The escape clause under the Succession Regulation and other international issues Maria Grazia Antoci Lawyer in Florence, Italy UNIT 1 Summary and the notion of habitual residence - Part I Succession Regulation (SR): questions to be addressed What is an escape clause? Is there any autonomous field of application of such clause under the Succession Regulation? Summary Definition of habitual residence under the SR Scope of Escape Clause under the SR Scope of Escape clause under other instruments Comparison Conclusions Habitual residence (SR) To better understand the scope of escape clause we need to: recall the notion of habitual residence; compare the field of application of the habitual residence with the scope of the “escape clause”. Article 21.1 introduces the connecting factor of the Habitual Residence as general rule. “Unless otherwise provided for in this Regulation, the law applicable to the succession as a whole shall be the law of the State in which the deceased had his habitual residence at the time of death.” Habitual residence (SR) The provision of an uniform connecting factor in the Succession Regulation is a significant development in the process of harmonisation at European level. The adoption of a connecting factor which was close to the centre of interests of the deceased, thus satisfying the need for proximity, does facilitate the mobility of persons within the European area. The aim was to choose a criterion that was as free as possible from the substantive law of each State (unlike “domicile”) and that had an international origin. Habitual residence (SR) It responds to the need for integration and non-discrimination between individuals established in a Member State, whatever their nationality is. It is flexible. It ensures proximity. It must be "effective" and "sufficiently stable" (that is not temporary or occasional). It should reveal a "close" and "stable" link with the State concerned. It should be defined taking into account the "specific objectives" of each Regulation. European Court of Justice (Decision of 15 September 1994 Case C- 452/93) The habitual residence is described as "the place where the person concerned has established, with the intention of stability, the permanent centre of his interests", that is, his own centre of life. It is also stated that, in determining the place of habitual residence, account must be taken of all the factual circumstances which contribute to its assessment. European Court of Justice (Decision 2 April 2009, Case C-523/07) According to the case law of the European Court of Justice, the concept of habitual residence developed in relation to a given field of European law cannot be directly transposed into the framework of another field of European law. Therefore, the concept of habitual residence for the purposes of each European Regulation must be interpreted independently, taking into account the specific objectives pursued by the Regulation in question. Definition of habitual residence (SR) The Succession Regulation (as many other international instruments) lacks a definition of habitual residence. Recitals 23 and 24 of the Succession Regulation have been included to provide some guidance on the definition of the habitual residence of the deceased at the time of death. Recital 23 spelling out certain factual elements to be taken into account. Recital 24 listing certain complex cases. UNIT 2 The notion of habitual residence - Part II Recital (23) (SR) In view of the increasing mobility of citizens and in order to ensure the proper administration of justice within the Union and to ensure that a genuine connecting factor exists between the succession and the Member State in which jurisdiction is exercised, this Regulation should provide that the general connecting factor for the purposes of determining both jurisdiction and the applicable law should be the habitual residence of the deceased at the time of death. Recital (23) (SR) In order to determine the habitual residence, the authority dealing with the succession should make an overall assessment of the circumstances of the life of the deceased during the years preceding his death and at the time of his death, taking account of all relevant factual elements, in particular the duration and regularity of the deceased’s presence in the State concerned and the conditions and reasons for that presence. The habitual residence thus determined should reveal a close and stable connection with the State concerned taking into account the specific aims of this Regulation. Complex cases It is not always easy to establish which country is the country of the last HR of the deceased. For example: the deceased may have been temporarily posted for professional reasons to another country or may have lived in several countries without settling permanently in any of them. Recital (24) SR: complex cases In certain cases, determining the deceased’s habitual residence may prove complex. Such a case may arise, in particular, where the deceased for professional or economic reasons had gone to live abroad to work there, sometimes for a long time, but had maintained a close and stable connection with his State of origin. In such a case, the deceased could, depending on the circumstances of the case, be considered still to have his habitual residence in his State of origin in which the centre of interests of his family and his social life was located. Recital (24) (SR): complex cases Other complex cases may arise where the deceased lived in several States alternately or travelled from one State to another without settling permanently in any of them. If the deceased was a national of one of those States or had all his main assets in one of those States, his nationality or the location of those assets could be a special factor in the overall assessment of all the factual circumstances. First example: complex cases (Recital 24) The transfer for work to a country, even for a long period, could be not decisive for the purposes of establishing the habitual residence of the deceased where he had maintained a close and stable connection with the country of origin. The location of the centre of interests of the deceased’s family and the location of his social life determines such close and stable connection prevailing on the duration of the stay for professional/financial reasons. Second example: complex cases (Recital 24) In the second example the determination of the habitual residence can be complex in cases in which the working activity is carried out alternately in more than one State without settling in any of them permanently. In this case, the elements of nationality or location of the deceased’s main assets are taken into account in the assessment of the habitual residence. Case: Bram 1. Bram from the Netherlands was posted to Germany for a 5-year project. 2. He died while living in Germany. 3. His wife has continued to live in the Netherlands. 4. No children. 5. Family house in the Netherlands. 6. Bank acount in the Netherlands. 7. Bank account and rented house in Germany. What is the law applicable to Bram’s succession under SR? The authority dealing with the succession concludes that Bram had his habitual residence in the Netherlands because Bram’s family and friends and his main home were in the Netherlands. Although Bram’s job was in Germany, he intended to go back to the Netherlands on completion of his project in Germany. Dutch law will apply to Bram’s succession UNIT 3 Scope of the escape clause under the Succession Regulation – Part I One habitual residence only The Succession Regulation assumes that: each person has only one habitual residence and that the habitual residence can be always identified even in complex cases. Therefore, there is no space for any subsidiary rule to apply if the habitual residence is complex to assess as HR should always be established. How relevant is the intention of the deceased to assess the HR? It is argued if the intention of the person concerned is relevant or not to establish the habitual residence in a given State. According to the established opinion of the European Court of Justice expressed in case law related to other European Regulations the intention is relevant provided that it has been objectively expressed in the relations with third persons. (Decision of 22 December 2010, Case C-497/2010, Mercredi, among the others) Intention of the deceased The various elements, both objective and subjective, may have different connotations and impacts for the purposes of various European Regulations. In succession matters the intention of the deceased can be ascertained only after death and therefore, it should be externalised in factual elements in order to be taken into account. The intention might play a limited role in the definition of the habitual residence under the Succession Regulation. This is, at least, the opinion of some scholars as we are going to see later on. Length of the stay (SR) The length of stay in a country is significant but may not be decisive. A certain degree of stability is required, but Regulation (EU) No 650/2012 does not require a defined minimum period, unlike the 1989 Hague Convention, which provides for a minimum period of 5 years. It follows that the transfer of the habitual residence could have taken place shortly before the death as long as the centre of the deceased's life has really been transferred to the new country. Length of the stay (SR) However, the subsidiary jurisdiction provided by Article 10.1(b) might indicate that it may be difficult to change habitual residence in less than 5 years. The length of the stay may play a role in the application of the escape clause.