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Document 52002PC0013

Proposal for a Council Directive to improve access to justice in cross-border disputes by establishing minimum common rules relating to legal aid and other financial aspects of civil proceedings

/* COM/2002/0013 final - CNS 2002/0020 */

OJ C 103E , 30.4.2002, p. 368–372 (ES, DA, DE, EL, EN, FR, IT, NL, PT, FI, SV)

52002PC0013

Proposal for a Council Directive to improve access to justice in cross-border disputes by establishing minimum common rules relating to legal aid and other financial aspects of civil proceedings /* COM/2002/0013 final - CNS 2002/0020 */

Official Journal 103 E , 30/04/2002 P. 0368 - 0372


Proposal for a COUNCIL DIRECTIVE to improve access to justice in cross-border disputes by establishing minimum common rules relating to legal aid and other financial aspects of civil proceedings

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. OBJECTIVES

The European Union has set itself the objective of maintaining and developing an area of freedom, security and justice in which the free movement of persons is ensured.

Article 61(c) of the Treaty establishing the European Community provides that in order to progressively establish this area, the Council is to adopt measures relating to judicial cooperation in civil matters.

By Article 65(c) of the Treaty, these measures are to include measures eliminating obstacles to the good functioning of civil proceedings, if necessary by promoting the compatibility of the rules on civil procedure applicable in the Member States.

The Tampere European Council on 15 and 16 October 1999 called on the Council to establish minimum standards ensuring an adequate level of legal aid in cross-border cases throughout the Union.

In March 2000 the Commission issued a Green Paper on legal aid in civil matters. A hearing with national experts and professional circles concerned was organised in February 2001 to gather reactions before preparing a legislative initiative.

The Green Paper's objective was to take stock of difficulties met by cross-border litigants in obtaining access to legal aid and to propose solutions to these difficulties.

There is a trend for cross-border disputes to proliferate, and they can concern citizens with such low resources that they cannot obtain access to justice without proper legal aid.

To obtain such aid in the Member State where he wishes to bring an action or to defend an action if it is brought against him, the cross-border litigant will come up against a series of obstacles by reason of the differences between national systems. These difficulties will be related above all to national rules concerning the nature and amount of the legal aid and financial or personal eligibility, but they can also flow from the need for the legal aid applicant to be familiar with the procedures of the state of the forum, to seek advice in certain cases from two advocates and to bear the additional expenditure generated by the cross-border nature of the dispute.

The cross-border litigant will find it quicker and easier to obtain legal aid in the state of the forum if there are effective procedures for cooperation between the various national authorities involved. Training and information measures targeted both on the general public and on professional circles would also be helpful.

The Green Paper was warmly welcomed, and the vast majority of interested parties recognised the need for action at Community level.

On 29 June 2001 the Commission organised a meeting with the experts of the Member States to discuss a first preliminary draft.

The numerous reactions to the Green Paper, the hearing in February 2001 and the meeting in June 2001 all revealed that the majority of the interested parties considered that the Commission initiative must envisage minimum standards to ensure effective access to justice throughout the Union for cross-border litigants by means of legal aid on a proper scale.

The proposed Directive accordingly contains many provisions ensuring both that the cross-border litigant will be treated in the same way as if he resided in the Member State of the forum and that the difficulties inherent in the cross-border nature of the dispute will not preclude the grant of legal aid.

In the same spirit, the proposal provides for cooperation and information mechanisms between the Member States to facilitate the formalities to be performed by people engaging in cross-border litigation.

The existing international conventions (the Strasbourg Agreement of 1977 on the Transmission of Legal Aid Applications and the Hague Convention to Facilitate the International Access to Justice, signed in 1980) have not been ratified by all the Member States and remain somewhat under-used. Consequently the Commission's proposal aims among other things to make the machinery for cooperation between Member States more efficient.

The purpose of the proposed Directive is above all to guarantee a proper level of legal aid in cross-border disputes. To guarantee this proper level, it is necessary to ensure the compatibility of certain provisions of national law. Given this necessity, a Council Directive is the most appropriate legislative instrument.

The purpose of laying down certain minimum common standards is also to avoid situations where the poorest people are deprived of access to legal aid and thus excluded from the European judicial area simply because they cannot afford to exercise their rights effectively. The mutual recognition programme adopted by the Council on 30 November 2000 sets out to secure the free movement of judgments by gradually abolishing the procedure for registering foreign judgments for enforcement (exequatur). And the Commission will shortly be presenting a proposal for a Regulation establishing a European enforcement order for uncontested claims.

The proposed Directive accordingly contains rules to facilitate the compatibility of national laws. These principles will apply in all civil proceedings. That said, the Commission initiative does not prevent the Member States from organising their legal aid system as they wish in accordance with their own traditions.

It should be specified that the proposed Directive does not prevent Member States from making provision for more favourable arrangements for legal aid applicants.

The Commission initiative follows on from other international and Community instruments, including:

The Charter of Fundamental Rights of the European Union, which provides that legal aid is to be made available to those who lack sufficient resources in so far as such aid is necessary to ensure effective access to justice (Article 47(3)).

The European Convention for the Protection of Human Rights and Fundamental Freedoms, Article 6 of which provides that everyone is entitled to a fair hearing. This provision primarily concerns the criminal law, but the principle that everyone is entitled to a fair hearing whatever the nature of the procedure was extended to include, in certain circumstances, a right to legal aid in civil matters (see Airey v Ireland, judgment given on 9 October 1979).

The Hague Convention of 1980 on International Access to Justice, Article 1 of which provides that "Nationals of any Contracting State and persons habitually resident in any Contracting State shall be entitled to legal aid for court proceedings in civil and commercial matters in each Contracting State on the same conditions as if they themselves were nationals of and habitually resident in that State". This Convention has so far been ratified only by a minority of Member States.

2. LEGAL BASIS

The proposal for a Directive is based on Article 61(c) of the Treaty establishing the European Community.

The purpose of laying down minimum standards is to enable an appropriate level of legal aid to be guaranteed throughout the Union, which will facilitate the free movement of persons and the smooth operation of the internal market. It is not addressed to Denmark, pursuant to the Protocol on Denmark annexed to the Treaty on European Union.

It is not basically addressed to the United Kingdom and Ireland, but pursuant to the Protocols which concern these two Member States they may decide to "opt in".

3. JUSTIFICATION OF THE PROPOSAL IN TERMS OF THE PROPORTIONALITY AND SUBSIDIARITY PRINCIPLES

The proposal for a Directive falls within the context of the area of freedom, security and justice provided for by the Treaties and for which the impetus was given by the Tampere European Council in October 1999.

The measure aims to establish cooperation procedures between the Member States and to approximate certain national provisions by establishing common minimum standards.

As these objectives cannot be achieved by the Member States acting alone, it requires action at Community level.

The proposal is limited to the minimum required to achieve the objectives pursued and does not exceed what is necessary to this end.

4. ARTICLE-BY-ARTICLE COMMENTARY

Article 1 (Object and scope)

The proposal for a Directive is made in response to the European Council's desire to encourage effective access to justice. It provides for the establishment of common minimum standards to ensure that parties to litigation have effective access to justice throughout the Union, and consequently also contributes to the smooth operation of the internal market and freedom of movement.

The "other financial aspects of civil proceedings" concern Article 17, the provisions of which range beyond legal aid in the strict sense.

The scope of the proposal concerns civil matters, irrespective of the type of court in which they are heard.

This approach, which is in the spirit of Council Regulation No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ("Brussels I" Regulation), [1] means that the proposal concerns all disputes in civil and commercial matters, including employment and consumer law, even if they are heard by another type of court, for example an administrative court.

[1] OJ L 12, 16.1.2001, p.1.

The proposal excludes disputes concerning administrative law, as they are not covered by Article 61 of the Treaty, which constitutes the legal basis of the Directive. Even so, legal aid for administrative litigation could be covered by another proposal (such as Article 19(2) of the proposal for a Directive on minimum standards for the reception of asylum-seekers, [2] which provides that "Member States shall ensure that applicants have the right to bring proceedings before a court against the decisions referred to in paragraph 1 and that they have access to legal assistance").

[2] OJ C 213 E, 31.7.2001, p. 286.

Article 2 (Definitions)

This Article defines the concepts of legal aid, litigation in civil matters and costs of proceedings for the purposes of the Directive

Article 3 (Right to legal aid)

One of the objectives of the proposal is that nobody should be prevented from asserting their rights in the courts by a lack of financial resources.

The scope of the concept of legal aid can vary considerably from one Member State to another, reflecting different national traditions and philosophies. The various means which can be made available to a person by the state with a view to assuring effective access to justice include:

The free assistance of a lawyer. The proposal does not affect the Member States' powers to organise aid procedures (responsibility of the state, the judicial authorities or the bar) and the procedures for remuneration of the lawyer. The assistance of the lawyer must be effective; it is not enough that a lawyer be simply appointed, as the European Court of Human Rights held in Artico v Italy on 13 May 1980.

Exemption from or assistance with court costs. This involves court costs in the strict sense and not "other costs connected with the dispute", which are difficult to define and can be quite high; it is for the Member States to decide whether these other costs should be eligible for legal aid. Costs directly connected with the cross-border dimension of a dispute are eligible (see Article 5).

Article 4 (Responsibility for legal aid)

One of the main questions arising in the context of legal aid in cross-border cases is what legal system should apply: the system of the applicant's Member State of residence or the system of the Member State of the forum. It would be logical for the Member State of the forum, which will be financing the aid, to apply its own system, particularly as regards the scale of aid and the eligibility criteria, in compliance with this Directive. (that is to say having regard for the cross-border aspect of the dispute, in particular where there are cost-of-living differences between the two Member States concerned).

Article 5 (Costs related to the cross-border nature of the dispute)

Article 5 provides that legal aid given by the Member State of the forum is to cover costs directly connected with the cross-border dimension of the dispute (except for travel, unless the physical presence of the parties is mandatory). This provision aims to avoid financial discrimination to the detriment of the cross-border litigant. It is a major contribution to remedying the difficulties inherent in cross-border disputes. Paragraph 3 leaves the Member State of residence of the aid recipient responsible for costs incurred in this state. For example, if a person needs the advice of a lawyer from the country of residence before embarking on litigation in another state, the costs will fall to be borne by the country of residence.

Article 6 (Non-discrimination)

Article 6 reflects the ban on nationality discrimination enshrined in Article 12 of the Treaty. The proposal also aims to avoid all discrimination between Union citizens on the basis of their place of residence.

It therefore applies not only to Union citizens but also to all people who are habitually and lawfully resident in a Member State, including stateless persons, refugees and asylum-seekers.

But this provision does not preclude Member States from maintaining broader legislation making legal aid available to all parties to litigation within their jurisdiction irrespective of nationality or residence.

Article 6 also fits in with the other international measures mentioned above.

The Tampere European Council stressed that "The enjoyment of freedom requires a genuine area of justice, where people can approach courts and authorities in any Member State as easily as in their own".

In the hearing on the Commission Green Paper, the need to recall the non-discrimination principle in the operative part of the Directive was stressed by many participants.

Article 7 (Continuity of legal aid)

If legal aid recipients win their case, legal aid should logically extend to the costs of having a judgment declared enforceable or enforced. Similarly, where there is an appeal against them, provided their financial situation has not substantially improved in the meantime. But where legal aid recipients decide to appeal against a judgment given against them, the Member State can provide that the legal aid application must be reviewed in the light of whether there are good grounds for the appeal.

Regarding the procedure for registration of a foreign judgment for enforcement (exequatur), effect must be given to the principles of Article 50 of Council Regulation No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, which provides that "An applicant who, in the Member State of origin has benefited from complete or partial legal aid or exemption from costs or expenses, shall be entitled, in the [exequatur] procedure ... to benefit from the most favourable legal aid or the most extensive exemption from costs or expenses provided for by the law of the Member State addressed."

Article 8 (Processing of applications)

The purpose of this Article is to protect the legal aid applicant's rights. The appeals referred to in paragraph 3 are not necessarily court appeals.

Article 9 (Introduction and transmission of legal aid applications)

The Strasbourg Agreement of 1977 on the Transmission of Legal Aid Applications provides that "Every person who has his habitual residence in the territory of one of the Contracting Parties and who wishes to apply for legal aid in civil, commercial of administrative matters in the territory of another Contracting Party may submit his application in the State where he is habitually resident. That State shall transmit the application to the other State".

The proposal takes over the mechanisms provided for by the Agreement, which have so far been used relatively little. The sending and receiving authorities designated by the fourteen Community Member States that have ratified the agreement should remain the same for the purposes of this Directive.

That said, the proposal makes changes by adding an eight-day time-limit for transmitting applications and establishing a standard form.

Article 10 (Notifications to the Commission)

This Article requires the Member States to notify the Commission of the list of sending and receiving authorities and the list of languages in which they accept that legal aid applications may be transmitted to them.

Article 11 (Standard form)

Devising a standard form is a tricky task which will take time. But once the instrument is in place, it will facilitate cooperation between the relevant authorities and the formalities to be undertaken by legal aid applicants.

Article 12 (Emergency procedure)

The purpose of this Article is to avoid situations in which a litigant is summoned or must bring an urgent action in a Member State other than the one in which he resides and is unable to obtain legal aid soon enough in that Member State.

Article 13 (Conditions relating to financial resources)

The question when somebody cannot bear court costs because of their financial situation is difficult to answer. Most Member States have established resource thresholds below which people are eligible for legal aid subject to certain conditions.

Given the differences in costs of living and in legal costs between Member States, it is difficult to define a common "European" threshold. The proposal accordingly allows the Member States to establish their own thresholds in order to attain the objectives of the Directive. Irrespective of the thresholds set objectively, it must always be possible for legal aid applicants to prove that without this aid, they would be unable to assert their rights. This is particularly important on the occasion of cross-border disputes.

Article 13 also refers to the possibility for legal aid applicants to resort to a private financing mechanism allowing them effective access to justice. For example, they may have insurance or a no-win no-fee agreement with a lawyer. This type of agreement does not constitute legal aid but it gives the person concerned access to justice, removing the need for legal aid.

Article 14 (Conditions linked to the substance of disputes)

This provision would enable Member States to reject legal aid applications for unrealistic or hopeless cases. There are similar provisions in the Member States' legislation. That being so, the proposal intentionally does not refer to concepts like the "reasonable prospects of success" of the action, as that would introduce a subjective element whereby the analysis of the legal aid application would become a kind of "pre-judgment". This approach is inspired by a recent judgment (Aerts v Belgium, 31 July 1998) in which the European Court of Human Rights held that the authority responsible for examining the legal aid application should not examine the prospects for the success of the action (in this case an appeal in cassation).

Article 15 (Application to legal persons)

The financial survival of a small firm or its employment situation may depend on the outcome of legal proceedings. Legal persons such as these may need legal aid for the same reasons as natural persons, i.e. when they do not have adequate financial resources to bear the financial costs of the proceedings. The legislation of certain Member States allows legal persons to receive legal aid in circumstances, while others exclude this or impose extremely strict conditions. Given the differences in the approach of the Member States and the reservations expressed by most of them, the proposal does not apply to profit-making legal persons.

But it provides that legal aid is available to non-profit bodies, for example consumers' associations, where proceedings are designed to protect legally recognised general interests, i.e. collective interests rather than a mere accumulation of private interests. This provision should be compared with Directive 98/27/EC of 19 May 1998 on injunctions for the protection of consumers' interests. [3] That Directive empowers "qualified" entities recognised by the Member States to bring proceedings for an injunction throughout the Community. The possibility of legal aid for these organisations contributes to the objectives of the 1998 Directive.

[3] OJ L 166, 11 June 1998, p. 51.

Article 16 (Extra-judicial procedures)

The Commission is preparing a Green Paper on alternative modes of dispute-settlement. The use of procedures such as mediation is already promoted by the law in certain Member States with a view in particular to unburdening the traditional legal system. Extra-judicial procedures can entail costs for the parties just as traditional procedures can, and it is logical that those who cannot afford costs because of their personal financial situation should be eligible for legal aid on the same terms.

Article 17 (Reimbursement of court costs and lawyers' fees)

This Article is of general scope, going beyond legal aid. In August 1999, the Commission sent the Member States a questionnaire to ascertain how far their legislation goes in entitling winning parties to have their lawyers' fees reimbursed. The vast majority of the Member States which answered the questionnaire have a system which provides that winning parties are to have their lawyers' fees reimbursed in accordance with procedures which vary from one State to the other. These costs generally have to be borne by the losing party, subject to a ceiling determined sometimes by law and sometimes by the bar or the bench. The proposal aims to generalise this type of system, while leaving the Member States with a great degree of flexibility (illustrated by the use of the words "fair" and "all or part of the costs incurred").

The prospect of having to pay court costs or lawyers' fees even if one wins the case is a major barrier to access to justice. Anybody who knows that these expenses will be as high as, or even higher than, what they can hope to gain at the end of the case will probably not bother to assert their rights.

In addition, they will be less well off than the legal aid recipient, which constitutes a form of discrimination.

The proposal also refers to the possibility of providing for exceptions to these principles to protect the weaker party. These exceptions concern in particular employment and consumer-protection law. For example, it would not be fair for an employee who unsuccessfully contests his dismissal to have to refund the expenses of the company which dismissed him.

Lastly, if the losing party received legal aid, he probably does not have the means to reimburse the winning party's lawyer's fees; Member States can provide that reimbursement is not due or is borne by the State.

Article 18 (Information)

Improvements to the possibilities of access to justice, in particular in the case of litigation having a cross-border dimension, are likely to be of little effect if possible recipients are not aware of them. The characteristics of national legal aid systems are already described on the "Dialogue with Citizens" site and in a Council of Europe publication. Additional information on national legislation and on this Directive should be published on the site of the European Judicial Network.

Proposal for a COUNCIL DIRECTIVE to improve access to justice in cross-border disputes by establishing minimum common rules relating to legal aid and other financial aspects of civil proceedings

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 61(c) thereof,

Having regard to the proposal from the Commission, [4]

[4] OJ C [... ], [... ] , p. [... ] .

Having regard to the opinion of the European Parliament, [5]

[5] OJ C [... ], [... ] , p. [... ] .

Having regard to the opinion of the Economic and Social Committee, [6]

[6] OJ C [... ], [... ] , p. [... ] .

Having regard to the opinion of the Committee of the Regions, [7]

[7] OJ C [... ], [... ] , p. [... ] .

Whereas:

(1) The European Union has set itself the objective of maintaining and developing an area of freedom, security and justice in which the free movement of persons is ensured.

(2) By Article 65(c) of the Treaty establishing the European Community, these measures are to include measures eliminating obstacles to the good functioning of civil proceedings, if necessary by promoting the compatibility of the rules on civil procedure applicable in the Member States.

(3) The Tampere European Council on 15 and 16 October 1999 called on the Council to establish minimum standards ensuring an adequate level of legal aid in cross-border cases throughout the Union.

(4) Neither the lack of resources of a litigant, whether acting as claimant or as defendant, nor the difficulties flowing from a dispute's cross-border dimension should be allowed to hamper effective access to justice.

(5) The main purpose of the Directive is to guarantee an adequate level of legal aid in cross-border cases, but to guarantee that adequate level it is necessary to lay down certain minimum common standards. A Council directive is the most suitable legislative instrument for this purpose.

(6) The Directive applies to all disputes in civil matters, which include commercial law, employment law and consumer protection law.

(7) All persons involved in a civil dispute must be able to assert their rights in the courts even if their personal financial situation makes it impossible for them to bear the costs of the proceedings.

(8) Legal aid must include at least the services of a lawyer and exemption from the cost of proceedings.

(9) Legal aid can be regarded as appropriate when it allows the recipient effective access to justice.

(10) Since legal aid is given by the Member State of the forum, except pre-litigation assistance provided by a local lawyer if the legal aid applicant is not habitually resident in the Member State of the forum, that Member State must apply its own legislation, in compliance with the principles of the Directive.

(11) The complexity of and differences between the legal systems of the Member States and the costs inherent in the cross-border dimension of a dispute should not preclude access to justice. Legal aid should accordingly cover costs directly connected with the cross-border dimension of a dispute.

(12) All Union citizens, wherever they reside, must be eligible for legal aid if they meet the conditions provided for by the Directive. The same applies to third-country nationals who habitually and lawfully reside in a Member State.

(13) If legal aid is granted, it must cover the entire proceeding, including expenses incurred in having a judgment declared enforceable or enforced; the recipient should continue receiving this aid if an appeal is brought against him.

(14) Judicial cooperation in civil matters should be organised between Member States to encourage information for the public and professional circles and to simplify and accelerate the transmission of legal aid applications between Member States.

(15) The European Agreement on the Transmission of Applications for Legal Aid, signed in Strasbourg in 1977, which requires the contracting parties to notify sending and receiving authorities and their systems for transmitting applications, remains applicable to relations between Member States and third countries that are parties to the Agreement. But this Directive replaces the Agreement in relations between Member States.

(16) The notification and transmission mechanisms provided for by this Directive are inspired directly by those of the European Agreement. A time-limit, not provided for by the 1977 Agreement, should be set for the transmission of legal aid applications. A relatively short time-limit would contribute to the smooth operation of justice.

(17) The establishment of a standard form for the transmission of legal aid applications in the event of cross-border litigation would make the procedures easier and faster.

(18) Given the differences in the costs of litigation and in standards of living between the Member States, they should accordingly be left free to define the threshold above which a person would be presumed able to bear the costs of proceedings, in such a way as to attain the objectives of the Directive.

(19) The objective of the Directive could not, however, be attained if legal aid applicants did not have the possibility of proving that they cannot bear the cost of proceedings even if their resources exceed the threshold defined by the Member State of the forum.

(20) The possibility of resorting to private mechanisms or agreements to ensure effective access to justice is not a form of legal aid. But it can warrant a presumption that the person concerned can bear the costs of the procedure despite his unfavourable financial situation.

(21) Member States should be allowed to reject applications for legal aid in respect of manifestly unfounded actions, without however going so far as to prejudge the case with a view to evaluating the applicant's prospects of winning the case.

(22) The Directive does not extend to profit-making legal persons except for non-profit legal persons, such as consumers' associations, which take action in the courts to protect legally recognised general interests. This principle contributes to the attainment of the objectives of Directive 98/27/EC of 19 May 1998 on injunctions for the protection of consumers' interests. [8]

[8] OJ L 166, 11.6.1998, p. 51.

(23) Legal aid must be granted on the same terms both for conventional legal proceedings and for out-of-court procedures such as mediation, where recourse to them is encouraged by the law.

(24) The possibility that a party to a dispute may have to pay court costs or a lawyer's fees even if he wins the case constitutes an obstacle to access to justice. Their reimbursement by the losing party on an equitable basis mitigates this disadvantage. The protection of weaker parties, in particular in the field of employment and consumer protection law, may justify exceptions to this principle.

(25) It should be specified that the establishment of minimum standards does not prevent Member States from making provision for more favourable arrangements for legal aid applicants.

(26) As the objectives of this Directive cannot be achieved adequately by the Member States acting alone and could better be achieved by action at Community level, the Community may take measures in accordance with the principle of subsidiarity as declared by Article 5 of the Treaty establishing the European Community. In accordance with the principle of proportionality laid down in the same article, this Directive goes no further than is necessary to achieve these goals.

(27) This Directive respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union as general principles of Community law. In particular, it seeks to promote the application of the principle of legal aid for all persons who lack sufficient resources where access to such aid is necessary to secure access to justice in accordance with the third paragraph of Article 47 of the Charter of Fundamental Rights of the European Union.

(28) [The United Kingdom and Ireland are not participating in the adoption of this Directive in accordance with Articles 1 and 2 of the Protocol on the position of the United Kingdom and Ireland annexed to the Treaty on European Union and the Treaty establishing the European Community.] [The United Kingdom and Ireland have given notice of their wish to participate in the adoption of this Directive in accordance with Article 3 of the Protocol on the position of the United Kingdom and Ireland annexed to the Treaty on European Union and the Treaty establishing the European Community.]

(29) In accordance with Articles 1 and 2 of the Protocol on the position of Denmark annexed to the Treaty on European Union and to the Treaty establishing the European Community, Denmark is not participating in the adoption of this Directive. This Directive is accordingly not binding on Denmark nor applicable there,

HAS ADOPTED THIS DIRECTIVE:

Article 1

Aims and scope

The purpose of this Directive is to improve access to justice in cross-border disputes by establishing minimum common rules relating to legal aid and other financial aspects of civil proceedings.

It shall apply to civil disputes of all types, irrespective of the type of court.

Article 2

For the purposes of this Directive:

"Legal aid" means all resources made available to persons to ensure their effective access to justice where their financial resources are inadequate to cover the costs of litigation, and includes at least the services of a lawyer and the costs of proceedings;

"Litigation in civil matters" means all litigation in matters of civil law, including commercial law, employment law and consumer protection law;

"Costs of proceedings" means the costs of the proceedings themselves and lawyers' fees.

Article 3

Right to legal aid

All persons involved in a civil dispute, as either claimant or defendant, shall be entitled to receive appropriate legal aid if they do not have sufficient resources within the meaning of Article to enforce their rights by court action, without prejudice to Article 14.

Legal aid shall include the services of a lawyer and/or other person entitled by the law to represent parties in the courts, providing pre-litigation advice and representation in court, and exemption from, or assistance with, the cost of proceedings.

Member States may provide that recipients of legal aid must refund it in whole or in part at the end of the procedure if their financial situation has substantially improved meanwhile.

Article 4

Responsibility for legal aid

Legal aid shall be granted by the Member State in which the court is sitting in accordance with its law and with this Directive.

Article 5

Costs related to the cross-border nature of the dispute

Legal aid granted in the Member State in which the court is sitting shall cover the costs directly related to the cross-border nature of the dispute.

Such costs shall include interpretation and translation and travel costs where the physical presence of the persons concerned in court is mandatory.

The Member State in which the legal aid applicant resides shall grant legal aid to cover costs incurred by the recipient in that state and, in particular, the cost of consulting a local lawyer.

Article 6

Non-discrimination

Member States shall grant legal aid without discrimination to Union citizens and third-country nationals residing lawfully in a Member State.

Article 7

continuity of legal aid

Legal aid shall continue to be granted to recipients to cover expenses incurred in having a judgment declared enforceable or enforced in the Member State of the forum, without prejudice to Article 3(3).

Article 50 of Council Regulation No 44/2001 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters shall apply in exequatur matters.

Legal aid shall continue to be provided if an appeal is brought against the recipient. Provision shall be made for re-examination of the application where the appeal is brought by the recipient.

Article 8

Processing of applications

The national authorities empowered to rule on legal aid applications shall ensure that the processing of applications is as transparent as possible.

Where applications are rejected, the reasons for rejection shall be given.

Member States shall make provision for appeals against decisions rejecting legal aid applications.

Article 9

introduction and transmission of legal aid applications

Legal aid applicants who habitually reside in a Member State other than the one in which the dispute is heard may submit their application to the authorities of the Member State in which they habitually reside.

The relevant authorities of the Member State of residence shall transmit the application to the relevant authorities in the Member State of the forum within eight days.

Documents transmitted under this Directive shall be exempt from legalisation or other comparable formalities.

The Member States may not charge for services rendered in accordance with paragraph 2.

The transmitting authorities may refuse to transmit an application if it is manifestly inadmissible, and in particular if the dispute is not in a civil matter.

Legal aid applications transmitted in accordance with the procedure provided for by this Directive shall be written in the language of the receiving authority or in another language which it accepts.

This Directive replaces the Strasbourg Agreement of 1977 on the Transmission of Legal Aid Applications in relations between Member States.

Article 10

Notifications to the Commission

Member States shall provide the Commission with a list of authorities empowered to send and receive applications. This list shall be published in the Official Journal of the European Communities.

The Member States shall notify the Commission of the list of official languages of the European Union other than their own language or languages in which they accept that legal aid applications may be transmitted to the relevant authorities.

Article 11

Standard form

To facilitate transmission, a standard form for legal aid applications shall be established by the Commission, assisted by the committee provided for by Council Regulation No 1348/2000 on the service in the Member States of judicial and extra-judicial documents in civil and commercial matters. [9]

[9] OJ L 160, 30.6.2000, p. 37.

Article 12

Emergency procedure

Member States shall ensure that legal aid applications made by applicants not residing in the Member State of the forum are examined within a reasonable before the case comes to trial.

Article 13

Conditions relating to financial resources

Member States shall grant legal aid to natural persons involved in a dispute within their jurisdiction who are unable to meet the costs of proceedings as a result of their personal financial situation.

Member States may define income thresholds above which legal aid applicants are presumed able to bear the costs associated with disputes. These thresholds shall be defined in the light of various objective factors such as the cost of living and the costs of proceedings.

Legal aid applicants who do not meet the conditions set out above shall be granted legal aid if they can prove that they are unable to pay the cost of the proceedings, in particular as a result of differences in the cost of living between the Member States of residence and of the forum.

Legal aid applicants shall be presumed able to bear the costs of proceedings if in the instant case they enjoy actual access to a private mechanism involving a no-win no-fee agreement with the lawyer and providing that court costs will be paid by a third party.

Article 14

Conditions relating to the substance of disputes

Member States may provide that legal aid applications for actions which appear to be manifestly unfounded may be rejected by the relevant authorities.

Article 15

Application to legal persons

Legal aid shall be granted to not-for-profit legal persons based in a Member State where proceedings are designed to protect legally-recognised general interests and they do not have sufficient resources to bear the cost of the proceedings, without prejudice to Article 14.

Article 16

Extra-judicial procedures

Legal aid shall be granted in cases where disputes are settled via extra-judicial procedures, if the law makes provision for such procedures or if the parties to the dispute are ordered by the court to have recourse to them.

Article 17

Reimbursement of court costs and lawyers' fees

Member States shall provide that the winning party shall be entitled to fair reimbursement from the losing party of all or part of the costs of the proceedings.

Member States may provide for exceptions to this principle to ensure appropriate protection of weaker parties.

Member States may provide that where the losing party received legal aid, reimbursement is not due or is dealt with by the State.

Article 18

Information

The competent national authorities shall cooperate to provide the general public and professional circles with information on the various systems of legal aid, in particular via the European Judicial Network in Civil and Commercial Matters established by Council Decision No 2001/470/EC.

Article 19

More favourable provisions

This Directive shall not prevent the Member States from making provision for more favourable arrangements for legal aid applicants.

Article 20

This Directive shall enter into force on the [twentieth] day following its publication in the Official Journal of the European Communities.

Article 21

The Member States shall put into force the laws, regulations and administrative provisions needed to comply with this Directive no later than 1 January 2004. They shall forthwith inform the Commission thereof.

When Member States adopt these measures, they shall contain a reference to this Directive or shall be accompanied by such a reference on the occasion of their official publication. The methods of making such a reference shall be laid down by the Member States.

Article 22

This Directive is addressed to the Member States in accordance with the Treaty establishing the European Community.

Done at Brussels, [... ]

For the Council

The President

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