GAVC

I have delayed reporting on judgment in Case C-322/14, Jaouad El Majdoub v CarsOnTheWeb.Deutschland GmbH, held 21 May 2015, for exam reasons. I reported earlier on the due diligence required of businesses when establishing choice of court through electronic means. The ECJ has now also had its say, in a case concerning a B2B contract for the purchase of a car. [Choice of court in a B2C context tends to be covered by the consumer contracts title hence is not at stake here. [Mark Young and Philipe Bradley-Schmieg review the relevance of the case for B2C contracts here].

Choice of court allegedly had been made in favour of the courts at Leuven, Belgium, in the vicinity of which the seller’s parent company has its head office. The buyer however sued in Germany, the domicile of the German daughter company (and of the buyer, a car dealer). Buyer claims that the  contract at any rate was with the daughter company, not the mother company, and that choice of court had not been validly made. He submits that the webpage containing the general terms and conditions of sale of the defendant in the main proceedings does not open automatically upon registration and upon every individual sale. Instead, a box with the indication ‘click here to open the conditions of delivery and payment in a new window’ must be clicked on (known as ‘click wrapping’).

In essence therefore the question is whether the requirements of Article 23(2) of the Brussels I Regulation (now Article 25(2)) are met only if the window containing those general conditions opens automatically, and upon every sale. That Article was added at the adoption of the  Brussels I Regulation, precisely to address the then newish trend of agreeing to choice of court (and indeed choice of law; but that is not covered by Brussels I) through electronic means.

The provisions on forum clauses in the 1968 Brussels Convention, Brussels I and the recast are drafted in a way ‘not to impede commercial practice, yet at the same time to cancel out the effects of clauses in contracts which might go unread’ (Report Jenard) or otherwise ‘unnoticed’ (the ECJ in the core case Colzani). the Report Jenard also notes that in order to ensure legal certainty, the formal requirements applicable to agreements conferring jurisdiction should be expressly prescribed, but that ‘excessive formality which is incompatible with commercial practice‘ should be avoided.

The first sentence of Article 25(1) discusses the parties ‘agreement’ as to choice of court. (It leaves a large array of national law issues untouched, such as consideration, mandate, 3rd party effect. etc. On some of those issues, see also Refcomp). The remainder of Article 25(1) concerns the possible formats in which agreement is testified. Article 25(2) (and 23(2) before it) accompanies Article 25(1) a’s option of having the agreement put down ‘in writing’.

In line with the requirement not to be excessively formalistic, the ECJ essentially requires that parties be duly diligent when agreeing to choice of court. If click-wrapping makes it possible to print and save the text of those terms and conditions before the conclusion of the contract, then it can be considered a communication by electronic means which provides a durable record of the agreement.

Note that the Court does not hold on whether the agreement is actually reached between the parties: only that click-wrap may provide a durable record of such agreement, where it exists. (One could imagine choice of court having been protested, for instance, or other issues of national law having an impact on the actual existence of the agreement. and one can certainly imaigne a continuing discussion on what contract was concluded between what parties in the case at issue].

Geert.

Within the context of the service of documents Regulation (1393/2007) but with no less relevance for the Jurisdiction Regulation, the Court held last week on the qualification of an action by (German) holders of Greek bonds, against the Greek State, for the involuntary shave they took on those bonds. I reviewed Bot AG’s Opinion here. He had suggested that in the case at issue, the Greek State, with its retroactive insertion of the collective action clause in the underlying contract, exercised acta uire imperii with direct intervention in the contract itself. Not an abstract, general regime (such as a change in overall tax) which only has an impact on said contract at arm’s length.

The ECJ disagreed. Its finding may be distinguishable, in that it emphasises (at 40 and 44 in particular) that for the service of documents Regulation, things need to move fast indeed and hence interpretation even of core concepts of the Regulation needs to proceed swiftly: ‘in order to determine whether Regulation No 1393/2007 is applicable, it suffices that the court hearing the case concludes that it is not manifest that the action brought before it falls outside the scope definition of civil and commercial matters.‘ (at 49) However in the remainder of the judgment it does refer to precedent in particular under the Brussels I Regulation, hence presumably making current interpretation de rigueur for European civil procedure generally.

As noted in my earlier review, Bot AG opined that the Greek State’s intervention in the contracts was direct and not at a distance from the contract. The Court on the other hand essentially emphasised (at 57) that even though the Greek State, with its retroactive insertion of the collective action clause in the underlying contract, enabled the subsequent vote by the majority of the bondholders (to the dismay of the outvoted applicants), it was the vote, which led directly and immediately to changes to the financial conditions of the securities in question and therefore caused the damage alleged by the applicants – not the Act which enabled it. Not acta iure imperii therefore and hence European civil procedure is applicable.

I need to ponder this a bit further however at first sight the ‘direct and immediate’ effect test brings back soar memories of the ‘primarily aimed at’ test in WTO law, which took some time for the Appellate body to shake off. A bit of a leap, I know, but the trade lawyers among you will know what I mean. Applicants in the case at issue may be left arguing that identifying the Greek State’s intervention as the cause of the change in law, is no application of the butterfly effect (an extremely remote event which is being blamed for downstream effects) but rather an elephant in the Greek bond market room.

‘Direct and immediate effect’ may become an important consideration in the ECJ’s application of ‘civil and commercial’ in EU civil procedure law.

Geert.

I have delayed reporting on this initiative for exam reasons. The Belgian Parliament is currently debating a private members’ proposal for statute to address so-called ‘vulture funds’. These funds are described by the financial dictionary as ‘A fund that buys distressed debt of commercial companies or sovereign nations at a cheap price and then often sues them for the entire value of the debt. The resemblance to vultures is because these funds profit from the debt of failing companies or poor nations.‘

The text of the proposal (in Dutch and French) is available here. Vulture funds litigation is generally called immoral in the proposal. Reference is made to a number of high-profile recent judgments where vulture funds have been given approval by various courts worldwide, to seek redress against assets held by the sovereign nations concerned, or indeed their creditors. Particularly sore is the enforcement sought against funds destined for development aid.

The proposal essentially defines ‘vulture funds’ and then suggests that recognition and enforcement of relevant judgments or arbitral awards, regardless of the law applicable to the underlying relationship with the government concerned, is considered to be contrary to Belgian ordre public international, hence unenforceable. The proposal as it stands now adds (probably superfluously) that relevant EU (read: the Brussels I recast Regulation) and international (read especially: the 1958 New York Convention) law takes priority.

The part of the proposal that is bound to attract attention is the attempt at defining the ‘vulture’ in vulture funds. Frits Bolkestein for instance (former EU Commissioner) has remarked that buying up ‘bad debt’ need not always be morally reprehensible (I would suggest it is not that part of the fund’ activities which has attracted the Belgian Parliament’s attention). The enforcement /recognition part of the proposal is interesting because it applies ordre public in a categorical manner, rather than in the ad hoc application which both EU law and residual Belgian conflicts law (the Belgian Private International Law Act) ordinarily call for. For residual Belgian law, this is probably Parliament’s prerogative. However for EU law (and the New York convention), a general apprehension against vulture funds may not qualify as a proper exercise of the ordre public exception. Courts at the least may wish formally to disregard the act when the judgment /award concerned is covered by Brussels I cq. New York; however they can point to the sentiment expressed in the Act, to support incompatibility with Belgian ordre public when tested against an individual case.

The drafters are aware that this initiative may be a drop in the ocean. Reference is made to other, national initiatives (France, UK, US) which may point to an emerging pattern of anti-vulture funds sentiment. Indeed the realities of forum shopping mean that vulture funds action will migrate away from the Belgian legal order. On the other hand, Belgium’s safe harbour may also mean that relevant assets will seek refuge there. All of course, presuming the initiative will actually be adopted by Parliament.

Geert. Disclosure: I advised the MPs concerned on the technical aspects of the recognition and enforcement leg of the proposal. [My advice may or may not have been followed ].

I have reported elsewhere (In Dutch – I am hoping for some time at some point to write something similar in English; see in particular para 23) on the fact that the conjunctive ‘or’ has been dropped in all language versions of Article 19 of the Brussels I recast:

The provisions of this Section may be departed from only by an agreement:

• which is entered into after the dispute has arisen;
• which allows the consumer to bring proceedings in courts other than those indicated in this Section; or
• which is entered into by the consumer and the other party to the contract, both of whom are at the time of conclusion of the contract domiciled or habitually resident in the same Member State, and which confers jurisdiction on the courts of that Member State, provided that such an agreement is not contrary to the law of that Member State.

This contrast with the similar proviso on choice of court in employment contracts, Article 23:

The provisions of this Section may be departed from only by an agreement:

• which is entered into after the dispute has arisen; or
• which allows the employee to bring proceedings in courts other than those indicated in this Section.

I have suggested, with others, that much as I do not understand why the conjunctive has been dropped, its deletion, combined with its being kept in Article 23, means that for consumer contracts, choice of court pre the dispute are now simply impossible under the Regulation, while being maintained for employment contracts. I was also puzzled as to why such an important change was not discussed at all in the run-up to the recast.

A little bird at the European Commission (one high up the conflicts tree) now tells me that what has happened in reality, is quite different. Reportedly the ‘juristes-linguistes’ took it upon them to correct an apparent linguistic mistake in the previous version of the Regulation (indeed one going back to the Brussels Convention): there ought not to be a conjunctive when listing more than one, non-cumulative alternative. That would also explain the difference with Article 23, where there are only 2 alternatives.

This clears up the legislative intent. It does not to me, at least, clear up the linguistic confusion. We may have been grammatically wrong under the previous format (I cannot judge the correctness of that in all these language versions). However at least we were legally certain. Being fully respectful of grammatical correctness myself (punctuation jokes never fail to amuse me), I am not sure which one to prefer in this instance.

Geert.

In Case C-352/13 CDC, in which the ECJ held last week, at issue is among others the use of Article 6(1) of the Brussels I-Regulation (8(1) in the recast) when the claim against the anchor defendant has been settled before the trial is well and truly underway.

I reviewed JÄÄSKINEN AG’s opinion here.  The ECJ’s overall approach to Article 6 is not to take into account the subjective intentions of plaintiff, who often identify a suitable anchor defendant even if is not the intended target of their action. Like its AG, the Court does make exception for one particular occasion, namely if it is found that, at the time the proceedings were instituted, the applicant and that defendant had colluded to artificially fulfil, or prolong the fulfilment of, Article 6’s applicability. I had expressed reservation vis-a-vis this suggestion, obviously in vain. In cases such as these, where tort is already clearly established (via the European Commission’s cartel finding), the intention of ECJ and AG seem noble. Collusion to defraud is disciplined by the non-applicability of Article 6. However this arguably serves the interests of the parties guilty of the other type of collusion involved: that of defrauding not procedural predictability, but rather consumers’ interest. 

Next, the referring court enquired about the application of Article 5(3)’s special jurisdictional rule in the event of infringement of competition law, where that infringement concerns a complex horizontal agreement, spread over a long period of time, and with varying impact in various markets. The AG had suggested dropping application of Article 5(3) (now 7(1)) altogether, both with respect to locus delicti commissi and locus damni. Here the Court disagreed. Difficult as it may be, it is not to be excluded that locus delicti commissi can be established. At 50: one cannot rule out ‘the identification, in the jurisdiction of the court seised of the matter, of a specific event during which either that cartel was definitively concluded or one agreement in particular was made which was the sole causal event giving rise to the loss allegedly inflicted on a buyer.’

For locus damni, the Court again has no sympathy for either mozaik effect of Article 5(3), or indeed the often great difficulties in establishing locus damni, flagged by the AG. At 52: ‘As for loss consisting in additional costs incurred because of artificially high prices, such as the price of the hydrogen peroxide supplied by the cartel at issue in the main proceedings, that place is identifiable only for each alleged victim taken individually and is located, in general, at that victim’s registered office.‘

Registered office as the locus damni for purely economic loss, lest my memory fails me, has not been as such confirmed by the ECJ before. It is also currently pending in Universal. The Court is in my view a bit radical when it comes to justifying registered office as the Erfolgfort: at 53: ‘That place fully guarantees the efficacious conduct of potential proceedings, given that the assessment of a claim for damages for loss allegedly inflicted upon a specific undertaking as a result of an unlawful cartel, as already found by the Commission in a binding decision, essentially depends on factors specifically relating to the situation of that undertaking. In those circumstances, the courts in whose jurisdiction that undertaking has its registered office are manifestly best suited to adjudicate such a claim.‘

Finally, on the issue of choice of court in the agreements between the victims of the cartel, and those guilty of the cartel, the Court follows the AG’s lead. Such clauses are not generally applicable to liability in tort (the clause would have to refer verbatim to tortious liability). Neither do they in principle bind third parties, lest of course there be subrogration (Refcomp). (The referring national court has given very little detail on the clauses at issue and hence the ECJ notes that it could not reply to all questions referred).

In the end, it is the finding with respect to economic loss for which the judgment may be most remembered.

Geert.

The ECJ today has held, in a matter of factly manner (I had suspected the Court would be brief), that the enforcement of arbitral awards falls outside the Brussels I-Regulation, where that enforcement by the court of that State, effectively prohibits the party concerned from taking the case to a court in that very Member State. Rich was the main formula referred to, among the various precedents: ‘reference must be made solely to the subject-matter of the dispute‘ to assess the scope of Brussels I’s arbitral exclusion.

Importantly, West Tankers was distinguished particularly on the basis that in the facts at issue, there was no competing court in another Member State, hence no scope for the principle of mutual trust to be violated. The AG’s review of the impact of the recitals newly added by the Brussels I recast, was not addressed at all by the Court.

The judgment does not solve all outstanding issues, however. Firstly, the Court’s reasoning seems to suggest that where competition with a court in another Member State is at issue, effet utile of the Brussels I Regulation might take the upper hand, as it did in West Tankers. Recognition of the award arguably in such case would amount to anti-suit. Further, the Court (this was a Grand Chamber judgment) points out that the award still has to go through the national court’s standard recognition and enforcement process, outside the framework of Title III of the Regulation, instead governed by national residual law as well as the New York Convention. Both of these (including through ordre public) might still offer quite a remit for the Lithuanian courts to refuse recognition.

Geert.

CRUZ VILLALÓN AG Opined yesterday in C-47/14 Holterman (no EN version of the Opinion was available at the time of writing). What if a defendant is pursued both on the basis of his capacity as a director of the company, and for alleged failure properly to have carried out his duties as employee?

Applicant Holterman is incorporated in The Netherlands. Defendant is Mr Spies, a German national, domiciled in Germany. He was employed by applicant between 2001 and 2005/06, first as employee, subsequently also as director of Holterman’s establishments in Germany. Applicant alleges that defendant has caused damage as a result of improper fulfillment of his duties, indeed intentional recklessness, as director. Application is made at the court at Arnhem, where Spies successfully argues that the court has no jurisdiction on the basis that application has to be made of the protective category of ‘individual contracts of employment’.

Questions referred, were

1.    Must the provisions of Section 5 of Chapter II (Articles 18-21) of Regulation (EC) No 44/2001 1 be interpreted as precluding the application by the courts of Article 5(1)(a) or of Article 5(3) of that Regulation in a case such as that at issue here, where the defendant is held liable by the company not only in his capacity as director of that company on the basis of the improper performance of his duties or on the basis of unlawful conduct, but quite apart from that capacity, is also held liable by that company on the basis of intent or deliberate recklessness in the execution of the contract of employment entered into between him and the company?

2    (a) If the answer to question 1 is in the negative, must the term ‘matters relating to a contract’ in Article 5(1)(a) of Regulation (EC) No 44/2001 then be interpreted as also applying to a case such as that at issue here, where a company holds a person liable in his capacity as director of that company on the basis of the breach of his obligation to properly perform his duties under company law?

(b) If the answer to question 2(a) is in the affirmative, must the term ‘place of performance of the obligation in question’ in Article 5(1)(a) of Regulation (EC) No 44/2001 then be interpreted as referring to the place where the director performed or should have performed his duties under company law, which, as a rule, will be the place where the company concerned has its central administration or its principal place of business, as referred to in Article 60(1)(b) and (c) of that Regulation?

3    (a) If the answer to question 1 is in the negative, must the term ‘matters relating to tort, delict or quasi-delict’ in Article 5(3) of Regulation (EC) No 44/2001 then be interpreted as also applying to a case such as that at issue here, where a company holds a person liable in his capacity as director of that company on the basis of the improper performance of his duties under company law or on the basis of unlawful conduct?

(b) If the answer to question 3(a) is in the affirmative, must the term ‘place where the harmful event occurred or may occur’ in Article 5(3) of Regulation (EC) No 44/2001 be interpreted as referring to the place where the director performed or should have performed his duties under company law, which, as a rule, will be the place where the company concerned has its central administration or its principal place of business, as referred to in Article 60(1)(b) and (c) of that Regulation?

Spies essentially argues that the employment section of the Regulation trumps concurrent jurisdiction on the basis of contract. ‘Contract of employment’ so far has not been addressed in the abstract by the ECJ, other than incompletely in Shenavai Case 266/85, where it referred to the need for a durable relation between individual and company. In particular of course, a contract for employment needs to be distinguished from a contract for the provision of services. The Advocate General takes inspiration from the protective intent of the employment contracts heading, to suggest that supervision and instruction, jointly summarised as ‘subordination’, are determining factors for positions of employment. Even higher management can find itself in such position, given that and provided its actions, notwithstanding a wide independent remit, are subject to control and direction of the companies’ bodies. Review of the company’s by-laws should reveal the existence of such control vis-a-vis higher management, read together with the terms and conditions of the contract of employment at issue (at 32). It is only, per Asscher, C‑107/94, if management itself through its shareholding, exercises control over those bodies, that the position of subordination disappears.

Once the national court, on the basis of ad hoc analysis, holds that there is a position of employment, the national court has to apply Brogsitter per analogia: namely whether the action concerned follows from an alleged improper fulfillment of that agreement (as opposed to an improper fulfillment of duties as a director).

In subsidiary fashion only, does the AG entertain the questions relating to Article 5(1) and 5(3) (now 7(1) and 7(2) respectively). Spies’ duties as a director (again, should the ECJ find against applicability of the employment section) have to be considered ‘contractual’ within the meaning of the Regulation. The place of performance of the obligation in the view of the AG needs to be determined using Article 7(1)b, ‘the place in a Member State where, under the contract, the services were provided or should have been provided;’. Using Car Trim and Wood Floor Solutions and quoting Stephanie Francq, the AG suggests the national court identify the location where the service was mainly provided.

The AG’s views on the employment heading, however, seem solid and I would be surprised were the ECJ to have to go into the subsidiary questions.

Geert.

In Case C-483/13 KA Finanz AG, the ECJ is asked to clarify the ‘corporate exception’ to the Rome Convention and subsequent Regulation on the law applicable to contractual obligations. The two main questions ask whether the ‘company law’ excepted area includes (a) reorganisations such as mergers and divisions, and (b) in connection with reorganisations, the creditor protection provision in Article 15 of Directive 78/855 concerning mergers of public limited liability companies, and of its successor, Directive 2011/35.

(Creditor protection, incidentally, was also addressed in C-557/13 Lutz, judgment held last week, within the context of insolvency proceedings. I shall have a posting on that case soon).

Reuters tells me ‘KA Finanz was split off from nationalised lender Kommunalkredit in an attempt to secure a sustainable future for the rest of the public sector finance specialist firm following the global financial crisis’. KA Finaz therefore is what is generally referred to as a ‘Bad Bank’.

The referring court, Austria’s Oberster Gerichtshof, would seem to be hedging its bets on whether the Rome Convention or the Regulation applies to the contract, and ditto for the 1978 Directive or the 2011 Directive aforementioned. The file may reveal more factual detail than the application as published, however the questions as phrased (namely quite speculatively rather than file related) probably will run into trouble on the admissability front, I imagine.

At the time of adoption of the convention, the Giuliano Lagarde Report went into a bit more detail as to what is and is not excluded:

Confirming this exclusion, the Group stated that it affects all the complex acts (contractual administrative, registration) which are necessary to the creation of a company or firm and to the regulation of its internal organization and winding up, i. e. acts which fall within the scope of company law. On the other hand, acts or preliminary contracts whose sole purpose is to create obligations between interested parties (promoters) with a view to forming a company or firm are not covered by the exclusion.

The subject may be a body with or without legal personality, profit-making or non-profit-making. Having regard to the differences which exist, it may be that certain relationships will be regarded as within the scope of company law or might be treated as being governed by that law (for example, societe de droit civil nicht-rechtsfahiger Verein, partnership, Vennootschap onder firma, etc.) in some countries but not in others. The rule has been made flexible in order to take account of the diversity of national laws.

Examples of ‘internal organization’ are: the calling of meetings, the right to vote, the necessary quorum, the appointment of officers of the company or firm, etc. ‘Winding-up’ would cover either the termination of the company or firm as provided by its constitution or by operation of law, or its disappearance by merger or other similar process.

At the request of the German delegation the Group extended the subparagraph (e) exclusion to the personal liability of members and organs, and also to the legal capacity of companies or firms. On the other hand the Group did not adopt the proposal that mergers and groupings should also be expressly mentioned, most of the delegations being of the opinion that mergers and groupings were already covered by the present wording.

This explanation does not necessarily of course clarify all. For instance, the Report would seem to suggest that ‘mergers and groupings’, at issue in KA Finanz, are covered by the exception. Presumably, given the nature of the remainder of the exception, this is limited to the actual final agreement creating the JV or merged company, and not to the complex set of agreements leading up to such creation, such as Memoranda of Understanding (MOUs), or non-disclosure agreements (NDAs). Along those lines and without at this time having revisited relevant scholarship outside my own, I would suggest creditor protection is not covered by the exception.

The Gerichtshof also seks clarification on whether there are ‘any requirements concerning the treatment of mergers in relation to conflict of laws to be inferred from European primary law such as the freedom of establishment under Article 49 TFEU, the freedom to provide services under Article 56 TFEU and the free movement of capital and payments under Article 63 TFEU, in particular as to whether the national law of the State of the outwardly merging company or the national law of the target company is to be applied?’ Again, without having seen more reference to fact in the actual referral, this question to me seems far too academic to prompt the ECJ into entertaining it.

The Court’s ledger shows the application as having been lodged on 31 October 2014. That means some movement on it ought to be expected soon.

Geert.

The German Federal Labour Court, the ‘Bundesarbeitsgericht’, has provided the ECJ with an opportunity to provide much needed clarity on the application of Rome I to continuing (employment) contracts, and on the Regulation (or as the case may be, the Rome convention)’s provisions on overriding mandatory law. The Bundesarbeitsgericht has issued a press release on the case, Giesela Rühl flagged the case in March, and Lisa Günther has more detailed input on the overall context. Claimant is a Greek, employed by the Greek State at the Greek primary school in Nuremberg (Germany). His salary was reduced in accordance with relevant Greek Saving Laws. Claimant asks for payment of the sums withheld. Is the German court bound to apply the Greek Saving Laws?

The case (which as yet to appear on the ECJ’s website) first of all seeks clarification on the temporal scope of Rome I. Article 28 Rome I provides that it applies to contracts concluded ‘as from 17 December 2009′ (this is the corrected format; initially Article 28 read ‘after’). When exactly a contract is ‘concluded’ needs to be determined in accordance with the lex causae as identified by the Regulation (an extension of Article 10(1), suggested by most if not all of relevant scholarship). There has hitherto been much less noise about the application of Article 28 to ‘continuing’ contracts': those concluded before the temporal scope of the Regulation, continuing after, however renewed, renegotiated, amended…: do these continue to be covered by the Rome convention ad infinitum, or is there a cut-off point at which these continuing contracts become newly concluded? Any suggestion along these latter lines presumably requires determination of a threshold. For instance, adaptation of price in line with inflation presumably is not sufficient to speak of a ‘new’ contract. But would contractually foreseen price renegotiation to take account of economic cycles, lead to such a new contract?

One’s intuitive assumption may be to prefer autonomous interpretation of the concept ‘concluded’ however in the current state of (lack of) harmonisation of contractual law, it is more likely that the Court will prefer an Article 10(1) type solution.

Next up is the application of Article 9’s provision on overriding mandatory provisions. This is the first time the ECJ will rule on that Article (Unamar was held under the Rome Convention). The Regulation quite deliberately limited the room for manoeuvre for the court seized to apply overriding mandatory law other than that of the forum: only such laws of the country where the obligations arising out of the contract ‘have to be performed’ can come into calling. That place is likely to be Germany in the case at issue (the Regulation does not define ‘place of performance’ under Article 9(3)).

No doubt the ECJ will cut some corners, per judicial economy, however the case nevertheless promises to be entertaining.

Geert.

In East Sussex County Council Case C-71/14, the question under consideration is the application of Directive 2003/4 ‘s reasonableness test. Article 5 of the Directive provides that in situ access to information to for example public registers has to be free of charge. Further, that charges for supplying any environmental information must be ‘reasonable’.

In particular, how ‘objective’ must a reasonable cost be, seen against the light of English statutory law which allows local authorities to specify access (and other) fees providing that the amount ‘shall not exceed an amount which the public authority is satisfied is a reasonable amount’. Application in that case is made by a property search group with a view to commercial conveyancing. Sharpston AG on 16 April 2015 opined that even for commercial applicants, authorities’ hands are quite tied. In particular,

• that Article 5(2) of Directive 2003/4 does not authorise a public authority to recover, through a charge for supplying information, all or part of the costs of establishing and maintaining a database in which it has organised the environmental information it holds and which it uses to answer requests for information of the type listed in a questionnaire such as that at issue in the main proceedings.
• that a charge which does not exceed a reasonable amount within the meaning of Article 5(2) of Directive 2003/4 is a charge which: (i) is set on the basis of objective factors that are known and capable of review by a third party; (ii) is calculated regardless of who is asking for the information and for what purpose; (iii) is set at a level that guarantees the objectives of the right of access to environmental information upon request and thus does not dissuade people from seeking access or restrict their right of access; and (iv) is no greater than an amount that is appropriate to the reason why Member States are allowed to make this charge (that is, that a member of the public has made a request for the supply of environmental information) and directly correlated to the act of supplying that information; that
• In particular, a charge of a ‘reasonable amount’ under Article 5(2) of Directive 2003/4 is to be based on the costs actually incurred in connection with the act of supplying environmental information in response to a specific request. That will include the costs of staff time spent on searching for and producing the information requested and the cost of producing it in the form requested (which may vary). However, it is not permissible for such a charge also to seek to recover overheads such as heating, lighting or internal services. And that
• Article 5(2) of Directive 2003/4 requires public authorities to ensure that their charges do not exceed a reasonable amount, judged by the yardstick of what a ‘reasonable amount’ means objectively under EU law. That does not, as such, preclude a rule of national law according to which a public authority must satisfy itself that a charge levied meets that standard, however, Member State to ensure that there is (first) administrative and (then) judicial review of whether a public authority’s decision on what constitutes a reasonable charge is in conformity with the autonomous EU law meaning of what is ‘reasonable’ under Article 5(2) of Directive 2003/4.

In other words: the current wording in the relevant English statute, in the view of the AG, does not infringe the Directive. (It does in my view at least however add a layer of complication: for the authority’s subjective finding of reasonableness subsequently has to be checked, in two tiers of appeal (administrative cq judicial), against the Directive’s objective standard).

Aarhus is considered throughout the appeal and hence Charles Banner’s book on the Aarhus Convention, just out with Hart, a timely publication I would think.

Geert.