A Political Decision Disguised as Legal Argument: Opinion of CJEU 2/13 – and other things
Over the summer an interesting article was published by Graham Butler, on his interview with David Thor Björgvinsson, former Icelandic judge in the European Court of Human Rights – see here.
One subject was the CJEU’s refusal to permit accession by the EU to the ECtHR (see my post here) – despite the EU’s commitment to accede via Article 6 of the Lisbon Treaty, in December 2009. A Draft Agreement on Accession was concluded in April 2013, but it required the obtaining of an opinion from the CJEU on whether the Agreement was compatible with the EU Treaties – to which the CJEU gave a dusty answer in December 2014.
Quite a lot has happened in the 6 months since my post here on the Transatlantic Trade and Investment Partnership (TTIP). TTIP is a proposed trade agreement between the US and the EU, with negotiations on the substantive issues between the EU and the US underway in Brussels at the moment.
The proposed treaty may have significant effects on EU regulation, but let’s concentrate on whether TTIP should contain specific provisions enabling investors to sue governments.
The ground for action would be governmental “expropriation” of investments – and that may mean anything from telling a cigarette manufacturer that he must have to change what his packets look like, (with consequential loss of profits), to imposing new environmental standards on a power generating plant.
This mechanism is known as Investor-State Dispute Settlement or ISDS. Our government seems astonishingly sanguine about this, on the basis that it has not yet been sued successfully under existing bilateral treaties with similar provisions. This does not seem to be a very profoundly thought-through position to adopt, if the proposed system has its problems – which it plainly does, when one compares it with traditional claims in the courts. Put simply, why wave it on?
Unsurprisingly, the Opinion of the EU Court (just before Christmas – my post here) that the proposed accession of the EU to the ECHR on current terms would be unlawful has not gone down well in Strasbourg.
An excellent post today by Tobias Lock on the Verfassungblog tells the story here, but these are the highlights. In short, the President of the Strasbourg Court, Dean Spielmann, added some text to his review of 2014, in a speech given yesterday, 29 January – here.
Lots of interesting stuff on the 2014 ECtHR case law (and case load), but his withering bit on the CJEU’s Opinion is worth quoting.
Bearing in mind that negotiations on European Union accession have been under way for more than thirty years, that accession is an obligation under the Lisbon Treaty and that all the member States along with the European institutions had already stated that they considered the draft agreement compatible with the Treaties on European Union and the Functioning of the European Union, the CJEU’s unfavourable opinion is a great disappointment.
In short, the CJEU is out of line with the views of the member states, and not least with the obligation in Article 6 of the Lisbon Treaty that the EU “shall” accede to the ECHR.
But Spielmann did not leave it at that, as we shall see.
Last week, on 15 January 2015, TTIP was debated in the House of Commons – see here. It is important for us all, but why?
TTIP stands for the Transatlantic Trade and Investment Partnership, a proposed trade agreement between the US, the EU, and various members of the EU including the UK. A sober account of its history and scope was produced for the HoC debate (here), and a rather less polite view is here from George Monbiot.
Now, TTIP contains the usual things which one might expect to see in a trade agreement, such as the reduction or removal of tariffs between the respective trading blocs. And it comes with the usual accompanying material suggesting that all parties will benefit massively from the deal to the tune of billions of euros.
So what is there not to like?
Well, one part of the concern is that it will confer on investors (think multi-nationals) the right to sue governments for regulatory regimes causing loss of profits to those investors. This ability to sue is known as Investor-State Dispute Settlement or ISDS. And the suing does not happen in domestic courts, but in a special international law tribunal consisting of corporate lawyers drawn from the world over. I shall give some examples below of the sort of litigation engendered in the past by ISDS, so you can assess what this means in practice.
TTIP with ISDS is being enthusiastically backed by the present Government – not hitherto a fan of foreign judges taking charge of how our laws comply with external standards.
Opinion of CJEU, 18 December 2014 – read Opinion
Well, here’s a thing. The EU top court in Luxembourg has decided that it is somehow against the EU treaties for it to defer in specific instances to the other European top dog, the ECtHR in Strasbourg.
Accession of the EU to the ECHR has been a very slow-burn process, with the Commission starting things off in 1979 (sic). The breakthrough, or so it appeared at the time, was the entry into force of Article 6 of the Lisbon Treaty of European Union, in December 2009. This (Art.6(2)) makes it a treaty obligation that the EU
“shall accede to the ECHR”.
Nice and simple then? No, not exactly, when you look at the extremely complex Draft Agreement on Accession of the European Union to the European Convention on Human Rights, concluded in April 2013- my post here. This seeks to make the adjustments to both the EU and ECHR institutions enabling a non-state organisation such as the EU to sign up to the ECHR.
One of the steps contemplated by the draft Agreement was the obtaining of an opinion from the CJEU on whether the Agreement was compatible with the EU Treaties. And the CJEU’s firm “non” to that question will inevitably set back the process, if not lead to its complete derailment.
The Opinion has already been well analysed by Aidan O’Neill QC here and Steve Peers here, neither in terms flattering of the CJEU. It is of some importance, so here is my penn’orth.
C-501/11P Schindler v. European Commission, CJEU, 18 July 2013 – read judgment
Two things of general interest to the human rights lawyer in this unsuccessful attempt by Schindler to challenge a fine of a mere €143 million for anti-competitive behaviour before the EU’s top court.
The first is that the Commission’s role as investigator, prosecutor and enforcer was not found to be in breach of Article 6(1) – because its decisions were subject to “full review” by the EU judges. The second is the remark in the CJEU’s judgment that the EU status of Article 6 ECHR will change when the EU accedes to the ECHR – I shall look at whether this change will be formal or substantive, given the presence of an equivalent right in the EU Charter, within Article 47.
Like a lot of decisions involving issues of high principle, the underlying facts do not reflect well on the offending company, in this case Schindler. It, with three other companies (Kone, Otis and ThyssenKrupp), stitched up the lift and escalator markets in Belgium, Germany, Luxembourg and the Netherlands. Somebody tipped off the Commission, who conducted a massive investigation, and fined all these companies. As is standard, the process of investigation did not involve any oral hearing, with some limitations on the access by the accused companies to all the material which the Commission received.
As my image shows, cartel fines by the Commission involve big big money, and I dare say they dwarf any fines levied by member states on “true” criminals.
Last Friday, 5 April, saw a break-through in negotiations as to how the EU is to accede to the ECHR – see the Draft Agreement on Accession of the European Union to the European Convention on Human Rights. There has been a lot of speculation (e.g. my post of June 2012) about how the roles of the EU Court (the CJEU) and the Strasbourg Court might be fitted together. Now at least we have some of the proposed answers, though there are a number of formal steps to be undergone before it comes into law.
The move is a culmination of a process trailed as long ago as the 1970s, though kick-started more recently by Article 6 of the Lisbon Treaty of European Union. This entered into force in 2009, and says that the EU “shall” accede to the ECHR. Negotiations started in earnest in 2009/10, initially with negotiators from 14 Convention countries (7 in the EU, 7 ECHR but non-EU members) who met with members of the European Commission, and latterly involving all 47 Council of Europe countries. Those negotiators have now reached agreement.