The Bill proposes to give the force of law to two international conventions which, as a member state of the European Communities, we are committed to ratify. Both conventions deal with the reciprocal recognition and enforcement of judgments in civil and commercial matters.
One of them — the Accession Convention — provides for the accession of Spain and Portugal to the 1968 EC Convention and to the Protocol on its interpretation by the Court of Justice of the European Communities in Luxembourg.
The other — called the Lugano Convention — was negotiated between EC member states and the member states of the European Free Trade Association and extended the area of reciprocal recognition and enforcement of judgments from the European Communities to all the six EFTA countries.
The conventions will come into force on the first day of the third month after deposit of the instruments of ratification. From then on our civil judgments and other court orders will be enforceable on a reciprocal basis in Spain and Portugal and in the EFTA countries, namely, Austria, Finland, Iceland, Norway, Sweden and Switzerland.
I shall deal first with the background to the Accession Convention. In 1968 a convention for the mutual recognition and enforcement of judgments was negotiated by the six original member states of the European Community. A Protocol was added in 1971 providing for the interpretation of the convention by the European Court of Justice. When Denmark, Ireland and the UK joined the Community, and later on when Greece joined, the convention and Protocol were amended to cater for the particular concerns of those countries. In 1988 we gave the force of law to the amended 1968 Convention and Protocol with the result that our judgments are now enforceable, on a reciprocal basis, in nine of the other EC member states. Passage of the Bill will enable the area of reciprocal enforcement to be extended to the whole Twelve.
So, as regards the Accession Convention, what the Bill does is to extend the application of the 1988 Act to Spain and Portugal. This is achieved in the Bill by consequential amendments of that Act and these amendments, as Senators will see, are of a technical character. The Bill also gives effect to a number of other amendments made by the Accession Convention to the EC Convention. These other amendments were made so that the EC Convention would correspond as closely as possible with the Lugano Convention concluded with the EFTA countries. I shall come back to the various amendments later.
I think it is worthwhile recalling some of the main principles underlying the EC Convention. First, it applies only to judgments in civil and commercial matters. It extends to employment contracts, and also to maintenance orders. It expressly excludes such matters as those affecting the status of legal capacity of natural persons and rights in property arising out of a matrimonial relationship. And of course it does not apply to fiscal or administrative matters, but clearly, the convention has a very wide scope.
Secondly, it includes uniform and comprehensive rules on jurisdiction which apply in the country where the proceedings are instituted and serve to determine the court vested with jurisdiction. The importance of this is that, with a few exceptions, an enforcing court in another member state is obliged to accept the jurisdictional competence of the court which gave the judgment so that enforcement of a judgment given in one member state is, as nearly as possible, automatic in each of the other member states.
The third principle is that the defendant must be sued in the member state where he or she ordinarily resides. Obviously it is more difficult, generally speaking, to defend oneself before a court of a foreign country than it would be before a court in another town in one's own country, but there are several exceptions to this principle to cover cases where the plaintiff is the weaker party to the proceedings or for other practical reasons. For example, a married woman seeking maintenance against her husband living in another member state may initiate the proceedings in her local court. The same applies to consumers and holders of insurance policies.
Finally, the convention limits the grounds for refusing to recognise and enforce judgments mainly to public policy and natural justice and it provides a unified and simplified enforcement procedure.
The 1968 Convention was a tremendous step forward at the time in facilitating the free circulation of judgments throughout the Community. The more or less automatic recognition of judgments made possible their speedy enforcement. Here, for example, the foreign creditor has only to apply to the Master of the High Court ex parte to have the judgment enforced as if it were an order of the High Court. However, a creditor, particularly a maintenance creditor, who is not in a position to avail himself or herself of even this simplified procedure is still at a disadvantage as compared with a person enforcing an order within the jurisdiction. I shall be addressing this matter in another measure which is now being prepared and which will further help in the enforcement abroad of maintenance orders. This measure will enable Ireland to accede to the EC and UN Maintenance Conventions which improve procedures for recovery of maintenance within the European Communities and which provide a mechanism to assist in the recovery of maintenance payments for spouses resident in non-EC countries.
I now turn to Part III of the Bill which is concerned with giving the force of law to the Lugano Convention. In 1985 the member states of the European Free Trade Association expressed a wish to conclude with the member states of the European Communities a convention based on the principles of the EC Convention. The negotiations were completed relatively quickly. They resulted in a convention on jurisdiction and the enforcement of judgments in civil and commercial matters, which was opened for signature in Lugano on 16 September 1988 at the close of a diplomatic conference held at the invitation of the Swiss Government.
The Lugano Convention is also based on the fundamental principles of the EC Convention and most of its articles are identical with those of that convention. A number of improvements to the EC Convention were incorporated by the Lugano Convention. It was therefore natural that these improvements should be taken into account in the preparatory negotiations, within the Communities, for the accession of Spain and Portugal to the EC Convention.
The main amendments made to the EC Convention has been outlined in the appendix to the explanatory and financial memorandum circulated with the Bill. Several of the amendments are designed to improve the position of the weaker party to proceedings by enabling him or her to commence the proceedings in his or her own courts. For example, the position of an employee is improved in several respects. Under the 1968 EC Convention the employee could sue the employer either in the courts of the employer's domicile or those of the country where the contract of employment was to be performed. Under the amended EC Convention and the Lugano Convention the employee has the option of suing in the country where he or she habitally works and, if the employee does not habitually work in any one country, in the country where the employee was engaged. Actually, the amended EC Convention goes further. It covers also the case where the business that engaged the employer has moved to another member state and gives the employee the option of suing there also.
Another amendment designed to protect the employee is contained in a paragraph added to Article 17 of each convention. That article allows parties to agree on the court of a contracting state that is to have jurisdiction to settle any disputes that have arisen or may arise. The Lugano Convention provides that, in the case of an individual contract of employment, such an agreement will not be valid unless it is entered into after a dispute has arisen. The amendment to the EC Convention makes similar provision but also allows an employee to invoke a pre-dispute agreement. Thus under the amending EC Convention the choice between the courts having jurisdiction is entirely at the discretion of the employee as plaintiff. The chosen court can be that of the state where the employer is domiciled, or the court of the state where the contract of employment is to be performed, or the court of the state designated in an agreement covering jurisdiction.
Another improvement in the EC Convention I might mention relates to short term lettings of properties abroad. Under Article 16.1 of the 1968 EC Convention proceedings relating to tenancies of such properties have to be taken in the country where the property is situated. That would obviously be most inconvenient where, for example, an Irish resident needed to sue another Irish resident for rent due under a letting of a holiday home, say in Spain. Under the amended EC Convention such an action can be instituted in our courts. The amended provision will apply only where both parties are individuals — companies are excluded on the grounds that they are concerned with commercial actions — and where they are both domiciled in the same state.
The corresponding provision in the Lugano Convention is somewhat less restrictive. It provides that in the case of holiday lettings the plaintiff can apply to the courts of the state where the defendant is domiciled. The only qualification is that the tenant is an individual and that neither party is domiciled in the country where the property is situated.
This is the first of the Bills which I am committed to introduce under the Programme for a Partnership Government. Although it is a technical Bill, it has significant practical implications. It will be of benefit to our business community in securing more or less automatic enforcement for Irish judgments in Spain, Portugal and all the EFTA countries. But it will also — and, as the Minister for Equality and Law Reform, I am particularly concerned with this aspect — ensure the enforcement in those countries of orders for the maintenance of spouses and dependants. I trust it will be acceptable to the House as a noncontroversial measure which arises out of our obligations as a member state of the European Communities.
I shall be happy to give any clarifications that Senators may seek and to consider any amendments they may wish to put forward either now or on Committee Stage.