Two European cases of interest

There was much press coverage this week of the advocate general’s opinion on the UK’s application to the Court of Justice of the European Union in the case of bankers’ bonuses. But there was another of his opinions at the same time of more direct interest to lawyers.

Yves Bot delivered his opinion in cases C-146/13 and C-147/13, which were brought by Spain against the European regulations implementing enhanced cooperation in the area of the creation of unitary patent protection. One of Spain’s gripes was against the language regulation, which says that future unitary patents can be submitted only in English, French or German.

The advocate general stated that limiting the number of languages, though discriminatory, was appropriate – because it will ensure unitary patent protection throughout those member states which are participating in the scheme, while enabling a significant reduction in translation costs. He said that the EU legislature had no choice but to restrict the number of languages, if costs were to be minimised.

His opinion was on all points against Spain. Such opinions are usually followed by the court (which is presumably why the UK government withdrew from the bankers’ bonuses litigation once the opinion was known).

The question of language is always sticky in the EU, where people fight to keep their languages relevant, particularly in the face of the English juggernaut. The advocate general said two further interesting things in his opinion.

First, EU law has no principle of equality of languages. Second, the choice of languages in this case acknowledges the linguistic realities of the patent sector where (i) most scientific papers are published in German, English or French; and (ii) those languages are spoken in the member states from which most of the patent applications in the EU originate.

A second case interesting for lawyers is headed towards the European Court of Justice. The Belgian Supreme Court delivered a decision a few days ago on the question of VAT on legal services. As I have written before, Belgium was the last member state to introduce VAT on lawyers’ services, and its bars challenged the law as being contrary to human rights.

The argument is that individuals face a tax (21% in Belgium) on bringing or defending cases through a lawyer, even though they may have no choice but to resort to law to enforce or defend their rights. This is not only an obstacle to access to justice and the right to a fair trial, but leads to an inequality of arms, because VAT-unregistered individuals have to pay it, whereas VAT is cost-neutral for companies eligible for VAT refunds.

In the past, there has been much scepticism in those dealing with the question on the UK side as to whether the removal of VAT on legal services is achievable. But now the Belgian Supreme Court has referred numerous questions to the Court of Justice of the European Union for a preliminary ruling. Here is an edited and simplified version of three of the many questions, to give a flavour of the whole:

Is the 2006 VAT Directive compatible with Article 47 of the Charter of Fundamental Rights of the European Union (in conjunction with Article 14 of the International Covenant on Civil and Political Rights and Article 6 of the European Convention on Human Rights), given that everyone has the right to a fair trial, and to being advised, defended and represented, and to legal assistance if without sufficient means?

Can services provided by lawyers as part of a national legal aid scheme be included in the services covered by Article 132 of the 2006 VAT Directive, which are closely linked to assistance and social security, or can they be exempt under another provision of the Directive?

Is Article 132 of the 2006 VAT Directive compatible with the principle of equality and non-discrimination enshrined in the Charter of Fundamental Rights of the European Union (Articles 20 and 21) and of the Treaty on European Union (Article 9), in conjunction with Article 47 of the Charter, if it does not include, among the activities of general interest, an exemption from VAT for legal services – despite other services being exempt for being activities of general interest, such as public postal services, various medical services or services related to education, sports and culture, and even though lawyers’ services contribute towards upholding certain fundamental rights?

We wait to see whether Belgian lawyers will yet achieve victory in this field for the whole European legal profession.

Jonathan Goldsmith is secretary general of the Council of Bars and Law Societies of Europe, which represents around a million European lawyers through its member bars and law societies. He blogs weekly for the Gazette on European affairs