Private International Law of Reinsurance and Insurance

Raymond Cox; Louise Merrett and Marcus Smith

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2 HISTORICAL OVERVIEW OF THE EUROPEAN PRIVATE INTERNATIONAL LAW RULES

2.1 A description of the context of the Brussels Regulation could perhaps be confined to the powers under which the regulation itself was made, and the objectives of those powers. However, the Brussels Regulation replaces the Brussels Convention for the Member States and differences between the regulation and the Brussels Convention shed light on the regulation. It is clear that in many if not most ways the Brussels Regulation will be interpreted consistently with the Brussels Convention. It is therefore important to know the context of the Brussels Convention. It is also convenient to deal with the history of the Brussels Convention and the Lugano Convention in one go. 2.2 This chapter therefore considers, in chronological terms:

(1) the original Brussels Convention made between the six original Member States;
(2) the amended Brussels Convention to which Denmark, Ireland and the UK became parties;
(3) the re-amended Brussels Convention to which Greece became a party;
(4) the Lugano Convention made between the states of the EEC and members of EFTA;
(5) the re-re-amended Brussels Convention to which Spain and Portugal became parties;
(6) the re-re-re-amended Brussels Convention to which Austria, Sweden and Finland became parties; and
(7) the Brussels Regulation.

2.3 Having considered the development of the Brussels Regulation we will then outline the historical background to other parallel European developments; namely the Rome Convention and the insurance directives.

1. 1957 EEC treaty

2.4 The predecessor of the Brussels Regulation was the Brussels Convention, the origins of which are to be found in the Treaty establishing the European Economic Community (the EEC Treaty).1 There were originally six parties to the EEC Treaty: Belgium, France, Germany, Italy, Luxembourg and the Netherlands. The EEC Treaty was signed on 25 March 1957 and came into force on 1 January 1958. 2.5 The focus of the EEC treaty was on the economic integration of the Member States. Essentially it established a common market, a customs union and certain common policies. Article 2 of the EEC Treaty stated that the task of the Community was “by establishing a common market and progressively approximating the economic policies of member states, to promote economic activities … and closer relations”.2 Article 3 described in very general terms some of the anticipated activities of the Community for the purposes in Article 2. The treaty specifically provided for the creation of certain institutions including a Court of Justice

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to serve the Community, for the Community to have legal personality, for the creation of a custom union, for a common market for agriculture, free movement of workers, services and capital, for common policies on transport, competition, and tax in order to promote the common market, the economy and social policy. 2.6 Towards the end of the original EEC Treaty was Part Six, headed “General and Final Provisions”, which contained miscellaneous provisions, including a provision at Article 220 that the Member States shall, so far as is necessary, enter into negotiations with each other with a view to securing for the benefit of their nationals amongst other things “the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts or tribunals and of arbitration awards”. 2.7 It is this apparently obscure provision in Article 220 relating to judgments and awards which was destined to become the basis of the development of the wide regime of co-operation in matters of civil jurisdiction which existed until the Brussels Regulation was made. 2.8 The EEC Treaty has been heavily amended by the Single European Act, and the treaties of Maastricht, Amsterdam and Nice. These are noted below. Other amendments have been made but are not relevant.

2. 1968 Brussels Convention

2.9 At the time the EEC Treaty was agreed, there were a series of widely differing bilateral conventions between the Member States relating to enforcement of judgments.3 As mentioned, Article 220 of the EEC Treaty had provided that Member States would negotiate simpler formalities concerning the recognition and enforcement of judgments. 2.10 In 1960, pursuant to Article 220 of the EEC Treaty, the Commission invited the Member States to set up a committee of experts to consider proposals for negotiations.4 The Commission’s view which has often been cited in the interpretation of the Convention was that “a true internal market between the six States will be achieved only if adequate legal protection can be secured. The economic life of the Community may be subject to disturbances and difficulties unless it is possible, where necessary by judicial means, to ensure the recognition and enforcement of the various rights arising from the existence of a multiplicity of legal relationships. As jurisdiction in both civil and commercial matters is derived from the sovereignty of member states, and since the effect of judicial acts is confined to each national territory, legal protection and, hence, legal certainty in the common market are essentially dependent on the adoption by the member states of a satisfactory solution to the problem of recognition and enforcement of judgments.”5 2.11 The committee of experts produced a draft report and draft Convention which led to the Brussels Convention which was signed on 27 September 1968 and came into force on 1 February 1973 for an unlimited period.6 The text of that report formed the Jenard report on

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the Brussels Convention which is an official commentary on the Brussels Convention describing its genesis and effect.7 2.12 Two purposes of the Contracting States in agreeing the Treaty were recorded in the recitals.8 They desired to implement Article 220 of the EEC Treaty in which they undertook to simplify formalities governing recognition and enforcement of judgments. They were also anxious to strengthen the “legal protection” of persons in the Community. This seems to be a reference to the approach of the Commission (para. 2.10 above) which had linked legal protection and legal certainty. 2.13 Perhaps the major and enduring feature of the Brussels Convention, followed in the Lugano Convention and the Brussels Regulation, was that it set out rules for the international jurisdiction of the courts of the Member States which were part of the national law of Member States governing whether or not those courts had jurisdiction in respect of original proceedings (sometimes called a “double” system).9 The alternative would have been a much less ambitious system of rules (sometimes called a “single” system) which would not alter the international jurisdiction of the courts in respect of proceedings but would only apply in relation to the recognition and enforcement of judgments obtained in another country. However, the experts favoured the former system over the latter because they considered it “would allow increased harmonisation of laws, provide greater legal certainty, avoid discrimination and facilitate the ‘free movement’ of judgments”.10 2.14 This feature of directly applicable rules under the Brussels Convention was crucial because it led to “an autonomous system of international jurisdiction in relations between the member states”.11 In essence what this meant was that the rules created their own code which was to be applied by all Member States and which did not depend on national laws of jurisdiction or the methods of interpretation of such national laws. This process of establishing an autonomous system was aided by the agreement of Member States in a declaration to the Convention that the European Court of Justice had jurisdiction to give rulings on the interpretation of the Brussels Convention (see paras 2.18 et seq.). 2.15 Furthermore, it is now clear that the uniform rules of jurisdiction contained in the Brussels Convention apply whenever there is an international element; it is not necessary that there is a connection with two or more Convention States.12 Thus despite the fact that the origins of the Convention lie in Article 220 and accordingly the working of the internal market, the European Court of Justice has made clear its view that achieving an internal market can also require removing disparities between national legislations on jurisdiction.13 It is very unlikely that the European Court of Justice would reach a different conclusion as to the scope of the Brussels Regulation.

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“If this hardens into law, it will mean that it will never be admissible to argue that an absence of actual connection to the internal market means that the Convention is inapplicable. This marking out of territory by the court was deadly serious. It was intended to warn off those who might advance similar arguments about lack of connection to the internal market to trim or undermine the scope of the Judgments Regulation. It will also serve to prevent those who may advance similar arguments to cast doubt on the treaty basis of Regulations, present and to come, governing choice of law in contract, tort and unjust enrichment, family law, etc. Disparities in any of these areas of national law may, just as speciously, be said to obstruct the internal market. Careful and precise legal arguments about the legal basis for such legislation will be impotent against a boilerplate paragraph, bolted into every judgment, which will say that any disparities between national legislation will impede the functioning of the internal market, and that legislation to eradicate such disparities is therefore within the competence of the organs of the European Union. Left unchallenged, this appalling claim removes every limitation on the extent to which English private international law may be dismantled.”14

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