Recent developments in the EU: company boards; small claims; trade secrets

Balanced company boards?

The European Parliament has backed by a large majority the proposed directive on improving the gender balance on company boards. Its report makes some important changes to the Commission’s text, clarifying that the directive should be without prejudice to national law governing the appointment of listed companies’ board members, and stating that sanctions should only be applied for failure to comply with the selection procedure and not failure to reach the 40% target. Other changes, however, aim to strengthen the text and limit exemptions.

The future of the proposal remains uncertain, as work in Council has been subject to a blocking minority of member states who feel that the proposal does not comply with the principle of subsidiarity. One of these states, Germany, has however agreed as part of its coalition agreement to introduce a 30% target for women on boards.

Small claims: next steps

The European Commission has issued a proposal to amend the European Small Claims Procedure, designed to simplify the process for making a small claim in cross-border cases. The changes proposed include increasing the threshold from €2,000 to €10,000 (or equivalent amount); broadening the scope of claims classified as “cross-border”; and limiting court fees.

The UK Law Societies will scrutinise these proposals carefully.

Protecting trade secrets

On 28 November 2013, the Commission announced its proposal to strengthen the protection of trade secrets to encourage higher levels of investment in research, development and innovation. The protection of such secrets is highly fragmented within the internal market. The proposed directive seeks to introduce a common definition of a “trade secret” and what constitutes the unlawful acquisition, disclosure and use thereof. The Commission also proposes minimum rules and standards on the remedies that should be available to the holder for the purpose of civil law redress in case of breaches of trade secrets.

The proposal is based on the internal market legal basis and is therefore subject to the co-decision procedure by Parliament and Council.

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