Unity v Renvoi: the struggle endures - the Brussels IV Succession Regulations

Sunday, 01 April 2012

Life is usually a trade-off. More time, less money or vice versa is one such example. The balance in law is often between simplicity and fairness. Simplicity may be cheaper, but rough and ready. Fairness may be more expensive, uncertain and complex. The Brussels IV Succession Regulation (BIV) started life along the simplicity track. Let’s all be unitarians.

Unity and renvoi in this context are not a reference to two of the Mitford sisters. Unitarian states apply the same law to both movables and immovables, whereas schismatic states apply different laws. Renvoi or referral is reference back to the law of another state, sometimes including that other state’s private international law (PIL) rules (double and total renvoi) and sometimes not (single renvoi). The original BIV draft regulation made it clear that any renvoi would be abolished and any reference to a particular law would be to the relevant internal law, ignoring any further PIL rules. Hoorah! No future need for wet towels and furrowed brows.

However, second thoughts began to creep in. Abolition would mean that the estate of a French person dying resident in Saudi Arabia may be subject to the Shari’a. Is this right, if Saudi private international law might itself direct French law to apply? Why not permit French law to apply in such circumstances?

There are the continuing issues of clawback and administration of estates to be resolved and a number of recitals are to be extended or clarified. Resolution of these issues to enable the UK and Ireland to opt in may be possible, but is difficult. BIV is now likely to come into force in 2015.

However, in the midst of the hue and cry, renvoi has made a quiet return in BIV article 26. It is never to apply to a specific choice of national law under BIV article 17. (The lobbying by STEP on this issue seems to have been taken into account.) Such an explicit choice is always to be of the relevant internal law, with no reference to PIL. However, any applicable law under the general provisions of BIV article 16 (decided by the connecting factor of the habitual residence of the deceased) is to include PIL rules to the extent that they refer back to a BIV zone state or to the law of another state that would apply its own law. Fair enough?

In the midst of the hue and cry, renvoi has made a quiet return in Brussels IV Succession Regulation article 26

However, how does this now sit with the unitarian principle set out in BIV articles 4 and 16, which state that the relevant law (decided by the connecting factor of the habitual residence of the deceased) shall apply to the estate as a whole? If another state is schismatic and treats movables and immovables differently (for example, US or UK residents with a house in France) and there is a renvoi back to a BIV zone state in relation to immovables only, will that be accepted?

We already have the same issue with current conflicts in the Spanish Civil Code between the unitarian principle of article 9 and the acceptance of renvoi in article 12. The Spanish Supreme Court has made a number of decisions on this conflict, but the position is still not certain. The same issues have applied to Italian PIL since its changes in 1995.

BIV article 26 does, therefore, need to be clarified as to whether or not it is subject to the unity principle. Is a renvoi accepted even though it is in breach of articles 4 and 16? If clarification is not made, we will be waiting some years for the European Court of Justice to come to a conclusion.

In the meantime, bear in mind that EU PIL will be changing in 2015. Estate planning based on existing rules may no longer be sensible. Consider whether a choice of the law of nationality under BIV article 17 may be prudent now. Brussels IV may be becoming fairer, but it is also becoming more complex – more time, more expense.

The latest, 12 December 2011, version of the BIV regulation is online at bit.ly/BIVreg and some explanation of its current status is at bit.ly/BIVstatus

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Richard Frimston

Richard Frimston TEP is a Partner and Head of the Private Client team at Russell-Cooke LLP, and Chair of the STEP EU Committee.

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