The Treaty of Nice and Reform of the Community Courts
By Liz Heffernan BL
Introduction
The Treaty of Nice was signed on 26 February 2001 and is expected to enter into force on 1 January 2003 following ratification by each of the fifteen member states. The Treaty is the culmination of the Intergovernmental Conference convened in February 2000 to tackle the so-called "Amsterdam leftovers," those issues of institutional reform left unresolved by the Treaty of Amsterdam. The principal focus of IGC 2000, and of the publicity surrounding its negotiations, was reform of the political institutions. Thus, the Treaty addresses such delicate issues as the size and composition of the Commission, the weighting of votes in the Council and the extension of qualified majority voting. From the standpoint of the legal practitioner, however, the proposed changes to the structure and operation of the Community courts represent a more significant development.
The Impetus for Reform
The Treaty of Nice is designed to prepare the institutions for enlargement to a union of at least twenty-seven member states. In the case of the judicial branch, the new provisions are also inspired by an urgent need to remedy overburdened dockets and the attendant inefficiencies in the administration of justice. In Luxembourg, the problem of docket control is by no means new. For several years the Court of Justice has been waging a losing battle to keep pace with the organic growth of Community litigation. The Court of First Instance, created in 1989, has played its part in alleviating caseload pressures. But the benefit of an additional Community forum has been offset by several factors, such as the Kirchberg's unique multilingualism, the exclusivity of the Court's jurisdiction over requests for preliminary rulings, a steady rise in the number of appeals to the Court from decisions of the CFI, and the challenging extensions of judicial jurisdiction introduced by the Treaties of Maastricht and Amsterdam. These days, the CFI, no less than the Court, is working at the limits of its capacity. Both courts are afflicted with burgeoning caseloads and the manifold side-effects of congestion.
From the point of view of the legal practitioner, an increase in the length of proceedings is the most telling symptom of the malaise. The duration of direct actions before the Court of Justice has been on the rise since 1996 - a temporary decline following the creation of the CFI having run its course -- and currently stands at 24 months. The average length of proceedings before the CFI is 27 months and an appeal to the Court an additional 19 months. The length of preliminary reference proceedings - on average 21 months -- is an even more serious indictment of the current system. For the litigant, the time and expense of the preliminary reference sojourn in Luxembourg must be added to the proceedings before the referring, national court.
IGC 2000
Notwithstanding the extent of the caseload crisis, reform of the judicial system was not tackled at Amsterdam nor included in the initial agenda of IGC 2000, largely for political reasons. Eventually, the issue was added to the miscellany of secondary items to be addressed at IGC 2000, but only after the judiciary publicized the issue, both officially and extra-judicially, and the President of the Court, Judge Rodriguez Iglesias, took the unprecedented step of airing his concerns in the press.
Debate on judicial reform at IGC 2000 focused on the submissions of the Community Courts, the Commission, the Friends of the Presidency Group, and individual member states. The European Bar was also represented in the guise of a report by the Council of the Bars and Law Societies of the European Union which shed some welcome light on the perspective of the litigant and practitioner.
Certain official reports proved particularly influential in shaping the reforms ultimately adopted, as well as those rejected, at Nice. The Court of Justice and the CFI published their views on the caseload dilemma in a May 1999 paper on the future of the judicial system. The Courts' Paper is cast as a springboard for debate: the tone is reflective rather than directive, the Courts discussing the pros and cons of various reforms without endorsing any one, much less presenting a vision of where they see themselves ten or twenty years down the line. The Commission took up the reins by setting up an independent working party under the chairmanship of former president of the Court, Ole Due. The Due Report, published in January 2000, contains a more aggressive analysis of the issue, endorsing some reform proposals and rejecting others. Finally, the Friends of the Presidency Group (consisting of legal experts from the member states and political institutions) was more intimately involved in IGC 2000, monitoring the negotiations, submitting draft texts and hammering out compromise forumulae.
The Reforms
An eclectic range of reforms was mooted in advance of IGC 2000. Proposals ranged from modest tinkering with current practice and procedure to radical ideas for restructuring the system. Several minor but important changes have been introduced since then, such as empowering the Court of Justice to dispense with oral hearings in certain cases and extending the circumstances in which it may respond to requests for preliminary rulings by reasoned order. Recently, steps have also been taken to expedite proceedings before the CFI.
The following were among the broader issues canvassed at IGC 2000: limiting the number of judges on the Court and the CFI; giving both courts the power to amend their Rules of Procedure; making the CFI the principal forum for direct actions; establishing specialised courts or tribunals; and introducing a mechanism to filter appeals within the Community court system. Understandably, the bulk of attention was devoted to the preliminary ruling procedure, the very heart of the problem. Suggested reforms included limiting the referral powers of the national courts, giving the Court of Justice a discretionary jurisdiction over requests for preliminary rulings, conferring a preliminary rulings jurisdiction on the CFI, and establishing specialised preliminary rulings courts.
At IGC 2000, the search for consensus on substantive reform was intrinsically linked to method. At issue was not only the nature and extent of reform but also the means and timing. Should the Conference redesign the system or maintain its current structure? Should it adopt any one of the proposed changes or a combination of same? Should the Conference decide these issues or delegate decision-making to the Council? And should these decisions be made now or postponed until the next IGC? At the end of the day, the spirit of compromise so emblematic of intergovernmental conferences enveloped the judicial reform agenda. The Conference opted to renovate rather than redesign the judicial architecture and, at the same time, to make the system more adaptable to change in the future. Thus, it adopted some specific proposals, rejected others, left to the Council the resolution of many of the details, and declared the debate to be on-going.
The following is a summary of the key changes contained in the Treaty of Nice.
1. Flexibility
The role and operation of the Court of Justice and the CFI is set out in the EC Treaty, the Statute of the Court (which is contained in a separate protocol to the Treaty) and the Courts' Rules of Procedure. The Treaty of Nice re-organizes these legal instruments so as to ensure a proper hierarchy among the various provisions and to render them more amenable to future amendment. In particular, the Council will be empowered to amend all parts of the Statute (except for Title 1 which deals with the appointment and replacement of judges and advocates-general). This will enable the Community to adopt a wider range of future reforms without recourse to the cumbersome process of Treaty amendment.
Regrettably, the Treaty is less generous with regard to the Rules of Procedure. At the current time, changes to the Rules are subject to the unanimous approval of the Council. The Conference rejected a proposal that the Court of Justice and the CFI be equipped to modify their practices and procedures, a power that other courts, such as the European Court of Human Rights and the United States Supreme Court, take for granted. Instead, the Council will continue to have the final say over amendments to the Rules, although its approval will now be based on a qualified majority vote rather than unanimity. This seems an unduly restrictive approach, particularly since the Conference also made provision for the transfer from the Rules to the Statute of certain matters of special concern to the member states, such as the rules governing languages.
2. Composition of the Courts
A "quick fix" to the problem of overburdened dockets is the appointment of additional judges. Bolstering the ranks of the judiciary might clear the dockets but arguably at an unacceptable price. As the Court of Justice warned at the last enlargement, an increase in its current membership of fifteen could transform the plenary session from a collegiate court to a deliberative assembly while extensive recourse to decision-making by chambers could pose a threat to the consistency of Community law. The problem is not merely one of numbers. Traditionally, each member state appoints one judge to the Court and a second to the CFI, an entitlement not explicitly recognized in the EC Treaty but one that the member states are anxious to retain. But what will happen post-enlargement when, ultimately, as many as twenty-seven member states stake a claim to national representation on the Court of Justice?
As between the seemingly irreconcilable demands of operational efficacy and national representation, the Conference came down squarely on the side of the member states. The new version of Article 221 entrenches the principle that the Court of Justice shall consist of "one judge from each Member State." To accommodate a uniquely large and potentially unwieldy bench, the Court shall sit in chambers of three and five judges as well as a new Grand Chamber of eleven judges (replacing the current practice of sitting in grand plenum and small plenum as well as chambers of three and five judges). Plenary session, with a quorum of eleven, will be reserved for exceptional cases, as provided in the Statute, or when a member state or Community institution that is party to the proceedings so requests.
Clearly, the Grand Chamber will serve as the storm center in the new arrangement, handling cases currently heard in plenary session. Whereas, under the current practice, the Small Plenum is constituted on an informal, ad hoc basis, the membership of the Grand Chamber will comprise the President of the Court, the presidents of the chambers of five judges and other judges appointed under conditions laid down in the Rules of Procedure. Understandably, fears have been expressed that the composition of the Grand Chamber may be influenced by national interest and that it may create a sense of judicial hierarchy at the Court. A more serious concern is whether the Court, sitting in its various guises, will be able to maintain the jurisprudential integrity that it central to its constitutional mandate.
As for the plenary session, the Court may decide, after hearing the views of the advocate-general, that a case of exceptional importance, however defined, should be referred to the "full court." Precisely how the full court will function is an open question. A packed, plenary session seems at odds with the Court's valued tradition of collegiate decision-making. On the other hand, adjudication of these exceptional cases by a number less than the full compliment may raise concerns about the unity of the bench and the equality of national representation.
The new Article 224 provides that the CFI shall comprise "at least one judge per Member State." The Conference recognized that increasing the membership of the CFI is a less risky proposition not least because any threat to the consistency of Community law can be tackled on appeal by the Court of Justice. Given the CFI's expanded role under the Treaty of Nice, a larger bench will prove beneficial. Apparently, COREPER has given the nod to an increase in six judges at the CFI, although a system for rotating appointments has yet to be settled. Provision is also made for the CFI to sit in many and varied guises, in accordance with the Rules of Procedure: in chambers of three and five judges, in a Grand Chamber, as a full court and as a single judge.
The Conference resisted calls to eliminate or reduce the role of the advocate-general at the Court of Justice. It also decided against including advocates-general in a rotational scheme for the distribution of judicial posts at the Court. The number of advocates-general remains unchanged at eight and may even be increased by unanimous vote of the Council at the request of the Court. However, the opinion of the advocate-general will no longer be obligatory. Under the new version of Article 223, the advocate-general will issue an opinion only on cases which "require his involvement," namely, those which the Court considers raise some new point of law. Relieved of the duty to opine purely as a matter of form, the advocates-general should be able to concentrate on the challenging cases, where their contribution is needed most. Finally, under the new version of Article 224, the Statute may provide for the CFI to be assisted by advocates-general. Opinions vary as to whether such a move is necessary or desirable. The CFI has rarely availed of its existing power to appoint one of its own to perform the function ad hoc in a particular case.
3. Direct Actions
One of the most significant and attractive features of the changes adopted at Nice is an expanded role for the CFI. Potentially, the CFI will become the primary forum for direct actions, a secondary forum for preliminary rulings and an appellate forum for decisions from newly-created judicial panels. The CFI will no longer be simply "attached to" the Court. The new version of Article 220 will affirm that ensuring that the law is observed will be the task of both courts, each within its own jurisdiction. At the same time, the Treaty of Nice contains various safeguards to ensure that the Court of Justice has the final say on the interpretation of Community law.
The jurisdiction of the CFI over direct actions has gradually increased from the initial grants over staff and competition cases conferred by the Single European Act. At the current time, the CFI hears actions brought by individuals or legal persons and the Court actions instituted by member states or Community institutions. Under the new version of Article 225, the CFI shall have jurisdiction over all actions or proceedings brought under Article 230 (proceedings against a decision), Article 232 (action for failure to act), Article 235 (action for damages), Article 236 (staff cases) and Article 238 (contractual disputes to which the Community is a party), "with the exception of those assigned to a judicial panel and those reserved in the Statute for the Court of Justice." Jurisdiction over other classes of action or proceeding may be conferred on the CFI by subsequent amendment to the Statute. The current practice of allowing appeals from the CFI's decisions on points of law will continue.
Although the new Article 225 falls short of declaring the CFI the first judicial forum for all direct actions, it embodies an important change in emphasis. As regards these classes of actions, adjudication by the CFI will become the rule rather than the exception. This is a natural and desirable development. As the legal system matures, it is appropriate that the CFI and the Court should pursue their respective vocations, the former as a general trial court and the latter as an appellate supreme court. Much will depend upon the division of competence between the Court and the CFI and, specifically, the choice of those direct actions for which the Court will retain exclusive competence. The Due Report contains a number of pragmatic suggestions guided by the principle that direct access to the Court should be limited to "those actions for which a rapid judgment is essential to avoid serious problems in the proper functioning of the Community institutions." This is particularly important if, as we shall see, the Court retains the lion's share of preliminary rulings. In a declaration attached to the Treaty of Nice, the Conference calls upon the Court of Justice and the Commission to consider the division of competence between the two courts (particularly in the area of direct actions) and to tender proposals when the Treaty enters into force.
4. Judicial Panels
The most innovative change to the current system is the introduction of a new form of judicial institution, the specialised judicial panel. Under Article 225a, the Council "may create judicial panels to hear and determine at first instance certain classes of action or proceeding brought in specific areas." The judicial panels will be attached to the CFI and their jurisdiction and modus operandi will be defined by Council decision. The decisions of a judicial panel may be appealed to the CFI on points of law only, unless the Council decision establishing a particular panel also provides for appeals on matters of fact. There will be a further right of review by the Court of Justice in exceptional cases where there is a serious risk to the unity or consistency of Community law.
The concept of specialised judicial panels was inspired in part by the burden of staff cases which has dogged case management in Luxembourg from the outset. Thus, in a declaration attached to the Treaty of Nice, the Member States call on the Council to set up a judicial panel for staff cases as soon as possible. Another likely candidate is trademark cases, currently adjudicated by the Alicante Boards of Appeals established under the Community Trade Mark Regulation. The possibility of creating a judicial panel for cases under the future Community patent has also been mooted.
Judicial panels will be a welcome compliment to the extended role of the CFI over direct actions and hold the promise of significant caseload relief in areas that are a particular drain on judicial resources. The concept of specialisation within the judicial system is also an attractive development, although not one that should be give free rein. Most cases are not amenable to simple categorisation and it may be imprudent to assume that the factors that lend staff and intellectual property cases to specialised treatment apply to other, wide-ranging areas of Community law.
5. Preliminary Rulings
Appropriately enough, the preliminary ruling procedure took centre stage on the judicial reform agenda at IGC 2000. Requests for preliminary rulings comprise over half of the cases filed at the Court of Justice and are the greatest single drain on judicial resources. But reform of the preliminary ruling procedure is a uniquely delicate issue. The lynchpin of the system, preliminary rulings have enabled the Court of Justice to nurture the development of Community law and to shepherd its uniform application throughout the member states. The procedure also underscores the role of the national courts in the Community legal order and provides citizens with indirect access to the Court of Justice. Hence a reluctance, even unwillingness, on the part of the member states to upset the status quo notwithstanding the pressing need for reform. Given the range and depth of the various proposals to amend the preliminary ruling procedure, the modesty of the projected changes is striking.
The significant step taken at Nice was to remove the exclusivity of the Court's jurisdiction over preliminary rulings. Under the new Article 225(3), the CFI "shall have jurisdiction to hear and determine questions referred for a preliminary ruling under Article 234, in specific areas laid down by the Statute." The proposed role for the CFI marks a profound shift in traditional thinking which associates preliminary rulings with the Court's uniquely constitutional function. It is too early to predict, however, whether there will be any radical change in practice. The Treaty of Nice creates a potential rather than an actual jurisdiction for the CFI. Whether - and, if so, when and how - the CFI delivers preliminary rulings has yet to be determined. The specific areas in which the CFI may exercise jurisdiction are as yet undefined but will probably be limited. They might, for example, include the technical and other fields that the CFI currently tackles under the rubric of direct actions. But devising an effective and efficient means of delegating the more routine requests for preliminary rulings to the CFI while retaining the so-called "important" cases for the Court, presents an intractable challenge. Absent a workable solution, the Court will doubtless be reluctant to loosen its grip over preliminary rulings.
Even within the conferred jurisdiction, there are safeguards against excluding the role of the Court altogether. First, the CFI may refer a case to the Court for a ruling where the CFI considers that the case requires "a decision of principle likely to affect the unity or consistency of Community law." Secondly, in exceptional circumstances, decisions of the CFI on questions referred for a preliminary ruling may be reviewed by the Court "under the conditions and within the limits laid down by the Statute, where there is a serious risk of the unity or consistency of Community law being affected." These provisions allow for a good deal of subjectivity in determining those requests which will be reserved to the Court. If the objective is to reduce the length of proceedings, it will be important to ensure that recourse to the Court is truly exceptional and that the participation of the CFI does not simply add an additional tier of review.
Regrettably, the Treaty of Nice makes no attempt to reduce the volume of requests for preliminary rulings emanating from the national courts. Notwithstanding the many and varied proposals of the Due Report and others, the Conference decided against altering the mechanics of the procedure. Thus, the role of the national courts and the terms and conditions under which cases are currently referred will remain unchanged. Retention of the status quo will assuage the concerns of many but it will not lead to any significant reduction in the length of proceedings. For the time being at least, we can assume that preliminary rulings will continue to be an enormous drain on resources at the Court of Justice.
Concluding Remarks
The Treaty of Nice signals an important step in the evolution of the Community's judicial system. Taken collectively, the reforms should go some way towards alleviating current pressures and preparing for future challenges. In particular, an enhanced role for the CFI and the creation of new judicial panels should strengthen the judicial system and enable the Court of Justice to concentrate on its fundamental, constitutional tasks. It is difficult to predict the impact of many of the projected reforms. Certainly, it will take some time before the effects are felt in practice, even with respect to the more immediate changes. The devil will be in the details, many of which have yet to be decided. The starting point is clarification of the division of competence between the Court and the CFI. Similarly, the promised reductions in the length of proceedings will depend in large measure on how the Court's appellate jurisdiction is defined. Legal issues aside, the success of the reforms is linked to the provision of adequate financial and administrative resources, especially at the CFI.
For advocates of radical reform, the decision to renovate rather than redesign the judicial architecture is a disappointment. Given the overburdening of the Community courts and the daunting prospect of enlargement, the package of reforms adopted at Nice seems too modest, standing alone, to guarantee effective, lasting solutions to the caseload crisis. From this perspective, Nice may be viewed as an opportunity lost. The reticence of the Conference to opt for dramatic change is explained in part by the cautious tenor of the Courts' own submissions and the occasionally conservative stance of the Due Report. But the decisions taken at Nice must also be seen in the broader context of IGC 2000. As against the Commission and Council, reform of the Courts generated relatively little controversy or political interest. This begs the question whether a multi-purpose intergovernmental conference is the optimum forum for reform of the judicial branch. In any event, only time will tell whether IGC 2000 has paved the way for the effective administration of justice or condemned courts and litigants alike to continued gridlock.
To be fair, the Treaty of Nice is intended to mark the continuation rather than the culmination of the reform process. As noted, several of its provisions lay the groundwork for future developments without necessarily committing the courts to their adoption. Moreover, the Community already has an eye to the next intergovernmental conference, scheduled for 2004. The increased flexibility in the rules governing the judicial system should be a boon to its evolution provided other core values, such as legal certainty, are not threatened. The Community must ensure that reform does not become so piecemeal and protracted as to undermine the integrity of the rule of law. Flexibility, after all, is a poor substitute for a lasting vision of the design of the judicial system. It is hoped that the continuing debate will generate more fundamental thought on such important issues as the relationship between the national and Community courts and the legitimate expectations of European citizens in the administration of justice.