On 18th January this year the EU Commission published a draft Directive with the aim of improving access to justice in cross-border disputes by establishing minimum common rules relating to legal aid and other financial aspects of civil proceedings. This follows a Green Paper on legal aid in civil matters issued by the Commission in March 2000. The draft Directive attempts to promote, in the context of legal proceedings, the progress toward general market harmonisation across the EU. A revised draft of the Directive is expected to be published shortly.
The United Kingdom and Ireland will not be subject to the Directive unless they opt in, which neither has yet done. This "opt in" arrangement arises under the Treaty on European Union, known as the Maastricht Treaty of 1992. Denmark has opted out of the regime.
The current draft provides that after the Directive has come into force, Member States will have until 1 January 2004 to make the necessary domestic arrangements to comply with the Directive.
Key Provisions
The draft introduces a right to legal aid in all disputes in civil and commercial matters in the EU, including employment and consumer law (but not administrative law). Legal aid is defined to mean "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 cost of proceedings".
The provisions apply to natural persons (whether claimants or defendants) and to legal persons so long as they are non profit-making, for example consumer organisations. The right to legal aid is not restricted to EU citizens - it would extend also to "third-country nationals residing lawfully in a member state".
Eligibility
Each Member State may define the financial criteria for granting legal aid. Although there is also a merits test, the proposed approach is far less restrictive than are, for example, the requirements in England and Wales. The draft Directive states that applications may only be rejected "for actions which appear to be manifestly unfounded".
The draft provides that where alternatives to private funding exist, such as 'no-win no-fee' arrangements, legal aid applicants will be presumed to be able to bear the cost of proceedings, so long as court costs are also payable by someone other than the applicant. Member States are required to 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. However, it is possible to make exceptions to this principle in order to protect 'weaker parties' (this is presumably a reference to financial weakness).
Application of the proposals
The draft Directive assumes that applications for legal aid will relate to cross-border proceedings (including extra-judicial procedures such as mediation, if available). Accordingly, if the legal aid applicant is not resident in the country where the litigation is to proceed, the legal aid will be provided by the relevant authority in the State where the proceedings take place (the forum State). The Member State in which the applicant resides will be required to provide legal aid to cover costs incurred in that State, for example the cost of consulting a local lawyer for initial advice.
The draft includes arrangements for the rapid transmission and processing of legal aid applications which originate in the State of residence and are directed to the forum State. An eight day time limit will apply to the transmission of legal aid applications to forum States.
The United Kingdom Position and Implications of the Draft
The Directive will be likely to have a significant impact in other EU Member States, particularly any that do not currently have in place "access to justice" arrangements for those with limited resources. Once in force, it is likely that the Directive will increase the exposure of defendants to claims in the courts of other EU States.
In the United Kingdom, legal aid is already available to the parties involved in litigation, whether resident in the UK or not. If the United Kingdom were to opt in, the draft would permit such arrangements to continue, but the merits criteria for eligibility for legal aid would need to be relaxed. This would clearly have implications for legal aid expenditure.
The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.