Participation of the UIHJ in the EU Justice Forum Meeting in Brussels
The UIHJ was invited by the European Commission to participate on 16 October 2009 in Brussels in the meeting of the Justice Forum entitled "Economic Crisis: what can be done in the justice field?"
In 2008 the European Commission established the Justice Forum in order to provide a platform for consultation with stakeholders on EU justice policy. Following the launch of the Forum, the Commission organised a number of meeting, amongst others meetings on Mutual Recognition in Criminal Matters, Judicial Training and European e-Justice.
Given the current economic situation, the Commission decided to devote a thematic meeting of the Justice Forum to the economic crisis in the context of justice. That meeting took place in Brussels on the 16th of October 2009. The UIHJ was represented by its vice-president, Roger Dujardin.
Although the link between the current economic crisis and the area of justice may not be the most apparent one, the Commission believes that the scale of the present difficulties and their possible impact on the functioning of justice systems are of such magnitude that they merit serious reflection. An exchange of view among legal practitioners and the Commission can surely lead to a better understanding of the existing challenges. Such an exchange helps to design concrete actions in the justice field capable of mitigating the negative effects of the economic crisis.
Mr. Jacek Garstka, the European Commission's Head of General Justice Issues and e-Justice Unit, gave a presentation on the impact of the economic crisis on European justice systems, noting that the effects of the economic crisis are visible in the functioning of the justice system.
The meeting was divided into four thematic parts: general justice and security, economic and financial law, civil law, and criminal law aspects of the economic crisis.
During a recession, public budgets usually decrease and/or have limited scope for action, so that there may be less money available also for management of the judicial system. This calls for improved effectiveness of judicial systems, which is already a strong trend and objective in the EU's justice policy and several Member States. In this regard, the use of IT tools (e-Justice) is a viable way to make progress.
Where appropriate, the use of modern IT communication tools can speed up and facilitate dispute resolution and render it less costly. It is one of the most important tools to improve access to justice, to render proceedings more efficient and speed up enforcement of judicial decisions, particularly in cross-border disputes.
The civil justice policy could provide support to citizens and businesses affected by the economic crisis as well as prevent future effects or future crisis situations through actions in the following areas:
- Enforcement of claims: businesses and citizens need to be able to recover their debt claims. Particularly in the current situation (where access to capital and credit is limited) a rapid enforcement of claims can prove essential for the survival of a business.
- Legal aid: to cope with increased litigation for claims, citizens and also small businesses may need to resort to legal aid to handle their cases.
- Insolvency/bankruptcy: insolvency proceedings play a particular role in an economic crisis and should be as efficient as possible. Cutting the length, complexity and cost of these proceedings is to the advantage of both creditors and debtors. As far as possible (with regard to creditors' interests), debtors in relevant situations should be enabled to continue their business and to preserve work places, i.e. viable firms should be kept in economic activity. Sound bankruptcy laws have to reconcile this interest with the aim of maximizing the value received by creditors, shareholders and other stakeholders and to establish a clear system for ranking creditors' claims. Reforms in this area tend to focus on increasing court efficiency, as well as to increase flexibility in bankruptcy/insolvency procedures and secured transactions laws, and developing bankruptcy-related professions, such as trustees.
- International jurisdiction: the affected persons in Europe might benefit from the possibility to bring their claims to the European courts against defendant(s) outside of the Union. Harmonisation of the subsidiary jurisdiction rules would serve their interest.
- Debt management/relief mechanisms: The 1990s recession caused the Nordic states to develop mechanisms such as debt advisory services for private persons. In case of over-indebtedness, citizens can apply for debt management from the local magistrate's court. Finance and debt advisors authorised by local authorities help with conciliation/arbitration negotiations and propose settlement plans. A well-functioning debt management system helps citizens to overcome the effects of a crisis.
- Debt collection agencies: private debt collection will increase. We must ensure that debt collection agencies respect the rights of consumers. Exchange of good practices concerning debt collection could be enhanced.
- Right to appeal: the parties to a case should have the right to a review/remedy against decisions and/or measures affecting their rights.
- Alternative dispute resolution (ADR) through recognized and reliable institutions and private services (such as mediators, lawyers, notaries, debt advisors, etc.) is one way to facilitate and accelerate agreements between parties and avoid lengthy and costly court proceedings.
- Assignment of claims is an important part of current financial markets. Clear rules on the applicable law in this area will increase legal certainty. With regard to the origins of the crisis, this seems to be an area of particular importance.
- Rule on conflicts of laws in business/company law: a core task of the EU is to guarantee the good functioning of the Internal Market, in particular in a difficult economic situation. There are currently no European rules on international private law on companies and legal persons. Thus, we need to reflect on the necessity of common rules on the applicable law in situations involving a conflict of laws with respect to the setting up of companies and legal persons, their legal capacity, their internal functioning and winding up, as well as on the personal responsibility of shareholders, organs and agents for debts of the company.
- Choice of court agreements in contracts: a sound and well developed financial market prevents an economic crisis. An important aspect of the financial market is the enforceability of choice of court agreements in contracts.
Roger Dujardin exposed the position of the UIHJ in the presence of the actual economic and financial crisis. He underlined that the European judicial officers are very concerned about the increase of the number of debts. The judicial officer must stand surety for legal certainty, where in the course of a judicial enforcement a human treatment of the debtor must be central. He must also protect the rights of the creditor, so that a balance of interests is created. He can intervene to reach a settlement between the debtor and the creditor. The efficiency of the enforcement of judgments and other enforceable titles is in times of economic crisis very important. That could lead to a so called ‘private justice', where the civil law and the criminal law could meet each other. Therefore it is important that there is an independent, impartial, personally liable and legally recognized enforcement agent, who is charged with the forced recovery of debts.
