Contracts (Applicable Law) Act 1990 (Amendment) Order 2000

HL Deb 30 June 2000 vol 614 cc1263-7

5.36 p.m.

Lord Bach rose to move, That the draft order laid before the House on 5th June be approved [21st Report from the Joint Committee].

The noble Lord said: My Lords, in moving the order, I shall, with the leave of the House, speak also to the Civil Jurisdiction and Judgments Act 1982 (Amendment) Order 2000.

The main purpose of the Civil Jurisdiction and Judgments Act 1982 (Amendment) Order 2000 is to make some minor modifications to the 1982 Act to reflect the accession of Austria, Finland and Sweden to the 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters.

The 1968 Brussels Convention to which all member states of the European Union are parties was brought into United Kingdom law by the Civil Jurisdiction and Judgments Act 1982. It harmonises throughout the European Union the law on the civil jurisdiction of national courts and facilitates the enforcement of their judgments in other member states. The agreement is important and it has generally been seen as operating satisfactorily in practice. Its underlying purpose is to promote mutual recognition and enforcement of judgments throughout the European Union, thereby inspiring business confidence and generally encouraging the right conditions for trade.

On becoming member states of the European Union, Austria, Finland and Sweden undertook to accede to the convention. An accession convention to this effect was agreed at the end of 1996. It makes no changes of substance to the convention but only the technical amendments necessary to ensure that the convention contains, where appropriate, the references to the relevant national courts in those countries, their procedural rules and existing bilateral agreements between those countries and other member states covering the same subject matter as the convention.

The practical and legal consequences of those accessions to the convention are limited because the new member states are already parties to the 1988 Lugano Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters which is modelled on, and is in very similar terms to, the Brussels Convention. All the member states of the European Union are parties to that agreement. Articles 3 to 8 of the order make the necessary amendments to the Civil Jurisdiction and Judgments Act 1982.

The other purpose of the order is to make the necessary changes to the 1988 Lugano Convention for the purposes of the law of the United Kingdom, which will reflect the accession of Poland to this agreement on 1st February 2000. The Lugano Convention is an agreement between the member states of the European Union and other countries that either belong to the European Free Trade Area or, like Poland, are prospective members of the EU. I have already mentioned its close resemblance to the 1968 Brussels Convention. It was given legal effect in the UK by the Civil Jurisdiction and Judgments Act 1991, which amended the Civil Jurisdiction and Judgments Act 1982.

In order for Poland to be allowed to accede, the consent of all the member states to the Lugano Convention was required and has been given. It was agreed that the Polish legal system could be trusted to produce civil judgments worthy of recognition and enforcement in other member states and that its procedures for the enforcement of civil judgments justified confidence that judgments from other members states would be properly enforced in accordance with the principles underlying the convention. The Government were able to give their consent to Poland's accession after consulting widely, particularly among British lawyers practising in that country. Articles 9 to 12 of the order amend the 1982 Act to include appropriate references to Poland and the relevant provisions of Polish law, its appeal courts and procedures.

I move on quickly to speak to the Contracts (Applicable Law) Act 1990 (Amendment) Order 2000. The purpose of this order is to make some minor modifications to the Contracts (Applicable Law) Act 1990 to reflect the accession of Austria, Finland and Sweden to the 1980 Rome Convention on the law application to contractual obligations.

Perhaps I may say a few words by way of background about the 1980 Rome Convention, which was implemented in the United Kingdom by the 1990 Act. This is a convention made between member states of the European Union the purpose of which is to harmonise their private international law rules on contract law. It lays down rules to determine which law is to apply to a contract that has connections with more than one country. It does not affect the substantive law of contract but merely enables courts to decide which country's law governs a contract. This harmonisation is designed to make it easier for people to do business in the Community, as the rules on the applicable law of contract will no longer vary according to which member states' courts have jurisdiction.

The two basic principles of the convention accord with the previous law in the United Kingdom. First, the parties to a contract may choose which country's law is to apply to it; this enshrining of freedom of choice is central to the convention. Secondly, in the absence of such a choice, the contract is to be governed by the law of the country with which it is most closely connected. The convention lays down various rebuttable presumptions for determining this connection.

As with the 1968 Brussels Convention, Austria, Finland and Sweden undertook to accede to the Rome Convention on becoming member states of the European Union. The Accession Convention was signed at the end of 1996; it makes no changes of substance to the Rome Convention and contains only technical adjustments designed to ensure that the convention contains, where appropriate, the necessary references to the national courts and laws of the new member states.

Finally, Article 6 of the order amends the First Protocol to the convention, which deals with the jurisdiction of the European Court of Justice in relation to the Rome Convention and adds to the list of the supreme courts of the member states those in Austria, Finland and Sweden. The schedule to the order sets out the 1996 Accession Convention and adds it as a new schedule—namely, Schedule 3B—to the Contracts (Applicable Law) Act 1990.

In conclusion, the changes to the Civil Jurisdiction and Judgments Act 1982 and the Contracts (Applicable Law) Act 1990 contained in these two orders are minor and uncontroversial and are necessary for this country to be able to ratify the conventions whereby Austria, Finland and Sweden have acceded to the Brussels Convention and the Rome Convention. The proposed amendments to the 1982 Act are also necessary to reflect the accession of Poland to the 1988 Lugano Convention. These orders therefore facilitate useful developments in these important areas of private international law and I commend them to the House.

Moved, That the draft order laid before the House on 5th June be approved [21st Report from the Joint Committee].—(Lord Bach.)

Lord Goodhart

My Lords, I should like to begin by entering a mild protest at the fact that the business for today has been so very heavy. I wonder on what previous occasion the House has been still sitting at quarter to six on a Friday afternoon. It seems to me that the business arrangements are unsatisfactory in that the orders are discussed so late in the day.

I turn to the orders themselves. They are obviously a necessary element in a highly welcome fact; namely, the accession of Austria, Sweden and Finland to the European Union. The accession of Poland to the Lugano Convention is particularly welcome on the ground that this is the first occasion on which an east European state has acceded to the convention. That is clearly a step forward in what one might call the bringing together of eastern and western Europe which we all hope will lead to other developments such as enlargement of the European Union itself.

There is only one question I wish to raise. Why, in the case of the accession to the Brussels and Rome conventions of Austria, Sweden and Finland, has it taken over three and a half years from the signing of the conventions for these orders to come before your Lordships' House? I believe that in the case of Poland's accession to the Lugano Convention it is only a matter of some four or five months which seems much more reasonable.

Lord Brabazon of Tara

My Lords, I have absolutely no objection to these orders. I am sure that they are admirable orders. However, I join the noble Lord, Lord Goodhart, in saying that we are now sitting at a quarter to six on a Friday afternoon to discuss the first of six government orders. This is quite unacceptable. The Government must organise their business better. I am minded to divide the House on the order. I know perfectly well that if I do there will not be a quorum and the Government will then have to bring the orders back at an appropriate time. I assure the noble Lord that I shall not do that, although I am minded to do so. I hope that the noble Lord will take back the message that it is quite unacceptable to bring six government orders before your Lordships' House at a quarter to six on a Friday evening.

Lord Bach

My Lords, I am grateful to both noble Lords who have spoken. The point that they have made is well taken. I am also grateful for their support for the two orders to which I have spoken. The noble Lord, Lord Goodhart, mentioned the delay in the orders coming before the House in relation to the three countries that have acceded to the EU. The delay occurred because we were awaiting Poland's accession to the Lugano Convention, which took place only in February 2000, as we wanted to deal with all these matters in the same debate. However, that may not be an entirely satisfactory answer to his question.

On Question, Motion agreed to.