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EUC Report: Court of Justice of the European Union

Volume 748: debated on Wednesday 9 October 2013

Question for Short Debate

Asked by

To ask Her Majesty’s Government what is their response to the Report of the European Union Committee on Workload of the Court of Justice of the European Union: follow-up (16th Report, Session 2012–13, HL Paper 163).

Baroness Corston (Lab): My Lords, in opening this debate, which seeks the Government’s response to the European Union Committee report on the workload of the Court of Justice of the European Union, it is important to stress at the outset that the Justice, Institutions and Consumer Protection Sub-Committee, which I have the honour to chair, has been interested for some time in the operation of the CJEU. In 2011, the sub-committee carried out an inquiry under the excellent chairmanship of the noble Lord, Lord Bowness, into the workload of the Court of Justice and produced a report in April of that year. Among other things, the sub-committee recommended that the number of advocates-general appointed to the Court of Justice should be increased; the General Court should consider establishing specialist chambers; and, most significantly, that the number of judges appointed to the General Court should be increased in order for the court to deal with its workload efficiently and to speed up proceedings.

Shortly after the report was published, the president of the CJEU put forward a series of proposals designed to increase the efficiency of the court. Most notable were the proposals to increase the number of judges in the General Court by 12 in order to tackle the increasing number of pending cases before the court. The Commission thought that increasing the number of judges in the General Court would be the only possible solution to the court’s workload problems, stating that,

“only by immediately increasing the number of judges . . . will it be possible to stem the flow of new cases and effectively tackle the backlog of cases”.

Member states generally agreed that the number of judges ought to be increased. However, agreement proved elusive, principally over the method for appointing the additional judges. In May 2012, the aspects of the president’s proposal dealing with increasing the General Court’s judiciary were dropped in order to facilitate agreement by the member states to the other parts of his proposals.

Subsequently, a Friends of the Presidency Group was established by the Council, comprising representatives from all member states with a view to examining the case for increasing the number of judges in the General Court. However, the group failed to reach any conclusions and the presidency put forward a proposal for consideration at the General Affairs Council on 11 December 2012 which included the appointment of nine additional judges appointed through a rotation system. The proposal was rejected by the member states.

At this point, the sub-committee decided to conduct a follow-up inquiry to determine whether the adopted proposals were having an impact on the workload of the court and whether there was still a case for increasing the number of advocates-general in the Court of Justice and increasing the number of judges in the General Court. The sub-committee wrote to the witnesses who had participated in the original inquiry and asked them to provide written evidence. Evidence was also heard from the Minister for Europe, the right honourable Mr David Lidington, in March. Shortly after we published our call for evidence, the CJEU requested that the number of advocates-general be increased by three, and after debates in both Houses of Parliament, as required by the European Union Act 2011, the proposal was agreed by the Council on 25 June. The first of the new advocates-general will be from Poland and is due to take up the post shortly. In line with the existing rotation, the other two will be of Czech and Danish nationality. They will take up their posts in October 2015.

In our follow-up inquiry we concluded that there was still a case for increasing the number of judges to the General Court. The latest statistics from the court indicate that there has been a reduction in the number of pending cases due to a fall in the number of new cases. The average time that it takes the General Court to dispose of a case has fallen by 1.9 months to 24.8 months. The sub-committee welcomed the decrease in the number of new cases but considered it a temporary respite. It argued that little could be inferred from the decrease in the number of new cases brought before the court as the long-term trend was clearly upwards. The sub-committee called on the Government to make the case strongly in discussions with member states to increase the number of judges and to urge member states to find a system of appointment of additional judges that safeguards the stability of the court and the quality of the judiciary. The Government responded to our follow-up report in July. They agreed with most of the conclusions in the report and appeared to be more positive about appointing additional judges to the General Court as a means to deal with the court’s backlog of cases. They also seemed to favour a merit-based selection process to appoint additional judges. The Commission also agreed with the follow-up report’s conclusions. It stated that “an overwhelming majority” of member states and MEPs supported the appointment of more judges to the General Court. However, the Commission cautioned that it is up to the member states to agree, by what is called “common accord”, a method for appointing additional judges.

Given the inability of member states to reach agreement on a method for the appointment of additional judges to the General Court, the Commission appears to have lost interest in the issue for the time being. However, the Legal Affairs Committee of the European Parliament, the JURI committee, continues to push for an increase in the number of judges. In June 2013, it agreed a report on the draft regulation of the European Parliament and of the Council amending the Protocol on the Statute of the Court of Justice of the European Union by increasing the number of judges at the General Court. The report states:

“As a consequence of the progressive expansion of its jurisdiction since its creation, the number of cases before the General Court is now constantly increasing . . . resulting over time in an increase in the number of cases pending before that court and an increase in the duration of proceedings”.

It concludes:

“The General Court—in spite of its substantial efforts—can no longer handle the growing workload”.

The JURI committee has proposed a number of amendments to the draft legislation governing the statute of the CJEU which include an increase in the number of judges in the General Court by 12; that the additional judges should be appointed,

“exclusively on the basis of their professional and personal suitability”;

that there should be no more than two judges per member state; and that during a procedure to appoint one or more of the 12 additional judges, member states may submit nominations, and judges retiring from the General Court may nominate themselves. The report appears to be sound. It follows months of work by the rapporteur, Alexandra Thein, meetings in Luxemburg with officials from the General Court and the president of the CJEU, and discussions at five JURI committee meetings.

The proposals safeguard the geographical balance and representation of national legal systems as there will continue to be one judge per member state and no more than two judges for any member state. Appointing additional judges on the basis of their professional and personal suitability, as assessed by the Judicial Appointment Commission, seems quite sensible and hard to refute. However, Ms Thein proposes that the European Parliament should be receptive to compromise proposals from the Council or the CJEU. She considers that, given the urgency in appointing additional judges to the General Court:

“Any agreement is better than further delay.”

The report is due to be considered in plenary by the European Parliament on 10 December 2013.

The questions that arise for the Minister are: can the Government confirm whether they support appointing more judges to the General Court? If so, would they support a system for appointing those judges based solely on merit? Will the Government make representations to the Commission and the Council to adopt the JURI committee's report?

My Lords, I wish to do little more tonight than support the noble Baroness, Lady Corston, in her plea to the Government for answers to those questions and particularly that they ensure that additional judges are indeed appointed to the General Court as soon as possible. As the noble Baroness has told the House, the committee concluded that this was necessary some time ago while I had the pleasure of serving on that committee and nothing, to my knowledge, has changed. I am pleased to say that, from the Government’s response to the follow-up report, they now appear to agree that the case for increasing the number of judges has been well made. If that is indeed the case, I am pleased that they have been converted to the idea. As I have said on previous occasions, I trust that resources will not again be considered the problem.

A robust functioning legal system is invaluable. The rule of law in the widest sense is perhaps the greatest bulwark against bad government, and preserving the quality and effectiveness of the European Court system is important. The court is a vital institution for the proper functioning of the Union. Without the court we have nothing to buttress the operation of the single market which is so much more complicated than a trade deal and is, we are told and all agree, essential for our interests.

The question of resources should be put in the context of the sums involved. From an overall EU budget of the cost of the court is just over 0.25%. It is difficult to know how much the United Kingdom contributes to that because statistics do not give a breakdown. However, on the basis that we contribute something like 11.5% of our share to the overall EU budget, our share of the court budget would be £32 million.

Put into context, we are quite happy to spend some £25 million, if a Statement made by my right honourable friend the Foreign Secretary in July of this year is correct, on various international tribunes, all of which are very worthy, but are certainly no more important than the Court of Justice of the European Union.

The issue, as the noble Baroness, Lady Corston, has indicated, is how we appoint these additional judges. I am rather disappointed that paragraph 10 of the response says:

“The Government looks forward to examining detailed proposals in the Council”.

We all look forward to something coming; the question is, what are we going to do about bringing it forward? I understand and, to some extent, support the principle of a merit-based system, but if not, I am at a loss to understand why the procedures for the appointment of the advocates-general cannot be used.

I am sure that we are all delighted to see my noble friend the Minister on the Front Bench replying to this short debate on what, in the scheme of the many things with which she is concerned, may appear a small matter. It is nevertheless an important matter for the European Union. I will therefore perhaps trespass upon her good will to seek assurances from her that the Government will keep this matter, and other important matters within the European Union, at the forefront of the agenda at European Union meetings, taking positive steps to ensure that they are considered.

The United Kingdom could have great influence. Indeed, we often speak of our worldwide influence, so it would be good to know that that influence can be brought to bear within the European Union. There are matters which are not for the grand world stage, not the material of headlines but important nevertheless. If I may stray slightly from the topic, there are problems such as progress on the admission of Macedonia, Moldova, Transnistria, Serbia and Kosovo to name but a few. Of course, there is also the problem of more judges for the General Court—another kind of problem but one that needs a solution.

I believe that a British lead on such issues would be both welcome and constructive, and a change—if I may say so—from our apparent obsession with our relationship with the European Union.

My Lords, it is a great pleasure to be able to follow the noble Lord, Lord Bowness, and I very much agree with the content of his remarks. Not wishing to embarrass my noble friend in any way, or cause him any difficulties, I will also add that there have not been many occasions when I find myself strongly disagreeing with what he says on all sorts of different kinds of European matters. He has the reputation of having been an excellent chairman of the sub-committee before the noble Baroness, Lady Corston, and we were grateful for his guidance on many matters, particularly those in more recent times.

We are now coming to an important moment in the development of the European Union, albeit with at least one member Government who seem hesitant on a number of aspects. That is disappointing to the observers of the general scene in Europe. I hope that that attitude will change over time. The Government face enormous complications about how they will handle these matters in the UK’s political cockpit between now and the next general election, either with or without a change of Government, and with or without a coalition.

Under the provisions of the Lisbon treaty, the Court of Justice of the European Union, by the beginning of December next year, will undertake a much greater, with widespread consent and enthusiasm, and will need extra resources. Although there was a temporary dip, the workload is already showing signs of renewed increase and that will become a major element of its work in future as it deals with all aspects under the treaties—the contents of the two main treaties and dealing principally with the single market and all the things of greater complexity that flow from that as time goes on. One thinks of all the possible cases that will arise over trade marks, patents and intellectual property, as well as more mundane disputes that will arise between corporations, and between Governments and corporations in different member states, as the single market develops. There is still a lot of work to be done in the single market context. People tend to think that it is mostly completed, but that really is not true; it is an ongoing situation and the Court of Justice is going to be a vital part of that.

On the Government’s side, there seems to be a psychological reluctance to show any enthusiasm for these matters at all, which is a great pity. I am sure that that view is shared be members of the main European Union Select Committee, of all parties and backgrounds, as well as the sub-committees. Although scrutiny means the right to be critical about things that are either manifestly not in our national interest or against the practical interest of a particular piece of policy formation or political decision, the general picture should be more positive. As my noble friend Lord Bowness quite rightly said, the amount of money involved in making sure that this court works efficiently and properly on an expanded basis with additional judges—who, I personally hope, will be chosen on their merits, as has already been enunciated; we thank the noble Baroness, Lady Corston, for her opening remarks—is so minuscule as to be within any of the foreseeable elements of the European Union budget totals anyway. I think I am right in saying that year in, year out, the actual expenditure outlays of the European Union budget are below the allocated amounts from the previous decision-making period.

Although the idea that there should be hold-ups because there is an austerity programme that should affect everybody is right in terms of many other aspects of the Commission budget—the big stuff in the budget and the modernisation of that budget—it cannot be right to harm the effective functioning and future efficiency of this important body, which will be much more influential and powerful, quite rightly, in future in adjudicating on legal matters affecting all the member states and the various parties involved in those cases.

I share the disappointment that the indication in the debate on 23 July that this had to be done under the European Union Act was not greeted with much enthusiasm in this House, as we recall; indeed, there were members of the coalition who were very strongly opposed to it and thought that it was the wrong kind of procedure to bring in at this time on treaty-based matters, which are international treaties and should be treated on that basis in the future. Be that as it may, I was particularly pleased that one of the report’s main suggestions was:

“The Court should take further steps to encourage national courts requesting preliminary rulings to include a provisional answer”.

I think that is a very practical suggestion.

As has already been mentioned, the Government’s response was very unenthusiastic, which we found disappointing. The report states:

“On the most important reform, namely the increase in the GC’s judiciary, the Government ‘noted’ the recommendation while pointing out that they were seeking significant cuts to administrative spending over the following years and that any budgetary implications relating to proposals for reform of the CJEU would have to be consistent with their position”.

Bearing in mind the minuscule amounts of money involved, it seems to be more of an ideological reluctance to show any enthusiasm for the Court of Justice because of the very nature of the institution itself. That cannot be right, when it has been agreed under the Lisbon treaty as a vital part of the future development of the European Union, and is supported overwhelmingly by the other member states, including of course with great enthusiasm by the new member states, which do not fear this magical loss of pretend national sovereignty which seems to be an obsession of at least one of the political parties, or a good segment thereof, in this country. I cannot understand that.

I hope, therefore, that the Government, in the form of my noble friend Lady Warsi, whom we thank for coming to conclude this debate, will give us an encouraging answer on these matters. It is time to face up to these things. Time is short between now and the beginning of December next year for these matters to be resolved. The sub-committees are going into other areas, too, where the Government need to show greater enthusiasm: the big stuff in policy, the opt-outs and all that, which is a continuing saga to which I will not refer any longer.

The European Commission letter of 17 September says that,

“in line with the view of the House of Lords, the Commission is of the opinion that it is too early to tell to what extent the amendments to the Statute of the Court of Justice of the European Union which, together with changes to the Rules of Procedure of the Court, only entered into force last year, will lead to a decrease in the number of pending cases”.

That means that it did not really feel that that was going to be so in the future, as has been suggested. The letter goes on to say that,

“the Commission is pleased to see that an overwhelming majority both amongst the Member States and within the European Parliament support the idea of additional judges”.

The letter concludes:

“The Commission agrees with the House of Lords that an increase in the number of judges should be preferred over the creation of specialised courts”.

That is an extremely important point. I hope that the Government tonight will agree.

My Lords, it is somewhat paradoxical that this is the fourth time in the past two years that I, as European spokesman for the Opposition, have had to speak on this matter. I cannot think of any European topic on which we have had so many debates, other than our membership of the EU itself. Some people might say that to have four debates on the European Court of Justice in the space of two years shows that the House of Lords has got its priorities wrong in timetabling its business. That may be a true general point but in this case it actually demonstrates the persistence of your Lordships’ European Union Committee and the quality and commitment of its members to see that its recommendations are acted on by the Government. The noble Baroness, Lady Corston, and the noble Lord, Lord Bowness, are to be greatly praised for the determination they have shown in making this case for Court of Justice reform.

We last debated this in June, when we had to approve the Government’s support for three new advocates-general. There was a bit of self-congratulation that we had at least achieved something. The Polish advocate-general takes office this year and there are to be another two advocates-general by October 2015. This seems to be reform at a snail’s pace. There are very strong reasons why that pace should be quickened.

First, there is already a backlog. Secondly, it is overwhelmingly in our national interest. The coalition has made one of the prime objectives of its European policy the deepening of the single market in the areas of digital economy, energy and services. I can tell your Lordships that in all these three areas progress will be very dependent on the court and its judgments. The digital area is full of competing vested interests. The energy area is full of strong national incumbent companies that want to hang on to their monopoly positions. We had the services directive in 2005 and there has been a great deal of foot-dragging by some member states in its implementation. If you are to achieve your objective, all these things require a much stronger court that is able to deal with these issues in a more speedy way.

Thirdly, there is in 2014 the “communitisation”—in the European parlance—of justice and home affairs as a result of the Lisbon treaty, which means that vast areas of what has been intergovernmental legislation will come under the jurisdiction of the Court of Justice, increasing the workload again. Of course, we are going to be participating if we get our opt-ins in some of those areas.

As the noble Lord, Lord Bowness, and the noble Baroness, Lady Corston, have said, the argument about cost is really absurd. The court is 0.26% of the EU budget —one-quarter of one-hundredth of the EU budget. The EU budget itself is only 1% of EU GDP. If my arithmetic is right, and it may be wrong because I am getting a little rusty, the cost of the court is one forty-thousandth of Europe’s GDP.

In terms of Britain’s national interests, which ought to be at the forefront of this Government’s policy for Europe, there is indisputable academic evidence that the single market has permanently added 1.9% to British GDP. That is a result of our being members of the single market. Potentially, if we get what we want, it could be much more. The noble Lord, Lord Bowness, calculated that the cost of the court is roughly £30 million. That addition to our GDP is worth over £30 billion. When one thinks about the importance of the single market to our economy, it is absurd to allow some ideological points about the jurisdiction of the court to get in the way of sensible moves to strengthen its efficiency.

I hope that the Government will support the case for more judges. I should like to make one point. The noble Lord, Lord Wallace, answering the debate in June on behalf of the coalition, said:

“We are strongly in favour of additional members—not another 27 but another nine or 12”.—[Official Report, 10/7/13; col. 1484.]

We very much hope that will be agreed. It will be a pleasure if the noble Baroness, Lady Warsi, will reiterate that firm commitment given by the noble Lord, Lord Wallace, that British policy is to press for an increase in the number of judges in the court.

The noble Lord, Lord Wallace, went on to say that the problem lay in the difficulty of agreeing how the extra judges should be chosen: which member states would have them and which would not. This raises a difficulty of fundamental importance to the Government’s ambitions to see reform in the European Union. For instance, if we are to have a more efficient European Commission that does not over-regulate, we have to get away from every member state having a commissioner of its own, each with a portfolio of their own. That inevitably results in an extension of European action. We want a much more focused Commission. At the very minimum, there has to be some system of senior and junior commissioners. The equality of member states will have to be addressed in that case.

Similarly, if the costs of Europe are to be cut, it is absurd that there is a Court of Auditors in which every member state has an auditor with their own cabinet system. To cut the costs, it is necessary to move away from the principle of every member state having its own person. The question of reconstituting the court on a basis where not every member state gets an additional judge is at the heart of the reform agenda for Brussels. It is a fundamental point. The Government have to seize this and elevate it if they want reform to the top political level of the European Council. I urge the Government to press on and to pursue a genuine reform strategy for Europe. If they do that, they will have our full support.

My Lords, I am grateful to the noble Baroness, Lady Corston, for opening this debate, and also to all members of the sub-committee on justice, institutions and consumer protection—both for their report and for their continued interest in this matter. I am also grateful to members of the European Union Committee. I am grateful to the noble Baroness for her detailed opening remarks, some of which I may repeat for the record.

A well functioning European Court is in the interests of all EU member states. I accept the view of the noble Lord, Lord Liddle, that it is in our national interest too. The Government have consistently supported efforts to reform the court to uphold the integrity of EU law and to increase the capacity and efficiency of the court. We all benefit from effective EU law—including British businesses operating within the single market. I accept the views of the noble Lord, Lord Liddle, on that. In evaluating any proposed reforms, the UK has been keen to ensure a number of things. First, reform should promote the effective passage of justice. Secondly, it should be based on clear evidence of need. Thirdly, it should not place additional burdens on the EU’s budget. Fourthly, it should avoid full-scale treaty change; and fifthly, it should be acceptable to Parliament.

Since the European sub-committee’s initial report in 2011, several useful reforms have been implemented. These include increasing the number of judges in the Grand Chamber from 13 to 15; streamlining procedures by, for example, abolishing the requirement to read the report for the hearing in full; allowing for the appointment of temporary judges to the Civil Service Tribunal and establishing a new office of vice-president in the Court of Justice and the General Court. In the debate of 23 July 2012, when this House agreed to support these changes, my noble friend Lord Howell noted that they were fairly modest. The Government agree that their impact on the processing speed of the court is also likely to be modest. However, we believe that even a modest impact is to be welcomed. Given that these measures came into effect only towards the end of last year, it is too early to assess their substantive impact. We will monitor their effect over the coming months.

Moving to more substantive reforms, your Lordships will remember that earlier this year, the Government received the approval of both Houses to agree to increase the number of advocates-general at the Court of Justice to nine from 1 July 2013, and to 11 from 7 October 2015. The Government share the belief of the sub-committee that this reform will help the court to handle cases more quickly and improve the quality of decision-making. At the Council of Ministers meeting in June, the Government agreed to this reform. We expect the first of these additional appointments—a permanent Polish advocate-general—to be made soon. This appointment will bring Poland into line with the other “Big Six” member states, including the UK, all of which have permanent advocates-general. The two other additional advocates-general will increase the existing rotation system from three to five. Under the current arrangements, we expect that the first two, due to be appointed in October 2015, will be Czech and Danish.

In its request, the court sought to have the first additional advocate-general in post from 1 July 2013. Since this request was made only on 16 January 2013, and as the Council agreed to it only in June, this was always an ambitious timetable. The Poles estimate that their nomination process will take four months. We therefore expect that we will shortly be presented with the Polish nomination. The court and other member states are keen for the Polish advocate-general to be in post as soon as possible. The UK therefore stands ready to approve any suitable candidate.

Most of these reforms have concentrated on the Court of Justice, so there is now a need to focus on reform to the General Court. The Government share the European Union Committee’s eagerness for a resolution to the question of additional judges for the General Court. These negotiations have continued since March 2011, and still seem some way from a successful conclusion. While there is a case to be made for additional judicial appointments, the questions of how many more judges there should be, and how they should be appointed, remain open; as does the question of cost-effectiveness. In particular, the debate on selection method has reached an impasse. The political reality is that there is currently no agreement on any particular system.

The Government have a set of key priorities. Among other things, we want to ensure that the legal expertise and judicial memory of the court remain strong, that there is an appropriate balance in terms of the representation of common and civil law and that reforms are cost effective. Within this framework, the Government are maintaining a flexible stance in negotiations to help to facilitate an agreement. We are working hard to find a solution, and I assure my noble friend Lord Dykes that we are committed to finding a solution on which necessary agreement can be reached.

In response to the noble Baroness, Lady Corston, the Government believe that increasing the number of judges in the General Court could form part of the solution to the problem of the court’s backlog of cases but, alongside this, we think that the court must also review its working practices and processes to ensure that they are as efficient as possible. In this context, we are expecting the court to publish a recast of its rules of procedure later this year and to submit it to the Council for approval.

A merit-based system would better meet our priorities than the rotation-based systems previously discussed, and I should like to think that UK judges would have a good chance of nomination under those circumstances. The problem, however, is that there simply is not the consensus in the Council that would be needed to move towards a merit-based system. Many details still need to be worked out, and many states have strong objections in principle. That said, we are encouraged by President Skouris’ comments on the benefits and feasibility of a merit-based system, and we look forward to negotiations continuing.

I hear what my noble friend Lord Bowness said on budgets. In the current economic climate, there is an imperative on all the EU’s institutions to reduce their administrative costs. The Government have been clear throughout that any additional advocates-general or additional General Court judges should not result in an increase to the EU’s budgetary demands. We believe that the relatively small additional financial pressures of appointing the advocates-general can be met from within the court’s existing budget, which was more than €354 million for 2013, and which the court has underspent in previous years. When we agreed to these appointments at the Council of Ministers meeting of 25 June, we submitted a statement noting this expectation. Likewise, we will continue to emphasise that any additional reform costs must not create pressure for an increase in the EU’s administrative budget. During discussions on the annual budgetary framework next year, we, alongside like-minded member states, will press very firmly for costs to be met from within the court’s existing budget.

I note what my noble friend Lord Dykes said, but in the current economic climate there is an imperative to find ways to reduce administrative costs. In the same way that we have asked our domestic institutions to do more, we look to the EU to do likewise. I also assure him that we are heavily engaged on a wide range of European issues. My honourable friend the Minister for Europe regularly updates Members of your Lordships’ House on the broader issues raised by my noble friend Lord Bowness.

The Government are committed to promoting the effective passage of justice by the Court of Justice of the European Union. We believe that the appointment of additional advocates-general, alongside the reforms that the court has already made, will contribute to this goal. The Government will continue to work closely with the court, the Commission and other EU member states to identify and take forward both long and short-term solutions to the General Court’s backlog, and we will continue to explore the full range of options for structural reform in order to find a solution that meets the objectives I have outlined today.

Sitting suspended.