Proposal for a Regulation of the European Parliament and of the Council on jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of Succession COM(2009)154 final – 14 October 2009 Text and Glosses ELRA Madrid 2010

A matter of title The ‘neutral’ title Text and Glosses hides the ‘real’ title The proposal for a Regulation: a potential catastrophe for the Land Registry. A first reading: we are not really concerned. A second reading (after some reflection): a potential catastrophe (unknown property rights will be entered in the register) ? A first reading: the objective presentation of the text. A second reading: some glosses on the text. Gloss: a brief explanation of a difficult or obscure word (first meaning), and not a false and often willfully misleading interpretation (second meaning). ELRA Madrid 2010

Text: a Registrar’s reading 1.Purpose of the Regulation 2.Scope of the Regulation 3.Jurisdiction 4.Applicable law 5.Recognition and enforcement of decisions and authentic instruments 6.European Certificate of Succession 7.Information made available to the public ELRA Madrid 2010

1. Purpose of the Regulation The objectives that the European legislator is trying to achieve are stated in recital (6) of the proposal for a Regulation: ‘The smooth functioning of the internal market should be facilitated by removing the obstacles to the free movement of persons who currently face difficulties asserting their rights in the context of an international succession. In the European area of justice, citizens must be able to organise their succession in advance. The rights of heirs and/or legatees, other persons linked to the deceased and creditors of the succession must be effectively guaranteed.’ ELRA Madrid 2010

2. Scope of the Regulation Art. 1(1) This Regulation shall apply to successions to the estates of deceased persons.... Art. 1(3) The following shall be excluded from the scope of this Regulation:... (d) questions regarding the matrimonial property regime...; (f) rights... created or transferred other than by succession... including gifts...; (i) the constitution, functioning and dissolving of trusts; (j) the nature of rights in rem relating to property and publicising these rights. ELRA Madrid 2010

3. Jurisdiction Art the courts of the Member State on whose territory the deceased had habitual residence at the time of their death shall be competent to rule in matters of successions. Art. 9 Where the law of the Member State of the place in which property is located requires the involvement of its courts in order to take measures under substantive law relating to the transmission of the property, its recording or transfer in the public register, the courts of the Member State shall be competent to take such measures. ELRA Madrid 2010

4. Applicable law Art. 16 … the law applicable to the succession as a whole shall be that of the State in which the deceased had their habitual residence at the time of their death. Art. 17(1) A person may choose as the law to govern the succession as a whole the law of the State whose nationality they possess. ELRA Madrid 2010

5. Recognition and enforcement Art. 29 A decision … shall be recognised in the other Member States without any special procedure being required. Art. 33 Decisions given in a Member State and enforceable there... shall be carried out in the other Member State in accordance with... Regulation (EC) No 44/2001. Art. 34 and 35 Authentic instruments: idem. ELRA Madrid 2010

6. European Certificate of Succession Art. 36 This Regulation introduces a European Certificate of Succession, which shall constitute proof of the capacity of heir or legatee and of the powers of the executors of wills... The use of the European Certificate of Succession shall not be obligatory... Art. 41(2) The European Certificate of Succession shall contain the following information:... (h) and (i)... the list of rights and assets for heirs and legatees;... ELRA Madrid 2010

7. Information made available to the public Art. 46 The Member States shall provide within the framework of the European Judicial Network in civil and commercial matters a description of the national legislation and procedures relating to the law on succession and the relevant texts... ELRA Madrid 2010

Glosses 1.A limited purpose and scope, and yet... 2.A limited impact on the land registration ? 3.Succession law: an island in the sea of law ? 4.Unknown property rights ? ELRA Madrid 2010

1. A limited purpose and scope, and yet... No harmonization of the rules of substantial law (à l’impossible nul n’est tenu). And yet: the Regulation covers not only rules of international private law, but contains also rules about the applicable, substantial law (art. 16 et seq.). And yet: the applicable law governs ‘the succession as a whole’ (art. 16 and 17(1)). And yet: there will be no longer different rules for moveable and immovable property. ELRA Madrid 2010

2. A limited impact on the land registration ? ‘The nature of rights in rem relating to property and publicising these rights’ are expressly excluded from the scope of the proposal for a Regulation (art. 1(3)(j)). The lex rei sitae rules (recital (10) and comment on art. 1). Prima facie the only impact of the Regulation is that we could be asked to list the property rights of the deceased (and hence the heirs and legatees) in the European Certificate of Succession. Caveat: we should take care to pass the information contained in the register as such, with or without the guarantees attached to it. ELRA Madrid 2010

3. Succession law: an island in the sea of law ? Succession law is treated as a rather autonomous set of rules: an island in the sea. Cf. the subject-matter left out of scope (art. 1(3)): questions regarding the matrimonial property regime, maintenance obligations, gifts, trusts, taxes, the ‘nature of rights in rem... and publicising these rights’,... Cf. also the scope of the (chosen) applicable law: the applicable law ‘shall govern the succession as a whole, from its opening to the final transfer of the inheritance to the beneficiaries’ (art. 19(1)) and this intention is executed in the list of ‘particular issues’ that the succession law is to govern (art. 19(2)). Question. Is it possible to cut succession law off from property law, matrimonial property law, trusts, etc ? Question. Is ‘foreign law’ smuggled into the domestic law and – if yes – what are the consequences ? ELRA Madrid 2010

4. Unknown property rights ? Two worries: Could foreign, unknown property rights indeed be smuggled into the domestic law ? What about the afterlife of inherited property rights ? Professor Matthews said ‘There is a very big problem here’ (House of Lords, European Union Committee, 6th Report, Evidence Question 36) and I’m afraid he is right. An example. What if I inherit the usufruct of a house in London? The French usufruct will apply to English land and at the same time the usufruct will not be entered in the land register: as Professor Matthews calls it ‘the worst of all possible worlds’ (ibidem). And even if Her Majesty’s Land Registry should decide to register the property right, who will convert this unknown property right into a recognised and registrable property right ? The notary ? The solicitor-conveyancer ? The court ? In what right ? A life interest ? Another example. In the Belgian system a transfer mortis causa is not entered in the land register. An unknown property right may thus exist (and operate) in the Belgian law, although one could wonder what the colleagues of the inheritance tax and the cadastre will do. But what if the unknown property right is sold? The same questions need to be answered: who will convert the right (the notary ?) and in what right ? ELRA Madrid 2010

Conclusion The last gloss showed that some uncertainty could affect the property rights. This is unacceptable, given the nature of property rights and their effect on everyone, erga omnes. And it could damage the Land Registry. I believe the European legislator did not consider all the consequences of applying the foreign applicable law to immoveable property. Moveable property can be moved and thus ‘brought under’ the application of the rules. Immoveable property cannot be moved and the ‘local’ rules apply per se. We could hope that ‘estate planners’ will do the job for which they are paid... and convert the life interest into a usufruct and vice versa. In order to help them, we could try to introduce the basics of ‘registry law’ in the presentation of the national law within the framework of the European Judicial Network in civil and commercial matters. ELRA Madrid 2010

Further reading the text in the different European languages the 6th Report ‘The EU’s Regulation on Succession’ of the European Union Committee of the House of Lords eu-regulation-on-succession-and-wills/ some critical ‘reflections’ by Professor Harris And last but not least: ELRA Madrid 2010