Court of First Instance

– in the House of Commons at 12:35 pm on 25th March 1988.

Alert me about debates like this

Photo of Sir Nicholas Lyell Sir Nicholas Lyell Solicitor General (Law Officers) 12:35 pm, 25th March 1988

I beg to move, That this House takes note of European Community Document No. 8770/87 on the establishment of a Court of First Instance; endorses the view that the setting up of this Court is necessary to relieve the Court of Justice of some of its workload; and supports the Government's intention to work for the early adoption and implementation of the proposal.

The motion deals with the setting up of a new court for the European Communities. In order to set this proposal in its context, it is helpful to look at the work so far of the Court of Justice of the European Communities. I shall take a few moments for a historical look at that before turning to the details of the proposal. I shall refer generally to the court's work under the treaty of Rome, which established the European Economic Community, not forgetting that the court has separate jurisdictions under the Coal and Steel treaty and under Euratom.

The European Communities are based on law, which is established by a treaty, which is not simply an agreement among sovereign states, but which has created for those who live and work in its 12 member nations a new legal framework. That is the Law of the Communities, and it is superimposed upon, overlaps, and to some extent remoulds, the law of the individual member states. The authors of the treaties rightly saw that one cannot create a new supra-national legal order without providing a means whereby those new laws are to be interpreted and enforced. It was to this end that a wholly new court was created, the Court of Justice of the European Communities.

That court has three principal areas of jurisdiction and they are very important. First, at the instance of the Commission, or of a member state, the court may declare that a member state has failed to fulfil its obligations under the treaty of Rome. Secondly, it may review the Acts of the Community institutions— the Council, the Commission and the Parliament—and it may declare them void. In other words, the court has power of what we would in Britain term judicial review over the actions not only of member states, but of the institutions of the Community itself.

The court has a third role, and this is the interpretation of Community law at the request of the national courts where a question of Community law arises in the course of domestic litigation. That, one might say, is the link between the private litigant and the Court of Justice in Luxembourg.

I should mention two other areas of jurisdiction that come into the discussion of the jurisdiction proposed for the new court. The Court of Justice has to deal—this has proved time-consuming — with disputes between officials of the Communities and their employers—the so-called staff cases. It also deals with cases where the Community itself is sued in damages for non-contractual liability. A good example is the case of Mr. Stanley Adams, which is a well-known illustration of that type of case.

In fulfilling its obligations under the treaties the Court of Justice has been at the centre of the development of Community law. It might be said that it has acted as the flywheel in the Community engine, maintaining the development of the Communities, despite an occasional misfiring in the political mechanism. It has developed a number of fundamental principles, not expressly found in the treaties, providing for or safeguarding the rights of individuals and corporations. Among these principles, and perhaps the most important, is the concept of direct effect—that is the idea or concept that certain provisions of Community law create rights on which individuals can reply and which they can enforce in their national courts, even in the absence of implementing measures apparently required to be taken by member states.

Also well known are the principle of proportionality — that is, the means to achieve a particular objective should be proportional, they should be no more than is necessary to obtain that end — and the principle of legitimate expectation—a concept that now finds a place in our own domestic law of judicial review.

The court's work has been fundamental to the functioning of the Community. It may be asked, "Why is it necessary now to transfer part of the court's own jurisdiction to another court?" The answer lies partly in the increasing role played by Community law in the affairs of everybody in the Communities, and partly in the fact that the Community itself has been enlarged to double the size of its original membership. The result has, of course, been increasing difficulty for the court, as presently constituted, to cope with its enlarged work load. In 1970, for example, the number of cases of all kinds that were brought to the court was only 79. In 1985 that had risen to an absolute peak of 433, although the rise may more representatively be seen by the figures for 1986 and 1987, which were 329 and 395 repectively.

The court has done its best by adapting its procedures to deal with that increasing work load. In 1970, 64 judgments were delivered. Fifteen years later that number had increased to no fewer than 211 judgments. However, it is clear that the court has been falling behind and that has shown up in delays between the commencement of a case and the time of judgment.

In article 177 cases, those where questions are referred by national courts, that delay is now averaging 15 months, while in other kinds of cases the average is 21 months. In this, as in so many other legal areas, it can properly be said, "Justice delayed is justice denied."

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

I am grateful to the Solicitor-General for volunteering those periods. Is he saying that when a case is thus referred under article 177 the British domestic court—whatever level is may be—adjourns the case for a period either side of the average that he mentioned—some, of course, will be longer than that—and reconvenes the case to give judgment only after the receipt of the opinion, which may be well over 24 months later?

Photo of Sir Nicholas Lyell Sir Nicholas Lyell Solicitor General (Law Officers)

Yes, indeed. That highlights the problem and the danger of justice delayed being justice denied for those in our domestic courts, whose issues raise questions upon which the treaty and the law of the Community bear. This increasingly difficult position has been evident for several years and everyone agrees, as the hon. Gentleman's intervention makes clear, that it is unacceptable. A number of ideas have been floated to resolve the problem, but none came to fruition until, during the negotiations leading to the Single European Act, the Court of Justice proposed the creation of a court to be attached to it and to act as a Court of First Instance. This was agreed and the provisions were incorporated into the Community treaties by the Single European Act.

The relevant provision from the EEC treaty is in article 168A, and reads: At the request of the Court of Justice and after consulting the Commission and the European Parliament, the Council may, acting unanimously, attach to the Court of Justice a Court with jurisdiction to hear and determine at first instance, subject to a right of appeal to the Court of Justice on points of law only and in accordance with the conditions laid down by the Statute, certain classes of action or proceeding brought by natural or legal persons. That Court shall not be competent to hear and determine actions brought by Member States or by Community Institutions or questions referred for preliminary ruling under Article 177. The remaining paragraphs provide for amendment of the statute of the Court of Justice, the appointment of members of the new court, and establishment of rules of procedure for the new court.

Thus, the Single European Act does not itself set up a Court of First Instance, but confers power on the Council to do so. Furthermore, it confines the potential jurisdiction of the Court of First Instance to proceedings brought by natural or legal persons, thus excluding from it actions brought by member states or Community institutions and references from national courts under article 177. Subject to these limitations, however, it is left to the Council to determine the precise scope of the Court of First Instance's jurisdiction

To complete the history, hon. Members may recall that the ratification of the Single European Act was delayed by court proceedings in the Republic of Ireland. Nevertheless, pending ratification, the court presented an informal draft proposal for consideration by the Council. It was this informal proposal that was considered by the European. Communities Committee in another place, but the Committee was also able to take account of the formal proposal presented to the Council in October.

May I remind the House briefly of the conclusions reached by that Committee: The establishment of a Court of First Instance broadly on the lines proposed by the Court of Justice could provide a major step to solving the endemic problems experienced by that Court: inadequate time and judge power for fact finding processes and an excessive workload. Given a judiciary of high calibre and flexible procedures, the new Court should improve the administration of justice and take a considerable load off the Court of Justice. So we now have a formal proposal for the establishment of the Court of First Instance. Subject to some relatively minor points both of substance and of drafting, the Government welcome the proposal.

In considering the proposal it is important to appreciate that no new jurisdiction is being proposed. The treaties do not permit this. What article 168A does enable is the transfer of a part of the jurisdiction of the Court of Justice to the new court, but with the provision for appeals to the Court of Justice on points of law. Secondly, there is no creation of a new institution. There will be a new court, but, as article 168A makes clear, that new court is attached to the existing Court of Justice. Essentially the proposal is to provide a redistribution of the existing jurisdiction and work load of the Court of Justice with a view to speeding up justice.

The proposal itself is in the form of a draft Council decision including amendments to the statute of the Court of Justice, and additional rules of procedure for the hearing of appeals from the Court of First Instance. Article 2 of the draft decision deals with the composition of the new court and provides for seven judges. While this has its attractions from the point of view of economy, it is not likely to be acceptable. The Government recognise the importance of there being represented in the court the juridicial traditions of all the member states and have therefore suggested — in line with the report made in another place — that the court should consist of 12 members.

There is no provision in the draft for advocates general. The Government believe that the provision of advocates general would generally be unnecessary and would also increase the time for the court to deal with cases. However, it is possible that there might be some cases where the services of an advocate general would be desirable: for instance, in a long and difficult competition case an advocate general could assist the court considerably in teasing out the strands for the benefit of the court. So it may be appropriate for advocates general to be appointed from among the judges of the Court of First Instance on an ad hoc basis.

The Court of Justice has proposed that the new court should always sit in chambers and that each chamber should be composed of three judges. The Government agree that there seems no real purpose in providing for the court to sit in plenary session, but there is a case for allowing flexibility in composition so that, when appropriate, the court could decide to select a chamber larger than three. In particular we consider that competition cases should normally be heard by chambers of five judges.

The jurisdiction of the new court is set out in article 3 of the draft decision. It is to deal with competition, antidumping and steel matters and also with certain non-contractual liability claims and with staff cases. It is clearly right to remove from the Court of Justice the burden of staff cases. The other categories are suitable for transfer, in particular, because they often call for detailed and time-consuming investigation of questions of fact which, because of the pressures of other business, the Court of Justice has not always been able to handle satisfactorily. On points of law there will be a right to go the Court of Justice on appeal. As I have mentioned, cases brought by member states or the Community institutions — as opposed to private individuals or corporations — and cases in which questions are referred by national courts will continue to be dealt with by the Court of Justice alone.

The jurisdiction proposed could be wider than that now proposed, with the aim of relieving the European Court of Justice of part of its case load to the maximum extent possible in one step, though it must be borne in mind that the extent of the jurisdiction cannot exceed the limits set down in article 168A of the treaty. But what is proposed is, in the Government's view, about right as a first, and substantial, step. We would expect the Court of Justice to keep this matter under review and, if experience shows that other classes of case could with advantage be heard at first instance, to bring forward a further proposal to amend the scope of the new court's jurisdiction.

If the objective of relieving the work load of the Court of Justice is to be achieved, the judgments of the Court of First Instance need to be of a high quality and so command respect. This will help to minimise the number of appeals on points of law from that court to the Court of Justice and will also facilitate the handling of the appeals that are made. It is therefore essential that the members of the new court should be of the highest calibre. The Government consider that it may be appropriate to provide for a Council minutes statement pointing out that all member states have agreed on the importance of this point. We have made a proposal to this effect in the Council working group, which is it.

The remainder of the proposal consists of additions to the statute of the Court of Justice and its rules of procedure providing for the circumstances in which an appeal lies and how it is to be made. The Government are pleased to note that article 48(3) of the statute provides for a right of appeal for member states and the Community institutions whether or not they took part in the proceedings before the Court of First Instance. This is important, as it represents a change from the court's informal draft proposal. The Government consider this matter to be important, since there could be a decision of the Court of First Instance with which the parties to the case itself were content but which raised a point of Community law of wider application which a member state would see the need to contest.

The proposal does not deal with the rules of procedure of the Court of First Instance. Under article 168A of the treaty, these rules will be established by the new court when it comes into existence. However, the rules require the agreement of the Court of Justice and also the unanimous approval of the Council. The House will therefore have a full opportunity to scrutinise the proposals for those rules.

I shall not detain the House on drafting points, except to mention two matters where the present draft in English hides a possible point of substance and which, in any event, only serves to confuse. The first point relates to article 113 of the additions to the rules of procedure, which concerns the order that a party may seek on appeal to the Court of Justice. This speaks of "conclusions" and "grounds" which a party must "maintain" in his appeal. What is apparently intended to be achieved by these provisions is that the appeal should involve the same subject matter and cause of action as did the hearing before the Court of First Instance. In other words, an appellant should not seek to mount an entirely different case on appeal. That must be right and the Government are seeking to refine the English draft more accurately to reflect that idea.

The second point arises out of article 120 of the additions to the rules of procedure of the Court of Justice and relates to oral hearings. The opportunity for the parties to urge and reinforce their case by oral argument is of great importance in the United Kingdom's systems of law. The court modified its informal proposal to the extent that the court now proposes that an oral procedure will be dispensed with only where the parties have, had a full opportunity to state their points of view in the written procedure. This must be right.

We have, I am glad to say, persuaded the court to accept a further amendment to ensure that the parties have an opportunity to make representations as to whether they would like an oral hearing before the court decides whether to hold one. The parties should by the close of pleadings at the appeal stage have had ample opportunity to set out their submissions and meet the submissions of the other parties, but they should nevertheless be able to seek a hearing when appropriate. We believe that the Court of Justice now accepts this and that an appropriate provision will be added to the proposal.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Southend East

Does my hon. and learned Friend regard that as something new? He said that the individuals concerned may apply for the right to an oral hearing. Does he regard that as entirely satisfactory?

Photo of Sir Nicholas Lyell Sir Nicholas Lyell Solicitor General (Law Officers)

I understand my hon. Friend's point. We regard it as the best compromise that we could achieve. I have already emphasised the importance of the oral tradition in English proceedings. Initially, the proposals to allow an oral hearing were more restrictive. We have made some progress and it will be possible for the parties to urge forcefully on the court the desirability of an oral hearing before the court decides to dispense with one. Although that does not provide an absolute right to an oral hearing, it is a significant improvement.

There are many other rather more technical points, and if any hon. Member wishes to raise any particular concern on the technical aspects, I would be very grateful if he or she would write to me, but I hope that I have made clear the general thrust of the proposal.

Photo of Mr David Martin Mr David Martin , Portsmouth South

I have not yet heard a definition of who is a natural and legal person. I am sure that anyone who appeared before the court would have a great shock if he was told that he was unnatural and illegal. Will my hon. and learned Friend tell us to whom that definition applies?

Photo of Sir Nicholas Lyell Sir Nicholas Lyell Solicitor General (Law Officers)

My hon. Friend will he comforted to know that he is a natural and legal person and so, as it happens, is a corporation. I hope that that will assist him for the time being.

To sum up, the Government welcome this proposal. We believe that it will improve the speed and quality of the administration of justice in the Community. We are participating actively in the Council working group with a view to resolving the remaining drafting difficulties, and we are doing all that we can to ensure that the Court of First Instance is established at the earliest opportunity. I commend the motion to the House.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South 12:58 pm, 25th March 1988

I had expected to hear a contribution from this side of the House, but 1 am pleased to follow the Solicitor-General, who introduced the motion. Although it is concerned with the extension of the European Court of Justice to a Court of First Instance, it gives us an opportunity to review the work of the court from which it springs and the need for it.

Those matters have been outlined by the Solicitor-General. In his initial remarks, he emphasised the superimposition on the institutions and courts of this country of the decisions of the European Court of Justice. We have had a relatively dramatic example of that recently in respect of spectacles, and we expect a fairly controversial judgment in the next few months.

The Select Committee on European Legislation summarised the proposals for an extension to a Court of First Instance in its report, HC43-VIII. As the Solicitor-General said, the other place did a more extensive investigation. Its report — House of Lords 20, in the Session 1987–88—goes into even greater detail, including witnesses' comments and more history of the court. There is the Government's explanatory memorandum signed on 23 November 1988 by the Minister of State, Foreign and Commonwealth Office. EEC document 8770/87 is in the form of a draft decision, and I take it that it is that base document in respect of which the working party to which the Solicitor-General referred is dotting the i's and crossing the t's.

This development springs from the Single European Act, which will become better known than when it was debated two years ago under one of the most stringent guillotines ever seen in the House — and that on a constitutional matter. The contents page of the Single European Act, as published in Cmnd. 9758, are scrutinised in vain for any reference to the establishment of the Court of First Instance. The provisions are interlarded into Single European Act articles 4, 11 and 26, which write subsidiary articles into the main treaty of Rome arid expand on the three communities to which the Solicitor-General referred, inserting the relevant paragraphs relating to the powers of the Court of First Instance.

The treaty of Rome, as originally adhered to by Britain, is printed by Her Majesty's Stationery Office, but it has not yet managed to print the treaty as amended by the Single European Act. A few weeks ago, I had a letter from the Minister of State, Foreign and Commonwealth Office telling me that that is indeed so. I regard the delay as unfortunate, unnecessary and semi-constitutional. The Single European Act came into effect last summer after a delay, and I should not have thought that it was beyond the wit of man for the presses to have been set up some time ago and for the consolidated law, which applies as a written constitution to the United Kingdom, to have been printed.

A volume has been produced in Europe, but I hope that you, Mr. Deputy Speaker, and the House would not regard that as a satisfactory solution to an increasingly important matter.

What I have said so far is fully compatible with my being Chairman of the Select Committee on European Legislation, but anything that I say henceforth will not be in that capacity but by way of personal comment. The establishment of the Court of First Instance, though it is only an extension of the existing court, marks an extension of the constitutional role of the EEC in the life of our country and the degree to which its findings and recourse to it will be important for corporations and other courts. It will not perhaps be so important for individuals.

In response to an intervention of mine a few moments ago, the Solicitor-General confirmed the degree of delay. In an answer given to me yesterday, which can be found in column 181 of the Official Report for 24 March, the Foreign Office listed no fewer than 23 occasions on which the Commission has taken the United Kingdom Government to court. In column 177, the Attorney-General said that since accession to the treaty of Rome the House of Lords has had to seek an opinion from the European Court of Justice on six occasions, the Court of Appeal on six and other courts of the land on no fewer than 64.

Although the Court of First Instance may not be fully involved—as we have heard from the Solicitor-General, it is not involved in article 177 consultation—that at least shows the importance of the institution. The court does not only give verdicts when we have been party, or there has been an appeal or at least a reference from our own courts. There is, I understand, a growing body of case law in which different firms or organisations — or, indeed, different states—are involved in the European Court of Justice, and the findings of that court are applicable to us through case law, just as case law in our own courts has been applicable to jurisdiction subsequently. The European Court of Justice is important for that reason alone.

I do not know whether any organisation other than the commercial publishers—I shall not name them; they are very well known—is producing volumes of case law from the European Court of Justice. No doubt the Court of First Instance will be producing some of its own, and the House should pay some attention to the increasing documentation that will result.

Another consequence of the European Court's jurisdiction is the importance of determining cases on article base. We are becoming used to operating within a written constitution—or perhaps we are not becoming used to it, as the case may be. If we are not becoming used to it, we must do so pretty quickly, because it runs counter to most of our instincts and assumptions in Parliament, and those of Ministers in Whitehall.

A current instance of great importance relating to the Court of Justice lies in the interpretation of the treaties, and the question of which articles should be taken into account as the basis of law. That is particularly important in regard to articles 100 and 100A, which are important for the harmonisation to which we move as we approach 1992. Article 100, as it stands and as it was, requires unanimity for matters of harmonisation; article 100A, as introduced by the Single European Act, requires only majority voting. It may be asked why, as virtually everyone agreed with that, it cannot be speeded up. The point at issue is whether a particular matter should be regarded as a matter of harmonisation according to the aims of 1992—in which case jurisdiction should be based on article 100A—or whether it is a matter outside harmonisation for the purposes of achieving a common market, and should be based on some other article of the treaty, perhaps agricultural or industrial, or indeed, on article 100.

There is, of course, a big difference. If the court determines that the article used should be 100A, then the House, the nation and indeed the courts will be subject to a majority vote; whereas if it is subject to article 100 or article 99 — which, as the Prime Minister has often reminded us, deals with matters of taxation — it is a matter of unanimity. Perhaps those matters will not arise in the Court of First Instance. I think that they probably will not. However, it is important when considering the powers and responsibilities of the European Court of Justice that those matters are made clear.

There may be problems over a topical subject such as summer time and its dates and hours. Some people might argue that jurisdiction on that matter should be based on article 100A. In that case, a majority view must prevail in the Council of Ministers to which this nation, House and people will be subject. On the other hand, it might be contended, no doubt by the Government, that other articles are more appropriate because the case involves matters of social and economic affairs as well as harmonisation. In that case, the determination would be consequential upon unanimity and the agreement of the Government, possibly with debates and decisions in this House. If in due course the European Court of Justice has to make an adjudication not on the merits of the matter, but on the basis of the article on which a decision is made, the powers of the House and the Government may or may not be circumscribed.

Another matter in relation to the European Court of Justice about which the House should be aware is the appropriate juncture at which to bring it to the attention of the House. I want to consider the responsibility of the court to make judgments in accordance with the treaties. That is a sine qua non of the situation. People may not be aware of the fact that, unlike our statutes, where a court must take account only of the sections of the relevant Act, the European Court of Justice takes into account the context in which treaties have been made. It therefore takes into account when interpreting argument the preamble of the treaties concerned.

We are aware that the European Communities are essentially a centralist organisation. I want to put on record some of the criteria that the European Court of Justice would need to take into account when reaching a decision. There are a number of preambles to the treaties, not least that to the Treaty of Rome. The most recent preamble, the preamble to the Single European Act, contains two paragraphs which should be placed in the Official Report. First: Convinced that the European idea, the results achieved in the fields of economic integration and political cooperation, and the need for new developments correspond to the wishes of the democratic peoples of Europe, for whom the European Parliament, elected by universal suffrage. is an indispensable means of expression. In other words, the expression of view by the European Parliament should be taken into account in the interpretation of treaties.

I should explain that I am not quoting from the whole of the preamble, but simply from the final two paragraphs. The second paragraph states: Determined to improve the economic and social situation by extending common policies and pursuing new objectives, and to ensure a smoother functioning of the Communities by enabling the Institutions to exercise their powers under conditions most in keeping with the Community interests. Whereas at their Conference in Paris from 19 to 21 October 1972 the Heads of State or of Government approved the objective of the progressive realisation of Economic and Monitary Union. That is a second area in which the criteria of judgment of the European Court of Justice at any level will have to refer and on which it will ultimately have to depend.

I should also emphasise a point which I believe was mentioned by the Solicitor-General with regard to the nature of the European Court of Justice. The court is not adversarial. It is not in general a place where cross-questioning takes place or where witnesses appear. As I have understood and observed it, it is a court in which argument is made on points of law by depositions of papers, usually preliminary to any oral hearing, and that is normal in continental practice. I make no complaint about it in terms of the task that the European Court of Justice has to fulfil in respect of its constitutional interpretation of treaties.

Whereas dealing with technical opinion and the witnessing of experts is common in our courts, I surmise that that will not apply to the Court of First Instance. It will mirror decisions, with simplifications and without the opinion of, for example, the Advocate-General. It will, I hope, speed up the process. If the range of cases with which the new court deals involve great technical detail and witnesses, I am not convinced that the paper method, used by the existing European Court of Justice, will necessarily be adequate to do what the Solicitor-General said was its aim—to see that justice is done, swiftly and adequately.

The Lords report touches on this matter to some extent, but I am not convinced that the new court will do its task to the extent that we would wish. The rules will be drawn up by the European Court of Justice. The treaties give the European Court of Justice the power to originate proposals for its extension. That was agreed—wisely or unwisely—some time ago by the House. I should have no objection to those who run the existing court saying to the Council or the Commission, "We suggest that we expand our activities in this, that or the other way." That is consultation and would be acceptable. To require the existing Court of Justice to provide the draft of the decision—in other words, to write the Bill for its own future expansion — and to give the framework for its activity, is outwith, to use an old-fashioned but well-known phrase, the experience, tradition and expectations of our constitutional development.

This is instanced by the fact that consultative document 8770/87 is from: Mr. A. J. Mackenzie Stuart, President of the Court of Justice of the European Communities. It is almost like a new legal Bill coming before the House, having been drafted and presented by the Lord Chief Justice. We must be aware of that aspect and of the general manner in which the Court of Justice operates. There must be observation of how the court works.

I have referred to the probable increase in the scope of the court's work load. I concede that the articles relating to the Court of First Instance do not expand the court's jurisdiction, but the Single European Act certainly increases the jurisdiction of the European Court of Justice, because it significantly extends the European Community's scope and powers into matters concerning the environment, economic and social cohesion and defence procurement, which involves Foreign and Commonwealth Office co-operation, although I think that that is less likely to feature in a legal case.

Therefore, by automatic escalation, the scope of the European Court of Justice, not just the Court of First Instance, must also expand. That is where matters of detail, witnessing and argument may cause some difficulties. In future people may look back with some astonishment to the fact that the matter was taken on a quiet Friday, and that the original intention of the Government was that it should be discussed in Committee.

The amount of legislation which is creeping up the creeks and estuaries of Britain from across the water is growing daily. The areas of our social, domestic and economic life into which that legislation is penetrating are increasing. It is clear that not only will the scope and activity of the European Court of Justice increase and loom larger in our national life, but by definition so will the activities of the court that we are discussing today.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Southend East 1:21 pm, 25th March 1988

The only obvious thing about these proceedings is that very few hon. Members wish to talk about this issue. I have only a few brief questions for the Minister after his courteous and helpful speech.

Perhaps the Table will give some consideration to the formula of the papers which are presented for debate and perhaps at some later stage will decide whether any rules have been breached. I draw attention to the explanatory note to article 120 which has been referred to by the Minister. It includes some very long foreign words which do not mean a great deal to me. I have never experienced this before in the House, and I wonder whether it is strictly in order or whether it is a precedent for long foreign words which have no meaning to the great majority of people who do not have a widespread knowledge of foreign words to appear in official papers presented to the House for discussion and which will affect almost all our constituents. I do not expect more than general guidance, but I hope that the Table will consider whether is in order that long foreign words which the majority of people simply do not understand should be inserted in papers which are directly relevant to our discussions.

The Minister is always extremely courteous and he is an extremely good Solicitor-General. I should like him to comment briefly on a number of questions. He has expressed hope, expectation and optimism about the operation of the new court. He has explained that the European Court of Justice it getting busier. I am well aware from my research that, for example, the number of cases brought before the European Court of Justice has risen from 79 in 1970 to 329 in 1986. The number of cases brought each year has more than doubled from 200 in 1979 to more than 400 in 1985. We are also aware of the increase in expenditure. About £3 million has been added to the annual budget of the court by the creation of this new mini-court.

First, is the Minister aware, is he worried and is he concerned about the fact that Ministers, including himself, regularly come before the House to give optimistic and hopeful indications about future policy in relation to the Common Market, and in almost every case those expectations and hopes sadly are not accurate. For example, we were told by the Government and by the Civil Service that Fontainebleau would reduce the United Kingdom's net contribution. So far we have had three revisions of that figure, yet this year, despite all the hopeful conclusions, our net contribution is the highest ever and is still rising.

In previous debates, hopeful statements were made about Britain's trade with the EEC, and documents were presented for consideration by the House which we were told would improve the position. But our trade with the EEC in manufactures is the worst in history, with a net deficit of more than £11,000 million — something that could have an effect on the Government's economic policies.

Recently the Prime Minister came before the House with the results of a European Community discussion which she said would have a marked effect on agricultural spending, yet in the past few weeks agricultural spending has rocketed, exports from the EEC are cheaper than ever and we are flooding the Soviet Union with butter at 6p a pound and beef at 11p a pound. I am not being critical, especially of this most courteous and helpful Solicitor-General, who has an extremely good reputation in Government, but I suggest that in presenting this document Ministers should be suspicious about the optimistic noises that are made about the limited effects of the measure.

The Solicitor-General said, and gave me a kindly look in so doing, that the court will not create a new jurisdiction. On reflection, does he not consider that by offering new facilities for making decisions on complex matters he is extending the operation and jurisdiction of the institution of the EEC? He will be aware that, apart from the many cases that are presented to the court, even during the past few days many problems affecting the details of Government policy have been caused because of possible applications to the court. I mention only a few.

The other day, the unfortunate Secretary of State for Enterprise, as I think he is now called, was summoned by the Commission and told that his exciting new deal to merge the Rover company with British Aerospace was causing a problem. We were told that it had to be sorted out by next month, but he was hastily summoned over by the Commission and told that, sadly, this could not happen because the European Community wanted to examine it first to see whether the figures added up and were acceptable, and that it would take six months to do so. I understand that the Government took legal advice on what would happen if they went to the court, and were told that they did not have a hope. So that vital and urgent decision will have to be delayed because of a possible application to the European Court.

Some of my hon. Friends are careful with their purchasing and wish to ensure that they buy goods from particular countries. They are worried about origin marking, which the Government said was vital to protect the consumer. But recently we had to pass a law to ensure that origin marking, as we know it, will disappear—not because the Government want it, but because the Government's solicitors were told that if they resisted that proposal from the Common Market we could be taken to court and would lose the action. There has been a flood of transfer of sovereignty, not because of decisions of the European Court but because of potential decisions on applications that are undermining the freedom previously enjoyed by the House.

My third question to the Minister is this: will the new court deal with the policies of Governments as opposed to individuals or organisations? Many of us are becoming worried by the extent to which new powers are emerging that will affect Government policy. The other day the court told us that we shall have to charge VAT on spectacles and hearing aids whether we want to or not. We cannot discuss that in this debate. Very soon the European Court will tell the Government whether they will be obliged to levy VAT on electricity and gas for industry and on new commercial and industrial building. That could involve and extra £350 million in building costs.

My fourth question is about costs. I am well aware that industry and commerce, particularly small firms, are often worried about going to court because of the costs involved. We have a fair idea of what is involved with British courts. Several people, particularly in Southend, have expressed to me a concern about costs in the event of an application to the Court of Justice or to the new court. We have just been told that we must charge VAT on spectacles. Our application against that was turned down, and we have to pay costs. Could my hon. and learned Friend the Solicitor-General give us some idea of the costs in European Community courts, perhaps by telling us what the costs in that case were?

Finally, in drafting this new court extension, did the Government give any thought to implementation? Quite a few of us are worried that, while the United Kingdom consistently agrees to decisions of courts and obeys them because of our traditional respect for the courts, in other countries decisions are not being applied because the domestic Governments concerned have to apply the law. Are the Government satisfied that other member states are applying the decisions of the Court of Justice as fairly and equitably as we are? Will the creation of this new sub-court include an additional clause which could have the effect of ensuring that these clauses are applied honestly and fairly in every respect?

Quite a few of us are beginning to get worried that in these various measures we are seeing part of a pattern of agreements which are basically taking away powers which have been traditionally enjoyed by this country. We know, for example, that my right hon. Friend the excellent Home Secretary has just brought in proposals to reinforce the gun laws and we now find that under article 100A the EEC is giving careful consideration to a proposal that would ensure that any person from a European country could walk up and down Oxford street with a Kalashnikov rifle as long as he had a certificate from his own country—in other words, a mutual recognition of firearms licences.

We also know that my right hon. Friend the Home Secretary is concerned about the independent television companies. Our traditional patterns could be overturned or undermined by a majority decision in the EEC. Summer time will no longer be our decision but that of others. Even this morning, there was an alarming report in The Daily Telegraph that these wonderful new structural funds of over £10,000 million will benefit only one part of the United Kingdom —Northern Ireland. That decision in not taken by the people or by democratic Governments—it is purely a decision by the EEC Commission.

I suggest that this court is not such a positive move and might not be as easy for Britain as my hon. and learned Friend the Solicitor-General has suggested. I hope that he will at least give us the clear assurance that in this matter, as in all others, he will approach European documents, whether written in English or any other strange language, with caution and reserve and read them carefully.

Photo of Mr John Fraser Mr John Fraser , Norwood 1:33 pm, 25th March 1988

The hon. Member for Southend, East (Mr. Taylor) asked the Solicitor-General a question, which the hon. and learned Gentleman will no doubt answer, about whether individual Governments are likely to have actions brought against them in the Court of First Instance. My understanding is that only natural and legal persons—that is to say human individuals and corporations—will be subject to proceedings before the court, although, once the Court of First Instance has come to a decision, it would be open to the Government or the Commission to intervene by way of appeal to the European Court of Justice.

I do not entirely share the hon. Member's emphasis on Community matters. His views are well known. However, I agree with him that there seems to be a contradiction in that the instrument before the House has as one of its objectives the escalation of hearing cases relating to competition matters. Once the competition directorate comes to a decision it will be possible to appeal in the Court of First Instance against its findings of fact. We are lending our hand to speeding up the operation of competition policy on one area, but there is no similar degree of urgency for dealing with the most anticompetitive part of the European Community—article 86 calls it an abuse of dominant market power—the common agricultural policy. So we are accelerating competition in industrial and commercial matters, but doing little to accelerate a balance of the market in agriculture. As we know, surpluses often damage not only our pockets but the operation of agricultural systems in other parts of the world—particularly South America and west Africa.

As a solicitor who specialised in competition matters, I should declare an interest when a new court that might deal with such matters is established. I endorse and underline what was said by my hon. Friend the Member for Newham, South (Mr. Spearing). He asked whether we could have annotated and updated copies of the treaty of Rome, which it is not possible to obtain in the Vote Office. Indeed, I am told it is out of print. An essential part of the British constitution is not available to hon. Members, and the book in the Library on the treaty has not been annotated or updated with the amendments that resulted from the Single European Act. When we debate these matters in the House, we labour under the difficulty of not having the relevant statutes before us. I hope that the Solicitor-General and other authorities will ensure that the articles of the treaty that we are discussing today — 100A and 168A — are available to Members of Parliament. It is unfair to ask us to debate European legislation without having it before us.

The treaty of Rome is part of British law and is directly applicable in some cases, as it is in other member states. It is no longer imposed by European courts or institutions. It has been adopted by the British Parliament and some of the amended articles of the treaty are directly applicable to the United Kingdom. It is important that the Court of Justice should be able to deal quickly with matters of law that are referred to it by national courts. The Solicitor-General said that jutice delayed is justice denied. Admittedly, there are occasions when it is to the advantage of one of the parties to proceedings to have a long delay. I am sure that the hon. Member for Southend, East might say that VAT was a case in point. However, it is wrong that proceedings in domestic courts can be delayed for some years as a result of being referred to the European Court of Justice, which finds itself with so much work that it cannot give a quick decision, and then having to return to a domestic court for a final decision in this country.

Speed and consistency of approach in different countries and in their domestic courts are important. I shall give a couple of examples of what I mean. Article 119 of the Treaty of Rome, which deals with equal pay, is directly applicable in member states. That was established by the Sabena case, in which an employee of that airline took proceedings in the Belgian courts to show the direct applicability of article 119. The employee won the case for equal pay, and that led to a directive by the Council of Ministers to member states so that they could legislate on the matter and create some certainty. I know it very well because I negotiated it.

Having negotiated the directive on equal pay, which we thought was already implemented by the Equal Pay Act 1970, we then had a challenge which established that our legislation was insufficient because it provided for equal pay for the same work, whereas the treaty provides for equal pay for equal work. That was interpreted as being work of equal value. I think that I am right in saying that the issue eventually came before the European Court of Justice which established that throughout the Community there should be equal pay for work of equal value. As a result, further amending legislation had to be passed by this Parliament.

An issue that began as a domestic one where somebody pleaded article 119 of the treaty of Rome led to the conclusion that it would be wrong if workers in one Community country had rights different from workers in another. Not only would that distort the terms of trade between Community members, but it would be a denial of basic rights granted to workers by the Treaty of Rome. It would be wrong for the Court of Justice to delay for some years adjudicating on that kind of dispute.

I shall give a second example of the direct applicability of the Treaty of Rome. Article 86 deals with the dominant power of a commercial institution, a power that affects trade between member states. That may be of considerable interest to the small business man or the small manufacturer—people who are very much bounden to those who have great commercial power inside the Community. In British law there is no absolute bar to a refusal to supply goods and services or on compulsion to take.

Article 86 of the treaty of Rome may make refusal to supply or compulsion to take illegal if an abuse of dominant power is involved and if it distorts trade between member states. There was an example of this when brewers in the north-east of England tried to compel their publicans in tied houses to take one kind of amusement machine, much to the chagrin of the suppliers of other machines — if I may use the word chagrin in the presence of the hon. Member for Southend, East. A supplier sought an injunction in the British courts to restrain brewers in the north-east of England from compelling their publicans in tied houses to obey their orders. The injunction proceedings were successful, because it was held as a result of the direct applicability of article 86 that a brewer was engaging in conduct that was an abuse of a dominant position. Thus the supplier of the amusement machines had his remedy.

It would be wrong if overseas suppliers of equipment — amusement machines, cars or anything else — were able, because of the United Kingdom interpretation of article 86, to operate with a greater facility in the United Kingdom than United Kingdom suppliers could operate in countries such as France or Italy. That is where the importance of the Court of Justice comes in, because in accordance with the British tradition of developing precedents, it can apply consistency as well as these directly applicable articles. A distinguished Scottish judge presides over the Court of Justice, although that in itself does not commend the proposals to the hon. Member for Southend, East.

I advise my hon. Friend the Member for Newham, South that it is not unusual for the courts themselves to take the initiative on procedural matters—for instance, rules of conduct—but I agree that when it comes to substantive matters, the initiative might better come from another source.

As the Solicitor-General said, the problem is that the Court of Justice is cluttered with staff cases and to a lesser degree with competition cases that involve much complex elucidation and foundation of facts. I understand that not half the time, but half the cases that come before the Court of Justice involve staff. That makes the European Court of Justice the most expensive, prestigious, multinational and multilingual employment tribunal in the world. It is ludicrous that staff cases should come before a court which is so expensive to operate and has such a big bench.

It seems sensible to establish a Court of First Instance to deal with matters of fact and where, for the time being, those matters will be related to staff, competition, dumping and certain matters involving the coal and steel communities.

I have one reservation about staff cases, which for two reasons, has been intensified by what the Solicitor-General said. I should have thought that the most appropriate way of dealing with staff cases would be to have some kind of staff employment tribunal, rather like our employment tribunals in this country.

First, from my experience of dealing with staff cases, such as unfair dismissal cases, it is often the cross-examination and oral evidence of the parties that is important. We are told by the Solicitor-General that in the proposed court the proceedings may be entirely written. There is a right to apply for an oral hearing, but not a right to have one. In staff and employment cases, the essence of the matter is often to cross-examine and to convince the court or the tribunal of the good faith, or otherwise, of the parties involved. It is extremely difficult to do that when somebody is not under cross-examination or giving viva voce evidence. That seems a good reason—made even greater by what the Solicitor-General said—for having a staff tribunal. However, I do not urge that as a reason for holding up the establishment of a Court of First Instance.

Secondly, and perhaps more important, now that it is proposed that a Court of First Instance will sit in chambers of five judges, rather than three, we are getting back to almost exactly the same problem as we have with the Court of Justice at the moment—

Photo of Mr John Fraser Mr John Fraser , Norwood

I am corrected, it is only for competition cases, so I withdraw that objection.

It seems sensible to enable the speed of proceedings of the Court of Justice to be made greater by establishing a Court of First Instance to deal with matters that are largely of fact.

I suppose that this is a fairly unremarkable debate on what is, at least on the face of it, an uncontested matter, dealt with in a House that is largely unattended. However, in a way that makes this proposal more remarkable because we have a Community of 12 which, if one talks linguistically, joins Celtic and Greek, Germanic and Romance, Hispanic and Nordic, and people of different nationalities, races and religions in an atmosphere of tolerance and harmony. It is a Community of rivals, and in some cases of former enemies, which in an uncontentious way, is taking a further stride towards the establishment of an international judicial system.

Can anyone imagine that 50 years ago in March 1938, on a deserted Friday afternoon we would simply be taking note of a proposal that applied a judicial process to the behaviour of the Governments of Hitler, Mussolini, Franco, Salazar and Metaxas, who, I remind the House, was also a dictator, alongside the democracies of Western Europe? Five decades ago, or even less, the proposition would have been impossible, but it now fails to ignite even much concern. It is a remarkable achievement that a fairly uncontentious, relatively minor change in the procedures of the Community will be endorsed. It is as well to reflect that it is a sign that, in part, Europe is now a safer, more democratic and law-abiding place.

Photo of Sir Nicholas Lyell Sir Nicholas Lyell Solicitor General (Law Officers) 1:49 pm, 25th March 1988

With the leave of the House, I shall answer this short but interesting debate. If I may say with some humility, the contributions, albeit limited in number, came from hon. Members — I absolve myself from this—who clearly have a deep knowledge of the European Community and its workings outside what might be provided for the purposes of this debate.

First, I shall respond to the anxieties expressed by all three hon. Members about the availability or non-availability of the treaty of Rome and the relevant treaties in the Vote Office. I have received information that the treaties, as amended, are available from the Office of Official Publications of the European Community and that the volume may be obtained through the Stationery Office. An application through the Vote Office to the Stationery Office for the updated volume can be made. I appreciate that there may not be copies in the Vote Office now, but I hope that that information will offer some comfort to hon. Members who take a great interest in the matter.

I shall take the several points in order. The House will welcome the speech of the hon. Member for Newham, South (Mr. Spearing). It is well known that he is the Chairman of the Select Committee on European Legislation, and that is no easy task. We have learnt to respect his knowledge of this detailed area in several debates. He rightly emphasised the consitutional role of the European Court of Justice and drew attention, as he has done in recent days, to the delays that have arisen, as highlighted by the answers to his parliamentary questions.

It is important in this debate and in the context of the hon. Gentleman's point that articles 100 and 100A on the effect of harmonisation and the important questions of whether or not a particular change requires unanimity, or is available for the majority voting system, to emphasis that the Court of First Instance is not directly affected. But it is right to say that the establishement of a Court of First Instance will make available more time and judge power within the European Court of Justice to concentrate on the extremely important issues that come before it.

All contributors to the debate have emphasised what certainly is not as widely understood as perhaps it should be, and that is the seminal importance of the European court as the supreme court of Europe and its ability to rule on these supra-national matters which affect every country in the Community.

The hon. Gentleman went on to draw attention to the fact that the Single European Act has a premable and to draw upon his knowledge of the development of European law as developed by the Court of Justice. He pointed out that the principles applied will mean that it will study the preamble carefully in deciding questions in future. I am sure that he is right to make that point.

The hon. Gentleman is right to say that the work of the court will loom larger over the years, so he is right to welcome the Court of First Instance as making available to the appellate court—the European court—more time and opportunity to devote its attention to these matters.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

I am not sure that "welcome" is the right word. I omitted by error to include in my speech an important point. If individuals are involved in the Court of First Instance, what will be the effect on the legal aid system of taking cases to or being a respondent in, the Court of First Instance? It may be that this has not yet been worked out, and although it is not part of the document that we are considering, I think that it should be given quick and close attention if it has not been considered.

Photo of Sir Nicholas Lyell Sir Nicholas Lyell Solicitor General (Law Officers)

The hon. Gentleman raises a matter to which I freely admit, at this moment I have not given my mind. It may be that I can give him some guidance before the termination of the debate, but if I cannot I shall write to him.

My hon. Friend the Member for Southend, East (Mr. Taylor) has a knowledge of these matters that is unsurpassed by anyone on the Conservative Benches. I thank him for his kind remarks, but whether my ability to answer his questions will justify those remarks remains to be seen. I well understand his chagrin—

Photo of Sir Nicholas Lyell Sir Nicholas Lyell Solicitor General (Law Officers)

I knew that I would raise a smile from my hon. Friend by using that word. It has already been used in the debate, although with a better pronounciation—I believe that it is an English word—and it describes how my hon. Friend felt about finding the word "Nichtzulassungsbeschwerde" — I cannot do it justice — in the explanatory note to article 120. I am happy to say that the explanatory note precedes that word with its meaning—it is German for "leave to appeal". I hope that that will mollify my hon. Friend in his proper desire that we use language that is at least intelligible to a British audience when we speak in this House.

I have been rapidly assisted on the subject of legal aid, which was raised by the hon. Member for Newham, South. It has been brought to my notice that legal aid before the Court of First Instance will become a matter for the rules of procedure of that court — it is master of its own procedure. It is expected that legal aid will become available in the same way as it is already available for those who have to go before the European Court of Justice. I hope that that will be a comfort to us all. If there is any modification in that position I shall inform the hon. Gentleman, and I am grateful to him for raising that matter.

My hon. Friend the Member for Southend, East took the opportunity to mention matters of grave concern to himself and to other hon. Members the trade deficits; the effect of Fontainebleau; agricultural spending; and the effect of the Community on mergers policy. Although those matters do not arise directly in this debate, and while I hesitate to apply the word "welcome", I believe that my hon. Friend will recognise the advantages that obtain as a result of the European Court of Justice, which has such a powerful, overall constitutional position in such matters, having its time more freely available for careful consideration of them. Its time will not be taken up with matters that can properly be directed to the Court of First Instance.

One may or may not like European developments, but, whatever one's approach, they are of huge importance to everyone in this country and to all member nations of the European Community. Therefore, it must be a matter of welcome that the court that has played such a developmental role in the concept of the Community should have adequate time and judge power to give fundamental matters the most careful attention.

In answer to my hon. Friend the Member for Southend, East I should emphasise that matters of Government policy, as opposed to matters for individuals and corporations, are not for the Court of First Instance. Should a case raised by an individual come before the court and give rise to a judgment that affects the Government, the Government have the right to take the matter on appeal to the European Court of Justice.

The precise figure of VAT on spectacles is not immediately available to my officials, but I shall write to my hon. Friend and let him know what it is.

My hon. Friend concluded by referring to the implementation by other countries of their obligations under the Treaty of Rome and the other two treaties. Although I do not wish to go overboard on optimism, on a number of occasions this country has exercised its right as a member state to bring matters before the Court of Justice and, therefore, cause our fellow members to implement their obligations under the treaty. The fact that the court is freed of more minor cases will make it easier to consider those matters quickly. In some of the cases that my hon. Friend has in mind, speed will be of considerable help to people and businesses in this country.

I wish to turn now to the contribution of the hon. Member for Norwood (Mr. Fraser). As I said, copies of the updated treaty are available, albeit from the Stationery Office. The hon. Gentleman again emphasised his deep personal knowledge of a number of matters that have come before the European Court of Justice, particularly in cases in which the treaty has a direct effect upon the rights of individuals. He emphasised the importance of justice not being unduly delayed, particularly in those matters concerning individuals. I agree with him about that. I should like to join him in paying tribute to Lord Mackenzie Stuart, the president of the European Court, in whose name these proposals stand.

The issue of staff cases has been of real concern over the years because of the amount of time that they have taken up with the Court of Justice. The number of staff cases in 1984 was 43, out of a total of 312. In 1985 the figure was 65 out of 433, and in 1986 it was 57 out of 329. Nevertheless, the hon. Gentleman's point is well made, as those cases represent a significant proportion of the work of the European Court and it is right that they should be dealt with elsewhere.

The question of a special tribunal has been discussed, but it has not been possible to reach agreement on setting up a separate and special tribunal. The beneficial effect of sending cases to the Court of First Instance is enhanced by the fact that this court can sit in chambers of three for such cases. A tribunal of three should provide a very much more satisfactory method of dealing with those cases than has applied hitherto.

The hon. Gentleman concluded by emphasising the importance of this international legal tribunal. He drew to our attention the fact that within Europe matters of supranational importance can now be decided carefully by a European court in a way that would have been unthinkable 50 or 60 years ago. That is a major change. Of course, it has its controversial aspects, but we can join in commending this motion in the thought that adding a Court of First Instance to the European Court of Justice will enable that very important court to do its work better in the future. I commend the motion to the House.

Question put and agreed to.

Resolved,That this House takes note of European Community Document No. 8770/87 on the establishment of a Court of First Instance; endorses the view that the setting up of this Court is necessary to relieve the Court of Justice of some of its workload; and supports the Government's intention to work for the early adoption and implementation of the proposal.