Thursday, 4 September 2008

We have a “two speed” Europe for cross border divorce law

News @ The Justice and Home Affairs Council. Raising concerns of a “two speed” Europe, a group of EU Member States has decided to proceed with further EU integration having decided to go ahead with enhanced cooperation to by-pass the veto of other Member States in order to adopt common rules to designate the law applicable to cross border divorce cases. The Council Regulation 2201/2003, the so called Brussels II Regulation, provides for rules on jurisdiction and on recognition and enforcement of judgments in matrimonial matters but the applicable law is determined according to the domestic conflict of laws rules. In 2006, the European Commission presented a proposal for a regulation on Applicable law and Jurisdiction in Matrimonial Matters, amending the Brussels II Regulation. The so called Rome III proposal introduces the possibility for the spouses to determine by common agreement the competent court in proceedings concerning divorce and legal separation. The choice of the party is not unrestricted – there must be a “substantial connection” with the Member State in question, hence the Member State chosen must be the place of the last common habitual residence of the parties or the Member State of nationality of one of the spouses. The Commission has pointed out that Brussels II Article 7 refers to the national rules on international jurisdiction in cases where the spouses are not habitually resident in the territory of a Member State and do not have common nationality. The national rules have different criteria and according to the Commission there may be cases where no EU Member State or a third State has jurisdiction to deal with an application for divorce.

The Commission has therefore decided to introduce a uniform rule on residual jurisdiction aimed at ensuring access to court for spouses who live in a third countries but would like to bring proceedings in a Member State with which they have a close connections: they are nationals or live in a country in which they have resided for a certain period. The draft regulation also introduces harmonised conflict-of-law rules to decide which law applies to the divorce and legal separation proceedings based, firstly, on the choice of the spouses. It introduces the possibility for the spouses to choose the applicable law to divorce and legal separation.

Such choice is limited to laws of countries with which the parties have a connection taking into account their last common habitual residence if one of them still resides there, the nationality of one of the spouses, the law of the State of their previous habitual residence, or the law of the forum. The draft regulation also sets up criteria to determine the applicable law in cross-border divorces in case of absence of choice by the spouses. The draft proposal defines several connecting factors hence a cross border divorce is to be ruled by the law of the country of the spouses common habitual residence, or failing that, by the law of the country of their last common habitual residence if one of them still resides there, or failing that, the law of the state of common nationality of the parties or failing that, by the law of the forum. The Commission has stressed that the draft proposal is meant to be of universal application – hence the conflict-of-law rule can designate the law of a Member State of the European Union or the law of a third state.

The Rome III Regulation would not harmonise Member States substantive divorce laws but will rule on conflict of laws. Nevertheless, the application of non-national law in domestic courts is a very controversial issue. The Justice and Home Affairs Council have failed to reach an agreement on the draft proposal. As abovementioned, the Rome III aims to set up rules for determining which law is applicable in divorce cases when the court is in a different member state from the country of at least one of the spouses. There are different opinions, especially between those Member States which apply lex fori and those which apply conflict of law rules to determine applicable law and apply foreign law within their systems. The UK as well as Cyprus, Denmark, Finland, Ireland, and Sweden apply the lex fori – hence, once jurisdiction is determined the courts apply domestic rules to a divorce case. Obviously, the Commission proposal entails substantial changes in the laws of several Member States especially in those which apply lex fori. Consequently, the UK has decided not opted in to such proposal. Moreover, Rome III could apply to cases with no connection with the internal market as it extends applicable law to non-Member State law. The Commission’s draft proposal raises subsidiarity issues. Several Member States could not support the measure on the grounds of subsidiarity and proportionality principles. Family and marriage are very sensitive issues and they are at the core of Member States’ traditions. Member States substantive domestic divorce laws vary substantially, so it is little wonder that the draft proposal could not achieve unanimous support. The draft proposal on Applicable law and Jurisdiction in Matrimonial Matters has been blocked, mainly by Sweden. Sweden could not accept the application of foreign divorce laws in its courts. At a recent Justice and Home Affairs Council meeting, member states came to the conclusion that the required unanimity to adopt the proposal on the law applicable in matrimonial matters (Rome III Regulation) could not be obtained. The solution found at the Council meeting was to proceed through enhanced cooperation. Consequently some member states would be allowed to proceed with the legislation whereas others would not participate.

So, in order to by-pass Sweden’s veto, a group of nine EU Member States Austria, France, Greece, Hungary, Italy, Luxembourg, Romania, Slovenia and Spain having indicated that they support the aims of the draft regulation and that it is not possible to reach an agreement. Therefore, they want to adopt it through the enhanced cooperation method. Those Member States have written to the European Commission formally requesting it to prepare a legislative proposal for enhanced cooperation, and for the first time activated this mechanism. The Commission will submit a proposal based on the request before the end of the year. The Commission has said that it would like to see, in order to prevent legal fragmentation, as many member states as possible involved in the enhanced cooperation. But that should not be a problem as several other Member States, Germany, Belgium, Portugal and Lithuania are already considering joining the initiative. Authorisation to establish enhanced cooperation would be granted by the Council, acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament. Hence, other member states are not able to veto and prevent other member states to press ahead with further integration. Such a move will eventually lead to a “two-speed Europe.” The provisions on enhanced cooperation had never been put into effect – therefore, their possible outcome is still being debated. But, one thing is for sure, enhance cooperation reinforces the integration process.

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