Flux européens

A posting that is long overdue but over at GAVC law  we have lots of things coming our way and the inevitable consequence is a bit of a queue on the blog. Open Rights Group & Anor, R (On the Application Of) v Secretary of State for the Home Department & Anor [2021] EWCA Civ 1573 was held end of October and discussed remedies for breach of retained EU law, that is in essence, EU law which has force in law in the UK by virtue of the Government’s copy /paste exercise following Brexit.

In April 2021 the CA had held that that the “Immigration Exemption” (which disapplies some data protection rights where their application would be likely to prejudice immigration control) of the UK Data Protection Act 2018 is contrary to Article 23 GDPR and Article 23 of the UK GDPR: [2021] EWCA Civ 800.  However in that judgment the CA had not specified at that stage what form of relief should be granted. It does now.

The claim form sought a declaratory order, the effect of which would be to “disapply” the Immigration Exemption. The Government argue it be granted a grace period to make regulations adding to or varying the provisions. The complicating factor is that even retained EU law enjoys supremacy (not by virtue of EU law but by virtue of the Government’s choice to do so). That means that any conflict between the GDPR and domestic legislation (including primary legislation) must be resolved in favour of the former: the domestic legislation must be overridden, treated as invalid or, in the conventional language, disapplied.

[15] A quashing order would not meet with the UK constitutional understanding and its limits to the rule of judges. However must supremacy, post Brexit, mean the courts must inevitably make an immediately binding order? Warby LJ sets out the principles of EU retained law as they follow from domestic legislation (the ‘EUWA’) at [23]:

(1) A UK court must now decide any question as to the validity, meaning or effect of any retained EU law for itself: it is no longer possible to refer any matter to the CJEU: EUWA s 6(1)(b).

(2) But the general rule is that the court must decide any such question in accordance with any retained case law and any retained general principles of EU law that are relevant: EUWA s 6(3). “Retained EU case law” and “retained general principles” mean principles laid down and decisions made by the CJEU before IP completion day.

(3) When it comes to principles laid down or decisions made by the CJEU after IP completion day, the court is not bound (EUWA s 6(1)) but “may have regard” to them (EUWA s 6(2)).

(4) The position is different in a “relevant court”, which includes the Court of Appeal. Subject to an exception that does not apply here, a relevant court is not absolutely bound by any retained EU case law: EUWA s 6(4)(ba) and Regulations 1 and 4. It can depart from that law; but the test to be applied in deciding whether to do so is “the same test as the Supreme Court would apply in deciding whether to depart from the case law of the Supreme Court”: EUWA 6(5A)(c) and Regulation 5.

(5) The test the Supreme Court applies is the one laid down by the House of Lords in its Practice Statement [1966] 1 WLR 1234, when Lord Gardiner LC said

“Their Lordships regard the use of precedent as an indispensable foundation upon which to decide what is the law and its application to individual cases. It provides at least some degree of certainty upon which individuals can rely in the conduct of their affairs, as well as a basis for orderly development of legal rules. Their Lordships nevertheless recognise that too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law. They propose, therefore, to modify their present practice and, while treating former decisions of this House as normally binding, to depart from a previous decision when it appears right to do so. In this connection they will bear in mind the danger of disturbing retrospectively the basis on which contracts, settlements of property and fiscal arrangements have been entered into and also the especial need for certainty as to the criminal law. This announcement is not intended to affect the use of precedent elsewhere than in this House.”

Relevant CJEU authority is Liberty: La Quadrature, A v Gewestelijke Stedenbouwkundige Ambtenaar van het Department ruimte Vlaanderen (Case C-24/19) (“Gewestelijke”), and B v Latvijas Republikas Saeima Case C-439/19, EU-C-2021-504 (“B v Latvia”). [24] Gewestelijke was decided before IP completion day. We are not absolutely bound by them, but we should decide this case in accordance with the principles they set out, unless we think it right to depart from those cases for the reasons set out by Lord Gardiner. B v Latvia was decided after IP completion day, so we can “have regard” to it.

[26] Warby LJ suggests 3 options:

One is to hold that since the power to suspend relief in respect of substantive laws that is identified in Gewestelijke is one that can only be exercised by the CJEU, it cannot be exercised at all in E&W. This is rejected [27] as an unduly mechanistic and literal approach, tending to subvert rather than promote the legal policy that underlies this aspect of the CJEU jurisprudence: it would remove from the judicial armoury a power that is, by definition, essential. 

An alternative would be what Warby LJ called “the Regulation 5 approach”: to apply the principles laid down in the 1966 HoL Practice Statement and depart from the CJEU case-law, holding that the power which, in that jurisprudence, is reserved to the CJEU should now be treated as available to at least some UK Courts. This [28] enable a court to perform one of its essential tasks: averting legal disorder and is an option which Warby LJ suggests is open to the Court of Appeal.

A third option is to follow and apply the CJEU jurisprudence as to the existence and limits of the power to suspend, but not that aspect of the case-law that reserves the exercise of that power to the European Court. That [31] is Warby LJ’s preferred route however he decides (and the other LJs agree) that there is at this time no need to choose between both options for in essence they lead to the same result in the case at issue. The Court concludes that the Government were given time until 31 January 2022 for the Data Protection Act 2018 to be amended so as to remedy the incompatibility. Whether the Government have done so, I leave to data privacy lawyers to verify.

Underhill LJ emphasises one point [57] ‘that, as Warby LJ says at para. 13 of his judgment, our power to suspend our declaration – in practice, to suspend the disapplication of the Immigration Exemption – derives entirely from retained EU law. It was not argued that the Court had any equivalent power at common law.’

This is an important judgment viz the application of retained EU law but also wider, viz the consequences of judicial review which is a hot topic at the moment in more than just the UK.

Geert.

Important Court of Appeal judgment on retained EU law and its effet utile (here: in the context of the 'UK' #GDPR).
What kind of remedies are available under UK law after a finding that retained EU law has been breached?
Open Rights Group https://t.co/4QVGVNA1NJ pic.twitter.com/p74inLB6MT

— Geert Van Calster (@GAVClaw) October 29, 2021

Bezirkshauptmannschaft Hartberg-Fürstenfeld (Effet direct)
Liberté d'établissement
Détachement de travailleurs : le juge national doit s’assurer que les sanctions pour la violation d’obligations administratives soient proportionnées

Commission / Royaume-Uni
Ressources propres des Communautés TVA
Le Royaume-Uni a manqué à ses obligations concernant le contrôle douanier et la mise à disposition de ressources propres de l’Union en n’adoptant pas les mesures nécessaires pour lutter contre des fraudes relatives à des importations sous-évaluées de produits textiles et de chaussures en provenance de Chine

Deutsche Umwelthilfe (Réception des véhicules à moteur)
Environnement et consommateurs
Avocat général Rantos : les associations de protection de l’environnement agréées doivent pouvoir contester en justice une réception CE par type de véhicules équipés de « dispositifs d’invalidation » susceptibles d’être interdits

Statistiques judiciaires 2021 : en dépit de la pandémie, l’institution judiciaire de l’Union a pu garantir pleinement la continuité de ses activités

I reviewed the first instance judgment in Skat v Solo Capital Partners here and concluded that it endangered the effet utile of Brussels Ia (and Lugano). Justice Baker had concluded that all SKAT’s claims were inadmissible as a consequence of Dicey Rule 3. The Court of Appeal has now largely reversed, [Skatteforvaltningen v Solo Capital Partners Llp [2022] EWCA Civ 234] thereby resurrecting a £1,4 billion claim.

SKAT (Danish customs and excise) seeks the return of amounts it says it was wrongly induced to pay out as tax refunds. SKAT is not seeking to recover due and unpaid dividend tax or indeed any tax, because the foundation of its argument is that in the case of the alleged fraud defendants there was no liability to pay tax, no shares, no dividends, no tax and no withholding tax. There was never a taxpayer/tax authority relationship between the Solo etc Applicants or the alleged fraud defendants and SKAT. The mere fact that the alleged fraud is committed in the context of taxation or against a foreign tax authority is insufficient to bring the matter within the rule [SKAT’s counsel arguments, [30]-[31]). To allow the defendants to escape their liability, not in a tax fraud but in a general conspiracy, would also run counter the fraus omnia corrumpit principle [ditto, 62], a point which Flaux C agrees with obiter [146] in a case of a major international fraud..

Flaux C is much less verbose than the submissions before him. Yet again a jurisdictional point was allowed to be litigated to great length – albeit one may appreciate counsel and clients’ energy on those issues given the value of the claim.

[127] the basis of the claim is fraudulent misrepresentation. It is not a claim to unpaid tax or a claim to recover tax at all. It is a claim to recover monies which had been abstracted from SKAT’s general funds by fraud [128]. Even though SKAT may be an emanation of the Danish state, the Dicey revenue rule does not apply [128], neither does the wider sovereign powers rule within Dicey Rule 3:

‘In bringing a claim to recover the monies of which it was defrauded, SKAT is not doing an act of a sovereign character or enforcing a sovereign right, nor is it seeking to vindicate a sovereign power. Rather it is making a claim as the victim of fraud for the restitution of monies of which it has been defrauded, in the same way as if it were a private citizen.’ [129]

This latter reasoning falls short I find of proper criteria to guide its future application, although more is said at [130]: the claim to recover the money is at the core of the Chancellor’s reasoning here and that claim is a straightforward money claim, and [133] ‘the claims are ones which could just as well be brought by a private citizen’. That is the kind of argument which echoes CJEU authority on civil and commercial and to my mind the Court of Appeal could have helped us all by pointing out more specifically to what degree Dicey Rule 3 be informed by CJEU authority on ‘civil and commercial’, regardless of Brexit.

That there would be a detailed examination of the Danish tax regime and possible criticism of it and of SKAT’s systems and control, does not somehow convert the claim into one to enforce that tax regime. Recognition of foreign revenue laws is permissible under Dicey Rule 3 [138].

The position of one of the defendants, ED&F Man, is different in the sense that there is no allegation that they were implicated in a fraud. Although it is alleged that misrepresentations were made by them, the misrepresentations are said to have been negligent.

SKAT has to accept that as against those defendants the claim is inadmissible by virtue of Dicey Rule 3 unless it can satisfy the Court: (i) that the claim is a “civil and commercial matter” not a “revenue matter” for the purposes of Article 1(1) of the Brussels Recast Regulation; and (ii) that the operation of Dicey Rule 3 is precluded because, contrary to the judge’s analysis, it would impair the effectiveness of the Brussels Recast Regulation.

Contrary to the conclusion the judge reached the Court of Appeal finds that the claim against ED&F Man is a “revenue matter” falling outside the Brussels Recast Regulation. Here the Court of Appeals applies parity of reasoning with its assessment of the other claims: [150]:

Whilst the test for the application of Dicey Rule 3 may not be identical to that for determining what is a “revenue etc matter” for Article 1(1) of the Brussels Recast Regulation, it can be seen that its application leads to the same answer. If Dicey Rule 3 applies (as SKAT has to accept it does in relation to the claim against ED&F Man) then by the same reasoning, the basis for the claim by SKAT against those defendants is either a right which arises from an exercise of public powers or a legal relationship characterised by an exercise of public powers, from which it necessarily follows that the claim is a revenue matter outside the Brussels Recast Regulation.

Unfortunately therefore the effet utile argument (that application of Dicey rule 3 impairs the effectiveness of BIa /Lugano, as I had argued in my earlier post) is not discussed [153].

The title of this piece of course hints at the relevance of claim formulation. It is also exaggerated: SKAT cannot conjure up fraud elements out of nowhere to reinvent a tax claim as one in mere tortious and fraudulent misrepresentation. However it is clear that in cases that are somewhat murky, claim formulation will be crucial to navigate Dicey Rule 3.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.28 ff.

Thank you Ali Malek QC (successful for defendants) for bringing this AM's CA's judgment in SKAT to my attention.
Dicey rule 3, foreign public law, revenue matters
Appeal only partially succeedshttps://t.co/UQwg8caiGf
Review of the first instance judgmenthttps://t.co/r7WXwAoaXl

— Geert Van Calster (@GAVClaw) February 25, 2022

Hill v Generali Zrt [2021] EWHC 3381 (QB) is an appeal from the County Court and discussed whether a subrogated claim by an insurer (Admiral) can be brought in the name of an English motorist in an English court together with his claim for uninsured losses against a Hungarian insurer (Generali) in respect of a pre-Brexit accident in Germany. The county court judge held that it could not but acknowledged that the question was not free from doubt and granted the motorist permission to appeal. Upon appeal the opposite conclusion was reached.

The case once again therefore concerns Brussels Ia’s insurance title which was recently at play at the CJEU in Betty Tattersal aka Seguros Catalana Occidente. Pepperall J summarises the ordinary application of the insurance title as follows [8]

Re the insured losses (the repair costs): __Generali can be sued in Hungary, being its place of domicile, or Germany, being the place of the accident: A4(1), 7(2), 11(1)(a) and 12 BIa___As the insured, Mr Hill can also sue Generali in England & Wales, being his place of domicile: A11(1)(b).___ As the insurer, and subject to being permitted to join an action already proceeding in another jurisdiction, Admiral cannot take advantage of the more favourable rules as to jurisdiction available to the policyholder, the insured and beneficiaries. 

There is therefore no dispute as to Mr Hill’s right to sue for his uninsured losses (the devaluation of the car) in England & Wales. The issue is whether Admiral’s subrogated claim:  is a claim brought by the insured such that it may be pursued in England & Wales under Article 11(1)(b); or is a claim that must be treated as brought by the insurer such that it cannot, subject to questions of joinder, be pursued in E&W.

Relevant recitals echo the general principles with which the CJEU approaches the issue: [10]:

“15 The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant’s domicile. Jurisdiction should always be available on this ground save in a few well-defined situations in which the subject-matter of the dispute or the autonomy of the parties warrants a different connecting factor …

16 In addition to the defendant’s domicile, there should be alternative grounds of jurisdiction based on a close connection between the court and the action or in order to facilitate the sound administration of justice. The existence of a close connection should ensure legal certainty and avoid the possibility of the defendant being sued in a court of a Member State which he could not reasonably have foreseen …

18 In relation to insurance, consumer and employment contracts, the weaker party should be protected by rules of jurisdiction more favourable to his interests than the general rules.

21 In the interests of the harmonious administration of justice it is necessary to minimise the possibility of concurrent proceedings and to ensure that irreconcilable judgments will not be given in different Member States. There should be a clear and effective mechanism for resolving cases of lis pendens and related actions …”

Part of the challenge is the different way in which claims are assigned /and or subrogated across jurisdictions [23]. In many European legal systems insurers take an assignment of the insured’s claim and sue to recover their outlay in their own names. In the common law’s approach the claim for insured losses remains vested in the insured.

CJEU Sovag is discussed for the joinder elements of the case and CJEU Kabeg is said not to be a right fit for in that case the insurer was the assignee of the claim for insured losses and able to sue in its own name.

The judge reaches his conclusion that the subrogated claim may be brought in E&W on the echo of SOVAG, hence underlining [34] the policy of minimising multiple proceedings and ensuring that irreconcilable judgments are not given but also in demonstrating practicality. The CJEU arguably in Betty Tattersal (the judge did not have the benefit of that judgment) took a different direction  on related issues and I find them both equally persuasive. It is time the insurance section be sorted out and the current EC evaluation of BIa would be a good trigger for same.

Geert.

1/2 Hill v Generali Zrt [2021] EWHC 3381 (QB)#travellaw, Brussels Ia, insurance
Subrogated claim by insurer can be brought in name of EN motorist in E&W court together with his claim for uninsured losses against a Hungarian insurer in respect of pre-Brexit accident in Germany

— Geert Van Calster (@GAVClaw) December 17, 2021

Préfet du Gers et Institut National de la Statistique et des Études Économiques
DGEN
Selon l’avocat général Collins, les ressortissants britanniques qui ont joui des droits de la citoyenneté européenne ne conservent pas ces avantages après le retrait du Royaume-Uni de l’Union européenne

TGSS (Chômage des employés de maison)
SOPO
La législation espagnole qui exclut les employés de maison des prestations de chômage alors qu’il s’agit presque exclusivement de femmes est contraire au droit de l’Union

A (Contrats d’assurance « unit-linked »)
Liberté d'établissement
La Cour précise la portée de l’obligation d’information précontractuelle en matière de contrats collectifs d’assurance-vie « unit-linked »

Agenzia delle dogane e dei monopoli et Ministero dell'Economia e delle Finanze
Liberté d'établissement
Lutte contre la consommation de tabac chez les jeunes : les États membres peuvent imposer des sanctions administratives aux opérateurs économiques violant l’interdiction de vente aux mineurs, telles que la suspension de leur licence d’exploitation pour 15 jours

Govern d'Andorra / EUIPO (Andorra)
Propriété intellectuelle et industrielle
Le Tribunal confirme que le signe figuratif ANDORRA ne peut faire l’objet d’un enregistrement en tant que marque de l’Union européenne pour plusieurs produits et services

United Parcel Service / Commission, ASL Aviation Holdings, ASL Airlines (Ireland)/Commission
Droit institutionnel
Le Tribunal rejette deux recours indemnitaires introduits par UPS et ASL Aviation Holdings

Sea Watch
Transport
Selon l’avocat général Rantos, les navires privés exerçant une activité régulière de recherche et de sauvetage en mer peuvent faire l’objet d’un contrôle de conformité aux normes internationales assuré par l’État du port

Commissaire général aux réfugiés et aux apatrides (Unité familiale - Protection déjà accordée)
Espace de liberté, sécurité et justice
Un État membre peut exercer sa faculté de déclarer une demande de protection internationale irrecevable au motif que le demandeur s’est déjà vu accorder le statut de réfugié par un autre État membre

Stichting Rookpreventie Jeugd e.a.
Liberté d'établissement
Cigarettes à filtre : la méthode établie par l’ISO pour déterminer les niveaux d’émission maximaux de goudron, de nicotine et de monoxyde de carbone, à laquelle renvoie le droit de l’Union, est valide et opposable aux producteurs de cigarettes

Openbaar Ministerie (Tribunal établi par la loi dans l’État membre d’émission)
DFON
Refus d’exécution d’un mandat d’arrêt européen : la Cour précise les critères permettant à une autorité judiciaire d’exécution d’apprécier le risque éventuel de violation du droit fondamental de la personne recherchée à un procès équitable

RS (Effet des arrêts d’une cour constitutionnelle)
Droit institutionnel
Le droit de l’Union s’oppose à une règle nationale en vertu de laquelle les juridictions nationales ne sont pas habilitées à examiner la conformité avec le droit de l’Union d’une législation nationale qui a été jugée constitutionnelle par un arrêt de la cour constitutionnelle de l’État membre

Many thanks Bruno Hardy, counsel at Liedekerke, for reconnecting me with a case I had seen in passing and then lost track off. Bruno also reports on the issues here; there is also a mainstream media report and a more specialised report.

On 18 January the Lithuanian Supreme Court held that the France-Lithuania BIT is no obstacle to Lithuania seizing the Lithuanian courts of a claim that Veolia and consorts unlawfully took over control of heating businesses in a dozen Lithuanian municipalities in 1993-2003, and excessively profited from same. The claim was initially formulated as a counterclaim in ongoing ICSID proceedings (note there are also ongoing commercial arbitration proceedings relating to the case under Stockholm Chamber of Commerce rules) and is now pursued in the courts in ordinary, using Article 7(2)’s locus damni gateway.

The SC first of all rejected Veolia’s claim that the case should at the least be stayed until the ICSID ruling has been issued. For the SC, CJEU Achmea (which declared dispute settlement via ISDS in intra-EU BITs incompatible with EU law) implies that the arbitration procedure under the BIT has now lapsed (and this ab initio, hence making the later entry into force of the EU Member States’ BIT termination agreement irrelevant) meaning Lithuania not merely may but indeed it must drop its claims in the ISDS procedure.

From what I understand, the SC did not hold on whether A7(2) BIa is a possible gateway, focusing instead on the fate of Lithuania’s involvement in the ISDS procedure. In a perhaps unexpected ruling, as Bruno reports, the Vilnius Regional Court subsequently found that it lacked international jurisdiction seeing as in its (prima facie unconvincing) view the Lithuanian claim falls under acta iure imperii, hence cancelling out Brussels Ia, instead making the claim subject to residual Lithuanian private international law rules. These seem to direct the suit to France, the domicile of the defendant.

This is where there is a final twist in the tail. What I assume to be the reason for the court to find acta iure imperii (that the claim’s origin and DNA are actions taken by a state in its sovereign capacity) may well result in the French court refusing to entertain the claim as well (potentially leading to the need for a Lithuanian forum necessitatis). Indeed as Bruno points out, under the French SC Guatemala rule, French courts do not rule on cases necessarily involving the application of foreign public law (this echoes some of the issues in Skatteforvaltningen, currently under appeal). The 1975 Institute of International Law’s Resolution on same comes to mind.

The judgment shows very clearly the urgency for a proper debate on the relationship between EU law, the CJEU, ISDS and other forms of international dispute settlement. I fear the rather unnuanced CJEU statements in cases like Komstroy do little to resolve many of the underlying issues.

Geert.

In Soriano v Forensic News LLC & Ors [2021] EWCA Civ 1952 the Court of Appeal end of December allowed the claimant’s cross-appeal on the territorial reach of the GDPR. I reported the decision at the time but had not yet gotten round to post on it. I reviewed the High Court’s judgment here and readers may want to refer to that post to help them appreciate the issues. Like in my review of the first instance judgment I focus here on the GDPR’s jurisdictional gateway ([75] ff), not the libel issue.

Claimant’s case on A3 (2)(a) GDPR is set out as arguing that Defendants, to the extent that they are data controllers, offer services to readers in the UK irrespective of payment. As for A3.2(b), it is contended that the website places cookies on readers’ devices and processes their personal data using Facebook and Google analytics for the purpose of targeting advertisements, with Facebook Ireland Ltd and Google Ireland Ltd operating as the registered joint data controller. Further, it is submitted that Defendants were collecting and obtaining data about the Claimant and were monitoring his behaviour within the UK and the EU with a view to making publishing decisions.

CJEU authority discussed, on the meaning of ‘establishment’, is Weltimmo, Google Spain and Verein fur Konsumerenteninformation. At [78] ff Warby LJ relies to my taste somewhat excessively on the European Data Protection Board’s Guidelines 3/2018 on the Territorial Scope of the GDPR, holding [97] that defendants’ offer and acceptance of subscriptions in local currencies (Sterling cq Euros) is a “real and effective” activity that is “oriented” towards the UK and EU – that the effort only yielded 6 UK and EU subscriptions in total is irrelevant: defendants did more than merely making their journalism accessible over the world wide web. 

The result is that jurisdiction in E&W under the GDPR gateway is upheld – as is therefore, the potential which I predicted for extensive splintering of private GDPR enforcement, in contrast with the EU’s stated intent to have one-stop shop public GDPR enforcement.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.9.2.5, para 2.258 ff.

Service out, 'establishment' and 'services', territorial reach of the #GDPR https://t.co/iyVsTQcUvo
For review of the High Court judgment see https://t.co/KBZ4s4VHVz https://t.co/cLi12uuFk7

— Geert Van Calster (@GAVClaw) December 21, 2021