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Reproduced with permission of 28 European Law Review (August 2003) 538-550 © Sweet & Maxwell

The 2003 action plan on European contract law: Is the Commission running wild?

Mel Kenny [*]

Introduction
Context of the Action Plan
-   The Europeanisation of private law
-   Legal polycentricity in cross-border trade
-   Communication on European contract law, 2001
The Commission's Action Plan 2003
-   The common frame of reference
-   Strengthening the acquis
-   The optional instrument
Evaluation of the Action Plan
-   Commitment to the vertical approach
-   Areas requiring special harmonization
-   A costless programme?
-   Lack of a co-ordinating mechanism
-   Proportionality?
-   Legal base, basic principles and legitimacy
-   Elaboration of the "optional instrument"
-   The fruits of Europeanisation
Conclusions

INTRODUCTION

This article evaluates the Commission's Action Plan for a more coherent European Contract law published in February 2003. The Action Plan is set in the context of the Europeanisation of private law, the legal polycentricity of cross-border trade and the debate initiated by the Communication on European Contract law of July 2001. Attention then turns to specific evaluation of the tools presented in the Action Plan: the common frame of reference, the improvement of the acquis and the passing of optional instrument(s). The article argues that the Action Plan lacks coherence: the Commission ostensibly supports the sector specific approach, yet identifies the necessity of horizontal measures; the plan is result-oriented, so that economic analysis and consideration of a coordinating mechanism for multi-level conflicts are suppressed. Attention is also drawn to the issues of the legal base, the compatibility of reform with basic principles of EC law and the legitimacy of the exercise. The lack of clarity on the precise form which the "optional instrument" should take, and the Commission's intent to co-opt academic research are also considered.

Bismarck is reputed to have said: "If you like laws and sausages, then you should never look to see how they are made." The EC Commission's attempts to ensure the coherence of European contract law remind us of Bismarck's scepticism towards law-making: the prospect may be appetising, but the product dubious. The aim of this article is to evaluate the Commission's Action Plan on European Contract law (Action Plan) published in February 2003.[1] This involves placing the Action Plan in the context of the "Europeanisation of Private law" and the legal polycentricity of cross-border trade; processes which have gained in momentum in the past few years and led to the Commission's Communication on European Contract law of July 2001 (Communication).[2] The work then turns to the more specific evaluation of the Action Plan. [page 538]

CONTEXT OF THE ACTION PLAN

The Europeanisation of private law

The Europeanisation of national private law systems started in the 1980's with the single market programme and the passing of the Single European Act.[3] A review of EC secondary law discloses the areas in which the contents of the contract and private law relationships generally, have been laid down, influenced or "Europeanised". The majority of this secondary law has attempted to impose standards in the fields of consumer and company law.[4] Such direct measures are supplemented with an indirect pressure on contractual provisions: via the block exemptions in competition law,[5] via provisions based on the EC's competences in the diverse areas of Environmental, Social Policy, Health and Safety and in the elaboration of Community-wide technical standards.[6] Here one can see how the EC, with the Member States,[7] intervenes in national legal orders in accordance with the Treaty [8] to secure free movement and the wider Community policy objectives.[9] According to the case-law this intervention is at once dynamic [10] and progressive.[11] Moreover, the communitarisation of procedural law, largely achieved in 2001, opens a [page 539] new dimension of Europeanisation involving the emancipation of the EC from international harmonisation initiatives.[12] This process is cumulative: Europeanisation itself now constitutes a justification for the further concentration of private law provisions.

Despite the momentum lent by market integration to the Community, the goal of integration is not to simply displace provisions of national law; respect for national identities is also a Community objective.[13] The balance the EC has to strike between these objectives means that the question of the extent to which the EC has truly integrated the market has been brought into ever sharper focus.

The real integrational effects of secondary law, whether measures of "full" or "minimum" harmonisation has long been the subject of debate; EC law has simultaneously had integrative and disintegrative effects. Regulations, for example, frequently fail to produce uniformity due to compromises made between the Member States (e.g. in the treatment of national insolvency requirements, in company law and in national measures of consumer protection).[14] Meanwhile, directives provide only a framework for national transposition, whereby Member States can insist on higher national standards where the directive is one of minimum harmonisation.[15] Minimum harmonisation thus represents a double compromise between market integration and the achievement of wider policy objectives, and the imperatives of market integration and respect for national identities. From the EC perspective this is a pragmatic solution, obviating the need for unanimity whilst improving the EC's law-making capacity. Finally, national law reform initiatives can be superimposed on the legal fragmentation generated by secondary law, producing further cleavages between and amongst the provisions of national and EC law.[16]

Given the tensions between the goals of integration and the uneven pattern of harmonisation, between national and EC competences, between national identity and secondary law, between the level playing field and the need for flexible responses, an array of attempts [page 540] aimed at extracting a common law of Europe (ius commune) have flourished.[17] In the main these initiatives have identified a need to consolidate EC law: to replace the vertically fragmented with more uniform norms.

Legal polycentricity in cross-border trade

The problem posed by this cumulative and supplementary, yet contradictory and gap-creating, galaxy of secondary law is well known. What has received less attention is that this problem also extends to the relationship between international, national and EC law. Here States have elaborated conflicts' approaches to manage the co-ordination of norms, identify the appropriate forum and manage the relationship between mandatory rules.

Moreover, through the choice of law the trading parties have attempted to emancipate themselves from national law. This trend found materialisation in the emergence of the new lex mercatoria; providing parties with an autonomous regulation of their contracts. The operation of this new plurality of sources is increasingly seen in terms of a polycentric multi-level system within which law emerges from the interplay of national, international, regional, conflicts, and the new lex mercatoria.[18] In his analysis of the relationship between national and EC law MacCormick has described the dangers of a "monocular view" faced with concurrently valid legal orders.[19] The danger of such a perspective is even greater in polycentric private law, for today's application of private law is not possible without taking into account non-national legal sources, The legally plural context of cross-border transactions results in an ever greater need to coordinate these interwoven legal orders.

Communication on European contract law, 2001

The Communication of July 11, 2001 can be seen as a first step in consolidating the contractually relevant aspects of EC secondary law. Such a consolidation is intended to act as a catalyst in the wider private law Europeanisation process. The Communication focused attention on the problems concerning the uncoordinated development, transposition and operation of EC law set to the background of the divergent provisions of national law; identifying the way in which the application of national standards and concepts [page 541] compromised the uniform application of EC law.[20] The Communication aimed at initiating debate along the lines of four options:

This listing, however, should not allow deflection from the result-orientation of the Communication: option I has an alibi function, whilst option III is also a "non-option." The Communication is also conspicuous for its horizontal scope, going beyond the strict boundaries of cross-border contract law.

THE COMMISSION'S ACTION PLAN 2003

The Communication triggered an intensive debate, to which the Action Plan claims to respond. The Commission observes that a narrowing of the reform options can be undertaken; that there is no need to abandon the traditional sector specific approach.[25] However, the Commission also recognises that, aside from appropriate sector specific responses, a further discussion of the options II-IV is required to secure "greater coherence" in EC private law. This second aspect of the conclusions is obscured by the commitment to the sector-specific approach and the simple renaming of the original options. Additionally, the Commission attempts no demarcation of the renamed options so that their precise interplay is contingent upon the next consultative round:

The search for greater coherence which these renamed options represent, should be placed in the wider context of consolidation seen in associated Commission initiatives, in particular: The Communication and Action Plan on Simplifying and Improving the Regulatory Environment,[31] The White Paper on European Governance,[32] The Green Paper on a European Payment Order [33] and The Green Paper on the conversion of the [page 543] Rome Convention into a Community Instrument,[34] which all evidence the trend towards substantive and procedural harmonisation.

EVALUATION OF THE ACTION PLAN

Commitment to the vertical approach?

The Commission views its approach as problem-oriented. It examines the inconsistencies which flow from the interplay of directives and the approaches adopted by the Directorates-General in the law-making process.[35] However, this is done whilst the Commission (consciously?) obscures the horizontal implications of its analysis.

Whilst the Action Plan commits the Commission to the sector specific approach, it also sees the need for a general overhaul of fundamental concepts such as the conclusion and validity of contracts; non-performance and unjust enrichment;[36] specific provisions concerning the representation of foreign companies;[37] the general, formal demands made of contracts;[38] and a more uniform treatment of national provisions on the exclusion or limitation of contractual liability. This leaves little room for a sector-specific approach. Moreover, the Commission determines that fragmentation is not only produced by divergent national mandatory rules, but also the de facto binding effect of non-mandatory national law.[39] The Commission attributes this to the fact that for many the choice of law is neither practical nor desirable.[40]

The Commission's conclusion that a general overhaul is necessary cannot be easily squared with the Action Plan's commitment to the sector-specific approach. The general frame of reference functions horizontally between interpretations of the same term in diverse directives which, in similar situations, ought to produce a single interpretation.

Areas requiring special harmonisation

Beyond the overhaul of fundamental concepts, the Commission also determines a range of specific areas ripe for special harmonisation. SME's and "active" consumers are identified as the particular victims in this regard.[41] An important area identified is that of services, particularly Financial and Insurance Services, where, despite the ease with which the services could be substituted, products have to be tailored to meet national mandatory rules. Such national requirements fragment the market: precluding market entry, reducing the efficiency of transactions and intensity of competition as, for example, insurance risks cannot be pooled.[42] [page 544]

Similar fragmentation is produced in the area of property law, especially in matters relating to the transfer and reservation of title.[43] Here divergence between national laws means that the seller's security disappears once goods have crossed the border, with the result that the seller's risks, margins and willingness to trade vary across the Community.[44] The choice of law provides no solution in this regard, because this applies only to contractual rules and not to rights in rem. Secondary law provides only a partial answer to this problem.[45] Furthermore, some security instruments are simply unknown in other jurisdictions.[46]

The Commission also finds fragmentation in the areas of cabotage transport, factoring and in consumer protection.[47] Finally, the Commission reaffirms that neighbouring areas, in / particular Tort law, are to be integrated into the review; extending the project beyond the province of contract law.[48]

The commitment to a sector specific approach is compromised by the number of fields of law, on either side of the strict delimitation of contract, which require resort to harmonisation measure(s). This could be the form of special chapters in the frame of reference, or invite specialized optional instrument(s). The Action Plan thus constitutes more than an exercise of sector specific "spring cleaning".

A costless programme?

The Commission underscores its intention to maintain the "consultative process". As the proposals are contingent on future debate this allows the ambivalent presentation of the optional instrument and frame of reference, whilst substantive criticism is barely addressed. The "consultative process" thus appears a convenient method by which to avoid taking firm positions and to "deal" with criticism. A more balanced assessment of the advantages and disadvantages of reform is called for.

Some arguments speak for the reform proposals. Primarily, proponents argue, the common frame of reference could function as a model, supplying parameters for contractual negotiations. Meanwhile, the optional instrument could ease or facilitate cross-border trade. Both instruments could better reflect the needs of SME's and consumers. Yet the introduction of such instruments could also work to increase parties' informational costs: a superficial frame of reference and a dearth of optional instruments would represent little more than a bonanza for the cross-border legal services.

Yet the Action Plan is conspicuous for the lack of any balancing of arguments. Despite the calls for economic assessment the Commission side-steps this issue. Similarly, no position is taken on the issue of the necessary flanking measures (judicial cooperation, legal training, re-organisation of the European courts). Such measures are necessary in order to elaborate a new and networked jurisprudence, and to improve legal certainty and thus [page 545] reduce the courts' workload. Whilst a reliable prognosis of the costs and benefits of reform is not easy, proceeding without such an analysis is even more questionable.

Lack of a co-ordinating mechanism

The Commission submits that the frame of reference should take into consideration the pre-existing inputs of trading parties, national rules, the established jurisprudence, contractual practice, the Acquis, as well as international instruments, in particular the CISG rules.[49] Yet the inclusion of so many sources threatens further fragmentation, as between the treatment of internal, EC and international transactions. More positively, the attempts to integrate these inputs can also be seen as a concession towards third countries and the international formulating agencies.

The more sources which the Commission seeks to integrate into its approach, the greater the problem becomes of how this nonnative diversity can be coordinated. Notwithstanding the potential for multi-level conflicts this question is again avoided by the Commission, despite the fact that its attention was brought to the urgency of this problem.[50]

Proportionality?

The Commission underscores that the elaboration of the reform options should not be seen as an opportunity to re-invent the wheel, but as a chance to combine current research projects.[51] To this end the Commission intends to fund a vast research project. Whether the hundreds of academics engaged in ius commune research can be efficiently coordinated can be doubted. Given that the existing projects pursue different approaches, methods and objectives, and that some of the working groups are further ahead than others, there is a risk that work will be duplicated in any forced "cohabitation ". Whilst the coordination of an umbrella group may appear easier for the Commission, there is a danger that concentrating academic capacity will obscure the breadth of alternatives.

A danger of the Commission's approach lies in the political motivation of its proposals. That the frame of reference is to be prepared by a broad working group, in which no existing group or individual is to be allowed to dominate is an aspect of this. Yet given the constraints of the need for consensus and the fact that there is no "European concept" of a concluded contract the search for a commonality risks degenerating into a search for the lowest common denominator. Furthermore, by calling for a new research group, the Commission indicates that any instruments passed should appear novel rather than pragmatic. Again, the impression is underscored that the Commission has wider ambitions than are explicitly stated. Revealingly, the question of whether the frame of reference should be binding on Council and Parliament has been left open. [page 546]

Legal base, basic principles and legitimacy

Quite astounding is the avoidance of the question of the Commission's competence to initiate legislation along the lines suggested. Again, this question was raised in the responses to the Communication. Moreover, the Court of Justice's positions in Keck and Tobacco announced caveats to the functionalism presumed in the Action Plan.[52]

The Commission assumes that, if it does not have the competence, a new legal base will be created if necessary. Yet absent a legal base the discussion of the optional instrument and its compatibility with subsidiarity and proportionality is premature. Again, Tobacco sets the limit that a divergence between national rules does not provide an adequate basis for the adoption of directives. If this is read strictly the Commission will have to wait for a new legal instrument to be introduced at the next IGC. Conversely, it can be argued that harmonisation is necessary in terms of Articles 3h, 95(1) und 5(3) (ex 3h, 100a(1) and 3b(3)) EC because the alternatives-recasting the conflict rules, harmonisation via regulations, resort to "full" harmonisation, or continued application of minimum harmonisation-are simply inadequate. This would also render measures compatible with the principle of subsidiarity. Yet if this were held to be the case, the legal bases of Articles 65 and 95 (ex Articles 73m and 100a) EC would apply only for vertical solutions. Whilst this may explain the Commission's commitment to such an approach, this would require a qualified majority for the passing of legislation.[53] Even if such a majority could be produced, it would be likely that the "losing" parties would take legal action to oppose the measures.[54] Yet once the vertical remit of these articles is exceeded, the adoption of horizontal measures would require resort to Article 308 (ex 235) EC which requires the greatest law-making exertion: unanimity.[55] The hostility of the UK government's response suggests that the parameters for a compromise solution are limited.[56]

The question of the legal base indicates the difficulty of squaring reform with the basic principles and established jurisprudence of EC law. Moreover, these observations raise a further question as to the legitimacy of the entire project. In this regard Joerges argues that the legitimacy of Europeanisation depends on the quality of the process by which the law is rationalised. The conclusion which can be drawn from this survey is that the quality of [page 547] the process and the legitimacy of the exercise are low; and that the acquis will be damaged rather than improved as a result.[57]

Elaboration of the "optional instrument"

The legal base question is linked to the elaboration of the form of the optional instrument. Again, the form and opportuness of the instrument awaits resolution.

There are a number of alternatives as to the form which the optional instrument could take: a "minimum " or "full " harmonisation Directive, a non-binding Recommendation or a Regulation. The form selected will have implications for the instrument's utility. Moreover, different questions regarding the instrument's proportionality and compatibility with the principle of subsidiarity arise according to which form is selected. Finally, a further question concerns the relationship between the choice of law and the danger of fragmentation through derogations.[58] The UNIDROIT Convention on Factoring, under which the parties, if they choose the convention, are precluded from derogating, could inform this debate.[59]

The issue of whether an optional instrument should adopt an opt-in or opt-out construction is also opaque. Again the Commission awaits consultations rather than supplying any guidance. A brief consideration of the options discloses the complexity of this issue. An opt-in instrument would allow the parties the choice of law, whilst an opt-out instrument could secure a broader field of application. However, an opt-in instrument has the virtue that it could be applied in cross-border and "internal" situations, yet the disadvantage that it could prove irrelevant, were trading parties to routinely ignore the instrument. Another question is whether a "mixed" solution is possible: an opt-out instrument for cross-border, an opt-in instrument for internal situations. Similarly, the instrument could initially take an opt-in form, converting into an opt-out instrument at a later stage. Yet a revealing dilemma arises in this context: whilst the Commission assumes that the optional instrument is made for the trading parties, it appears to fear that the instrument could prove worthless; whilst "committed" to the choice of law, the Commission signals that it is afraid that trading parties will "vote with their feet". A final observation is that, should the Commission be truly committed to a sector specific response, a number of optional instruments could also recommend themselves; a range of instruments which could react in a more differentiated way, for example in the insurance sector, to the variable requirements laid down in national mandatory rules.

The fruits of Europeanisation

The extent to which the Action Plan engages a deliberation of the issues arising from the Communication is minimal. Critical comments (on the need for reform and the legal base), alternative concepts (economic analysis and conflicts approach) and outstanding issues [page 548] (flanking measures and competition of legal orders) are simply ignored.[60] The commitment to consultations is an illusion. Clearly, one cannot rely on Commission unwillingness to engage in consultations as obviating the need for further debate on the grounds that it will never prove opportune to introduce the instruments.

The Commission has invited responses to the Action Plan.[61] Whether those representing "non-Commission" positions will bother to respond, remains to be seen. Additionally, the Commission intends to secure the exchange of information between trading parties on contractual practice by establishing an open forum website.[62] The Commission intends to fund research meeting the objectives laid down in the Action Plan within the framework of the Sixth Framework Programme in Research and Technological Development.[63] This may be seen as an attempt to establish a body fulfilling the role of a European Law Institute, though again this is probably not the "correct" language. The only element of certainty about this is that the hitherto forgotten private lawyers are to reap the fruits of engaging in European research and that the race is on for a "father/mother" for the nascent European civil code.

CONCLUSIONS

The evaluation of the re-named options does not disclose any significant narrowing of the options presented in 2001. Of those, only Option I (to do nothing) is rejected.

The Commission undermines its "commitment" to a sector specific approach. The need identified for a general overhaul of fundamental concepts, the breadth of specific sectors requiring horizontal measures and the inclusion of neighbouring fields of law erode the foundations of this commitment. Similarly, the resurrection of Option IV reaffirms the need for a horizontal approach. The Action Plan sanitises the language of the Communication; suppressing awkward references to a Civil Code. Moreover, the discrepancy between the Commission's positions and the implications of its analysis reinforces the impression that any results will be the child of compromise. This underscores the perception that the Commission relies on its institutional experience: presenting its positions as if they were the products of consultation in the hope that they will develop a momentum of their own. The danger of this is that the Acquis will be damaged rather than improved.

It is unfortunate that the Commission only took selective account of the responses to the Communication, reinforcing the impression that it is not concerned with substantive debate. The Commission also has an atypical understanding of a number of fundamental terms: treating the "open consultative process" as a non-reflective means to approve its own pre-existing proposals. One is tempted to ask why the Commission did not first produce a frame of reference by which we could understand the Action Plan. Amongst this (intended?) confusion, the real difficulties in coordinating legal sources in the multi-level [page 549] system have been obscured. The priority should lie less with the construction of a frame of reference or optional instruments and more in the establishment of clear rules to bring transparency to the interplay of divergent legal orders.

Yet the final contents of both the frame of reference and the optional instrument(s) will be decided neither by the trading parties nor the interested academics, but in the horse-trading that is EC law-making. Given this combination of result-orientation and sausage-making, parties interested in shaping the process should be aware of the risks: their capacity to influence the Commission is limited. Those not within reach of EC funding will be in a poor position to provide any critical input.

The danger is great that either nothing will happen at great expense; concluding the exercise with the observation that the time is not opportune for change (return to Option I), or that chaos will ensue to the detriment of trading parties and consumers. The principal source of chaos is that the debate will proceed on the basis of the wrong propositions: the EC must respect national identities whilst sweeping away anachronistic and market-fragmenting national law; the proportionality of reform must be proven, notwithstanding any bias against economic analysis. The reform project should be based on a balancing of such complex yet reciprocal problems which demand subtle responses rather than the assertion of pre-existing positions. Similarly, the Commission's linguistic contortions should be understood as a warning: what does the Commission mean by arguing for a frame of reference and an optional instrument, yet insisting that this is not to be understood as a nascent pan-European Civil law? Whilst the traditional approach finds approval, the Commission also identifies the need to avoid the risks associated with the outbreak of a new legal particularism in Private law. Do such positions signal a strategy or is the Commission unaware of the contradictory signals it is sending? The Action Plan deals with these more subtle balances inadequately. The Commission should not be surprised, recalling Bismarck, if there is simply no market for such an expensive and dubious sausage. [page 550]


FOOTNOTES

* Dr. iur., LL.M., Research Centre for Europeanised and Internationalised private Law. Lucerne University. Switzerland (<mel.kenny@unilu.ch>). I thank Prof. Andreas Puffer for his critical comments on the text.

1. Communication-A More Coherent European Contract Law - - An Action Plan COM(2003) 68 final, February 12. [2003); (2003) O.J. C63/1,March 15, 2003. <http://europa.eu.int/comm/consumers/cons_int/safe_shop/fair_bus_pract/cont_law/com_2003_68_en.pdf>;Staudenmayer, "The Commission's Action Plan on European private Law" (2003) E.R.P.L. 113; documentation at: <http://europa.eu.int/comm/consumers/cons_int/safe_shop/fair_bus_pract/cont_law/index_en.htm>.

2. Communication on European Contract Law, COM(2001) 398 final, July 11, 2001; (2001) O.J. C255/l, September 3, 2001: <http://europa.eu.int/comm/consumers/cons_int/safe_shop/fair_bus_pract/cont_law/cont_law_02_en.pdf>.

3. Single European Act [1987] 0.J. L169/1, June 29, 1987; UK incorporation: European Communities (Amendment) Act 1986.

4. Based on Art.153 (ex 129a) EC: Directive 93/13 on unfair terms in consumer contracts [1993] O.J. L95/29; Directive 97/7on the protection of consumers in respect of distance contracts [1997] O.J. L144/19; Directive 94/47 on the protection of purchasers in respect of certain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare basis [1994] O.J. L280/83; Directive 85/577 to protect the consumer in respect of contracts negotiated away from business premises [1985] O.J. L372/31; Council Directive 90/314 on package travel, package holidays and package tours [1990] O.J. L158/59; Directive 87/102 on the approximation of the laws, regulations and administrative provisions of the member states concerning consumer credit [1987] O.J. L42/48 (amended by: Directive 90/88 [1990] O.J. L61/14, and Directive 98/7 [1998] O.J. L101/17); Directive 1999/44 on certain aspects of the sale of consumer goods and associated guarantees [2000] O.J. Ll60/1. See Annex 1 of the Communication, cited above n.2, listing contractually relevant secondary law.

5.Regulation 123/85 on the application of Art.85(3) (now 81(3)) EC of the Treaty to Certain Categories of Motor Vehicle Distribution and Servicing Agreements [1985] O.J. L15/16; Regulation 1475195 on the application of Art.85(3) EC to Certain Categories of Motor Vehicle Distribution and Servicing Agreements [1995] O.J. L145/25; Regulation 4087/88 on the application of Art.85(3) EC to Categories of Franchise Agreements [1988] O.J. L359/46; Regulation 2790/1999, December 22, 1999 on the application of Art.81(3) EC to Categories of Vertical Agreements and Concerted Practices [1999] O.J. L336/21; Regulation 3932/92 on the application of Art.85(3) of the Treaty to Certain Categories of Agreements, Decisions and Concerted Practices in the Insurance Sector [1992] O.J. L398n; Regulation 240/96 on the application of Art.85(3) EC to Certain Categories of Technology Transfer Agreements [1996] O.J. L31/2. See: Green Paper on Vertical Restraints COM (96) 721, final.

6. Public Health Art.152 (ex 129) EC; Environmental Protection Art.174-176 (ex 13Or-130t) EC; Employment: Title VIII (ex Title VIa) EC; Industrial Policy Art.157 (ex 130) EC; Economic and Social Cohesion Title XVII. (ex Title XIV) EC; Research and Development: Title XVIII (ex Title XV) EC

7. The Commission has an exclusive competence only in competition law.

8. No harmonisation measures: Education. (Arts 149-150 (ex 126-127) EC) and cultural policy (Art.151 (ex 128) EC).

9. Brüggemeier & Joerges, "Europäisierung des Veftrags- und Haftungsrechts" in Müller-Graf, Gemeinsames Privatrecht in der Europäischen Gemeinschaft, (2nd ed., Baden-Baden, Nomos, 1999) p. 16: "The influence of the Community on contract law has gone through different phases, setting varying integrative accents. A differentiation is called for between the competition-based ... transformation of distribution agreements, the efforts to achieve market integration through deregulation and/or the harmonisation of national law, the harmonisation of minimum standards in social and consumer protection law, and the codification of common contractual principles ..." (my translation).

10. e.g. Case C-208/00, Überseering, November 5, 2002, para. 52.

11. The EC aims at high standards: Art.95(3) (ex 100a(3)) EC; Art.153 (ex 129a) EC.

12. Hess, "Die Integrationsfunktion des Europäischen Zivilverfahrensrechts" (2001) IPRax (Praxis des internationalen Privat und Verfahrensrechts) 389, at p. 395: "This development places third countries and "competing" international institutions under pressure ... In addition to the procedural uncoupling a substantive disconnection has taken place: The European area of Justice is based on premises other than traditional harmonisation. Because of the surrender of Sovereignty ... a novel networking of national systems can take place. The procedural law of the Member States has also, through Art.6 ECHR and referrals to the Court of Justice ... been brought together. The development of the cross border judicial cooperation, as well as the adoption of mutual recognition to secure the free movement of judgments, show that international conventions are no longer the appropriate tools ..." (my translation).

13. Art. 8(3) (ex F) TEU.

14. Burbidge "Cross Border Insolvency within the EU: Dawn of a New Era", (2002) 27 E.L. Rev. 589.

15. Resolution of May 7, 1985 on a new approach to technical harmonisation and standards, [1985] O.J. C 136/1; Minimum harmonisation: Arts 95(4) (ex 100a(4)) EC; 176 (ex 13Ot) EC; 153(5)(ex 129a(3)) EC; Pelkmans, "The New Approach to Technical Harmonisation" (1986-7) 25 J.C.M.S. 249, pp. 251-252.

16. Jayme & Kohler, "Europäisches Kollisionsrecht 2002: Zur Wiederkehr des internationalen Privatrechts" (2002) IPRax 461, p. 462.

17. ius commune approach: van Gerven, Lever & Larouche, Cases Materials and Text on National, Supranational and International Tort Law (Oxford, Hart, 2000); Schulze, Engel & Jones (eds.), Casebook Europäisches Privatrecht (Baden-Baden, Nomos, 1999); Schulze & Schulte-Nolke, Casebook Europäisches Verbraucherrecht (Baden-Baden, Nomos, 1999). Working Groups: Study Group on a European Civil Code co-ordinated by Prof. C. von Bar: (<http://itl.irv.uit.no/trade_law/doc/EU.Contract.Principles.1997.preview-.toc.html>). Comment: Riedl, "The Work of the Lando-Commission from an Alternative Viewpoint," (2000) 8 E.R.P.L. 7. See: <http://www.cbs.dk/departments/law/staff/ol/commission_on_ecl/index.html> and <http://www.sgecc.net>; the Tilburg Group on Tort Law: <http://www.civil.udg/es/tort/principles.htm>; the Trento Group on the Common Core of European Contract: <http://www.jus.unitn.it/elsg/common-core/home.html>; the Society of European Contract law (SECOLA): www.secola.org; Working Team on Extra-Contractual Obligations <http://www.europe.uos.de/ECC index.htm>.

18. Puffer, Response, <http://europa.eu.int/comm/consumers/cons_int/safe_shop/fair_bus_pract/cont_law/comments/5.4.pdf>, ss. 10-11. Puffer, Zivilrecht im gemeinschaftsrechtlichen Kontext, (Bern, Stämpfli, 2001), s.77: "Community law operates to adjust or harmonise the law but simultaneously produces an additional regulatory level and so leads to greater complexity. National law is seldom wholly suppressed, but is, rather, complemented." (my translation).

19. MacCormick, "Beyond the Sovereign State" (1993) 56 M.L.R. 1.

20. Case C-357/98, The Queen v Secretary of State Exp. Nana Yaa Konadu Yidom, [2000] E.C.R. 1-9265; [2001] 2 C.M.L.R. 8, para. 26.

21. ibid., paras 49-51.

22. ibid., paras 52-56. See: Schmid, Response: <http://europa.eu.int/comm/consumers/cons-int/safe-shoplfair-bus-pract/cont_law/comments/5.17.pdf>.

23. Leible, Response, p. 9 <http://europa.eu.int/comm/consumers/cons-int/safe_shop/fair_bus_pract/cont_law/comments/5.10.pdf>, based on: Communication-Simpler Legislation for the Internal Market, COM(1996) 204 final; Evaluation: Communication-COM(2000) 104 final of February 28, 2000.

24. Cited above n.2, Communication, para. 65.

25. Cited above 11.1, Action Plan, Executive Summary.

26. ibid., para. 21., p. 6. Case. C-160/00, Simone Leitner [2002] E.C.R. 1-2631.

27. ibid. Action Plan, para. 21, p. 6. Ibid. Case C-l60/00. Contrast AG Tizzano's systematic analysis of Art. 5, Directive 90/314 (paras 27-33, pp. 2642-4; paras 34-36, pp. 2645-6 Directive 85/374; paras 37-46, pp. 2646-9) with the interpretation of the Court of Justice which underscored the implicit need for compensation.

28. Acquis Communautaire: state of development of EC law: irreversible essential rights, obligations and remedies. (Art.3 (ex Art. C) TEU Consolidated Version).

29. Cited above n. l, para. 77, p. 14.

30. ibid. Executive Summary.

31. Communication-Simplifying and Improving the Regulatory Environment (COM(2001) 726 final), <http://europa.eu.int/eur-lex/en/com/cnc/2001/com2001_0726en01.pdf>, Communication -- Action Plan -- Simplifying and Improving the Regulatory Environment (COM(2002) 278 final): <http://europa.eu.int/eur-lex/en/com/cnc/2002/com2002-0278en01.pdf>.

32. European Govemance -- A White Paper (COM (2001) 428 final), [2001] O.J. C287/1, October 12, 2001: <http://europa.eu.int/eur-lex/en/com/cnc/2001/com2001-0428en01.pdf>

33. Green Paper -- On a European order for payment procedure and on measures to simplify and speed up small claims litigation (COM(2002) 746 final): <http://europa.eu.int/eur-lex/en/com/gpr/2002/com2002-0746en01.pdf>.

34. Green Paper -- On the conversion of the Rome Convention of 1980 on the law applicable to contractual obligations into a Community instrument and its modernisation (COM(2002) 654 final): <http://europa.eu.int/eur-lex/en/com/gpr/2002/com2002-0654en01.pdf>; (EC-Rome Convention, 80/934/EEC [1980] O.J. L266/1 of October 9, 1980; consolidated [1998] O.J. C27/34, January 26, 1998.

35. Cited above n. l, Action Plan, paras 17-18, ss. 5-6.

36. ibid. Action Plan, para. 33, p. 7 .

37. ibid. para. 34, pp. 7-8.

38. ibid. para. 35-36, p. 8.

39. ibid. para. 32, p. 7.

40. ibid. paras 28-29, p. 7 .

41. Cited above n. l. Action Plan, paras 30-31, p. 7. "Active consumers": Art.5 of the EC-Rome Convention.

42. ibid., paras 47-48, p. 9.

43. ibid., paras 41-42, p. 8.

44. ibid., para. 43, p. 9.

45. ibid., para. 41, p. 8. Directive 2000/35 on combating late payment in commercial transactions, [2000] O.J. L200/35 of August 8, 2000 addresses this problem in part by providing for the validity of retention of title clauses.

46. ibid., para. 45, p;9: citing the German Sicherheitsübereignung.

47. ibid., paras 49-50, pp. 9-10.

48. ibid., para. 67, p. 12.

49. ibid., paras 62-64, pp. 11-12. CISG Rules problematic as they are applicable in 12 of the current 15, and in 20 of the 25 prospective Member States. CISG rules apply only to the sale of goods and are routinely excluded by larger undertakings. Gaps in the rules on damages, agency, set-off, payments.

50. Cited above n.18, Fuffer, at p. 22.

51. Cited above n.1. Action Plan, para. 66, p. 12.

52. In Keck the Court of Justice rejected .the need for an ever-deeper harmonisation of national sales modalities' law: Joined Cases C-267 und 268/91, Keck anti Mithouard [1993] E.C.R. 1--6097; [1995] 1 C.M.L.R. 101, paras 16-17; Maduro, "Reforming the market or the state? Article 30 and the European Economic Constitution: economic freedom and political rights" (1997) 3 E.L.J. 55; Weatherill, "Recent case law concerning the free movement of goods: mapping the frontiers of market integration", (1996) 36 C.M.L. Rev. 51. In Tobacco the Court of Justice indicated the extent of the Community's law-making capacity: Case C-376/98, Germany v Parliament and Council (Tobacco) [2000] E.C.R. 1-8419; [2000] 3 C.M.L.R. 1175, para. 83: "... To construe ... (Art.95) as meaning that it vests ... a general power to regulate the internal market ...would also be incompatible with the principle embodied in Art.3b of the EC Treaty (now Art.5) ..." para. 84: " ... If a mere finding of disparities between national rules and of the abstract risk of obstacles to the exercise of fundamental freedoms or of distortions of competition liable to result therefrom were sufficient to justify the choice of Art.100a as a legal basis, judicial review of compliance with the proper legal basis might be rendered nugatory ..."

53. Pursuant to Art.251 (ex 189b) EC.

54. Under Art.230 (ex 173) EC.

55. Opinion 1/94 WTO; [1995] I C.M.L.R. 205, E.C.R. 1-5267 [1994], para. 59, pp. 5405-6.

56. UK Government Response: <http://europa.eu.int/comm/consumers/cons_int/safe_shop/fair_bus_pract/cont_law/comments/l.4.pdf>

57. Joerges, "Zur Legitimität der Europäisierung des Privatrechts -- Überlegungen zu einem Recht-Fertigungs-Recht für das Mehrebenensystem der EU" EUI Working Paper, LAW No.2003/02, p. 37.

58. Cited above n. l, Action Plan, para. 62, p. 11; para. 93 p. 15.

59. UNIDROIT Convention on International Factoring, Ottawa, May 28, 1988, Art.3: <http://www.unidroit.org/english/conventions/c-fact.htm>

60. In addition to UK Government cited above n.56: See Consumers' Association: <http://europa.eu.int/comm/consumers/cons_int/safe_shop/fair_bus_pract/cont_law/comments/3.2.pdf>, The Law Society: <http://europa.eu.int/comm/consumers/cons_int/safe_shop/fair_bus_pract/cont_law/comments/4.12.pdf>, The Bar Council: <http://europa.eu.int/comm/consumers/cons_int/safe_shop/fair_bus_pract/cont_law/comments/4.14.pdf>, Stellung.

61. ibid., para. 99, p. 16.

62. ibid., para. 87, p. 15.

63. ibid., para. 68, p. 12; Decision 1513/2002, June 27, 2002, [2002] O.J. L232/1, August 29, 2002.


Pace Law School Institute of International Commercial Law - Last updated May 22, 2006
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