Dáil Éireann debate -
Thursday, 2 May 1991

Vol. 407 No. 8

Contractual Obligations (Applicable Law) Bill, 1990 [Seanad]: Second and Subsequent Stages.

Minister for Justice (Mr. Burke)

I move: "That the Bill be now read a Second Time."

The purpose of the Contractual Obligations (Applicable Law) Bill, 1990, is to enable two conventions to be implemented. The first and most important of these is the 1980 convention on the law applicable to contractual obligations. The second is a related convention, the 1984 convention, which provides for the accession of Greece to the 1980 convention and makes the Greek text equally authentic with the other seven language texts.

The 1980 convention, our primary concern, was drawn up by the then nine member states of the European Communities who wished to establish uniform rules concerning the law applicable to contractual obligations in order to facilitate the free movement of persons, goods and capital among the member states. The 1980 convention sets out rules determining which country's law will apply in a contract case where there is a choice between the laws of different countries.

In the case of litigation concerning an international contract three key issues arise. They are: (1) which country's courts will have jurisdiction to try the dispute? (2) What law will those courts apply where there is a choice between the laws of the different countries involved and, (3), will the resulting judgment be enforceable in other states?

Two of these issues, i.e. jurisdiction and enforcement are already dealt with in the 1968 EC Judgments Convention which was brought into force in Ireland by the Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act, 1988. It is the remaining issue, that of the applicable law, which this Bill, and the conventions it will bring into force, addresses.

The area of applicable law although technical is of considerable practical importance because of its implications for international trade. I do not need to expand on the importance of international trade to our economy. The importance of this Bill can be gauged by the fact that nearly every future contract with an international element will be affected by the rules of the 1980 convention.

The area of private international law dealt with in the Bill is not well developed in Ireland and is uncertain. The benefit of the Bill will be to replace the existing uncertainty with a coherent and comprehensive set of rules as well as bringing our law into line with that of our Community partners.

The rules of the convention are broadly similar to the existing law as far as it has been determined. In particular the convention allows parties to international contracts the maximum freedom to choose whichever country's laws they wish to govern their contract.

Before expanding further on the provisions of the 1980 convention, I will deal with the particular provisions of the Bill itself. The Bill has four sections and four Schedules. Sections 1 and 4 are straightforward procedural provisions and require no elaboration.

Section 2 is the key section. It gives the force of law to the 1980 and 1984 conventions. The English and Irish language texts of both conventions are set out in Schedules 1 to 4 of the Bill for convenience of reference.

Subsection (2) of section 2 provides that one provision of the 1980 convention will not be applied in the State. That provision is Article 7 (1) which deals with mandatory rules. When I turn to discuss the detailed provisions of the convention I will explain the reasons this is being done. I would like to make it clear, however, at the outset that the convention itself in Article 22 allows states to reserve the right not to apply Article 7 (1).

Section 3 of the Bill deals with the two matters relating to the interpretation of the conventions. The first matter relates to the interpretation of the conventions by the Court of Justice of the European Communities. In December 1988 the Twelve member states agreed that powers should be conferred on the Court of Justice to interpret the 1980 convention. This was done by means of a Protocol to the 1980 convention. Since the Protocol would empower the Court of Justice to give rulings which would be binding on the courts of the contracting states it is not possible under the Constitution for Ireland to ratify this Protocol. Accession to the 1980 convention or the Protocol is not necessitated by the obligations of our membership of the European Communities and therefore is not covered by the terms of Article 29 4.3º of the Constitution. While decisions given by the Court of Justice on the interpretation of the 1980 convention will not be binding on the Irish courts, they are decisions which the Irish courts may consider in interpreting the convention. Accordingly, section 3 (1) (a) provides that judicial notice shall be taken of such interpretative decisions.

The second matter covered by section 3 is the official report on the 1980 convention by Professors Giuliano and Lagarde. Section 3 provides that judicial notice shall be taken of the report and the courts shall have discretion to decide what weight they shall give to the report when interpreting the convention. There is a similar provision in section 4 of the Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act, 1988, in relation to the reports on the 1968 Brussels Convention.

I turn now to the 1980 convention. Certain types of contracts listed in Article 1 are excluded from the scope of the convention for a variety of reasons. For example, rights in property arising from a matrimonial relationship are excluded because it is a family law matter and not appropriate for inclusion in a convention dealing primarily with commercial law principles. However there is only a limited number of exclusions and the convention will apply to the generality of commercial contracts.

The two basic rules of the conventions are set out in Articles 3 and 4. The first, contained in Article 3, is that parties to a contract are free to choose whichever law they wish to govern their contract. The law chosen does not have to be related to the contract. For example, two Irish people entering into a contract to be performed here could conceivably decide to choose a law other than Irish law to govern their contract. This reflects the existing law in Ireland. The Supreme Court in 1988 accepted that parties are free to choose the law they wish to govern their contract even to the extent of choosing a law wholly unconnected with the contract.

If the law governing the contract has not been chosen by the parties the second basic rule, contained in Article 4, applies. The purpose of this rule is to determine the applicable law in the absence of choice. It provides that where no choice has been made by the parties to the contract then it will be governed by the law of the country with which it is most clearly connected. This reflects existing Irish law which is to the effect that in the absence of choice a contract is to be governed by the system of law which has the closest and most real connection with the contract and transaction.

How does one decide which country has the closest connection with a contract? The convention provides in Article 4 for a series of presumptions to be used to determine the country with the closest connection. Under existing law the court has to look at all the factors involved to determine which system of law has the closest connection with a contract. The convention rule should provide greater certainty although in most cases they will produce the same result as would be achieved under the present law.

These two basic rules are supplemented by other rules dealing with specific issues. For example, the convention contains special provisions, which have no equivalent in present Irish law, to protect the weaker parties to certain consumer and employment contracts. These provisions are contained in Articles 5 and 6 respectively. Both articles include provisions to ensure consumers or employees are not deprived of the protection afforded to them by the mandatory rules of law of the country where he is resident in the case of the consumer and the country where he is working in the case of an employee.

There is a number of other provisions in the convention concerning mandatory rules. A mandatory rule is a rule of law which cannot be derogated from by contract. In giving parties to a contract wide freedom to choose which law should govern their contract there is a danger that this freedom could be abused to avoid the application of a mandatory rule of a country which has a legitmate interest in the matter. The approach taken in the convention to resolve this problem is to allow freedom of choice but to make that freedom subject to the application of relevant mandatory rules. In addition to the specific instances of consumer and employment contracts, the mandatory rules of a country are applicable where all the elements relevant to the contract are connected with that country but the law of another country has been chosen to govern the contract. This is provided for in Article 3 (3) of the convention. Under Article 7 (2) the mandatory rules of the country where the case is being tried are always applicable irrespective of the law otherwise applicable to the contract.

Controversy surrounds the remaining provision in the convention — Article 7 (1) — which deals with mandatory rules. Article 7 (1) provides that courts shall have discretion to apply the mandatory rules of another country with which the contract has a close connection. Objections were made to the inclusion of this provision in the convention on the basis that it would place a too onerous task on national courts and would create uncertainty. For that reason, although the provision was maintained in the convention, member states may, under Article 22, enter a reservation against its application. It is proposed that Ireland should avail itself of the reservation as have Germany, Luxembourg and the United Kingdom and as I have already said the Bill provides accordingly.

The difficulty with Article 7 (1) is its vagueness and the uncertainty that would result from its application. In a contract involving a number of countries it may be impossible to predict in advance which countries might be considered to have a close connection with the transaction — close connection not being defined in the convention. It might also be impossible to predict whether a court would apply the mandatory rules, if any, of that country. This would make it extremely difficult for Irish companies entering into international contracts to be advised fully in advance on the implications of a contract or the likely outcome in the case of a dispute. I might mention that the views of the Law Society and certain academic experts in this field were sought on this issue and they were strongly in favour of entering a reservation regarding Article 7 (1).

The remaining articles of the 1980 Convention deal with a variety of technical matters such as validity, scope of the applicable law and assignments. I do not propose to go into detail on these points which are subsidiary to the principal rules of the convention. However, if any Deputy has a specific query on these articles which is not addressed in the explanatory memorandum to the Bill I will be happy to deal with it now or on Committee Stage.

The last point I wish to refer to is the entry into force of the convention. Article 29 of the 1980 Convention provides that it shall enter into force on the first day of the third month following the deposit of the seventh instrument of ratification. The United Kingdom was the seventh contracting state to deposit its instrument of ratification and did so on 29 January 1991. The 1980 Convention entered into force on 1 April 1991 for seven out of the original nine contracting states. The 1984 Convention which provides for the accession of Greece to the 1980 Convention also entered into force on 1 April 1991. Ireland and the Netherlands have not yet ratified either convention. It is proposed that as soon as this Bill is enacted arrangements will be made for Ireland to ratify the convention and bring it into force for this jurisdiction. I commend the Bill to the House.

Mr. Flanagan

On behalf of the Fine Gael Party I welcome this Bill. We will not be opposing it on Second Stage and we will not seek to amend the legislation on Committee Stage to any great effect. It is a reasonable Bill, inspired by the European Community and, eventually, responded to by our Government. It struck me during the course of the Minister's speech to ask him a question I am sure he will not be able to answer on this occasion but perhaps he might consider answering towards the completion of Second Stage. How many international conventions have we appended our signatures over the last decade or more, conventions which were signed but, ultimately, not ratified? Ratification requires domestic legislation. I urge the Minister, and his Cabinet colleagues, to consider preparing a full and detailed list of such conventions and, perhaps consider taking appropriate action. In my estimation four or five Bills are introduced on an annual basis to ratify conventions, most of which were signed in the seventies or early eighties.

While I welcome the Contractual Obligations (Applicable Law) Bill, 1990, I urge the Government to proceed as quickly as possible with ratification of other conventions, many of which I recognise are not within the portfolio of the Minister for Justice. This legislation offers a measure of protection and comfort to people within this jurisdiction who engage in the delivery of goods and the provision of services abroad. It will facilitate their work when they enter into contractual obligations abroad. It will offer a measure of protection against international rogue financiers and, perhaps, also against some of our rogue contractors, and that is very necessary.

The Bill is non-contentious. It simply enables us to ratify the 1980 Convention on the law applicable to contractual obligations. The convention introduces a measure of order into an area of commercial activity, and that is to be commended. This convention, like many other conventions, is an example of the ability of the European Community to help countries co-operate at various levels. That ability is given further expression when we look at the effects that the whole concept of the Single Market and 1992 will have on our domestic law. The buzz word in matters of EC conventions and ratifications must be harmony, harmonising our law, harmonising the civil and criminal code in so far as we can, and accepting that different countries, including our own, have their own peculiarities and stances on many issues. Notwithstanding that we should be moving towards harmonising our laws.

It is precisely for that reason that I am somewhat perturbed that the Minister has abandoned, rather simplistically, Article 7 of the convention on the basis that it may give rise to domestic uncertainty among our courts. That is regrettable because it is certainly against the spirit of harmonisation and, therefore, is a deterrent towards the letter of harmonisation. I hope that will be considered in more detail on Committee Stage. To state that it will give rise to uncertainty may be an over-simplification.

A growing proportion of our legislative activity is motivated from the European Community, and the closer we get to economic, monetary and political union, the more that is going to be the case. It is very appropriate, therefore, that each member state has a code of legislation to protect its citizens from breaches of contractual obligations and from the various types of fraud carried out against institutions and individuals. One thing that is certain is that our national legislation is quite inadequate to deal with the question of large-scale fraud. There is general agreement that our legislation dealing with criminal activity cannot deal with matters of serious and complex fraud. This raises the question as to whether our legislation could cope with all disputes arising from the breaches of contractual obligations.

Assuming this Bill has the force of law, and I believe it will have over the coming weeks, the criminal sanctions that our national law has at its disposal following on a breach of a contractual obligation are matters that should be questioned. If there is a dispute about a serious fraud our laws are plainly deficient to deal with it. A person or company based in this jurisdiction could certainly be found to be in breach of contract under this legislation and our criminal law does not have the force to deal with the necessary investigation and consequent prosecution. Suffice it to say that we would not have sufficient armoury at our disposal to carry out a successful investigation not to mind a prosecution. I again appeal to the Government to urgently introduce a Criminal Justice Bill that would enable the consumer to feel a little more comfortable with regard to the level of theft, dishonesty and fraud and the tardy way in which many of these matters are brought before the court. Public confidence in many areas of our criminal law, particularly relating to fraud, has been undermined recently and not unjustifiably.

We can certainly handle with some measure of satisfaction the area of blue collar crime but the white collar criminal far too often is let off scot-free by the courts, if indeed the person is even brought before the courts. I hope the Government will show a little more concern in this area; I do not believe that they appreciate the very high level of dissatisfaction and disgust among the general public in this regard. Everybody knows someone who has a conviction for a minor or petty criminal offence; most people also know of those who carried out large scale frauds and who were not even brought before the courts. If we have laws and ratify conventions we must do so in the hope that our laws will stand on some form of high reputation.

Our criminal law, because of its glaring loopholes and inattentiveness towards white collar crime, is held in disrepute at present. We have a fraud squad but we need a serious fraud squad to tackle this problem; we need a team of highly trained professionals, lawyers, accountants and members of the Garda Síochána whose sole function will be to investigate serious fraud in society. Modern technology is often used for the purpose of detecting fraud and modern methods should be employed to detect, prosecute and ultimately convict. The only deterrent for this kind of dishonesty is an efficient investigative team and a speedy prosecution.

The Government have a duty to protect the financial services sector from crimes of serious and complex fraud but they have utterly failed to do so up to now. I appeal to the Minister to bring in an effective code of criminal justice at the earliest possible date. Fraud leads to misery and while the financial services sector may need a measure of protection, ultimately the consumer loses. If financial institutions, as a result of fraud, lose large amounts of money it is the ordinary Joe Soap who always picks up the tab. For example, the public remember quite well a statement by the Minister for Industry and Commerce that he could not establish the ownership of Master Meats when the Goodman empire collapsed some time ago. It was later confirmed, to nobody's surprise, that the Goodman Group owned a major shareholding in that company, although they had denied it on various occasions prior to that.

I hope that while ratifying this legislation we do so with the intention of updating our laws to tackle the very serious crimes of fraud to which we are closing our eyes. The legislation is somewhat watered down. I referred to the Minister's reservations in regard to Article 7. It is a pity that the Bill merely covers contractual obligations; I note that it does not cover any matters pertaining to tort. With an eye to harmonising our laws in 1992, I would have thought that this was an opportunity to cover areas other than contracts. The Minister referred to the other exemption, the rights of property, arising from a matrimonial relationship, which are excluded irrespective of their contractual degree. I am surprised that rights of property based on marital relationship, family homes and all matters pertaining to family law, are excluded. Are they not regarded as contractual obligations? Why is there such an exclusion as far as family law is concerned?

Another watering down of the Bill is the absence of direct involvement of insurance contracts which, it was deemed by the convention — or somebody — should form the basis of a separate matter and that it was not necessary to include them under these contractual obligations. That is a pity; contracts of insurance between states are matters of fundamental importance, particularly as far as liability is concerned. This is particularly so in regard to increased and advanced international trade. There is a huge involvement in the insurance industry as a result of contracts undertaken in countries other than this jurisdiction where there may be a degree of uncertainty as far as liability, ultimate responsibility and contractual arrangements are concerned. I would have thought they would have been included in this legislation.

The Bill is a measure of our advancement in terms of harmonising our laws; I would not place too much on it as it will not have any major earth shattering effects. It introduces a measure of greater security as we move to the greater Europe of 1992 but it leaves many questions unanswered in relation to the consequent ramifications and effects on our criminal law code. I hope the Minister will give the House assurances that the necessary wherewithal will be made available to the criminal prosecutors in this State so that if persons are in breach of contractual obligations — and if it is deemed necessary that there should be a criminal investigation — the full resources will be made available to allay the fears of the general public.

This is technical legislation and I hope we can iron out some of the technicalities on Committee Stage. Will the Minister elaborate on his reservations in regard to Article 7 (1) which reduces the force of applicability of the convention as far as our academic law is concerned? It smacks of a type of derogation; Governments of many hues, since we joined the European Community, have liked the weapon of derogation. Can we have derogation and still be committed Europeans? If we glibly accept exemptions of the type envisaged by Article 7, does it reflect an Irish attitude towards the European Community? Is it something regarding which we have extreme and serious difficulty? Does it mean that "in the vital national interest" we must be accorded this exemption? Nevertheless, I welcome the legislation.

Mr. McCartan

On behalf of The Workers' Party I wish to indicate that we accept the principle of the legislation before the House today. We welcome its introduction and will be supporting it on Second Stage. There are very few matters in the legislation that will require us to enter into controversy. I gather from what the previous speaker, Deputy Flanagan, said, that we may, nonetheless, need a very short Committee Stage.

Mr. Burke

Is there any possibility of that today? I think Deputy McCartan would be agreeable to it.

Mr. Flanagan

I would like to deal with the matter next week. I do not see it taking very much time but I would not like to take all Stages today.

Mr. McCartan

I know we should not believe everything and anything we read in the newspapers, but I read of the Minister for Justice addressing a body and telling them that he had an extensive programme of law reform to bring before the House. He itemised a number of matters. I do not recall them all, and I do not recall the Contractual Obligations (Applicable Law) Bill being among them. Perhaps he was quite right to leave it out.

To the extent that this measure might represent part of the armoury the Minister relies upon when he suggests that he has a wide ranging package of law reforms to bring before the House, we should address one thing. There are three pieces of legislation in the Minister's name waiting to be dealt with, all of them, if I am correct, at Committee Stage. There is no legislation outstanding from the Minister for Justice being debated at Second Stage.

Mr. Burke

Hang about.

Mr. McCartan

There is the Statute of Limitations Bill, the Criminal Damage Bill and the rather controversial O'Higgins pensions Bill.

The point I want to come to is that the Minister was for some time a part-time Minister for Justice. He had another portfolio dealing with Communications. We were all quite happy to see him depart from that for reasons that need not be gone into now. One would have thought that with the long overdue appointment to his Department of a junior Minister to assist him we would see a good deal of much needed legislation coming before the House in the Minister's name. That has not happened. The Department of Justice have ground almost to a standstill in regard to reforming legislation and the point must be made that there is no shortage of material available to the Minister. There are the reports he commissioned himself dealing with matters of urgency such as prison deaths, rights of appeal dealt with by the Martin Commission and the very many pieces of legislation from the Law Reform Commission that are now accumulating dust on the shelves of the Minister's office. I wanted to make that point because this is the first opportunity I have had to address this idea that the Minister is putting about that he is in some way an actively reforming Minister. Unfortunately, that could not be further from the truth. The Minister has suggested to me across the floor that I should hang about. I will, willingly, and look for legislation that is so badly needed in many areas.

Acting Chairman (Mr. Doyle)

I am waiting to hear the Deputy come back to the Bill.

Mr. McCartan

I am heading in that direction. I consider this a very poor form of legislation employing, as it does, a method increasingly being relied upon by the Minister and his Department of borrowing the conventions of the European Community or elsewhere on the international scene and incorporating them lock, stock and barrel into a Bill to be presented to this House. Complex and weighty as this document is, it comprises merely four sections of work on the Minister's part. That being so, why has it taken successive Governments since 1984 so long to present a Bill to the House? I say 1984 because that was the year of the small convention regarding the accession of Greece to the Community, but the substantive convention dates from 1980. Why did it take this Minister and his predecessors 11 years to put four sections together so that we could become what has been described as good Europeans? It is a remarkable delay and no explanation whatsoever has been given as to why it could not have been brought before us sooner.

Beyond the delay, there is the format itself. It is very lazy and sloppy legislation to transport a convention, lock, stock and barrel, as is done here. It is a device all too frequently used in this House. It goes on on a weekly if not a daily basis in every ministerial Department.

The directives and the rules of the EC are being incorporated into our domestic law not by statute as they should be, not by the actions of this or the Upper House, but by Ministers signing a directive and bringing into law certain directives of the European Community. The directive is reproduced in its entirety. The Minister simply signs it and there we have a new addition to the corpus of Irish law. This is happening in Departments every day unbeknown to us as legislators, and more important, unbeknown to the great public out there.

That process is unfortunate because, first, we are getting in a language that is untypical of our own domestic legal language so that when courts, tribunals or anyone else try to interpret it there are major difficulties. What should happen is that a Minister doing his job and keeping pace with what is happening in Europe and the international arena, should be drafting legislation with his officials reflecting the spirit and intentions of the conventions but translating and tranforming it into our domestic legislation. That is the way these matters should be addressed.

The other obvious defect and shortcoming of this method is that while the document here is entitled a Bill, the only parts that I or any other Member of this House can deal with are the first two pages, the first four sections. If I object to something in the convention itself, which by virtue of section 2 of the Bill is being given the force of Irish law, I cannot amend one jot of it. If I put down an amendment to change, say, the provisions of Article 2 of the convention as it appears in the Bill I will be ruled out of order. We have to accept the convention as it stands because that is the way it was drafted and agreed in the international arena. It is because of the sloppy and lazy way the convention is being incorporated into Irish law that we cannot deal with approximately 99 per cent of this document. This is not good legislative practice.

I should like to give a practical example. Article 2 of the convention refers to the areas of law which will be excluded from the very good principle being laid down in the legislation, namely, that there should be certainty and uniformity of the practice of rules of law that shall apply in inter-state inter-trade, disputes, issues and contracts. However, a whole range of matters are being excluded, for example, questions involving the status or legal capacity of natural persons; contractual obligations relating to wills or succession rights to property; rights and duties arising from a family relationship; obligations arising under bills of exchange; arbitration agreements; questions governed by laws of companies and other bodies corporate or unincorporate; the question of agency; constitution of trusts and evidence and procedure. Those matters will be excluded from the workability of this good principle which I welcome.

Some of the reasons given in the explanatory memorandum for the exclusion of these are that other deliberations are going on, that perhaps other conventions are to be concluded or that ministerial directives will issue from the EC in time. Those were the reasons given in the years leading up to 1980. It has taken us 11 years to get around to discussing this issue and God only knows what has happened in the interim. That was the explanation given that far back and it is borrowed here. If I, as a legislator, would like to include any one of those items into the legislation before us I cannot do so because I cannot put down an amendment and I cannot change, add to or subtract from the major body of this legislation as a result of a lazy and sloppy formula being adopted.

This is a very bad legislative practice. I am disappointed it has happened and I hope it will not be the practice of the Minister's Department for much longer. If the Minister is going to bring in this great body of reforming legislation about which he has spoken he should bring it in in substantive form so that Deputies and Senators will have the opportunity of addressing it in the way legislators should. We should not only be given the opportunity to speak on it but we should also be given the opportunity to amend in substance all of the provisions sought to be given the force of law. This is a regrettable procedure and I hope it is ended.

Having made those preliminary points, I should like to emphasise that I support fully the principles in regard to certainty laid down by the convention. The convention attempts to streamline and introduce uniformity to the rules governing the laws in the public area. I note that the Minister said our corpus of law in this area is poorly developed. I accept that it is poorly developed in the context of legislation but, perhaps, he is being unfair to our Judiciary when he talks about a poorly developed corpus of law. I remember from my law school days that I was impressed with the extent to which the Irish Judiciary had on occasion over the decades addressed this area of the law and given good rulings. We should not forget that we also have available to us as guidelines and authoritive statements the Judicial pronouncements of other common law countries. I would argue, from the point of view of commerce on an international level, that there has been little difficulty in dealing with the laws as they stand and are being developed. I agree with the reservations expressed by the Minister in regard to poorly developed legislative law but I am not entirely certain that we should extend that criticism to the judge-developed law in this area.

Having made that point, I want to express a major reservation about section 3. Will the Minister say why he proposes to legislate to tell our judges that they should take judicial notice of any rulings or opinions of the European Court on questions relating to the convention? I raise this query because it represents an intrusion into the time honoured and well established separation of powers which exist in our State between the Legislature, Executive and the Judiciary. I query whether or not it would be better to leave matters stand as they are on the basis that our judges will, as a matter of prudence and good practice, have regard to the rulings and opinions of an august body such as the European Court. We should leave it at that. Will the Minister say why he thinks this provision is necessary? Is he not concerned that it represents an invasion into the separation of powers which should properly and correctly exist between the Legislature, Executive and the Judiciary?

Another point which needs to be raised relates to the proposed reservation in section 2 in respect of Article 7 (1) of the convention. I welcome the provisions of the convention and the way it will protect consumers. For example, it recognises that even though consumers may, as a matter of choice or otherwise, elect to adopt the law of a particular country relating to their contract, they cannot opt out of certain provisions referred to in the legislation as, "mandatory provisions of the domestic country". This is particularly good in this State because very important, although perhaps not well known, rights are available to consumers under our hire purchase and sale of goods legislation. It is important that consumers are not forced or obliged to forego those rights. The provisions of the convention in this area are to be supported and welcomed. It is important that these mandatory provisions and protections in our legislation be sustained and adhered to.

Article 7 (2) provides that a court may, of its own election, decide, in a particular instance, to import some of these mandatory provisions or protections for the consumer from the law of the country concerned without the say so or prior agreement of the parties to the dispute. That is a good working principle and I do not accept the Minister's suggestion that it will lead to uncertainty in the area of law for parties generally. Even if it does, it is better, in the balance of things, to forego certainty in this area in order to maintain this additional protection for the consumer.

The Minister suggested that we should, for reasons of certainty, enter a reservation, and he may well have his way on this at the end of the day. I should like to ask him why he does not leave it as it is on the basis that when this convention is ratified, after this legislation is passed, he can append a reservation to the Treaty when it is being signed or when our ratification documents are being lodged? Why should we introduce a specific provision in section 2 (2) which will exclude Article 7 (1) from operating in our law? As I see it, attitudes may well change.

Perhaps a different view might prevail and the Minister or his successor in office would allow Article 7 (1) stand. At that stage we would have to bring back amending legislation to this House. The same effect will be achieved for the time being if the reservation is lodged with the document of application. If a Minister came to the view that things should change and that the provisions of Article 7 (1) should apply, he could simply withdraw the reservation. Is that not a much simpler, more straightforward way to deal with this? Why are we being asked to specifically legislate a provision into the Bill under section 2 (2)? The Minister suggests, in advancing his case that we should have regard to the derogation entered by Germany, Luxembourg and the UK. That is a matter for them but equally, Belgium, France and Italy have not entered one. We should stand with Belgium, France and Italy on this issue and give the protections, as far as they go, to the consumer as enunciated under the convention.

I welcome the principle of the Bill. I am dismayed at the delay and I am disappointed with the method and form of the legislation. Nonetheless, it is a useful measure to adopt so that we can work towards uniformity of laws in this area which will make trade and the rules governing such trade more easily dealt with in the future.

Mr. Bell

I did not intend to speak on the Bill because the Labour Party fully support the measure. What the Minister is endeavouring to do is what we want him to do to bring us into line in relation to this.

Minister for Justice (Mr. Burke)

I thank the Members of the House for their helpful and constructive approach to this Bill. This is highly technical but important legislation. It is part of a general reform of certain aspects of our private international law which has been undertaken in response to the challenges posed by our membership of the European Communities.

In the recent past that area of our private international law which dealt with international civil and commercial transactions was underdeveloped and full of uncertainties. It relied almost entirely on the development of case law and certain common law principles. It did not provide an adequate framework for our increasing trade within Europe.

In 1988 the Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act brought into force the EC Judgments Convention. This represented a radical step forward.

Overnight we gained a modern and comprehensive set of rules which were applicable throughout the Community and which governed jurisdiction in cases with an international element. In addition to these jurisdictional rules, the EC Judgments Convention provided reciprocal arrangements for the enforcement of judgments in civil and commercial matters between Ireland and eight of our Community partners. In 1989 this regime was extended to include Greece and is now being extended to include Spain and Portugal. These developments which have only taken effect over the last three years have already had a dramatic effect and this is apparent to anyone practising law in this jurisdiction.

The Bill now before this House continues the reforming work of the 1988 Act giving us a clear and modern code of rules determining which law is applicable in the case of contractual obligations.

In conjunction with the EC Judgments Convention this Bill represents a Community code which will make a significant contribution to the judicial aspects of the internal market.

Our work of reform however will not be completed by this Bill. Legislation is already under preparation to extend the reciprocal arrangements under the EC Judgments Convention to Spain and Portugal. There are also plans to introduce legislation to give effect to the 1988 Lugano Convention which would extend the system established by the EC Judgments Convention to the countries of the European Free Trade Association. The effect will be a legal network providing for reciprocal recognition and enforcement of judgments in civil and commercial matters covering all the states of Western Europe, and there is the possibility that in the future it will be extended to the newly emerging democratic States of Eastern Europe.

Deputy McCartan and Deputy Flanagan touched on the procedure of making the conventions directly part of our law. Making an international convention directly part of our law is a normal method of implementing conventions. Two recent examples of this are the Jurisdiction of Courts (Maritime Conventions) Act, 1989, and the Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act, 1988. The method of direct implementation facilitates uniform interpretation and is the method favoured by the European Commission in respect of the 1980 convention. The Commission has criticised the German legislation which gives effect to the 1980 convention as it does not make the convention directly applicable in Germany. The Commission went so far as to issue a formal recommendation that Germany should incorporate the convention, in the words of the convention, into German law. The reason was that it would assist uniform interpretation throughout the Community. While Deputies might consider this as being sloppy drafting, it is done in that way intentionally.

The situation in relation to Article 7 (1) was touched on by Deputy Flanagan and Deputy McCartan. I understand we will take Committee Stage immediately after Second Stage, so I will reserve my comments in relation to that Article until then. Deputy Flanagan touched on the important and interesting question of the number of conventions that we have signed through the years. I share his concern that we should ratify these conventions as soon as possible. In relation to the conventions that come within my Department, it is my policy to proceed as rapidly as possible with ratification.

Deputy Flanagan raised the question of tort. The Community has not yet come up with proposals in relation to tort. The Deputy also referred to other matters in relation to white collar crime, which will be appropriate for another day. There are questions in relation to that today and I will respond to them later.

Deputy McCartan in his opening remarks referred to my programme of legislation. The Deputy's mind must be slipping somewhat, because we have sat in this Chamber for many hours in relation to a long list of legislation. When the Deputy made the accusation I began to think of the legislation that I have brought through this House in less than two years. Amongst others was the major reforming legislation in relation to rape.

Mr. McCartan

I was talking of the future.

Mr. Burke

The list includes legislation on rape within marriage, the Forensic Evidence Bill, the Child Abduction Bill, the Larceny Bill geared to getting at the handlers of stolen goods, the Video Nasties Bill, the firearms legislation, the Abolition of Hanging Bill, the Criminal Damage Bill, the Statute of Limitations Bill and the Prohibition Against Incitement to Hatred Bill. That is just some of the legislation that has been passed or is going through this House at the moment. As far as future legislation is concerned I hope, within the next two weeks, to publish a new Courts Bill, a Confiscation of Assets Bill — which was commented on in the Law Reform Commission report — before the end of this session. A Solicitors Bill will be published during this session and it will be taken during this session. There will be phone tapping legislation in the next session. There will be a major Criminal Evidence Bill and a Court of Civil Appeal Bill which will be taken in the next session. There will be homosexual legislation and family home legislation. These are all major Bills, very important in improving the quality of life of all the people. As well as that major work is proceeding in the Department on the preparation of a White Paper on marriage breakdown. I would suggest to Deputy McCartan that that is not an insignificant body of work. To his credit, Deputy McCartan shared in that work in this House as we went through the Bills section by section. With regard to the rape legislation, we have during the past two years improved the quality of life of at least half our population — the female half. I commend the Bill to the House.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without amendment and passed.