"Letter dated May from Lord Grenfell to Bridget Prentice MP Parliamentary Under Secretary of State Ministry of Justice - 7403/08: Transparency of debtors' assets"
From: THE LORD GRENFELL Chairman of the Select Committee on the European Union COMMITTEE OFFICE HOUSE OF LORDS LONDON SW1A 0PW Tel: 020 7219 6083 Fax: 020 7219 6715 15 May 2008 Doc 7403/08: Green Paper on the effective enforcement of judgments in the EU: the transparency of debtors’ assets This Green Paper was considered by Sub-Committee E (Law and Institutions). We welcome the Green Paper and the useful options suggested by the Commission for addressing problems of cross-border debt enforcement. We strongly support the proposal that a manual of national laws and procedures be prepared and made widely available to improve information for creditors. We also welcome greater exchange of information, although we note the difficulties that may arise as a result of different levels of access in the Member States and the different nature of enforcement bodies. The Commission does not attempt to define what it means by “enforcement body” but indicates at page 4 of the paper that the focus is on “public” enforcement of judgments. It is not clear to us what this would cover in the UK context and we would be grateful for your comments. Who would be an “enforcement body” in the UK? We are less persuaded of the scope for Community legislation to increase the information available in registers given the disparities in the nature and content of the registers identified by the Commission. Improving access to registers, through exchange of information procedures discussed above, appears more realistically attainable. While the option of introducing a European Assets Declaration or an obligation to provide for a debtor’s declaration procedure appears attractive, we are concerned about the potential impact that an obligation to create or accommodate such a procedure could have in those Member States which do not currently adopt this approach. The Commission indicates that this is the case in Scotland although your EM suggests otherwise (paragraph 18). We would be grateful for clarification of the position as regards the UK jurisdictions. More generally, although we support in principle the Government’s undertaking to ensure that EU measures are limited to cross-border cases as required by Article 65 TEC (and as will continue to be required if the Treaty of Lisbon enters into force), we consider that difficulties could arise in attempting to reach an agreed definition of cross-border in this context. Given that the aim of the options proposed in the Green Paper is to reveal assets held by a debtor in any Member State, every case is potentially cross-border: any debtor may own assets abroad, even where the case itself involves a creditor and debtor with the same nationality and residence and a court action pursued in that Member State. On this analysis, the cross-border nature of the claim can only be established once full disclosure of the debtor’s assets has been made and it is difficult to avoid the conclusion that exchanges of information through enforcement bodies, facilitated access to foreign registers, a debtor’s declaration procedure or a European Assets Declaration, if introduced, should be available to all creditors in order to allow them to ascertain whether a debtor has assets elsewhere in the EU. However, this position is likely to offend against the principle that the proposal should not impact upon domestic laws and practices. We would be interested to hear your thoughts on this matter. We have decided to retain the Green Paper under scrutiny. I am copying this letter to Michael Connarty MP, Chairman of the Commons European Scrutiny Committee; and to Alistair Doherty, Clerk to the Commons Committee; Michael Carpenter, Legal Adviser to the Commons Committee; Les Saunders (Cabinet Office); and Deirdre Boylan, Departmental Scrutiny Co-ordinator. GRENFELL Bridget Prentice MP Parliamentary Under Secretary of State Ministry of Justice Selborne House 54 Victoria Street London SW1E 6QW