EUROPEAN COMMISSION Brussels,31.5.2018 SWD(2018) 287 final COMMISSION STAFF WORKING DOCUMENT



IMPACT ASSESSMENT

Accompanying the document Proposal for a



Regulation of the European Parliament and of the Council

amending Regulation (EC) No 1393/2007 of the European Parliament and of the Council on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (service of documents) {COM(2018) 379 final}



{SEC(2018) 272 final}



{SWD(2018) 286 final}



Table of contents 1. Introduction: Political and legal context 2. Problem definition 2.1. The problem tree 2.2. What are the problem drivers? 2.2.1. Ambiguities concerning the application of the Regulation 2.2.1.1. Lack of clear information on the channels available for assistance on locating an addressee 2.2.1.2. Unclear definition of extra-judicial documents 2.2.1.3. Unclear elements in the right of the addressee to refuse the acceptance of the document on the basis of is inappropriate language 2.2.2. Varying practices relating to costs of the serving documents (leading to both delays and inequalities in the market) 2.2.3. Reliance on paper-based means of communication between transmitting and receiving agencies 2.2.4. Direct electronic service of a document from MS A to a recipient with physical residence in MS B is not explicitly allowed or favoured 2.2.5. Insufficient quality of service by post (Article 14) including delays and insufficient filling out of acknowledgement of receipt 2.2.6. Use of direct service (Article 15) is restricted or inaccessible 2.2.7. Use of fictitious or alternative methods of service at national law is preferred to the Regulation 2.2.8. Insufficient protection of the defendant against the effects of default judgments 2.2.9. Information on the e-Justice portal not up-to-date or easy to find

2.2.10. Non-compliance of receiving agencies with the timeframes set out in the Regulation 2.3. What are the problems for citizens, businesses and public administrations 2.3.1. Delays, undue costs and confusion for citizens and business 2.3.2. Undue costs for Member States (Public administrations and justice systems) 2.3.3. Shortcomings in protection of procedural rights 2.3.4. Legal uncertainty 2.4. Effects at the level of wider EU policy 2.4.1. The smooth functioning of the Internal Market 2.4.2. Administration of justice 2.4.3. Fundamental rights 2.5. How will the problem evolve? 3. Why should the EU act? 3.1. Legal basis 3.2. Subsidiarity 4. Objectives: What is to be achieved? 4.1. General objectives 4.2. Specific objectives 4.3. Operational objectives 5. What are the available policy options? 6. What are the impacts of the policy options?

7. combined effects of the preferred option as a package 7.1. Baseline scenario 7.2. Policy package 7.2.1. Use of e-CODEX for communications and document exchanges between the designated agencies and central authorities 7.2.2. Facilitate the uptake of electronic means of serving documents 7.2.3. Address enquiries 7.2.4. Facilitating access to direct service 7.2.5. Strengthening quality of postal service under Article 14 of the Regulation 7.2.6. Summary of the results of the assessment 8. Conclusions 8.1. REFIT (simplification and improved efficiency) 9. How will actual impacts be monitored and evaluated? Annex 1: Procedural information Annex 2: Stakeholder consultation including the outcome of the public consultation on Regulation (EC) No 1393/2007 Annex 3: Who is affected and how? Annex 4: Analytical methods Annex 5: Tables with assessment of options for problems Annex 6: Assessment of impacts of baseline scenario Effectiveness Further improving the efficiency and speed of judicial proceedings and thereby reducing the burden for citizens and businesses

Improving access to justice and the protection of the procedural rights of parties to the proceedings Reducing legal uncertainty Efficiency Costs and benefits for public authorities Costs and benefits for citizens and businesses Coherence Impacts on fundamental rights Environmental impacts Annex 7: Assessment of the impacts of the policy package Effectiveness Further improving the efficiency and speed of judicial proceedings and thereby reducing the burden for citizens and businesses Improving access to justice and the protection of the procedural rights of parties to the proceedings Reducing legal uncertainty Efficiency Costs and benefits for Member States’ public authorities (incl. central bodies, courts) Costs and benefits for legal professionals Costs and benefits for businesses as service providers Costs and benefits for citizens and businesses as parties to legal proceedings Coherence Impacts on fundamental rights

Environmental impacts ANNEX 8: Evaluation Report 1. Introduction 2. Background to the intervention 2.1. Objectives and Intervention Logic of the Regulation 2.2. Functioning of the Regulation 2.2.1. Designation of specific bodies 2.2.2. Transmission: means, acceptance, receipt and refusal of requests and documents 2.2.3. Costs of transmission 2.2.4. Protection of the defendant 2.3. Baseline and points of comparison 3. Implementation / state of Play 3.1. Description of the current situation 4. Method 4.1. Short description of methodology 4.1.1. The economic study 4.1.2. The On-line Public Consultation 4.1.3. Preceding evaluative exercises 5. Analysis and answers to the evaluation questions 5.1. Effectiveness

5.1.1. Achievement of the operational objectives 5.1.1.1. Overall efficiency of service of documents under the Regulation 5.1.1.2. Preparation of the request and choosing the method of service Identifying the types of documents to be served Identifying the address of the person to be served Assessing whether translation is necessary Choosing the method of service 5.1.1.3. Service by transmitting and receiving agencies Step 1: Locating the relevant agencies and sending the request Step 2: Transmission of documents between transmitting and receiving agencies (and subsequent communications) Step 3: Service of the document by the receiving agency Step 4: Returning the certificate of completion or non-completion of service 5.1.1.4. Service by postal services 5.1.1.5. Direct Service 5.1.2. Achievement of the specific objectives 5.1.2.1. Improving the efficiency and speed of cross-border proceedings 5.1.2.2. Improving access to justice and the protection of the procedural rights of parties involved in cross-border proceedings The right to refusal of documents Default judgments based on a failure to respond Issues affecting the rights of parties that are omitted from the Regulation

5.1.2.3. Minimising the burden for citizens and businesses involved in cross-border proceedings 5.1.3. Achievement of the general objectives 5.1.3.1. Ensure the smooth functioning of the area of freedom, security and justice 5.1.3.2. Ensuring the smooth functioning of the Internal Market 5.2. Efficiency 5.2.1. Compliance costs for Member States 5.2.2. Costs for citizens and businesses 5.2.2.1. Translation Costs 5.2.2.2. Costs of method of service 5.2.2.3. Time for serving a document across borders 5.3. Relevance 5.4. Coherence 5.4.1. Internal coherence 5.4.2. External coherence 5.4.2.1. General Treaty objectives 5.4.2.2. Relevant EU instruments in the field of judicial cooperation 5.4.2.3. National law 5.4.2.4. The Hague Convention and other bilateral or multilateral agreements 5.5. EU added value 6. Conclusions

6.1. Effectiveness 6.2. Efficiency 6.3. Relevance 6.4. Coherence 6.5. EU added value 1.Introduction: Political and legal context The EU has the task to develop the European area of justice in civil matters based on principle of mutual trust and mutual recognition of judgements. The area of justice requires judicial cooperation over the borders. For this purpose, and for the proper functioning of the internal market, the EU has adopted legislation on cross-border service of judicial documents and on cooperation in taking of evidence . These are crucial instruments to regulate judicial assistance in civil and commercial matters between the Member States. Their common purpose is to provide an efficient framework for cross-border judicial cooperation. They have replaced the earlier international, more cumbersome system of Hague conventions between the Member States . This legislation on judicial cooperation has a substantial impact on the everyday lives of EU citizens in their private capacity or business activity. It is applied in judicial proceeding having cross-border implications; its proper functioning in these concrete cases is indispensable for ensuring access to justice and a fair trial for the parties to the proceedings (e.g. the lack of proper service of the document initiating proceedings is by far the most often used ground for refusing the recognition and enforcement of judgments ). The efficiency of the framework of international judicial assistance has, therefore, a direct impact on the perception of the citizens involved in such cross-border disputes on the function of the judiciary and the state of the rule of law in the Member States. Smooth cooperation between courts is also a necessary ingredient for the proper functioning of the internal market. In 2018, there are in the European Union approximately 3.4 million civil and commercial court proceedings with cross-border implications . In most of these cases, namely in those where at least one party resides in another Member State than the one where the proceedings takes place, courts apply the Regulation on service of documents, often even several times in course of the proceedings (since often further documents have to be served formally, in addition to the document instituting the proceedings, such as the decisions closing the proceedings). Furthermore, the application of the Regulation on service of documents is not restricted to proceedings before the civil tribunals, because its scope covers also "extra-judicial" documents, the service of which may arise in various out-of-court proceedings (e.g. in succession cases before a notary public, or in family law cases before a public authority), or even in the absence of any underlying judicial proceedings. The EU Justice Agenda for 2020 stressed that, in order to enhance mutual trust between the justice systems of the Member States of the EU, the need to reinforce civil procedural rights should be examined, for example as regards the taking of evidence. The aim of improving the framework of judicial cooperation within the EU is also in line with the objectives of the Commission set by the Digital Single Market Strategy : in the context of e-Government, the Strategy expresses the need for more actions to modernise public (including judicial) administration, achieve cross-border interoperability and facilitate easy interaction with citizens.In line with this, the Commission has committed in its work programme for 2018 to prepare proposals revising the Regulation on taking of evidence and the Regulation on service of documents. Regulation (EC) No 1393/2007 on the European Parliament and of the Council of 13 November 2007 on the service in the Member States of judicial and extrajudicial documents in civil and commercial matters (service of documents) and repealing Council Regulation (EC) No 1348/2000 provides for expeditious channels and clear rules for transmitting documents from one Member State to another, for purposes of service in the latter. The Regulation includes certain minimum standards with regard to the protection of the rights of defence (e.g. Articles 8 and 19), and sets uniform legal conditions for serving a document by post directly across borders. The Regulation represented a big step forword to The Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters (the “Hague Convention”). This latter establishes methods for provision of testimony and documents between a signatory state when evidence is sought and another signatory state where evidence is located, for use in judicial proceedings in the requesting state. The Convention provides for the taking of evidence by means of letters of request or diplomatic or consular agents and commissioners. Evidence is obtained by issuing a letter of Request to the designated central Authority of the signatory state where the evidence is located. By contrast with the Hague Convention, Regulation (EC) No 1393/2007 governs judicial cooperation between the courts of the Member States in the taking of evidence in civil and commercial matters and it allows the taking of evidence from one member state to another, without recourse to consular and diplomatic channels. This Regulation enables thus a simplified route by allowing direct contract between the courts in the member states. This Impact Assessment was developed on the basis of the findings of the retrospective evaluation of Regulation (EC) No 1393/2007, which has been conducted in parallel (back to back) and which concluded that although the Regulation has achieved its main objectives to a satisfactory level and continues to be relevant, there are a number of areas in which significant improvements can be made. The options for such improvements assessed in this document are based on the findings of the evaluation It should be noted that this Impact Assessment is closely linked to the Impact Assessment concerning Council Regulation (EC) 1206/2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters. The two initiatives are closely intertwined to the overall Commission priority of digitalization and e-Justice and follows the suit of parallel work in the field of criminal justice in order to create a level playing field in the areas of criminal and civil justice alike. It builds upon and benefits of already existing EU outputs and legal standards (e-CODEX, eIDAS Reg etc.). The Commission has recently adopted a proposal providing for a legislative framework on e-evidence, based on the Council's request in its June 2016 conclusions, for the Commission to develop a platform with a secure communication channel for digital exchanges of requests for electronic evidence under the Directive on the European Investigation Order. This initiative is closely interlinked with e-CODEX, since Member State experts participating in the development of the platform reached the conclusion, after considering different options, that the e-CODEX system would be the most suitable system to be used for such an exchange of electronic evidence. 2.Problem definition 2.1.The problem tree The problems, their causes and effects are presented below by means of a problem tree, which serves to illustrate the problems faced by EU citizens and businesses due to current limitations or shortcomings in the Regulation, the causes of these problems and their effects. The issues identified at the bottom of the so-called ‘problem tree’ are considered to be the root causes/drivers of the problems that ensue for citizens. Ultimately, the problems have effects at the level of overarching EU objectives. The figure should thus be read from the bottom to the top.

In the following sub-sections, each element of the problem tree is examined in further detail, starting with the causes/drivers of the problem and the resulting problems for citizens. It should be noted that the problems identified in this section are those which were evidenced in the parallel evaluation report on this Regulation. Both the evaluation and the impact assessment reports are based on data collected for both reports. Figure 1: Problem Tree Source: Deloitte elaboration 2.2.What are the problem drivers? As demonstrated in the problem tree, the problems under the Regulation are relatively few but their causes/drivers are many. Therefore, the causes/drivers are first explained in detail, after which it is explained how they lead to problems and what are their larger effects (i.e. based on a reading the problem tree from bottom to top). 2.2.1.Ambiguities concerning the application of the Regulation The Regulation either neglects certain aspects that are regarded as a priority by stakeholders or is not sufficiently clear in a number of provisions: 2.2.1.1.Lack of clear information on the channels available for assistance on locating an addressee It is clearly stated in Article 1(2) of the Regulation that it does not apply where the address of the person to be served is not known. As also highlighted in the Commission’s 2016 comparative legal analysis of the relevant laws and practices of the Member States regarding the service of documents, in practice this provision causes significant problems for transmitting and receiving agencies. Firstly, it is difficult to establish when an address is known or unknown. For example in some Member States it is sufficient to address a document to the last known address of the person to be served (e.g. in France). In some cases, documents are transmitted to national central bodies or receiving agencies with the expectation that they would assist in locating the addressee. In fact, Member States have different understandings on who is responsible for locating the addressee. In about half of the Member States, this responsibility lies exclusively with the party that wants a document to be served, while in the others, although the party may still be required to specify an address for the addressee, the court seized, the court officer or the bailiff have a duty to take certain measures in order to trace the whereabouts of the addressee. Therefore, there are currently different approaches in the Member States on the assistance provided (outside the Regulation) to applicants in civil and commercial matters on locating the whereabouts of an addressee or clarifying their address, once this is proven incorrectly indicated or obsolete. Consequently, the attitudes of the central bodies or the agencies designated under the Regulation vary in how they react to a situation where there is a deficiency in the address. Such interventions ultimately lead to delays if no assistance is provided by that Member State. Most of the stakeholders consulted agreed that the idea of helping to identify whereabouts is satisfactory since the regulation was created in order to initiate proceedings. The need will be to have tools to identify whereabouts during the proceedings (i.e. bank enforcement order that cannot be enforced for lack of address). ased on the assessment of the needs of stakeholders, a mechanism is required to assist the actors concerned in legal proceedings in clarifying an address in another Member State. 2.2.1.2.Unclear definition of extra-judicial documents Article 1(1) stipulates that the Regulation applies to both judicial and extrajudicial documents. In the Roda Golf & Beach Resort SL judgement, the CJEU extended the scope of application of the Regulation to purely private documents (i.e. document which do not emanate from a public authorities) if their service is needed for the assertion or safeguarding of rights. From this perspective, the definition of extra-judicial documents is unclear for the majority of stakeholders. In fapt, the broad interpretation of the Court contributed to the ambiguity of this concept, since in a lot of the legal systems there is a clear distinction between the mail delivery for private reasons and the legal concept of service of documents, whereby the latter is only conceivable in the context of legal proceedings. While this was not found as a problem which would directly affect the daily application of the Regulation (receiving agencies informed the economic contractor that in most cases they just comply with the incoming requests for service without strictly reviewing the nature of the documents to be served). The ambiguity around this concept of "extrajudicial documents" in the Regulation, the fragmented interpretation of its content relying on the diverging views of the national procedural laws, is against the stated intention of the EU legislator to have this notion as an autonomous concept of EU law . Most of the stakeholders (and especially The European Union of Judicial Officers) consultated suggested that the unclear definition of extra-judiciar documents could lead to legal uncertainty. 2.2.1.3.Unclear elements in the right of the addressee to refuse the acceptance of the document on the basis of is inappropriate language The unclear aspects of language requirements of documents to be served under the Regulation are causes of significant difficulties for stakeholders. The assessment of whether the addressee understands the language of the document generates practical problems in the absence of clear indicators or guidance in the Regulation. The burden of proof, and therefore the responsibility to present to court all relevant information indicating the actual language skills of the addressee is usually placed upon the sender (the adversary to the addressee in the proceedings). This is regarded as complicated in practice. The requirement to provide information on the right to refusal is also not sufficiently clear in the Regulation. This element appears in 20 out of 114 cases analysed on the Unalex database. In these cases, in general it was an issue before the court that the information on the right of refusal according to Article 8 of the Regulation had been misleading or not given. According to some interviewed stakeholders, the annex forms are not required to accompany the document served if the documents are already provided in (or translated into) either a language the addressee understands or an official language of the place of service. This practice is, in fact, contrary to the conclusion of the CJEU on the issue, which holds that the receiving agency is required, in all circumstances and without a margin of discretion, to inform the addressee of a document of his right to refuse to accept that document, by using systematically for that purpose the standard form set out in Annex II to the Regulation. This misunderstanding of the CJEU case-load is due to the fact that Regulation lacks clarity in terms of rights of addresses who do not understand the official language of the place of service and to the provision of information to addressees on the right to refusal and where it is clear that the addresses understand the language of the document. Some of the stakeholders, such as the The European Union of Judicial Officers and Chamber Européen des Huissiers de Justice related that there is a lot of reluctance in attaching the Annex II in all the languages.

A well-founded refusal does not render the service of the document invalid, but is regarded as an error which may be rectified by the subsequent transmission of the translation of the documents to be served (Article 8(3)). Such a remedy leads to additional delays which induced an unwanted consequence in practice, since transmitting agencies in some Member States require or encourage claimants to provide a “precautionary” translation of the relevant documents from the beginning.. Such a practice is difficult to reconcile with the objective of the Regulation to minimize the instances of cross-border service of documents where translations are actually required. 2.2.2.Varying practices relating to costs of the serving documents (leading to both delays and inequalities in the market) Article 11 of the Regulation on the costs of the service of documents was inherited from the preceding Hague Conventions and is based on the respect for diversity of the legal systems. This solution functions well with different legal traditions, and this aspect is also relevant in the EU context, since the systems Member States have in place with respect to the service of documents differ significantly. This difference of the procedural laws implies that a certain number of Member States charge costs for their services, whereas the majority of them do not. This tension was somewhat mitigated by the revision of the Regulation in 2007 obliging Member State using a bailiff system to notify a flat rate fee in advance, thereby creating transparency in the context of the costs. Nevertheless, differences still remain significant, including one Member State which asks for 132 € + VAT for serving a single document. As a repercussion of this situation, there is a trend, according to which also those States which do not use the "bailiff system" notify a flat rate fee for their services provided in return under the Regulation. However, in Member States where judicial officers are not generally involved in the service of documents (e.g. in Ireland) the burden for compliance with the Regulation is felt to be higher. This is because the processing and arrangement of serving documents is not seen as a typical “court” function and additional resources have to be mobilised to become acquainted with this service and to administer the requests. The consultation with stakeholders indicated that administrative formalities for transmitting and receiving agencies are felt to be heavy and quite bureaucratic. This is because of the rigid use of the long and complex standard forms in the Annex for communication between the agencies and the heavy reliance on paper-based procedures and postal service. 2.2.3.Reliance on paper-based means of communication between transmitting and receiving agencies The parallel evaluation of the Regulation found that communications between the designated agencies under the Regulation are overwhelmingly paper-based. This significantly prolongs the process and hinders the efficient and speedy transmission of documents under the Regulation. Although the Regulation includes declarations in favour of the more frequent use of electronic means of communication, as a result of a continuous reluctance of Member States to accept such communication means, it did not fulfil its objective to promote in practice the use of the modern communication channels. The majority of the Member States still relies exclusively on the paper-based communications: only seven Member States accepted e-mail as eligible means of communication for all types of interactions with their agencies under the Regulation, but the evaluation has shown that even in relations where electronic communication would be an option, they are not preferred in practice. The findings of the Evaluation Report can be verified by the results of a questionnaire conducted in the context of the European Judicial Network in civil and commercial matters, on the legal aspects of electronic service of documents under the Regulation, in 2017. The analysis of the replies received from 15 Member States has shown that whereas 88% held that there are no specific obstacles in their domestic procedural law which would prevent their transmitting agencies from forwarding the documents to be served under the Regulation through electronic channels, only 38% held it possible (technically and in legal terms) that their receiving agencies accept another Member States' electronic documents for purposes of service in their Member State. The replies to another question gave a blatant proof of the influence of old habits on the issue: when asked if receiving agencies would transform incoming paper documents into electronic messages, if those documents could be served electronically to the addressee in accordance with the law of the Member State addressed, 18% of the respondents answered that this is not done in practice even if this would be legally possible. Most of the stakeholders consulted, such as The European Union of Judicial Officers (UEHJ) the Chamber Européen des Huissiers de Justice and the Council of Bars and Law Societies of Europe supported the move towards electronic transmission of documents to be served or evidence, as it will allow rapid management of judicial cooperation 2.2.4.Direct electronic service of a document from MS A to a recipient with physical residence in MS B is not explicitly allowed or favoured The evaluation of relevance demonstrates that the Regulation is not well-adapted for technological developments already existing at the national level. Electronic service of documents is an emerging method in civil proceedings in the Member States, national procedural codes are opening up more and more towards this possibility (although the types of cases and the circle of addressee eligible for this method of service varies hugely). However the Regulation does not mention electronic service as a possible method for the service of documents in cross-border proceedings, and therefore falls behind those national systems already including such method. In respect with the direct electronic service, the Council of Bars and Law Societies of Europe and the European Union of Judicial Officers raised questions in relation with (i) the certainty of the fact that the served person takes note of the content, (ii) the date of service of document and about (iii) the validity of the documents sent and their content. 2.2.5.Insufficient quality of service by post (Article 14) including delays and insufficient filling out of acknowledgement of receipt Although service by post is a preferred method of service for the majority of stakeholders, there are still concerns regarding delays as well as the legal uncertainty when acknowledgments of receipt are not sufficiently completed. Regarding delays, stakeholders highlighted the uncertainty that accompanies using postal service with regard to the time it takes to reach the addressee, including considerable periods being necessary in some Member States. The biggest issue seems to be the different levels of quality of postal services in the Member States. Some interviewees pointed out that post is unreliable since they do not know if the postal services will deliver in time or to the right person. The origin of this practical problem lies in the fact that the Regulation does not harmonize the conditions relating to the eligible recipients in addition to the addressee (i.e. which other persons under the address can receive the document if the addressee is not present at the time of the delivery), and does not regulate the consequences of an unclaimed delivery (i.e. when the document is left uncollected and is returned to the sender by the postal operator). Even when delivery of the document is successful through postal services, often there are issues with the acknowledgement of receipt supplied by the mail carrier and effective service is not recognised in the court of origin. This is due to the fact that the acknowledgment of receipt is often not sufficient to prove that service was effective. For example the date of receipt may not be properly filled in or the signature is illegible or not supplied. In addition, some interviewees highlighted the fact that it is unclear whether digital versions of acknowledgment are regarded as “equivalent” to original versions. Some of the stakeholders consulted (the European Union of Judicial Officers and the Hague Conference on Private International Law) suggested that that it would be advisable to have an EU label envelope. 2.2.6.Use of direct service (Article 15) is restricted or inaccessible Article 15 of the Regulation allows that any person interested in legal proceedings in one Member State (Member State of origin) may request directly a judicial officer (bailiff), official or other competent person in another Member State (Member State addressed) to serve a document there. The availability of this method of service in the Regulation is limited in two senses: first, only persons involved ("interested in") a legal proceeding may apply this way of service, consequently transmitting agencies are not permitted to exploit this possibility. Second, this may be applied only in those Member States where the domestic law permits the service of the document through judicial officers or other competent professionals. Direct service is regarded as an efficient method of service among stakeholders. However, the use of the method is not available in all Member States, restricting the access of some applicants to a rapid and direct mean of serving documents. In addition, confusion is generated when Member States accept the direct service of documents domestically but restrict its application for cross-border service. The consultation with the stakeholders also indicated that Article 15 of the Regulation is a very effective tool and that extending its scope of application will mean a great step forward. Moreover, the group of experts suggested that Member States should leave open all the methods available under national law and should provide at least one person who can provide service under national law according to Article 15 of the Regulation.

2.2.7.Use of fictitious or alternative methods of service at national law is preferred to the Regulation This problem driver is generated by the vague precondition of the Regulation determining the scope of application, according to which it should apply only when a document has to be transmitted from one Member State to another. This precondition enables courts to keep the service of a document in a "domestic" context and to use national methods of substituted or fictitious service of documents also in cases where the addressee has his/her residence or seat in another Member State. This constitutes a clear disadvantage for foreign addressees, since when the Regulation is not used, the uniform standards therein protecting the rights of the defence (such as Art. 8 or Art. 19) do not apply. The frequency of this problem can be demonstrated by the fact that in total 19 out of 114 cases analysed on the Unalex database involve considering service valid in Member State A by the use of fictitious or alternative methods, irrespective of whether the defendant in Member State B was informed. In general, interviews with stakeholders found that fictitious service is quite common in cross-border proceedings. Nevertheless the lack of guidance of the Regulation on the use at domestic level of fictitious and substituted service on addressees with a residence or seat in another Member State causes uncertainty and fragmentation concerning the rights of parties in the Member State. In this sense, the group of experts suggested that more streamline rules are necessary with regard to the persons that can be substituted and proposed to codify Henderson Case. This divergence of approaches in practice remained even after the conclusions of the CJEU made on the scope of the Regulation in the Alder Case, which underlined that whenever the addressee has his/her residence or seat in another Member State, the Regulation should apply and the service of the document on him/her shall be attempted through the channels of the Regulation. There is evidence, that this conclusion of the Court is not followed and that there is a tendency of national courts to prefer "domestic" methods of service of documents even in cases where they are aware of the foreign residence of the addressee. 2.2.8.Insufficient protection of the defendant against the effects of default judgments Interviews in the fieldwork Member States found that default judgments are quite common in cases falling under the Regulation. According to Article 19(1) of the Regulation courts are limited by various requirements in passing default judgments against defendants on whom the document instituting the proceedings has had to be transmitted to another Member State. Irrespective of this, the interests of the defence are not in all instances properly protected, since Article 19(2) of the Regulation allows, for reasons of procedural economy, a continuation of the proceedings even if the court could not establish that the foreign defendant was actually informed. The consultation with stakeholders showed that the means of communication within the EU are different and therefore is difficult to assess when the judgements become definitive.The 2017 MPI Study found that the court of origin will often not be able to establish whether or not service in another Member State has been effected on the defendant or whether the defendant has at least received the relevant document because a court will often not be in a position to investigate the details of the service process in another Member State. Furthermore, the Study concludes that the reservation, which allows for the continuation of the proceedings after six months have elapsed and has been notified by more than half of the Member States, does result in fictitious service on the defendant. That will not only undermine the defendant’s protection but it is also contrary to the idea of mutual trust. Another weakness in the protection of the right of the defence is detected in the uneven level and lack of transparency of the available legal remedies after a default judgment has been issued. Article 19(4) of the Regulation provides a special, autonomous provision according to which the judge can relieve the defendant from the effects of the expiry of the time limit for ordinary appeal in cases of error of service of the document instituting the proceedings. The problem with this autonomous extraordinary relief is that its accessibility may be limited in time by the Member States (a majority of them communicated to the Commission that they will not entertain a request for the relief once one year has passed from the issuance of the default judgment). Another problem of this autonomous extraordinary relief is its relationship to further extraordinary reliefs in national law. 2.2.9.Information on the e-Justice portal not up-to-date or easy to find Despite the usefulness of the information contained on the e-Justice portal regarding the service of documents, it was found that information regarding the application of the Regulation, the contact details of agencies and central bodies and the national laws and practices on service of documents is often not up-to-date or easy to find. This generates uncertainty for the stakeholders involved and can add additional delays to the process of serving a document where e.g. information is relied upon and subsequently found to be incorrect. In the dedicated meetings with the Member States, some of them conveyed that there in an advantage in making it easier to search existing registers, including via the e-Justice Portal: UK, Netherlands, Cyprus, Austria, Germany, Portugal and Romania. 2.2.10.Non-compliance of receiving agencies with the timeframes set out in the Regulation It is broadly recognised that the timeframes for the communication between transmitting and receiving agencies (i.e. sending the acknowledgement of receipt within 7 days, serving the document with 30 days etc.) are not respected. The non-compliance with the timeframes leads to uncertainty and delays for the parties involved. As shown in the corresponding Evaluation Report, difficulties in meeting the time limits in the Regulation by the designated agencies are directly connected with the problem driver relating to the reluctance to use modern means of communication for interactions between the agencies. 2.3.What are the problems for citizens, businesses and public administrations The difficulties/causes identified in the previous section lead to concrete problems for citizens, businesses and Member States. There are four main problems. 2.3.1.Delays, undue costs and confusion for citizens and business Delays and undue costs are caused for citizens and business by all difficulties/causes. There is also a strong interplay between delays and costs, for example confusion generated by the uncertainties in the Regulation (e.g. efforts to clarify an address or to find the proper interpretation of an ambiguous provision) leads to delays in the process and ultimately undue costs for such delays. 2.3.2.Undue costs for Member States (Public administrations and justice systems) Member State’s central bodies and relevant authorities experience undue costs under the Regulation in terms of resources (i.e. staff costs, administrative costs) spent on dealing with requests and decisions under the Regulation. These undue costs are driven by uncertainties concerning the application of the Regulation.

Undue costs are also strongly driven by the reliance of transmitting and receiving agencies on paper based means of communication. 2.3.3.Shortcomings in protection of procedural rights Shortcomings in the protection of procedural rights are closely linked with the use of fictitious or alternative methods of service where the addressee is not in real terms informed of the existence of the document. In addition, the unclear elements in the right of the addressee to refuse the acceptance of the document on the basis of its inappropriate language also contributes to the problem of protection of rights for both the applicant and the addressee. As the grounds for refusal may be determined on a test of the addressee’s understanding of the language, which protects the addressee, this refusal method may also be abused, which leads to unnecessary delays in the procedure and denial of the procedural rights of the applicant. Insufficient protection of the Regulation against default judgments feeds also in to this problem. Similarly, the non-compliance of receiving agencies with the timeframes set out in the Regulation can affect the procedural rights of the parties as well as the insufficient consideration for substituted/alternative service methods. 2.3.4.Legal uncertainty Without a doubt, ambiguities concerning the application of the Regulation lead to legal uncertainty. In addition, legal uncertainty under the Regulation is connected to the preference of fictitious or alternative methods of service at national level to the use of the Regulation as this directly affects the scope of application of the Regulation. The insufficient quality of service by post is also a main driver of legal uncertainty. First, the acknowledgement of receipts (return slips) filled in an inappropriate way, may not prove in a legally appreciable way that service have been effected. Second, the silence of the Regulation on the eligible substituting recipients or on the consequences of an unclaimed delivery adds to the uncertainty of the result of the assessment of the delivery. Further, legal uncertainty may also derive from the fact that in some Member States the use of direct service is restricted/inaccessible, despite it being allowed domestically – as lawyers or transmitting agencies may rely on this method of service being acceptable though it is not. 2.4.Effects at the level of wider EU policy As shown in the Problem Tree figure (see Figure 1), the causes and problems identified and explained in the previous section have wider effects, influencing general EU policy objectives. The following effects have been identified: ·The smooth functioning of the internal market is not properly ensured ·Administration of justice is not efficient ·Fundamental rights are not sufficiently safeguarded The following subsections present the assessment of these effects. 2.4.1.The smooth functioning of the Internal Market Some of the problems previously described hinder the functioning of the Internal Market, which is manifested by: ·Costly and time-consuming procedures are a barrier to cross-border business; ·The development of the digital economy is hampered.

First, both citizens and businesses should be able to not only make use of the advantages of the Internal Market (i.e. an undisturbed flow of cross-border procedure), but also to solve any disputes that may arise in this context, regardless of the Member State concerned. Nevertheless, some concrete problems arising from the application of the Regulation are preventing the Internal Market from providing such benefits. The delays and undue costs and confusion created by the ambiguities concerning the application in the Regulation constitute a significant barrier for businesses and citizens. Businesses should be able to operate and solve any issue they face with their counterparts in any of the EU Member States. The lack of a smooth facilitation of the Internal Market by the Regulation may constitute a deterrent for citizens and businesses in getting involved in cross-border transactions in the future as they might prefer to avoid administrative hassle, delays and involved costs. Second, a proper functioning of the Internal Market should entail the development of the digital economy. However, as described in the previous section, transmitting and receiving agencies still strongly rely on paper based means to communicate and cross-border electronic service of documents is practically not possible under the Regulation. Yet, paper-based communication entails delays and costs for public administrations, justice systems, and citizens/businesses alike. The development of digital economy is therefore hampered in this case. 2.4.2.Administration of justice Public administrations as well as justice systems are facing several issues when implementing this Regulation which hampers their efficiency. As previously explained, they are facing undue costs in terms of resources (i.e. staff costs, administrative costs) spent on dealing with requests and decisions under the Regulation. These undue costs are driven by ambiguities in the Regulation and by the reliance of transmitting and receiving agencies on paper based means of communication. In addition, the legal uncertainty arising from the ambiguities in the Regulation (e.g. relating to the quality of service by post) together with the shortcomings in the protection of procedural rights also indicate that the administration of justice fails to be as efficient as it should be. 2.4.3.Fundamental rights Article 47 of the EU Charter of Fundamental Rights, stipulates that “Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law”. The access to justice is broader, and entails: effective emedies, access to court, fair trial, redress, judicial protection and due process. All these rights are at stake when the procedural rights of the parties are not duly respected in cross-border proceedings. It was found in the parallel evaluation exercise that the fundamental rights of a party to a cross-border proceeding may be at risk with regard to two main issues: ·Service of documents in a language not understood by the addressee (or conversely an abuse of this right). ·Insufficient level of protection of the defendant against default judgments in case he/she was not properly served with the document instituting the proceedings. The policy package addresses these shortcomings. Firstly, the policy package would contribute to more clarity and predictability of the procedure revolving around the right of refusal of addressees and a better protection of their procedural rights. In addition, the proposal will state the criteria to assess the language skills of the addressee. Such amendment would further protect addressees ensuring they understand the content of the document they have been served on the one hand, and would safeguard the non-abuse of the right of refusal, thus equally protecting the plaintiff’s rights on the other hand. As regard the protection of the defendant against default judgements, it should be noted that Article 19 of the Regulation contains provisions on the consequences of a defendant not entering an appearance. The provision limits the possibility for the court to give judgment against a defendant who has not appeared and who was to be served abroad. Paragraph 4 enables the judge to free the defendant from the effects of the expiry of the time for appeal against a default judgment. This provision thus provides a safeguard to make sure that the defendant’s procedural rights have been taken into account. It is complemented by the possibility to refuse recognition of a judgment on the ground that the defendant was not served with the document which instituted the proceedings or an equivalent document correctly, as stipulated in the Brussels Ia Regulation (Art. 45(1)(b)). The policy package will add more clarity concerning the due diligence to be carried out before issuing default judgements by obliging courts to send altert messages through all means of communication which are reasonably likely to be accessible (i.e. email address, social media etc). The possibilities created by the e-CODEX electronic system would have a positive impact on the ability to exercise the right to an effective judicial remedy, and are therefore in conformity with Article 47 of the Charter of Fundamental Rights since electronic communication and document transmission enhances and reduces the time of the court proceedings. Stakeholders have pointed out that Article 47 also guarantees the right to an impartial and independent tribunal, and that in order be in conformity with that Article, future governance and coordination of e-CODEX and e-CODEX-related activities need to ensure that the system does not interfere with the functioning of the judiciary is guaranteed .Moreover, the electronic method of service together with the proposed ‘digital by default’ principle is expected to not only have a positive effect on access to justice, but also contribute to faster proceedings. Furthermore, it reduces costs or failures of service of documents experienced otherwise, where an inefficient method to effect service would have been chosen due to a lack of options under the baseline scenario.Likewise, the clarification provided by the proposal on the definitions and concepts would reduce legal uncertainty and speed up procedures under the Regulation in practice. Next under the baseline scenario, the protection of personal data is not considered to be affected by the current Regulation. External factors influencing data protection and privacy are the General Data Protection Regulation (GDPR) and the growing threats to cybersecurity (also affecting public authorities). After entering into force in May 2018, the GDPR is expected to increase awareness on the issue, prompt actions to ensure security and integrity of databases and swift reactions to breaches of privacy in the judiciary. However, data protection in the judiciary will continue to be largely determined by national decisions and the integrity of postal services or the agencies/authorities involved in the process of cross-border service under the Regulation. At the same time, the incidence of attempted attacks on public IT infrastructure is expected to increase until 2030. This will also affect the judiciary in the Member States, depending on the proliferation of electronic communication, court IT systems and the interconnectedness with other IT systems or databases. Lastly, the wide variety of potential uses for social media corresponds to an equally broad range of legal issues relating to these communication channels. However, it should be noticed that documents will not be sent via social media, but these networks will be only used to sent information notice. 2.5.How will the problem evolve? With regard to the timeframe 2018-2030, the main findings of the quantification exercise are as follows: ·Number of legal proceedings in which the Regulation is expected to be applied: oIn year 2018, it can be expected that there are up to 3 255 070 legal proceedings across all EU Member States in which the Regulation will be applied;

oUntil 2030, this number is expected to increase up to 4 164 734 per annum (i.e. +24%) For service through postal services, cases are expected to increase from 1.9 million to 2.4 million between 2018 and 2030. For service through transmitting and receiving agencies, the number is expected to increase from around 1 million to 1.3 million over this time span. Regarding direct service, the number is expected to increase from 445 431 in 2018 to 569 911 in 2030. Finally, for service through diplomatic channels, the number is expected to increase from 68 528 in 2018 to 87 679 in 2030. The increase in the number of proceedings, where the Regulation will be applied, would generally amplify the existing problems, without any appropriate intervention. In particular, the continued reliance on paper based means of communication and transmission of documents would increase the gap between the output efficiency of the judicial assistance procedures of the Regulation and the demands and needs of EU citizens in a more digitalized world. Where society and governance is more and more digitalised, a system of cross-border service of documents, which is not following this trend but continue to be based on paper, will hamper the general governance of justice. 3.Why should the EU act? 3.1.Legal basis The legal basis is Article 81 TFEU (judicial cooperation in civil matters having cross-border implications). The broad mandate of Article 81 aims at creating an integrated system of circulation of judgments and other documents from one Member State to another. Subparagraphs (b) and (d) of paragraph (2) of this Article grants the EU the power to adopt measures, particularly when necessary for the proper functioning of the internal market, aimed at ensuring the cross-border service of judicial and extrajudicial documents and the cooperation in taking of evidence. 3.2.Subsidiarity The aim of the policy area concerning judicial cooperation in civil matters has been always be to establish a genuine area of freedom, security and justicewhere judicial decisions circulate and legal situations acquired under one legal system are acknowledged within the EU across borders without unnecessary obstacles. This approach is based on the conviction that without a genuine judicial area the underlying freedoms of the single market cannot be fully exploited. Some of the other EU instruments enacted under judicial cooperation in civil matters, however, prevent the circulation (either the recognition or enforcement) of judgments when at the origin of the proceedings there was a defect in service of process, such that the defendant did not receive proper notice of the existence of proceedings. The problems to be tackled by the initiative arise in cross-border judicial proceedings which by definition transcend the reach of national legal systems and stem either from the insufficient level of cooperation between the authorities and officers of the Member States, or from the lack of interoperability and coherence of the existing domestic systems and legal environment. Rules in the area of private international law are laid down in Regulations because that is the only way to ensure the desired uniformity of rules. While nothing prevents Member States in principle from digitalising the way they communicate, past experience and the projection of what will happen without EU action shows that progress be very slow and that even where Member States take action, inter-operability cannot be ensured without a framework under EU law. The objective of the proposal cannot be sufficiently accomplished by the Member States themselves and can therefore be only achieved at Union level. At a time when exequatur procedures are being gradually abolished, thus removing preventive verification of proper service before enforcement, the need to ensure that the defendant received actual notice is even more important.The EU added value lies in further improving the efficiency and speed of judicial procedures, by simplifying and accelerating the cooperation mechanisms with regard to the taking of evidence and thus improving the administration of justice in cases with cross-border implications. 4.Objectives: What is to be achieved? The policy objectives set out the political priorities and aims for action in the relevant field. They are an essential step of every impact assessment, including because they support the creation of a logical link between the identified problems and the solutions considered. Policy objectives are normally identified at the following levels: ·Operational objectives concern deliverables or objectives of actions; ·Specific objectives relate to the specific domain and set out what the Commission wants to achieve with the intervention in detail; and ·General objectives refer to Treaty-based goals and constitute a link with the existing policy setting. The following figure presents the policy objectives. Figure 2: Objectives Tree

4.1.General objectives The general objective of the initiative is to ensure proper administration of justice in cases with cross-border implications, thereby contributing to a better functioning of the Internal Market and reducing unnecessary costs whilst at the same time safeguarding fundamental rights (e.g. rights of the defence). 4.2.Specific objectives The specific objectives are to further improve the efficiency and speed of judicial proceedings, in a way which maintains or improves the existing level of access to justice and the protection of the rights of the defence in cross-border proceedings. This could be achieved through promotion of faster and direct means of digital communication, like e-Codex.The intervention should also reduce the burdens for citizens and businesses involved in cross-border proceedings resulting from undue costs and delays, and reduce the level of legal uncertainty identified in course of the evaluation of the Regulation. 4.3.Operational objectives The operational objectives ensure that all appropriate means are used to warrant a direct and rapid transmission of documents. In particular, this will include the determination of clear conditions under which the electronic delivery of a document to the user account of an addressee in another Member State would be considered as valid under the Regulation. In addition, the intervention should ensure that the direct methods of service of documents), become more attractive, efficient and broader. As for the service by post, benefit can be expected from greater certainty and reliability in terms of service by post (with the use of a specific return slip). In respect with Article 15 (‘direct service’), its application will be considerably enhanced by englarging the access of parties involved in a cross-border proceeding to services that are available in the Member States. Lastly, the intervention will reduce the instances where addressees are refusing the acceptance of the document due to the inappropriate language, by clarifying that Annex II of the Regulation should be attached in all cases, even where the document is in the language of the MS of the addressee or if there is a clear indication that he understands the language of the document and to include clear information on the legal consequences of the refusal for the recipient in the Annex. 5.What are the available policy options?

For each driver, a range of options from non-legislative to different levels of ambition of legislation has been identified. They are shown in the table below. Baseline Option 0 Non-Legislative Option 1 Legislative Option 2 The judicial system does not provide support to identify an unknown address cross border A Service of documents can only reach its objective if the person who initiates the service process disposes of information on the actual whereabouts of the addressee. This requires a correct physical address. Practical problems arise if the initiator of the service of the document either does not have any such information ("whereabouts unknown") or if the information at his/her disposal turns out to be incorrect. Currently, the Regulation does not provide any tool in order to help claimants in cross-border proceedings finding the whereabouts of a person abroad. 1.0 No policy change apart from what is already underway or currently planned 1.1.1 Providing information on the e-Justice Portal on the tools and options for citizens and business available at national level for locating an addresses. 1..1.2 Creating a uniform search mask on the e-justice Portal, through which individual requests can be forwarded to national domicile registries 1.2 Member States will be obliged to facilitate address enquiries through (at least) one of the following alternatives tools: a) providing judicial assistance upon request of courts/transmitting agencies from other Member States; b) accepting requests from individuals to national domicile registers which are transmitted through the e-justice portal; c) providing detailed information (with appropriate hyperlinks) on available tools in the territory of the Member State. · 2. Insufficient protection of the defendant against the effects of default judgments (Art. 19) Both recognition and enforcement of a judgment may be refused (under arts. 45(b) and 46 Brussels I Regulation) "where the judgment was given in default of appearance, if the defendant was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him or her to arrange for his/her defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so". Article 19 (4) does not provide a harmonised rule establishing a time period for the restitution against default judgements which can generate a different degree of protection of the procedural rights across the Member States. 4.0 No policy change apart from what is already underway or currently planned No options specified 4.2.1(a) If service fails or the physical address is not known, oblige agencies and central bodies to send alert messages through all means of communication which are known and reasonably likely to be accessible exclusively to the addressee, including e-mail addresses and social media accounts through private communications. 4.2.1(b) Introduce uniform time period of 2 or 3 years for the availability of the extraordinary review in Art. 19(4) to set aside a default judgment 4.2.2 Extraordinary reliefs in national law for restitutio in intregrum against default judgments may not be applied for purposes of cross-border recognition and enforcement of the default judgment after the expiry of the 2 year period in 19(4). (codification of the Lebek ruling): 4.2.3(a) If service fails or the physical address is not known, oblige courts to send alert messages through all means of communication which are known and reasonably likely to be accessible exclusively to the addressee, including e-mail addresses and social media accounts through private communications. 4.2.3(b) Delete time-periods in Art. 19(4) to set aside a default judgement 3. Reliance on paper-based means of communication between transmitting & receiving agencies The Regulation expressly promotes the use of electronic means of communication between the designated national authorities in a general manner. However, this did not materialise in practice since there is evidence that Member States' designated authorities do not accept electronic means of communications for transmitting documents between themselves Using existing EU products, such as the CEF e-Delivery building block (eCODEX) could be a reasonable solution since it is already used in almost 20 Member States. The e-CODEX system provides standard components for a communication system for the justice area, and it encompasses all the necessary standards to allow legal electronic communication between Members States or authorities in specific cross border legal procedures. 7.0 No policy change apart from what is already underway or currently planned 7.1 Sharing of best practices between MS (designated authorities) on e-communication 7.2.1 Codifying the principle of "digital by default" for communications and transmission of documents between transmitting and receiving agencies 7.2.2 Oblige Member States that all agencies and central bodies under the Regulation use, as a default, for purpose of communication and exchange of documents between each other a secure electronic channel (e-CODEX) 4.Electronic service of a document from MS A to recipient with physical residence in MS B is not explicitly allowed or favoured Currently, electronic service methods are not used in cross-border situations under the Regulation. The recently adopted eIDAS Regulation defines the concept of electronic trust services in the EU and regulates cross-border recognition aspects. According to Art. 43(2) of the eIDAS Regulation, "data sent and received using a qualified electronic registered delivery service shall enjoy the presumption of the integrity of the data, the sending of that data by the identified sender, its receipt by the identified addressee and the accuracy of the date and time of sending and receipt indicated by the qualified electronic registered delivery service". 8.0 No policy change apart from what is already underway or currently planned No options specified 8.2.1 Introduce cross-border electronic service as an accepted method of service under the Regulation, provided that this complies with some uniformly defined conditions: a) the document is transmitted electronically to an end-user who is a client of a qualified Electronic Registered Delivery Service (ERDS) (according to the standards of eIDAS Regulation ), OR b) the document is sent to another electronic mailbox or user account, if there is an express consent by the recipient in the individual case to use this account for purposes of serving on him/her. 8.2.2 Oblige MS to ensure interoperability between their domestic e-delivery systems used in legal proceedings in civil and commercial matters, where such systems exist at the national level 5. Insufficient quality of service by post (Art 14) including delays and insufficient filling out of acknowledgement of receipt Due to its low cost and expeditiousness service by post is used frequently and is even preferred to the method of transmission through transmitting and receiving agencies. However, there are several practical difficulties which affect the efficiency of this service method negatively, i.e. with acknowledgments of receipt which are filled in improperly or incompletely because they do not provide appropriate evidence on the relevant facts of the effected or attempted service. In such cases, courts in the requesting Member States may be unable to determine from the return receipt to whom the delivery was performed or when. 9.0 No policy change apart from what is already underway or currently planned No options specified 9.2.1 (a) Clarifying in a recital the uniform standard character of the existing conditions in Article 14 to postal service + 9.2.1(b) Obliging transmitting agencies to label envelopes containing documents to be served through which the postal operators and addressees are alerted to the official nature of the document 9.2.2 (a) Clarifying in a recital the uniform standard character of the existing conditions in Article 14 to postal service + 9.2.2 (b) Introducing a specific uniform international return slip (acknowledgement of receipt) through which documents under the Regulation are served by post (postal operators have to follow specific rules in course of the delivery of such docs) 9.2.3 (a) Create a uniform list of eligible alternative ("substituting") methods of service, once the document has to be served to another Member State: Acceptable methods could constitute the ones e.g. included in Art. 13-14 of Reg. (EC) 805/2004 or Art. 13-14 of Reg. (EC) 1896/2006 9.2.3 (b) Fine tune/upgrade the standard form in the Annex on the service of the document, so that it reflects in more detail the eligible alternative methods 6. Use of direct service (Article 15) is restricted or inaccessible In accordance with Article 15, only persons "interested in" the legal proceedings may have recourse to this method of service, which prevents transmitting agencies (who are not involved in the underlying proceedings as parties) from applying this way of service. 10.0 No policy change apart from what is already underway or currently planned 10.1 Information sheet for citizens and legal practitioners on the availability of direct service (Article 15) + Practice guide for the courts/ designated authorities on how to use Article 15 in the Regulation 10.2.1 Extending the scope of application of Article 15 so that also transmitting agencies (bodies, legal persons and bailiffs) of the MS of origin may apply for it 10.2.2 Obliging all Member States to ensure that foreign persons interested in legal proceedings may directly turn to competent persons or officials in their territory with a request to serve a document. This would imply that those Member States whose laws currently does not recognize such type of service should allocate this task to a particular branch of profession. 12. Information on the e-Justice portal not up-to-date or easy to find 12.0 No policy change apart from what is already underway or currently planned Measures related to the e-justice portal are considered in non-legislative options for other problems Source: Deloitte elaboration 6.What are the impacts of the policy options? This chapter presents the assessment of impacts of the individual options. It starts with an assessment of the options proposed for all high-priority issues. The preferred options are then combined into a “Preferred PolicyMeasure”, which is assessed against the baseline scenario (Option 0). This section includes the assessment of the options proposed for all problems identified in the problem assessment. The different options are assessed using the following common assessment criteria: Assessment Criteria for assessment of the options Criterion Examples of elements to consider Effectiveness (i.e. extent to which the options address the policy objectives) ·Potential of the options to achieve the key policy objectives, in particular: oTo reduce legal uncertainty oTo further improve the efficiency and speed of judicial proceedings oTo improve access to justice and the protection of the procedural rights of parties to the proceedings oTo reduce the burden from undue costs and delays for citizens and businesses involved in cross-border proceedings. Efficiency (i.e. cost-benefit balance) ·Main cost factors for various (public and private) stakeholders ·Main benefits for various stakeholders Proportionality (i.e. extent to which the options are in line with what is needed to achieve the policy objectives) ·Assessment of whether the option goes further than what is needed, based on: oScope of the option oType of instrument proposed (e.g. hard law vs. soft measures) The assessment tables, organised per problem to be addressed, are presented in Annex 5. As a consequence of this "high-level" assessment, for all specific problems we retain one option which received the highest ranking among the others addressing the same problem. The combination of these retained options will compose the preferred "Policy Package", for which a detailed assessment (including a cost-benefit analysis, and analysis of various other impacts) will be carried out, in line with the Better Regulation Guidelines of the Commission. The results of the assessment of the Preferred Policy Package can be summarised as follows: Problems Option 1. Lack of clear information on the channels (if any) that are available within each Member State for assistance on: locating an addressee, clarifying an address 1.2 Member States will be obliged to facilitate address enquiries through (at least) one of the following alternatives tools: a) providing judicial assistance upon request of courts/transmitting agencies from other Member States; b) accepting requests from individuals to national domicile registers which are transmitted through the e-justice portal; c) providing detailed information (with appropriate hyperlinks) on available tools in the territory of the Member State. 2. Unclear definition of extra-judicial documents 2.2.1 Codify the CJEU case law by specifying in the Regulation that its application is not restricted to documents which emanate from a public or judicial authority (for instance a public notary), but includes also private documents if formal service is required in order to prove or protect rights of the claimant. 3. Unclear elements in the right of the addressee to refuse the acceptance of the document on the basis of is inappropriate language 3.2.1 Amend provisions in the Regulation to clarify that: ·information on the right to refuse should always be provided, regardless of the language of the documents to be served, by the competent agency, diplomatic or consular agent, or the authority or person serving the document by postal service, through the standard form in Annex II of the Regulation (CJEU case-law). ·improvement of the content of the information note contained in Annex II of the Regulation (clearer messages to the recipient on the legal consequence of the refusal) ·inclusion of indicators (non-exhaustive examples) in a recital helping the assessment of the language skill of the addressee in case of refusal by the forum court.. 4. Insufficient protection of the defendant against the effects of default judgments (Art. 19) 4.2.1(a) If service fails or the physical address is not known, oblige agencies and central bodies to send alert messages through all means of communication which are known and reasonably likely to be accessible exclusively to the addressee, including e-mail addresses and social media accounts through private communications. 4.2.1(b) Introduce uniform time period of 2 or 3 years for the availability of the extraordinary review in Art. 19(4) to set aside a default judgment + 4.2.2 Extraordinary reliefs in national law for restitutio in intregrum against default judgments may not be applied for purposes of cross-border recognition and enforcement of the default judgment after the expiry of the 2 year period in 19(4) (codification of the Lebek ruling 5. Use of fictitious or alternative methods of service at national law is preferred to the Regulation 5.2.2 Codify that the use of fictitious methods are allowed against foreign parties, who, despite the invitation of the court seised, do not appoint representatives for purposes of service in the MS of the proceedings + 5.2.3 Transfer the content of recital 8 to the normative rules + ·5.2.4 Set the principle with regard to the use of fictitious and "alternative" (substituting) domestic service methods: as a default rule, service should be attempted through the ways of the Regulation, if the addressee has its seat/residence in another MS. 6. Varying practices relating to costs of serving documents (leading to both delays and inequalities in the market 6.1 Provision of information on the e-Justice portal on the approach to costs in the Member States i.e.: ·Clarifying whether a Member State charges for service by receiving agency ·Clarifying whether such payment is to be pre-paid and which means of payment are accepted 7. Reliance on paper-based means of communication between transmitting & receiving agencies 7.2.2 Oblige Member States that all agencies and central bodies under the Regulation use, as a default, for purpose of communication and exchange of documents between each other a secure electronic channel (e-CODEX) 8. Direct electronic service of a document from MS A to recipient with physical residence in MS B is not explicitly allowed or favoured 8.2.1 Introduce cross-border electronic service as an accepted method of service under the Regulation, provided that this complies with some uniformly defined conditions: a) the document is transmitted electronically to an end-user who is a client of a qualified Electronic Registered Delivery Service (ERDS) (according to the standards of eIDAS Regulation ), OR b) the document is sent to another electronic mailbox or user account, if there is an express consent by the recipient in the individual case to use this account for purposes of serving on him/her. 9. Insufficient quality of service by post (Art 14) including via security risks, delays and insufficient filling out of acknowledgement of receipt 9.2.2 (a) Clarify in a recital the uniform standard character of the existing conditions in Article 14 to postal service + 9.2.2 (b) Introduce a specific uniform international return slip (acknowledgement of receipt) through which documents under the Regulation are served by post + 9.2.3 (a) Create a uniform list of eligible alternative ("substituting") methods of service, once the document has to be served to another Member State and 9.2.3 (b) Fine tune/upgrade the standard form in the Annex on the service of the document, so that it reflects in more detail the eligible alternative methods 10. Use of direct service (Article 15) is restricted or inaccessible 10.2.2 Extend the scope of application of Article 15 so that also so that also transmitting agencies (bodies, legal persons and bailiffs) of the MS of origin may apply for it + 10.2.3 Oblige all Member States to ensure that foreign persons interested in legal proceedings may directly turn to competent persons or officials in their territory with a request to serve a document. 11. Non-compliance of receiving agencies with the timeframe set out in the Regulation 11.2.2 Introduce a “digital-by-default” principle obliging Member States’ agencies and authorities to use, as a rule, electronic means of communications for their interactions with each other. 7.combined effects of the preferred option as a package As a next step, first the baseline scenario and then the preferred policy package are assessed in relation to the following five criteria: ·Effectiveness; ·Efficiency;

·Coherence; ·Impacts on diversity, non-discrimination and the protection of personal data; ·Environmental impacts. 7.1.Baseline scenario Before the Regulation and its predecessor (Regulation (EC) 1348/2000) entered into force, the cross-border service of judicial and extrajudicial documents in civil and commercial matters was regulated by a various set of international conventions or bilateral mutual agreements between the Member States. There were two major global conventions elaborated in the Hague Conference on Private International Law, at least one of which each Member State was a party to, but these global conventions allowed for the use of bilateral agreements or arrangements if these further facilitated the cross-border service of documents. Consequently, there was a hugely fragmented legal landscape as to the applicable legal basis. The legal sources in place before the Regulation (EC) 1348/2000 provided for a cumbersome and slow transmission and service of the documents. Mainly based on the traditional diplomatic or consular channels, or as the 1965 Hague Convention on the intervention of Central Authorities, they included several intermediary steps until the document reached the local authority (court or judicial officer) in the State addressed, who was responsible for the actual service of the document to the addressee. The average timeline for serving a single document was between 6 and 9 months, which was visibly reduced with the introduction of the EU Regulation (2 months on average). e-CODEX has the potential to become the main digital solution for cross-border cooperation between judicial authorities and cross-border judicial procedures in the European Union Another feature of the baseline scenario was the high costs of the cross-border service, since the previous legal sources of the international law always required the translation of the documents to be served in the official language of the Member State addressed for a formal delivery of the document. The EU Regulation constituted a paradigm shift in this regard, since here the translation of the document is not an inevitable precondition of the service of the document, but an element for the protection of the rights of the defence, which becomes only necessary, if the original language of the documents is not understandable to the addressee. The baseline scenario is assessed in relation to these five criteria and afterwards the policy package. The detailed assessment is to be found in Annex 6. Criteria Assessment Rating Summary Effectiveness 0 The status quo is not highly effective at meeting the policy objectives. Although the Regulation would continue to have a limited positive effect on the efficiency and speed of judicial proceedings, delays based on uncertainties and practical challenges would persist. A major impact on the effectiveness of the Regulation going forward is the continued reliance on paper based means of communication and transmission of documents. In addition, cross-border proceedings are expected to grow up until 2030 and thus the application of the Service Regulation will become more common. Therefore, current legal uncertainties may become more widespread with the current issues on the access to justice not fully alleviated Efficiency 0 The efficiency of the status quo is limited. Although the assessment of efficiency in the evaluation did not indicate that the costs currently outweigh the benefits, going forward the current process of serving documents may become more cumbersome or incompatible with more modern processes at the domestic level, leading to more inefficiencies. Delays and costs are expected to remain at an equal level per case but increase at an overall level in line with the overall increase of cases. Postal services and process services are expected to generate additional revenue also because of the increase in cases. Coherence 0 In the baseline scenario, the overall internal and external coherence of the Regulation is expected to be ensured to a certain extent with both national and EU measures. Digitisation is a crucial trend that will challenge the coherence of the Regulation with other EU instruments and policies. Impacts on fundamental rights 0 The baseline scenario is expected to ensure the access to justice and the procedural rights. Nevertheless, some difficulties and confusions will still remain hampering the rights of the parties. In addition, the protection of personal data is not considered to be affected by the current Regulation. Environmental impacts 0 In the baseline scenario, the environmental impacts of the Regulation are expected to increase due to the increasing number of cross-border proceedings, the service of document via the service methods foreseen in its provisions, and the paper-based communications between the designated authorities. Overall rating and conclusion 0 Under the baseline scenario, the problems identified in the problem assessment, including in relation to costs and delays, would likely continue. 7.2.Policy package 7.2.1.Use of e-CODEX for communications and document exchanges between the designated agencies and central authorities The ideas of this option envisages that in the future, if possible, all interactions between the agencies and central bodies designated under the Regulation should be carried out electronically, through the e-CODEX (which uses the CEF e-Delivery building block, which is generally promoted by the EU in pan-European IT solutions). Using this channel “as a default” means in this context, that the legislator may consider some justified exceptions from this rule, but any such exceptions must be defined narrowly and exhaustively. Two possible exceptions may be considered. One situation is, when the document instituting the proceedings contains voluminous annexes of documentation pertaining to the cause of action, one may argue that the transformation of such a volume of documentation to electronic form and then back to paper-format constitutes an unnecessary burden both on the transmitting and on the receiving agencies. This argument is, however, less convincing given that most civil procedures allow for enclosing documentation through digital data storage medium. The other situation with relevance for a possible exception includes cases where the procedural law of the Member State of origin expressly requires the delivery of the true original of the document (in paper format). Nevertheless, even in such cases, the legislator shall thoroughly consider, why a digital equivalent (furnished with the same legal effects as the originals) could not be used. This option would constitute an important step towards the digitalization of workflows in the area of civil and which can be accomplished at moderate costs. The baseline scenario calculations estimate that currently, due to the paper-based communication processes, the processing of one request for service can take up to 2 months when no complications arise. With the use of e-CODEX, agencies will have access to direct communication and transmission of documents, thereby reducing the overall time for processing a request by about 3 – 9 days . As to the costs of the deployment of this solution, our estimates indicate that acquisition costs for the e-CODEX hardware are marginal at one-off costs of approx. EUR 15 000 and approx. EUR 2 000 annually for hardware maintenance. This cost concerns the deployment of the national connector and gateway which are the components of the e-CODEX enabling the interactions between the relevant national IT systems of the various Member States. Of course, Member States have to ensure that all their national transmitting and receiving agencies (and central bodies) at local level will be connected to their national gateway, so that all of these local agencies serve as e-CODEX access points in the national system. Nevertheless, additional hardware acquisition costs in this context are not included in the calculation, because it was assumed that all agencies and bodies designated under the Regulation (courts, bailiffs, governmental authorities) have internet connection and, at least, one PC point. It is to be mentioned that even these costs falling to a Member State under the proposed policy option may not incur, since those Member States (and there are many of them) who have already deployed the necessary infrastructure in the context of the previous e-CODEX pilot projects may choose to reuse this infrastructure (national connector and gateway) for purposes of the communication system to be established under the Service Regulation.

7.2.2.Facilitate the uptake of electronic means of serving documents The most relevant improvement of the preferred Policy Package in this context is the introduction of (direct) cross-border electronic service as an accepted method of service of documents under the Regulation, provided that this complies with some uniformly defined conditions. Such introduction is a gradual, but but important step towards digitalization in cross-border proceedings. It has full regard to the various IT developments and to the differing level of achievement in digitalization of the Member States, without unjustified interference with the pace of such national developments. Nevertheless, this step, by legitimizing the direct cross-border electronic service of documents (“direct” means here: sent directly from the applicant of one Member State to the user account of the recipient in the other Member State), it will certainly incentivize the use of this method. It is to be reminded that under the current Regulation such instances of service of documents do not happen in practice, mainly due to the silence of the Regulation on the legal effects of such a delivery. The two alternative conditions set for the use of direct electronic service is in coherence with the EU digital policy (by reusing and promoting the standards of the eIDAS Regualtion), and ensures compatibility with national procedural laws (by introducing the uniform requirement of the express consent of the addressee, which fully respects the rights of the defence). As to the cost-implications of this option of the preferred Policy Package, it should be noted that certain types of businesses will benefit from the implementation of the digitalization measures. 7.2.3.Address enquiries The policy package introduces a few new measures with regard to the problems associated with the situation where the physical address of the addressee is not known or proves to be incorrect or obsolete: According to the first measure proposed, Member States have to ensure that they provide assistance to persons interested in legal proceedings from other Member States in finding information about the physical whereabouts of their adversaries. In this flexible systems, Member States shall choose at least one of three different options by which they provide this assistance to right-seekers from other Member State: I.Their courts or authorities shall provide judicial assistance upon the request of courts or transmitting agencies from other Member States to determine the current address of a person in their territory , or II.Their national domicile registers shall accept applications from persons interested in legal proceedings in other Member States forwarded to these registers electronically, via the European e-Justice Portal, or III.They have to provide detailed information (with appropriate hyperlinks) on the tools available for right seeking persons from other Member State for purposes of clarifying the physical address of a person in their territory; With this measure it may be expected the reduction of the number of instances where the foreign defendants are actually not informed of the legal proceedings instituted against them abroad. Currently, such situations occur frequently, insofar as it is possible to conclude on such a frequency from the high rate of default judgments in cross-border cases . Claimants in legal proceedings with no information about the address of their adversaries abroad (e.g. proceedings against private individuals based on non-contractual claims) are left without any help in locating their counterparts. With the alternative set of options outlined above, these claimants will receive effective assistance in those Member States which will opt for the alternatives under i. or ii., whereas they will receive a useful guidance from where they can move on in getting to the information needed in those Member States which will opt for the alternative iii. Although the options under i. and ii. will generate some costs on the side of the public administrations, these costs will be marginal, assuming that only those Member States will opt for these options who have already similar tools in place: With regard to the option in i., relating to the provision of judicial assistance, it is to be noted that the commitment by States to execute requests for address enquiries in civil and commercial proceedings is a recurring element of mutual (bilateral) judicial assistance agreements of public international law. Such provisions have a history also in the agreements concluded between the Member States . With regard to the option under ii., relating to the direct applications to domicile registers via the e-Justice Portal, it should be underlined that due to the flexibility of the measure it does not create an obligation to Member States which currently do not have a central domicile register to create one. The latter Member States may simply opt for the other two tools when deciding the way they wish to assist EU citizens and businesses in address enquiries. Furthermore, it should be noted that the only additional “burden” falling on those Member States who opt for the solution in ii. is that in the future they will accept applications from other Member States via e-mails (the request submitted through the relevant web-service of the e-Justice Portal would be forwarded to the electronic account of the national register indicated by the Member State, and as of that moment of transmission the application will be treated in accordance with the relevant national rules in force there). Even if in this case, the domicile register of the Member State may expect the increase in the volume of applications, the additional workforce needed to address those extra applications could easily be compensated by the introduction of a reasonable fee corresponding the service (nothing in the EU Regulation would prevent a Member State to charge a fee for such a service). The second measure in the preferred option proposes that the courts seised with legal proceedings in the Member State of origin send, in the context of their duty under Article 19(1) and (2) of the Regulation, alert messages through all means of communication which are known and reasonably likely to be accessible exclusively to the addressee. It should be underlined that this option does not oblige agencies to attempt service of documents through social media; it only obliges the agencies in the Member States to look for other possible ways of alerting the addressee that service of a document has been attempted. By this, it will increase the number of situations where defendants whose physical whereabouts are not known to the court or claimant get actually informed about the fact that a foreign proceeding is instituted against them. In most of the cases, it may be assumed that good-faith defendants will activate themselves and try to engage in time into the proceedings. 7.2.4.Facilitating access to direct service Two new measures are introduced to facilitate the access to direct service of documents: a.Extending the scope of application of Article 15 so that also transmitting agencies (bodies, legal persons and bailiffs) of the Member State of origin may apply for it; b.Obliging all Member States to ensure that foreign persons interested in legal proceedings may directly turn to competent persons or officials in their territory with a request to serve a document.

The two measure above essentially open up the scope of application of direct service which is less prone to undue delays and costs than other service methods. As demonstrated in the evaluation, direct service, where no complications arise can be 2 times quicker than service by post. Allowing access to these services, even in the territory of Member States where currently this is not a possibility, will allow the choice for parties in a proceeding and also contributes to fair competition across the EU. This option may require adaptation in those Member States the procedural laws of which do not know the method of service of a document by a judicial officer, official or other competent person. But, it should be noted that only a minority of the Member States is affected: although, in line with the communications of the Member States to Article 15 of the Regulation there are 14 Member States acknowledging direct service of documents under Article 15, there are other Member States where the laws allow for a direct delivery to the addressee by a professional (competent person), such as a solicitor (lawyer) or a process server. For example, in the UK jurisdictions or in Ireland the service of a document may be performed by lawyers. Furthermore, it is to be noted that in those Member States, which have to allocate this task to a certain type of professionals as a novelty in their procedural law, this requirement does not directly affects the functioning of domestic procedural law, because this type of service should be provided only for the purpose of the Regulation, upon direct applications incoming from residents of the other Member States. In addition, any costs deriving by the introduction by and the adaptation to this new system could be compensated in a mid-term, if the national legislator allows that the competent persons charge a fee for their services. 7.2.5.Strengthening quality of postal service under Article 14 of the Regulation The introduction of a specific uniform return slip (acknowledgment of receipt) through which documents under the Regulation have to be served by postal service providers is expected to have an impact on the number of instances where service is deficient due to incomplete acknowledgements of receipt or possible ambiguities as to who actually received the documents in question. In this regard, strengthening the quality of service by post is also expected to reduce undue costs and delays for citizens caused when service is regarded as deficient. From experiences of Member States where the postal service of judicial documents is carried out on the basis of a special regime (different from the rules based on the framework of the Universal Postal Union), it can be expected an enhanced diligence from the postal service operators when delivering such documents. Such a measure might generate additional costs for the postal service operators who are requested to carry out the delivery of the document under Article 14. While majority of these costs would in principle seem to be of one-off nature, mainly concerning the adaptation (installation of relevant procedures, training of personnel etc.), it is clear that these might be very varied among Member States due to the different use of letters in general and of such letters in particular as well as to the different financial position of operators and their different cost structure. However, it would appear that with time the additional costs generated by the use this special acknowledgment of receipt would fade out, on the basis of the assumption that those documents have to be delivered by the postal service providers anyway to the addressee, and the only difference to normal mail delivery service provided by these operators would be the different legal basis of their duty. Although these additional costs of adaptation to the new obligations should not be overlooked, it is also important to note that in the vast majority of the Member States, postal service providers have to comply already now with specific rules of their national civil procedural law (supplementing the provisions for letter post of the Universal Postal Union Convention), when they are requested to deliver judicial documents in legal proceedings. In a number of Member States, the postal service providers are obliged not just to follow specific procedures when delivering, but they also have for example to use special acknowledgment of receipts (e.g Hungary) or special envelopes (e.g. Romania, Slovenia, Italy). Obviously, the adaptation of postal service providers in these Member States will be less cumbersome, since here they just have to change the already existing national regime to a European one. 7.2.6.Summary of the results of the assessment Criteria Assessment Rating Summary Effectiveness +2 Under the policy package, the effectiveness of the Regulation would be improved compared to the status quo. Mainly, the introduction of e-CODEX as a mandatory communication tool between the agencies and the facilitation of electronic and direct service will contribute to the efficiency and speed of proceedings, lowering the burden of citizens and businesses. The contribution of the package to access to justice and legal certainty are also high with the inclusion of measures to clarify ambiguities and locate an addressee. Efficiency +2 The policy package is expected to generate moderate costs for Member States but significant benefits for citizens and businesses involved in cross-border proceedings. The main cost driver for Member States is associated with the implementation of e-CODEX as a mandatory tool for transmitting and receiving agencies. Nevertheless, on balance the costs do not outweigh the benefits. Coherence +2 Under the combined policy package, the coherence of the Regulation would be improved compared to the status quo. The amendments introduced by the policy package would positively contribute to