a mechanism enabling judgments given in one EU member state to be recognised and enforced in each of the other member states. In essence, what that means is that such judgments, when they go through an enforceability process, can be enforced in a member state as if they were judgments which had originally been given in the member state.

There is considerable history attaching to the proposal which is the subject of this debate in that, before the Brussels I regulation was adopted, these matters were governed by a convention which dated from 1968 and was ratified by Ireland in 1988. Participation in the new instrument is part of the progression towards making access to justice easier and more efficient for all citizens which, in this context, includes consumers, economic operators and individual litigants in a wide variety of contexts.

The original Brussels I regulation is widely viewed as being a seminal instrument in the area of judicial co-operation in civil matters. The new proposal is essentially an add-on to the existing proposal and, as I indicated, preliminary examination does not suggest it gives rise to particular difficulties in so far as Ireland is concerned. The intention underlying it is to simplify further the recognition and enforcement regime for judgments in the civil and commercial area. This has the potential to be of particular benefit to the business community as studies suggest the complexities attendant upon cross-border litigation are a significant disincentive to doing business in another jurisdiction.

It is the case that, under the protocol, we may accept a proposal any time after it has been adopted. However, it is our considered view that early opt-in to the discussions will maximise our ability to influence the shape of the final outcome. It will give us voting rights and enable us to participate in alliances with like-minded member states in the event that this becomes necessary in order to defend a particular policy stance. It will also confirm our commitment to continued participation in a regime which has been operating successfully in this jurisdiction for more than 20 years.

I will deal briefly with the key elements of the new proposal. The first and most important element involves the abolition of a procedure known as exequatur. What this involves is a procedure whereby a declaration of enforceability is required before a judgment given in one member state can be enforced in another. In Ireland, a declaration of this kind is obtained by way of application to the Master of the High Court. Commission figures suggest that within the European Union the overall cost of exequatur proceedings amounts to more than €47 million per year. Its analysis also suggests the time for obtaining a declaration of enforceability can vary considerably from member state to member state. The costs and time involved in obtaining such a declaration are perceived to be inimical to the proper functioning of the Internal Market and present a real barrier to doing business within the Union.

It is recognised that the abolition of exequatur carries with it certain risks and, for that reason, a number of remedies to protect the rights of the defendant are envisaged. These include the right to contest a judgment in the member state of origin if the defendant has not been properly informed about the original proceedings in that state. Also included is the right to contest any other procedural defects that may have arisen before the court of origin and which may have infringed the right to a fair trial.

Another element of the proposal relates to the operation of the Brussels I regulation within the international legal order. Clearly, this is a matter of some delicacy since it involves relationships with third countries. What is proposed is that the jurisdiction rules of the regulation should be adjusted in order that jurisdiction in regard to defendants from outside the European Union would no longer be governed by national law but by specific rules set out in the regulation. In addition, the courts of a member state would have a certain discretion to stay proceedings in a case where a non-EU court was already dealing with the same case.

The proposal also attempts to improve the effectiveness of choice of court agreements in order that the court chosen by the parties to resolve the dispute will always have priority to decide on its jurisdiction, even where one of the parties seises another court first in time in an effort to avoid compliance with the original agreement. The provision has been designed to ensure it will not interfere with the future ratification of a Hague Convention which also deals with choice of court agreements. In this way, it is envisaged that the widest possible respect will be given to international choice of court agreements which are often an important tool in the formulation of international commercial contracts.

The proposal also contains provisions designed to improve the interface between the regulation and arbitration by providing that a court seised with a dispute involving an arbitration agreement would have to stay proceedings if an arbitral tribunal or a court at the seat of the arbitration was already seised of proceedings to determine, as its main object or as an incidental question, the existence, validity or effects of that arbitration agreement. This is intended to enhance the effectiveness of arbitration agreements in Europe and eliminate the incentive for abusive litigation tactics.

There are other minor elements designed to facilitate co-ordination between courts and the circulation of provisional and protective measures. However, the four elements I have outlined represent the key amendments that are being proposed in regard to the new regulation.

The technical negotiations on this proposal commenced in early February and the first reading has yet to conclude. It is too early at this stage to say when the negotiations will reach finality. By and large, member states seem to be of the view that the Commission has done a good job in presenting a well-balanced text which is likely to be of general benefit. Inevitably, however, the negotiation process is likely to reveal diverging views on some aspects of the proposal, and this underlines the need for us to be in a position to make common cause with those member states whose perspective most accords with our own.

It should be emphasised, lest there be any doubt on this point, that opting in to the proposal at this time does not mean we necessarily agree with every aspect of it. The opt-in process merely ensures we can be active participants in the negotiation process, and this carries with it the right to make proposals to alter the text should that seem to be desirable.

Ireland has taken a very positive approach to participation in the various civil law instruments that have been presented. These instruments range over matters as diverse as the service of documents in judicial proceedings, the taking of evidence in such proceedings, small claims procedures, mediation, legal aid and maintenance. It is a mark of our commitment to the EU project that we tend to be very positively disposed towards participation in such projects from the outset. Certainly, we are very positively disposed towards participation in this particular project which has the capacity to enhance legal certainty for individual litigants across the EU. I commend this motion to the House.