EN    EN EN 
EN    EN  EUROPEAN COMMISSION 
Brussels, 14.12.2010 
SEC(2010) 1548 final 
COMMISSION STAFF WORKING PAPER 
SUMMARY OF THE IMPACT ASSESSMENT  
 
  
Accompanying document to the 
 
Proposal for a  
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 
on jurisdiction and the recognition and enforcement of judgments in civil and 
commercial matters  
(Recast) 
  
{COM(2010) 748 final} 
{SEC(2010) 1547 final} 
EN    EN 1. BACKGROUND , CONSULTATION AND EXPERTISE  
Council Regulation (EC) No 44/200 1 on jurisdiction and the reco gnition and enforcement of 
judgments in civil and commercial matters (known  as "Brussels I") which entered into force 
in March 2002 is the matrix of civil judicial cooperation in the European Union. It identifies 
which court is competent for solving a cr oss-border dispute and ensures the smooth 
recognition and enforcement of judgments gi ven in another Member State. While the 
Regulation is overall considered to be workin g well, the consultation of stakeholders and 
several studies conducted by the Commission revealed  the need for reform. In the same vein, 
the Stockholm Programme calls for removing the remaining restrictions on the exercise of 
rights by citizens and companies.  
In preparation of the Regulation's revision, th e Commission broadly consulted stakeholders 
and sought extensive external expertise. It adopted a Gr een Paper launching a public 
consultation in April 2009 and commissioned a to tal of four studies addressing different 
issues of the reform. Empirical data supporting the preparation of the impact assessment was 
collected by a further external study and an  European Business Test Panel survey. The 
Commission also organised two major conference s, a meeting with nati onal experts and two 
meetings with experts on arbitration. Additiona l comments were provid ed by an inter-service 
steering group within the Commission.  
2. PROBLEM DEFINITION , OBJECTIVES AND ASSESSMENT OF POLICY OPTIONS  
2.1. THE FREE CIRCULATION OF JUDGMENTS 
2.1.1.  Problem definition and scope 
A judgment given in one Member State does not automatically ta ke effect in another Member 
State but has to be validated and declared enforceable in a special intermediate court 
procedure known as "exequatur". This procedur e is costly and time-consuming. On an EU-
average, it costs € 2.200 in a st raightforward case. This amount  can increase exponentially in 
a more complex or contested case (to about € 12.700). On the assumption that 25% of all 
cases are complex, the overall cost of exequatu r proceedings in the EU amounts to more than 
€47 million per year. The time for obtaining exequatur varies from a couple of days up to several months in appeal cases up to two years. In more than 90%  of cases, the procedure is a 
pure formality because there are no grounds fo r refusing recognition and enforcement; only 
few decisions are appealed and appeals are rarely successful. Th e exequatur procedure adds to 
the complexities of cross-border litigation wh ich deter companies from doing business cross-
border trade.  
2.1.2.  Objectives 
• The specific objective
 of this part of the Pr oposal is to achieve a ge nuine free circulation of 
judgments in all civil and commercial matters.  
2.1.3.  Retained Policy Options 
• Policy Option 1 : Status quo 
• Policy Option 3:  Maintain exequatur but alleviate so me of the burden for the claimant  
EN    EN • Policy Option 4A : Abolish the exequatur procedur e while introducing the necessary 
safeguards for the protection of the rights of the defence. However, exequatur will be 
maintained for judgments in defamation cases and collective redress proceedings. 
2.1.4.  Analysis of Impacts of preferred Option 4A: Abolition of the exequatur procedure 
and introduction of necessary safeguards 
(a) Effectiveness : This option would fully realize th e objective of creating a genuine free 
circulation of judgments in the European Union. (b) Key impacts : (i) Economic impact : The 
abolition of exequatur would el iminate the costs and delays associated with the current 
exequatur procedure, thereby allowing EU compan ies and citizens to save a major part of the 
current costs of almost € 48 Mio/year. In the vast  majority of cases in which the enforceability 
of the foreign judgment is not contested by th e defendant, the claimant would only have to 
bear minimal translation costs due to the introdu ction of standard forms which dispense with 
the requirement of having to tr anslate the full judgment. Only in complex cases, costs for 
translating the full judgment and legal fees woul d continue to arise. This option would also 
encourage more businesses, in particular SMEs , to engage in cross-bo rder transactions. At 
present, only 25% of Europe's 20 Mio SMEs are engaged in cross-border trade; i.e. 15 million 
SMEs could potentially expand their business to other Member  States. 39% of these SMEs 
would be a lot more inclined to get involved in cross-border transactions if the exequatur 
procedure were abolished. Even if only a quarter  of them actually does, this would bring 1.4 
Mio SMEs into the internal market. (ii) Fundamental rights : The abolition of exequatur 
would be accompanied by procedural safeguards which would ensure that a judgment in breach of the right to a fair trial and the right  of defence cannot be recognised and enforced. 
This option would therefore comp ly with the Charter,  in particular its Article 47. Since the 
grounds which could be invoked against the enforcement of the foreign judgment largely 
correspond to those which can be invoked today in the context of the exe quatur procedure, the 
level of judicial protection fo r cross-border proceedings would not be lowered compared to 
the status quo. (iii) Financial costs : Member States would incur costs due to the need to 
familiarize legal professionals with new procedur es. These costs would be minimal if national 
safeguard procedures were modelled on the procedures adopted under European instruments which have abolished exequatur for certain type s of claims. The proposal  will also contain a 
standard form which aims at facilitating direct enforcement.  
2.1.5.  Comparing the retained Options and  the preferred Policy Option 4A.  
Objectives/impact Option 1 – Status 
quo Option 3 – 
alleviating burden 
for applicant Option 4A – 
abolition of 
exequatur 
Removal of remaining barriers to the free circulation of judgments 0 + ++ 
Economic impact 0 + + 
Financial costs 0 – – 
Fundamental rights 0 0 0 
 
EN    EN 2.2. THE OPERATION OF THE REGULA TION IN THE INTERNATIONAL 
LEGAL ORDER  
2.2.1.  Problem definition  
• The jurisdiction rules of the Regulation curr ently (with some exce ptions) do not apply 
when the defendant is domiciled outside the EU, so that in these cases the Regulation 
refers to national law (so-called "residual ju risdiction"). Within the EU, national rules on 
jurisdiction for third country defendants vary  widely between Member States. In cases 
where the defendant is domiciled outside the European Union, 
• European citizens and companies have unequal access to justice, 
• unequal conditions for companies doing business in  the internal market are created which 
can lead to a distortion of competition, 
• the enforcement of European legislation protecting weaker parties (e.g. consumers, 
employees, insured etc) is not ensured. 
2.2.2.  Objectives 
• The specific objective  is to improve access to justice, le gal certainty, and protection of EU 
citizens and companies in disputes  connected with third States.  
2.2.3.  Analysis of retained Policy Options 
• Policy Option 1: Status quo  
• Policy Option 3A: Minimum harmonisation of  the rules on jurisdiction (Option 3A)  
• Policy Option 4A: Full harmonisation of the rules on jurisdiction  
2.2.4.  Analysis of impact of preferred policy opti on 4A: Full harmonisati on of the rules on 
jurisdiction 
(a) Effectiveness : The full harmonisation of jurisdicti on rules would ensure both full and 
equal access to justice in the European cour ts. Access to justice would also be fully 
transparent because all rules on international jurisdiction would be consolidated in one single 
document, the revised Regulation. This optio n would also do away with the artificial 
distinction between defendants domiciled within the EU and outside the EU. This distinction 
is no longer drawn by recent EU legislation, notably Re gulation 4/2009 on maintenance 
obligations, and the Commission proposal fo r a regulation on succession and wills. b) Key 
impact: (i) Economic impact: This option will increase the possibi lities for EU companies to 
litigate in the EU rather  than abroad. This will bring about  a reduction in the average litigation 
costs and delays for EU compan ies because litigation within th e European area of justice is 
generally cheaper and simpler than  litigation in a country outside the EU. Measures of judicial 
cooperation are largely absent in  relations with third countries  and the geographical distance 
of the competent court will most likely increase costs for witnesses and parties to appear in 
person. Moreover, a harmonisation of the rules relating to thir d country defendants will 
increase legal certainty and predictability which, in turn, is likely to produce cost savings for 
the companies involved. The improved legal framework might also encourage more 
companies to engage in cross-border transa ctions. In addition, possible distortions of 
EN    EN competition which result from the divergence of national rules on jurisdiction would be 
eliminated. SMEs : Any cost savings will be particular ly beneficial for SMEs which do not 
have the resources to handle complex interna tional litigation in the same way as large 
companies (ii) Financial costs Option 4A would trigger minimal to no financial costs for the 
Member States. (iii) Fundamental rights The full harmonisation would improve access to 
justice for weaker parties (consumers, employees etc) in line with Articles 38 and 47 of the 
Charter because it would guara ntee their access to an EU court in disputes involving 
defendants from outside the EU. In addition, this  option would ensure fu ll access to justice to 
European companies in litigation involving thir d country defendants. Th e creation of a forum 
of necessity would ensure that European compan ies would have access to an EU court in case 
no other court guaranteeing a fair trial has ju risdiction. Finally, the introduction of a forum 
geared specifically at non-EU  defendants would improve access to justice for companies from 
those Member States which currently do not have comparable provisions in their national law. 
(iii) Social impact This option would ensure that weaker parties retain the protection granted 
to them by mandatory EU law. (iv) Third countries The impact of Option 4A on non-EU 
countries would depend on the substance of th e harmonised jurisdiction rules. The envisaged 
creation of a forum of necessity and a "mildly exorbitant" rule of jurisdiction, e.g. based on 
the location of assets ha ving a link with the dispute in the te rritory, is hardly objectionable on 
a diplomatic level. On the contrary, impact on third countries would be positive as Member 
States would not be entitled to maintain more ge nerous conditions for acce ss to justice in their 
national law. Should internati onal negotiations on a worldwide judgments convention resume, 
the impact of the revision on the EU's negotiating position would equally depend on the substance of the harmonised rules. While the alignment of national ru les as such would be 
neutral in this respect, the precise contents of the rules could affect the EU's position in the negotiations.  
2.2.5.  Comparing the options and the preferred Policy Option 
Objectives/impact Option 1 Option 3A Option 4A 
Improve protection of 
EU parties in disputes with non-EU defendants 0 + ++ 
Economic impact 0 0 + 
Fundamental rights 0 + + 
Impact on third 
countries 0 0 0 or + 
 
EN    EN 2.3. CHOICE OF COURT AGREEMENTS 
2.3.1.  Problem definition and scope 
The overwhelming majority of EU business in volved in cross-border trade makes use of 
choice of court agreements (a lmost 70 % of all companies and 90% of large companies).  
• The Regulation gives in principl e effect to choice of court agreements but concerns have 
been raised that the effectiveness of such agreements may in practice suffer from abusive 
litigation tactics. This is due to the interp lay with another provision in the Regulation, the 
so-called lis pendens  rule which aims to avoid the situation that two courts in the EU deal 
with the same case at the same time. It stipul ates that the court second seized of a dispute 
must stay proceedings until the court first seized has ruled on its jurisdiction. A party 
wishing to escape the choice of court agreement can considerably delay proceedings in the chosen court if it first seises a (non-competent)  court in a country wher e the judicial system 
is comparatively slow. Over th e past five years, 7,7% of companies reported that their 
contractual counterpart did not comply with the clause design ating the competent court.  
• The effectiveness of choice of court agreements needs to be  ensured also beyond the EU's 
borders. The EU negotiated an internationa l agreement, the Hague Convention on Choice 
of Court Agreements, which improves legal ce rtainty for forum-selection-clauses in B2B 
relationships; the ratificati on process is ongoing. The revi sion of the Regulation should 
ensure that the approach to choice of court ag reements for intra-EU situations is coherent 
with the one which will poten tially be adopted for extra-EU  situations. Under the Hague 
Convention, the court seised but not chosen  must dismiss the case unless one of the 
exceptions established by the Convention applies.  
2.3.2.  Objectives  
The specific objective
 is to enhance the effectiveness of choice of court agreements. The 
reform should also facilitate the ratification by the EU of the Hague Convention on Choice of 
Court Agreements.  
2.3.3.  Description of retained policy options 
• Policy Option 1: Status quo.  
• Policy Option 2: Exempt the chosen court from obligation to stay proceedings  
• Policy Option 3: Give the chosen court priority to decide  on its jurisdiction 
2.3.4.  Analysis of impacts of preferred Policy Op tion 3: Give the chosen court priority to 
decide on its jurisdiction 
(a) Effectiveness to achieve objectives : Option 3 would discourage the use of tactical pre-
emptive claims which seek to undermine a vali d choice of court agreement and thus fully 
achieve the objectives set out above (b) Key impacts (i) Economic impact : Option 3 would 
eliminate the costs and delays which businesses incur today due to their partners' bad faith 
attempts to circumvent choice of court agreements . It is also likely to encourage at least part 
of the 30% of businesses which currently are not involved in cross-border trade because of 
problems inherent in cross-border litigation or de bt-recovery to do so. It would increase legal 
EN    EN certainty for businesses and boost their confiden ce in the effectiveness of their contractual 
arrangements for dispute resoluti on. The drawback of this solu tion is that it may lead to 
delays in judicial proceedings  where the designated court ev entually holds the agreement 
invalid (concerns only 1.1% of companies pe r year) and the parties end up litigating in 
another court. (ii) Financial costs  Option 3 would only entail mi nimal implementation costs. 
(iii) Fundamental rights  Option 3 would fully give effect to the will of the parties to a choice 
of court agreement. This would significantly imp rove the situation of th e parties in terms of 
the freedom to conduct a business as gua ranteed in Article 16 of the Charter. (iv) 
International aspects : Option 3 mirrors the solution adopted by the Hague Convention. 
Importantly, as in the Convention,  priority is given to the chosen court which is able to 
proceed even if seised second.  
2.3.5.  Comparing the options and preferred Policy Option 
Objectives/impact Option 1 
Status quo Option 2 
Exemption from 
obligation to stay 
proceedings Option 3 
Giving priority to the 
chosen court 
Eliminate the possibilities for abuse0 + ++ 
Economic impact 0 + ++ 
Fundamental rights 0 + ++ 
International aspects 0 + ++ 
 
2.4. INTERFACE BETWEEN THE REGU LATION AND ARBITRATION  
2.4.1.  Problem definition  
Arbitration is a matter of great importance in international commerce, as it used by larger 
companies and multinationals on a regular basis (about 63% of large European companies 
prefer arbitration over litigation). Arbitratio n is currently not covered by the scope of 
Regulation Brussels I. Difficulties have been reported concerning the relation of arbitration 
and court proceedings. Notably, a party challengi ng the validity of an agreement to arbitrate 
can request the court to rule also on the merits . This can lead to para llel court and arbitral 
proceedings with the risk of conflicting outcome s where the agreement is held invalid in one 
Member State and valid in another. This situation can be abused by litigants wishing to escape an arbitration agreement. The problem which ha s been highlighted by a recent decision of the 
Court of Justice in the West Tankers  case reduces the effectiveness of .  
2.4.2.  Objectives  
The specific
 objective of this part of the Proposal is  to ensure a transparent and predictable 
coordination of court and arbitral proceedings which preserves or improves the attractiveness 
of the European Union as place of arbitration.  
EN    EN 2.4.3.  Description of retained policy options 
• Policy Option 1: Status quo  
• Policy Option 2: Extend the exclusion of arbitration from the scope  
• Policy Option 3A: Enhance the effectiven ess of arbitration agreements. This 
option would provide that a court seised with a dispute involving an arbitration 
agreement would have to stay proceedings if  an arbitral tribunal or a court at the 
seat of the arbitration was seised.  
2.4.4.  Analysis of impacts of preferred Policy Option 3A: Enhance the effectiveness of 
arbitration agreements  
(a) Effectiveness to achieve objectives  This policy option would fully achieve the objectives 
outlined above. It would ensure the effectivenes s of arbitration agreements by eliminating the 
risk of parallel proceedings a nd by reducing the possibilities of  abusive litigation tactics. It 
would also ensure that all judgm ents that currently circulate w ithin the EU continue to do so. 
(b) Key impact (i) Economic impact  Option 3A would eliminate the risk of abusive 
litigation tactics, with the ec onomic benefits outlined above. In addition, Option 3A would 
eliminate the risk of paralle l court and arbitration proceedings, thereby significantly 
improving the attractiveness of arbitration in the EU and of European arbitration centers. (ii) 
Financial costs  As for Option 2, the modification of the Regulation would entail only 
minimal implementation costs for Member States. (iii) Fundamental Rights  Arbitration 
would become more effective and efficien t than under both Options 1 and 2, thereby 
improving the parties' access to alternative mean s of dispute resolution In addition, the option 
would improve access to justice for companie s wishing to challenge (in good faith) an 
arbitration agreement because it would establis h a clear and transparent legal framework for 
such challenges while defining clear rules to improve legal certainty and avoiding dilatory 
tactics. The standards set in Article 47 of the EU Charter w ill be further strengthened under 
this option. Finally, it would be ensured that throughout the Union, maxi mum effect is given 
to the will of the parties which enhances thei r freedom to contract and freedom to conduct a 
business as guaranteed in Ar ticle 16 of the Charter. (iv) Third countries  The attractiveness of 
arbitration in the European Union would be increased. 
2.4.5.  Comparing options and preferred Policy Option 
Objective/impact Option 1 
Status quo Option 2 
Extending the 
exclusion Option 3 
Enhancing the 
effectiveness 
Free circulation of judgments 0  –  + 
Ensuring effectiveness of 
arbitration in EU 0 + ++ 
Economic impact 0 + + 
Fundamental rights 0 + ++ 
EN    EN 3. NECESSITY OF EU ACTION (SUBSIDIARITY )  
The problems outlined above relating to the exis tence of the exequatur procedure, lack of 
effectiveness of choice of court agreements  and the interface betwee n arbitration and the 
Regulation are caused by the ru les of existing EU law and can only be remedied by the 
intervention of the European legislator. The harmonisation of jurisdiction rules concerning 
non-EU defendants is necessary to create a leve l playing field for companies engaged in the 
internal market and guarantee that the rights of  "weaker parties" guara nteed by EU law can be 
enforced. These goals cannot be achieve d by the Member States acting alone.  
4. LEGAL BASIS 
The Regulation has been adopted on the basis of Articles 61 (c) and 67 (1) of the Treaty 
establishing the European Commun ity. After the entry into force of the Treaty of Lisbon, the 
Treaty basis for adopting the revi sed Regulation consists of Artic les 67 (4) and 81 (2) (a), (c) 
and (e) of the Treaty on the Func tioning of the European Union.  
5. PROPORTIONALITY OF EU ACTION  
The package of preferred options outlined above respects the proportionality principle. The 
changes contemplated in the package of pref erred policy options do not go beyond what is 
necessary to address the problems identified. As  outlined above, the benefits and savings of 
the preferred policy options largely outweigh its costs and disadvantages. The potential for 
economic savings is substantial while the financial costs for implementing the reform in the Member States are overall small. The reform pack age has the potential to  promote trust in the 
internal market and encourage more compan ies and citizens to en gage in cross-border 
transactions, thereby reaping th e benefits of the internal market. Such increased economic 
activity, taken together with the savings the re form entails, would contribute to help citizens 
and companies overcome the current financial  
6. M
ONITORING AND EVALUATION  
The Commission will prepare every five years evaluation reports on the application of the 
Regulation. Since most Member States currently do not systematically collection of statistical 
data on the application of the Regulation, the revised Regulation will contain a requirement to 
provide relevant information, notably on the number of rec ourses to the special review 
procedures created to safeguard the defendant 's fundamental rights and on the outcome of 
these procedures.