Industry attacks European plans to change jurisdiction laws

According to FT.com, the AEB described the Commission’s proposals as “a damaging lost opportunity that will be to the detriment of EU consumers, suppliers and the attainment of the aims of e-Europe.” The DTI is expected to be making an announcement shortly.

The European Parliament recently voted to convert a convention on the recognition and enforcement of court judgements into a regulation while at the same time updating some of its provisions.

A regulation of the Parliament is binding in its entirety and is directly applicable in all member states, so no implementing legislation would be necessary in the UK.

Much debate was ignited by the European Commission’s recent proposal to extend the existing right under the Brussels Convention of 1968 for consumers to sue in their own courts to cover on-line trading. Industry had argued that such an approach would discourage companies from trying to set up EU-wide e-commerce sites, while consumer groups had argued that not extending the consumer right would lead to a denial of justice as consumers cannot be expected to sue abroad.

An EU committee decided by a narrow margin to change the jurisdiction clause so as to allow a company to choose the jurisdiction so that it only may be sued where it has its registered office. This approach was then rejected. In trying to allay some of the fears expressed by industry, the European Parliament did adopt an amendment restricting the right of consumers to sue foreign suppliers of goods or providers of services in their jurisdiction to “active” internet sites, meaning sites which target the consumer’s Member State.

For more information, see our guide on Jurisdiction.