C-20/92
ECLI:EU:C:1993:96
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HUBBARD v HAMBURGER
OPINION OF ADVOCATE GENERAL DARMON delivered on 10 March 1993 *
Mr President, the plaintiff to avoid giving such security. Members of the Court, Such a clause is not fully effective in relations between the United Kingdom and Germany, however, notwithstanding the conclusion of 1. The Landgericht (Regional Court) Ham- two international agreements on the matter burg asks the Court whether Community to which both States are parties. law, in particular in so far as it establishes freedom to provide services, precludes a requirement for security to be given for costs as laid down in Paragraph 110(1) of the Ger- 5. The first is the German-British Conven- man Code of Civil Procedure. tion on the conduct of legal proceedings of 20 March 1928, 2 brought into force again with effect from 1 January 1953. 3 That con- vention makes the non-provision of security 2. The parties to the main proceedings are conditional upon the British plaintiff's being Anthony Hubbard, a solicitor acting as the resident in Germany. Mr Hubbard, however, executor of the will of Mr Karsten, resident resides in the United Kingdom. in the United Kingdom, and Peter Ham- burger, resident in Germany, to whom the deceased had given a power of attorney in respect of his bank accounts. ' 6. The second agreement — the European Convention on Establishment signed in Paris on 13 December 1955 4 — provides in the 3. In his capacity as the defendant in the chapter on judicial and administrative guar- main proceedings, Mr Hamburger relied as antees that against Mr Hubbard on Paragraph 110(1) of the German Code of Civil Procedure, which provides as follows: ' N o security or deposit of any kind may be required, by reason of their status as aliens 'Foreign nationals who bring proceedings or of lack of domicile or residence in the must, on application by the defendant, give country, from nationals of any Contracting security for costs and lawyers' fees ...'. Party, having their domicile or normal resi- dence in the territory of a Party, who may be plaintiffs or third parties before the Courts of any other Party ...', 5 4. Under Paragraph 110(2), only a reciproc- ity clause would have made it possible for
2 — Reichsgesetzblatt II, p. 623. 3 — Bundesgesetzblatt II, p. 116. * Original language: French. 4 — BundesgesetzbUtt 1959 II, p. 998. 1 — Commission's observations, p. 2 of the French translation. 5 — Article 9.
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but is not applicable in this regard to nation- Community law with a view to enabling that als of the United Kingdom, which gave a res- court to assess the compatibility of those ervation in respect of that provision. rules with the provisions of Community law. 7
7. Since the national court was apparently unable, under either national law or the abovementioned conventions, to decline to 11. I shall first consider — once for all — apply Paragraph 110(1) of the Code of Civil the application of Article 7 of the Treaty. Procedure, it has asked the Court to examine That provision prohibits, within the scope of application of the Treaty, overt and covert the compatibility of that provision with discrimination on grounds of nationality. 8 Community law.
8. The four questions which it refers to the 12. Pursuant to the principle specialia gener- Court, which are set out in the Report of the alibus derogant, that article Judge-Rapporteur, 6 actually raise two issues. The first is whether the national provision in question satisfies the requirements of the right to freedom to provide services, as 'applies independently only to situations defined in Articles 59 and 60 of the Treaty governed by Community law in regard to (first question) and, more generally, complies which the Treaty lays down no specific pro- with the prohibition of discrimination on hibition of discrimination'. 9 grounds of nationality laid down in Article 7 of the Treaty (third question). The second issue is the potential effect on the application of the Treaty of, on the one hand, the inter- 13. The Court stated this in particularly national conventions mentioned above (sec- clear-cut terms in the judgment in Cowan v ond question) and, on the other, the connec- Trésor public: 10 tion of the dispute in question with the law of succession (fourth question).
'Under Article 7 of the Treaty the prohibi- 9. I shall begin by considering the first of tion of discrimination applies "within the those issues. scope of application of this Treaty" and "without prejudice to any special provisions contained therein". This latter expression 10. It should be recalled at the outset that it refers particularly to other provisions of the is not for the Court, in proceedings pursuant Treaty in which the application of the gen- to Article 177 of the Treaty, to make any eral principle set out in that article is given declaration on the compatibility of rules of national law with Community law, but it may provide the national court with all rele- 7 — Sec, inter alia, Case C-204/90 Bachmann v Belgian Stale vant guidance as to the interpretation of [1992] ECR 1-249, paragraph 6. 8 — Case 152/73 Sotgiu v Deutsche Bundespost [1974] ECR 153, paragraph 11. 9 — Case 305/87 Commission v Greece [1989] ECR 1461, para- graph 13. 6 — Paragraph 6. 10 — Case C-186/87 Cowan v Trésor public [1989] ECR 195.
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concrete form in respect of specific situa- tions. Examples of that are the provisions concerning free movement of workers, the right of establishment and the freedom to ... the essential requirements of Article 59 of provide services.' " the Treaty [have become] directly and unconditionally applicable ... 15
14. If the legislation in question is contrary to Article 59 of the Treaty, it will necessarily Those essential requirements abolish all dis- be contrary to Article 7. It is therefore in the crimination against the person providing the area of freedom to provide services that this service by reason of his nationality or the examination should be pursued. fact he is established in a Member State other than that in which the service is to be pro- vided. 16
15. In order to do so, it is necessary, accord- ing to the reasoning which the Court habit- ually uses, n to establish that the activity in question must be described as a provision of a service, that the national measure con- The ... aim of the third paragraph in Article cerned restricts the freedom to provide that 60 is to enable the provider of the service to service and lastly that that restriction is not pursue his activities in the Member State justified by any general interest. where the service is given without suffering discrimination in favour of the nationals of that State.' w
16. As to whether the activity in question constitutes the provision of a service within 17. Accordingly, that definition must be the meaning of Articles 59 and 60 of the regarded as covering the task carried out for Treaty, I would refer to the pragmatic defini- remuneration in a Member State by a mem- tion and the characteristics of that concept as ber of a profession established in another they emerge from the judgment in Webb: ' 3 Member State which consists in seeking, in the interests of the successors of his deceased client, to obtain possession of the assets 'According to the wording of the first para- which that client held on the territory of the graph of Article 60 of the Treaty the expres- first State. sion "services" means services which are nor- mally provided for remuneration, in so far as they are not governed by the provisions 18. In that respect, it is irrelevant whether relating to freedom of movement for goods, the provider of services acts 'in his own capital and persons ... 14 name', as the national court states, or in the name of the deceased's successors. In the
1 1 — Paragraph 14, emphasis added. 12 — See, inter alia. Case 352/85 Bond van Adverteerders v 15 — Paragraph 13. NetherUnds State [1988] ECR 2085. 16 — Paragraph 14. Sec also Case C-76/90 Säger v Dennemeyer 13 — Case 279/80 Webb [1981] ECR 3305. [1991] ECR 1-4221. 14 — Paragraph 8. 17 — Paragraph 16.
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latter case, it would be necessary to take into and which apply to all persons or undertak- consideration the status of the latter as recip- ings pursuing an activity in the State of des- ients of services. 1S tination, in so far as that interest is not pro- tected by the rules to which the person providing the services is subject in the Mem- ber State in which he is established. In par- 19. If a national provision, as a precaution- ticular, those requirements must be objec- ary measure, obliges the provider or the tively necessary in order to ensure recipient of the services to deposit a sum on compliance with professional rules and to the sole ground that he is neither a national guarantee the protection of the recipient of of the State in which the service is provided services and they must not exceed what is nor resident in that State, such an obligation, necessary to attain those objectives'. 20 even though it does not radically obstruct the provision of the service, has the effect of delaying the performance of the service and of increasing its cost. It therefore constitutes 22. There the Court essentially lays down a restriction on freedom to provide services two conditions for a possible limitation of contrary to Article 59 of the Treaty. the freedom to provide services: first, the existence of 'imperative reasons relating to the public interest' and, secondly, the requirement that the limitation should apply 20. Are there, however, any justifications uniformly to all economic operators. Fur- which, in the light of Community law, might thermore, that limitation must comply with validate such a restriction? the principle of proportionality.
21. In that respect, adopting the wording of the judgment in Webb, the Court held in 23. Nine Member States 21 still recognize Säger v Dennemeyer ' 9 that cauto judicatum solvi or security for costs, although the extent to which it is binding on the courts may vary. Thus in German law the court is obliged to require security for 'as a fundamental principle of the Treaty, the costs to be given if the defendant has freedom to provide services may be limited requested it and the conditions for its impo- only by rules which are justified by impera- sition are satisfied. In other Member States, tive reasons relating to the public interest on the other hand, such as Spain, Greece, Ireland and the United Kingdom, the court has a discretion to reject an application for security for costs. 18 — In that respect, the Court has held that 'the freedom to pro- vide services includes the freedom, for the recipients of ser- vices, to go to another Member State in order to receive a service there, without being obstructed by restrictions ...' (Joined Cases 286/82 and 26/83 Luisi and Carbone v Min- istero del Tesoro [1984] ECR 377, paragraph 16). See also 20 — Paragraph 15. It would note that, although this form of Cowan v Tresor public, paragraph 15. Consequently, words is the one that the Court commonly uses to explain whether it is the provider of services himself or the succes- the justification for an obstacle to the freedom to provide sors in title who act on the territory of another Member services, it has also held — in particular in Bond van Adver- State through the intermediary of the provider, the situation teerders — that in certain cases that justification may be resulting from a provision such as the one under consider- based on grounds of public policy within the meaning of ation is equally restrictive: either the successors must give Article 56 of the Treaty. security or they must restrict their choice to a provider of 21 — Portugal does not recognize any requirement to give secu- services who is a national of the State in which the court is situated. rity for costs, France repealed it by Law N o 75-596 of 9 July 1975 and Italy, for its part, has declared it unconsti- 19 — Cited in footnote 16. tutional.
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24. The raison d'être for such security is the is supposed to secure for the defendant loses intention to guarantee the payment of the most of its raison d'être where national costs and expenses of proceedings brought means of enforcement are available to every by a foreigner. This age-old rule aims at Community national and especially where guaranteeing the solvency of such a plaintiff the Brussels Convention ensures that in civil and to ensure his continuing representation and commercial matters the formalities gov- before the court. erning the recognition and enforcement of judicial decisions are simplified. Rather than securing protection for the defendant, there is a serious risk that security for costs will be 25. Suppose that an action is brought by a used for the purposes of delaying the pro- foreign plaintiff. The court before which the ceedings, enabling the defendant to postpone action is brought dismisses his action. In the any defence on the substance and increase event that the plaintiff is insolvent or in bad the number of procedural issues raised. It faith, his opponent must be able at least to seems difficult, moreover, to consider that it recover his costs without having to bring is based on imperative reasons relating to the potentially difficult and costly proceedings in public interest. 23 foreign courts.
29. I would also point out that in a case which was likewise concerned with a ques- 26. Although the rule regarding security for tion of procedure, but also with discrimi- costs continues to feature in the majority of nation on grounds of residence — only per- the Member States, the device is generally sons established on the national territory regarded by academic writers as obsolete and were entitled to act as legal representatives in the process of disappearing. before certain courts —, the Court held that the requirement of residence in the Member State could not be justified by a general interest. 24 27. Do the reasons put forward to justify its existence, that is to say, principally prevent- ing the risk of insolvency, constitute 'imper- ative reasons relating to the public interest', 30. Lastly, I would note that, in a recent or do other, less discriminatory, means exist decision of 17 November 1992, 25 the Ober- which afford sufficient guarantees? landesgericht (Higher Regional Court) München rejected of its own motion the application of Paragraph 110 of the Code of Civil Procedure on the ground that it did not 28. I am inclined to take the view that secu- comply with the prohibition of discrimi- rity for costs arises from an image of a for- nation on grounds of nationality set out in eigner which cannot apply to Community Article 7 of the Treaty. nationals, who, within a single market, must be able to move and carry out their activities without restriction. 22 The guarantee which it 23 — Sec paragraph 14 of the judgment in Case C-288/89 Collec- tieve Antennevoorziening Gouda v Commissariaat voor de Media [1991] ECR 1-4007, which sets out a number of overriding reasons relating to the public interest recognized by the Court. 22 — Belgian law dispenses Community nationals from having to 24 — Case 33/74 Van Binsbergen v Bedrijfsvereniging give security for costs where matters covered by the Treaty Metaalnijverheid [1974] ECR 1299. are concerned. 25 — RI W 1993, Heft 2, p. 150, at 151.
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31. The second series of questions referred 'the right to equal treatment laid down in by the national court seeks to establish the Community law may not be made depen- effect on the above-mentioned Community dent on the existence of a reciprocal agree- provisions of, first, international conventions ment between the relevant Member State and and, secondly, the connection of the transac- the country of which the person is a nation- tion at issue with a branch of private law, al'. 2S namely the law of succession, which has no apparent link with the scope of application of the Treaty. 35. Consequently, the exercise of the right to freedom to provide services cannot be made dependent on agreements concluded outside the Treaty by the Member States. Even where those agreements might be applicable 32. As regards the effect of international they cannot validate any restriction whatso- agreements concluded between Member ever on intra-Community trade. As the States, I would note that, apart from the fact Court held in Conegate, 29 Article 234 of the that they are alleged to be inapplicable in this Treaty must be interpreted as meaning that case, 26 it follows from the case-law of the Court that they may not in any way jeopar- dize the implementation of Community '[a] greements concluded prior to the entry principles as fundamental as the freedom to into force of the Treaty may not ... be relied provide services. upon in relations between Member States in order to justify restrictions on trade within the Community'.
33. In the judgment in Frali, 27 where the absence of a reciprocal agreement between 36. As regards the second point — the effect Belgium and Italy had been put forward as of Community law on a dispute coming grounds for refusing to grant entitlement to within the law of succession —, the lessons a minimum pension, the Court ruled that: from the case-law of the Court are unambig- uous. The Court has, on several occasions, rejected the classical argument, relied upon in order to oust the application of Commu- nity law, that the domestic law relates to a ' 'The grant of such a benefit to a foreign matter with which the Treaty is not con- worker who fulfils these conditions cannot cerned. depend on the existence of a reciprocal agreement with the Member State of which that worker is a national.' 37. In the Casagrande judgment, 3 0 which was concerned with education and training policy, the Court dismissed the argument that this sphere came within the exclusive 34. Furthermore, in Cowan v Trésor public, the Court, citing Frilli, held that 28 — Paragraph 12. 29 — Case 121/85 Conegate v HM Customs and Excise [1986] ECR 1007, paragraph 25. 26 — Commission's submissions, p. 3 of the French translation. 30 — Case 9/74 Casagrande v Landeshauptstadt München [1974] 27 — Case 1/72 Frilli v Belgian State [1972] ECR 457. ECR 773.
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competence of the Member States. 3I In the as that of direct taxation, that the national judgment in Casati,32 the Court also held rules comply with the principle of equal that criminal legislation and the rules of treatment laid down in Community law. 34 criminal procedure remained within the competence of the Member States, but that 39. Lastly, the Court has held generally that:
'it is clear from a consistent line of cases decided by the Court that Community law 'The effectiveness of Community law cannot ... sets certain limits ... as regards the control vary according to the various branches of measures which it permits the Member States national law which it may affect'. 35 to maintain in connection with the free movement of goods and persons'. 33 40. The fact that a dispute comes within the law of succession therefore has no effect on 38. The Court likewise makes sure, in a the application of the principle of freedom to sphere which has not been harmonized, such provide services.
4 1 . Accordingly, I p r o p o s e that the C o u r t should rule that:
(1) It is c o n t r a r y t o Articles 59 and 60 of the E E C Treaty for national rules to require a C o m m u n i t y national w h o , in his capacity as a p r o v i d e r of services, has b r o u g h t proceedings before a c o u r t of a M e m b e r State t o be p u t u n d e r an obligation, if the defendant so requests, to p r o v i d e security designed t o e n s u r e the r e p a y m e n t of the costs and l a w y e r s ' fees, before the defendant enters an appearance, o n the sole g r o u n d that the plaintiff is a foreign national.
(2) T h e application b y a M e m b e r State to a C o m m u n i t y national c a r r y i n g o u t his activities o n the t e r r i t o r y of a n o t h e r M e m b e r State of the principles of n o n - discrimination and freedom t o p r o v i d e services m a y n o t be affected b y the existence of reciprocal international agreements c o n c l u d e d w i t h that State and m a y n o t d e p e n d o n the b r a n c h e s of national law in w h i c h the p r o v i d e r of ser- vices carries o u t that activity.
31 — Paragraph 6. 34 — See paragraph 24 of the judgment in Case 270/83 Commis- 32 — Case 203/80 Casati [1981] ECR 2595. sion v France [1986] ECR 273. 33 — Paragraph 27. Sec, to the same effect, paragraph 19 of the 35 — Case 82/71 Pubblico Ministero v SAIL [1972] ECR 119, judgment in Cowan v Trésor public. paragraph 5.
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