On 15 February 2006, the European Commission adopted a modified proposal for a Regulation on the law applicable to noncontractual obligations ("Rome II"). The proposal focuses on the question of civil liability for damage caused to others, particularly in case of accidents such as traffic accidents or accidents caused by a defective product. Although the proposal doesn't seek to harmonize the substance of national laws, its goal is to ensure that, when several courts are seized in different Member States in a cross border dispute involving non-contractual obligations, they apply the same law for the solution of the case thereby facilitating mutual recognition of court rulings in the European Union. The amended text incorporates, for instance, the proposals by the Parliament intended to uphold, in business to business relations, the choice of law agreements, entered into before the non-contractual obligation arises. Taking into account the difficulties to articulate a inter-institutionally generally acceptable and balanced solution as regards the question of defamation by the media (Article 6 of the original proposal), the Commission decided to propose the exclusion of that issue from the scope of the proposed Regulation, paving the way for the adoption of the Regulation.

      The proposal for the "Rome II" Regulation is part of ongoing efforts by the European Union to create a genuine European area of freedom and justice, in particular by establishing a comprehensive set of rules of private international law in civil and commercial matters at the Community level. The proposed Regulation completes the harmonisation of the applicable law rules in the area of civil and commercial obligations as a whole, whether contractual or non-contractual in nature. This started with the 1980 Rome Convention on the law applicable to contractual obligations - in respect of which the Commission has adopted a proposal to modernise it and transform it into a Regulation in December 2005- and in particular to complement the Regulation (EC) No 44/2001 of 22 December 2000 ("Brussels I") on international jurisdiction of courts.

      Text of the proposal is available at: http://europa.eu.int/eur-lex/en/com/pdf/2003/com2003_0427en01.pdf

      The Court of Appeals of Lithuania in its 20 December 2005 ruling in civil case No 2A-376/2005 UAB Švaresta v Vilkaviškis District Municipality has stated that a contracting party may waiver an agreement or any separate provision thereof if at the time of conclusion of such agreement the agreement or any provision thereof unreasonably grants a significant advantage to the other party. In such cases inter alia account should be also taken of the fact that one party unfairly took advantage over the situation where the other party is dependent on it, has economic difficulties, immediate needs, is economically weak, noninformed, non-experienced, is acting negligently, has no experience of conducting negotiations, as well as of the nature and purpose of the agreement.

      At the request of the party entitled to waive an agreement or any separate provision thereof, the court is entitled to examine an agreement or any separate provision thereof and amend them accordingly so that the agreement or any separate provision thereof would meet the requirements of good faith and reasonable business practice.

      Also, the court has stated that in cases where the forfeit is too excessive or the obligation has been fulfilled in part the court may reduce the forfeit, however, to the extent not below the loss incurred due to non-fulfilment or improper fulfilment of the obligation.

      The court in such cases will take account of the nature and purpose of an agreement as well as the facts whether the creditor has suffered direct loss due to non-fulfilment of the debtor's obligation, whether the debtor has fulfilled the obligation in part and whether the creditor has terminated the agreement upon reasonable notification to the other contracting party. requirements.

      On 9 February 2006, the Minister of Finance by Order No 1K-057 approved the "Regulations for considering project applications for receiving support in accordance with the European Economic Area and Norwegian financial mechanisms".

      The Supreme Court of Lithuania in its 18 January 2006 ruling in civil case No 3K-3-48/2006 I. B. v UAB PZU Baltija has stated that insurance contracts are usually executed in accordance with the standard rules offered by the insurer in respect of a certain type of insurance. An insurance company, in pursuit of its business purposes, can offer various modified forms of insurance services and certain privileges meeting the interests of the insured.

      An insurer must afford conditions for public availability of the rules of a certain type of insurance and submit copies of such rules to an insured person before entering into an insurance contract. In cases where an insurance contract is executed subject to the conditions prescribed by an insurer unilaterally, an insured person will be considered as a weaker party to the agreement while an insurer will carry a more stringent contractual liability.

      In insurance relations, professional activities of the stronger party are subject to higher requirements. Thus, in any case - through offer of standard or modified conditions of a certain type insurance contract - an insurance company must ensure legal certainty and compatibility of the terms and conditions of the contract.

      The court will assess the contents of the contract in this respect because the rights and interests of an insured person must be protected in priority order, seeking to protect an insured person from unfair conditions of an insurance contract thus ensuring the balance of interests of the contracting parties. In cases where the contractual terms and conditions are indefinite, ambiguous, mutually incompatible, the court will interpret the contract in bona fide manner, taking account of the interrelation of the contractual conditions, the essence and purpose of the contract, to the benefit of the party who has entered into the contract by way of accession, and also considering the fact that in insurance relations an insured person is a weaker party to the contract.

      On 13 February 2006, the European Commission published an analysis of over 120 detailed responses from the European fund industry and other stakeholders to its July 2005 Green Paper on enhancing EU framework for investment funds (IP/05/927). The European Commission invited comment on a range of proposals aimed at boosting the efficiency of the single market for investment funds. The responses showed strong support for improving implementation of the existing framework and also provided insight into potential solutions to some of the main challenges facing fund investors and market practitioners. A significant number of respondents considered that regulatory fragmentation was holding back the development of the alternative investment/hedge fund sector and common understanding of a 'private placement' regime was widely regarded as a necessary and sufficient response to this.

      There was a wide spread of opinion on whether the current approach to regulating investment funds is sustainable in the long term. Responses revealed some support for an eventual move towards principle-based regulation, counterbalanced by concerns that a fundamental overhaul of existing single market rules could give rise to unintended consequences and disruption.

      The Commission will now proceed with impact assessment work on possible steps to improve the regulatory environment for the European fund industry and investors. It has recently appointed industry expert groups and commissioned studies on possible ways to tap efficiency benefits of an integrated fund market. This work will feed into the Commission's White Paper on investment funds, scheduled for publication in autumn 2006.

      Please find the feedback statement on the responses at: http://europa.eu.int/comm/internal_market/securities/ucits/index_en.htm

      The Supreme Court of Lithuania in its 25 January 2006 ruling in civil case No 3K-3-59/2006 R. K. v Council of Zarasai District Municipality has held that a gross breach of office duties is such breach of labour discipline wher eby the provisions of laws and other legal acts directly governing an employee's work are roughly infringed or the office duties and the prescribed work procedure is otherwise roughly offended. The list of breaches of labour discipline specified in the Labour Code is not finite.

      Gross breaches of office duties may also include other offences whereby the prescribed work procedure is roughly violated. The court has stated that in deciding the issue whether the breach of labour discipline can be ascribed to gross breaches of the prescribed work procedure, it is necessary to analyse objective and subjective indicators of the breach of labour discipline - the nature of an employee's unlawful conduct, the loss incurred as a result of such breach and any other adverse circumstances, an employee's fault and its forms, the effect of the actions of other persons to such breach, and other important circumstances. Article 240.1 of the Labour Code sets forth the obligation of an employer to demand, before imposing a disciplinary sanction, an employee in writing to give written explanations concerning the breach of labour discipline.

      An employer's letter should specify a reasonable term for submission by an employee of his written explanations, the committed breaches of labour discipline in respect of which an employee must submit his explanations, and the recommendation that an employee should mention in his explanations all the circumstances relevant to imposition of the disciplinary sanction.

      An employee's explanations to the persons who are not authorised to impose disciplinary sanctions may not be equalled to such employee's explanations to his employer who is preparing the disciplinary liability file. An employee's explanations to persons other than his employer may be considered as written evidence.

      An employee's written explanations concerning the breach of labour discipline is a significant guarantee of lawfulness of imposition of a disciplinary sanction. The omission of such guarantee hinders due consideration of the breach of labour discipline and of the conditions of imposition of disciplinary sanctions, as well as the choosing of an appropriate disciplinary sanction.

      Before imposing a disciplinary sanction, account should be taken of an employee's characteristics, graveness of the breach of the labour discipline, the consequences evoked by the breach, an employee's fault, the circumstances under which the breach of labour disciple was made, previous work characteristics of an employee, and other significant circumstances.

      The Supreme Court of Lithuania in its 18 January 2006 ruling in civil case No 3K-3-44/2006 instituted pursuant to the complaint of the applicant J. M, the owner of J. Medelian II Etma, pertaining to unlawful actions of the bailiff has held that an individual enterprise which is incorporated while in marriage is recognised as common joint ownership of the spouses unless otherwise is provided for in the marriage agreement of the spouses or any other agreement. Both spouses are recognised as participants of an individual enterprise because they are co-owners of such enterprise. No authorisation to represent an individual enterprise is required for itsparticipant. A participant of an individual enterprise is a representative under law.

      The Supreme Administrative Court of Lithuania in its 10 February 2006 ruling in administrative case No A7-783-06 AB Gubernija v Competition Council has addressed the issue of protection of commercial secrets. The court has ruled that the right of an undertaking accused of infringement of the competition law and the right of other persons participating in the proceedings, including the applicant, to have access to the confidential material of the investigation is different in the interpretation of judicial practice of EU courts and EC legislation. Applicants have no right to have access to business secrets or other confidential information obtained by the competition authority during the investigation. All rules pertaining to the rights of access to the material of the case are applied only in respect of the undertakings on which the fine for infringement of competition rules is likely to be imposed. The rights of third parties are confined only to participation in administrative proceedings. The competition authority is obliged to protect the confidential information of undertakings entrusted to it. Consequently, under no circumstances the confidential information concerning the undertaking may be disclosed to the applicant. Any other interpretation would undesirably result in the possibility of an undertaking to attempt to lodge a complaint with the competition authority concerning the infringement of the competition law by another undertaking with the sole purpose - to acquire access to business secrets of the latter undertaking.

      On 8 February 2006, the Commission announced the plans to propose a new set of measures designed to force European telecom operators to reduce the cost of international roaming services for mobile phone users. According to the Commission, roaming charges should not be higher than those charged by mobile phone network operators domestically for the use of a different network (i.e. 'domestic roaming'). Currently, international roaming can cost up to 20 times as much as domestic roaming.

      The Commission has long been concerned with the cost and complexity of international roaming charges, payable by mobile phone users when they are diverted to a different company's network while they make or receive calls outside their "home network". The Commission's aim has been to elicit selfregulation on the issue, but since in Reding's words "the market does not work", it is now prepared to take legislative action. A draft regulation, which will not prescribe an "ideal" price, is due out in April.

      If approved, the new laws will be directly applicable in all 25 member states. Upon their approval by the European Parliament and the national governments, they should enter into force late in 2007.

      www.europa.eu.int/comm/transport/iw/index_en.htm

      On 2 February 2006, the European Parliament adopted the agreement on the draft European legislation to improve driving times and rest periods for professional drivers and step up checks on lorries. Drivers will have at least two full days off every two weeks and a longer rest period each day. The new legislation will complement the working time legislation and strengthen the social rules in the road transport sector. The package brings in an obligatory minimum daily rest of 9 hours for drivers (instead of the present 8 hours) and an obligatory rest of at least 45 consecutive hours every two weeks. It is a substantial innovation benefiting the well-being of drivers and their families and the safety of all.

      Another important measure is the reduction of maximum driving time for professional drivers. At present they can drive for up to 74 hours a week. When this instrument comes into force, no professional driver in Europe will be allowed to drive for more than 56 hours a week. It complements the legislation already in force since 23 March that limits the working time for professional drivers to an average of 48 hours a week over a four-month period. The draft legislation also provides that it will be the drivers' employers (sharing liability with the shippers) and no longer drivers themselves who will be held responsible in the case of infringement of these requirements. Moreover, one Member State will be able to penalise infringements committed in another Member State.

      Additional information on transport policy is available on the Commission's website: http://europa.eu.int/comm/transport/index_en.html