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Full speed on Justice for Growth initiatives following European Parliament votes

European Parliament Committees backed three key initiatives of the European Commission that will make life easier and cheaper for European businesses and citizens alike.

The Parliament's legal affairs committee (JURI) and its internal market and consumer protection committee (IMCO) endorsed the Commission's proposals on Package Travel, (
IP/13/663), the European Account Preservation Order (IP/11/923), and on the jurisdiction rules for the specialised European patent court (IP/13/750).

"This is a good day for citizens and a good day for growth. Today's European Parliament votes pave the way for strengthening the rights of millions of package travellers and making the recovery of cross-border debts easier for our millions of SMEs. This is justice policy at the service of both citizens and growth," said Vice-President Viviane Reding, the EU's Justice Commissioner. "I am grateful to the European Parliament for striking down three clear votes and one clear message: Europe is simplifying procedures for companies and improving protection for citizens. I will continue to work with the European Parliament and national Ministers in Council to make sure these proposals enter the EU's statute book swiftly."

1. Package travel: improving consumer rights for 120 million holiday makers

The IMCO Committee of the European Parliament voted to give its support to the European Commission's proposal modernising EU rules on package holidays (IP/13/663). Existing EU rules on package travel holidays date back to 1990. Under the new rules, the Package Travel Directive enters the digital age and will better protect 120 million consumers who buy customised travel arrangements, especially online. The reform will bolster protection for consumers by increasing transparency about the kind of travel product they are buying and by strengthening their rights in case something goes wrong. Businesses will also benefit as the new Directive will scrap outdated information requirements such as the need to reprint brochures and will make sure that national insolvency protection schemes are recognised across borders.

The main changes supported by the IMCO committee are:

  1. Member States will be able to make package travel retailers liable if something goes wrong during the package holiday, in addition to the organiser of the package.

  2. Organisers may ask for a price increase only if their costs increase by more than 3%, and travellers will have the right to terminate the contract or, where possible, will have to be offered an alternative holiday if the price increase exceeds 8%.

Also the JURI Committee of the European Parliament adopted an opinion generally backing the Commission's Package travel proposal.

Next steps: A first reading plenary vote on the proposed Directive is expected in March 2014. After that, the European Parliament and the Council of Ministers will have to agree on the final text under the "ordinary legislative procedure" (co-decision).

2. European Account Preservation Order: helping businesses recover an extra €600 million in cross-border debts

The Parliament's JURI committee also voted to give its support to the compromise text agreed in trialogues with the European Commission and the Council of Ministers, on the proposal for a Regulation establishing a European Account Preservation Order (IP/11/923). The proposal will help businesses recover millions in cross-border debts, by allowing creditors to preserve the amount owed in a debtor's bank account.

While the EU’s internal market allows businesses to enter in cross-border trade and grow their earnings, today around 1 million small businesses face problems with cross-border debts. Up to €600 million a year in debt is unnecessarily written off because businesses find it too daunting to pursue expensive, confusing lawsuits in foreign countries. The European Account Preservation Order can be of crucial importance in debt recovery proceedings because it would prevent debtors from moving their assets to another country while procedures to obtain and enforce a judgment on the merits are ongoing. It would thus improve the prospects of successfully recovering cross-border debt.

The main changes introduced by the JURI committee – and reflecting the agreement of the trialogue talks – are:

  1. The requirement for the applicant to put security when requesting a preservation order so as to avoid unjustified claims (subject to some exceptions);

  2. A rule on creditor liability for the damage caused to the debtor of the European Account Preservation Order;

  3. A limitation of the possibility for debtors to obtain information on their creditors’ accounts;

Next steps: On 30 May, the European Parliament’s Legal Affairs Committee (JURI) already voted to back the Commission’s proposal (MEMO/13/481). Ministers discussed the proposal at the Justice Council meeting on 6 June 2013 and reached a general approach on 6 December 2013 (SPEECH/13/1029). In order to become law, the Commission's proposal needs to be adopted jointly by the European Parliament and by the EU Member States in the Council (which votes by qualified majority). It is expected that the European Parliament will vote in plenary in March so that the proposal is adopted under Greek EU Presidency.

3. Filling the legal gaps for unitary patent protection

The legal affairs committee (JURI) also voted in favour of the compromise text agreed in trialogues with the European Commission and the Council of Ministers, on rules proposed to complete the legal framework for Europe-wide patent protection, updating existing EU rules on the jurisdiction of courts and recognition of judgments (IP/13/750). The changes will prepare the way for a specialised European patent court – the Unified Patent Court – to enter into force once ratified, making it easier for companies and inventors to protect their patents. The court will have specialised jurisdiction in patent disputes, avoiding multiple litigation cases in up to 28 different national courts. This will cut costs and lead to swift decisions on the validity or infringement of patents, boosting innovation in Europe. It is part of a package of measures recently agreed to ensure unitary patent protection in the Single Market (IP/11/470).

The JURI committee supports the Commission proposal and its objectives, making only a few minor changes by suggesting:

  1. Clarifications that the Brussels I Regulation does not affect the internal allocation of cases between the divisions of the Unified Patent Court;

  2. Clarifications on which cases the Unified Patent Court will be able to hear disputes in relation to third state defendants;

  3. Ensuring the early entry into force of the Regulation.

Next steps:

After Ministers reached a general approach at the December Justice Council (MEMO/13/1109), the European Parliament now needs to vote on its report in plenary, which is expected at the latest in April 2014. The Commission is also encouraging Member States to ratify the Unitary Patent Court Agreement as quickly as possible, and to complete the preparatory work required for the Court to become operational accordingly, so that the first unitary patents can be granted in the shortest possible timeframe.

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