Expectations for the Final Common Frame of Reference

Speech by Diana Wallis MEP delivered to ERA, Ljubljana, Slovenia on Tue 29th Apr 2008

Thank you for inviting me here to speak again on the subject of European Contract law and the CFR on behalf of the European Parliament. In a sense it is very helpful to be here at this time and to hear the current status of thought in both the other two institutions. It is helpful to me because we in the Parliament are currently in the course of drafting a question and resolution on the CFR for debate with the Commission. It was appropriate that the Commission should speak first today, as it will be up to the Commission to deliver some form of proposal in the coming months, and now we also have a positive and clear position from the Council. The agreed Council position may perhaps be summarised as follows: the CFR should be a tool for better law-making comprising a set of non-binding guidelines to be used by the lawmakers at Community level on a voluntary basis as a common source of inspiration or reference.

Given our previous discussion today about tools and toolboxes, I cannot help remarking that, if this is it, it is surely better to call it a toolbox, indeed a very large toolbox, that can have a wide choice of tools which the Community legislator will be able to pick up or leave at will and as appropriate. If this is to be the nature or character of the implement, then there is no point in limiting the contents of the box!

In trying to frame our resolution for debate with the Commission, we in the Parliament are also asking the same type of questions about what exactly should be in the CFR, and how it should be used. In talking today about future expectations of the CFR, I thought it might be helpful to group my remarks around three issues. Those issues are accessibility, utility, and effects.

Firstly: accessibility. The DCFR is here, and I seem to be acquiring a new copy of it at every conference I speak at!

It should be important to gain the widest possible coverage and accessibility for the DCFR. Language is of course the most obvious barrier. I think there is some consensus in the Parliament that we would like to see it available in every community language. There may be those that will say that translation is only important when we have the final CFR, but then how are we meant to have a meaningful Europe-wide discussion about what should or should not be in the final CFR if we do not have this source document available in all the languages and accessible to all who might wish to comment?

There is also an important argument that this current document is indeed important in its own right, already as a tool for law students across Europe and beyond and indeed for judges and legislators. As it stands, this book can already give a greater understanding and a worthwhile explanation of both EU and national legal sources.

I would certainly recommend that a copy be sent to every MEP sitting on certain key committees, including Legal Affairs, Internal Market, Constitutional Affairs and Civil Liberties, accompanied by a short letter of introduction and explanation. It can do no harm to bring it to a wider audience in the Parliament beyond those key few involved in our Working Group. Furthermore, I see no reason why it should not also be sent to interested national MPs. I will return to the matter of national parliamentarians later.

However, if there is to be the widest accessibility it should not be just the book that it sent out. There needs to be some form of on-line version, particularly for the final CFR. The Council, and particularly the coming French presidency has expressed great interest in the subject of e-justice; an on-line version of the CFR in all the official language versions could be a valuable project in this respect.

Likewise I also raised the issue of up-dating in our discussions yesterday. The Commission has already indicated that it sees the CFR as a valuable resource at the beginning of the legislative process to highlight where the problems are with existing EU laws and also to reveal what is presently used in the various Members States by way of the comparative studies. Whilst the final text clearly fulfils this purpose, it will soon become out of date unless there is some very clear plan and scheme for up-dating it. Whilst the academics seemed to be aware of this, I was not sure that this potential problem had been taken on board elsewhere.

Then let me turn to the subject of utility, and in particular the question of whom the CFR is directed at. I have already mentioned students - it goes without saying how attractive it could be for law students across Europe to have one simple small volume like this, that all have some familiarity with. This would provide a common language and base point to work from.

However, it will of course also have utility for legal practitioners and particularly national judges in their understanding of EU law. The need for more accessible EU law material for national judges has been made more than clear to me during the course of preparing my recent report on the role of the national judge.

The main target though, especially as foreseen by the Council, is the Community legislator. I have already mentioned MEPs, but of course it also needs wide circulation, for instance among national Ministers and Council Working Group members. I can already confirm that it would have been useful to have had the finished CFR as we recently struggled in the final discussions of the Consumer Credit Directive. With access to, and assistance of, the final CFR text and notes on the subject of the right of withdrawal, we might, I dare venture to say, have produced a better result.

In terms of utility for the Parliament as a co-legislator, this of course comes at a very important time in the history of the European Parliament's development. This Lisbon Treaty considerably enhances our co-legislative role. This is something that is being taken very seriously in terms of preparing, hopefully, for the entry into force of that Treaty. Indeed I am a member of our Working Group on Reform from where we have recently returned from a high level visit to the United States Congress to see what we could learn from its legislative procedures. One of the key issues is certainly the tools available to help our legislative work. We do not have a Library of Congress, but one could conceive that in certain areas, a tool like the CFR could be key in helping research and providing correct and consistent drafting.

Likewise, while the whole debate on better legislation continues, a debate not necessarily about less but about better, more coherent legislation, hopefully the CFR will give us a greater sense of where any legislation fits into the overall structure of European contract law; for the first time we have been given a view of the overall edifice of the whole structure, rather than working away in one little corner that may not sit well with the rest, or may in the worse case risk bringing the whole edifice down.

In the interest of better legislation, and indeed better national implementation of EU law, it is hard to understand the Council's apparent antipathy to including national legislators amongst those who could benefit from use of the CFR. This particularly in a post-Lisbon Treaty environment, where some have suggested that national Parliaments acting jointly under the protocol on the application of the principles of subsidiarity and proportionality may become a quasi-eighth EU institution and will indeed have some role in the EU legislative process. On this basis, why not spread the understanding?

If, as the Council seems to suggest, the CFR should be non-binding on the legislator, something from which you can take or choose the appropriate tool at will, then it seems unnecessary, as the Commission here have suggested, that the content should be reduced by some 40%. If it is to be non-binding, then surely the toolbox can almost infinitely wide in scope and indeed need not be limited to only those areas where the Community legislator has up until now been active?

Indeed, if the instrument is to be non-binding, then it begs the question whether we have to get ourselves into such a deep discussion about an appropriate legal base. Of course, the Parliament took the step of commissioning a study on this issue. There are possibilities around Article 95 EC, or indeed, although I would prefer not, the catch-all Article 308 EC.

The other option that has been much discussed has been some form of Inter-Institutional Agreement. It seems to be that if we are going to have a non-binding instrument, then we at least need some form of agreement or agreed process that ensures that we will have regard to the CFR; that although it will not bind our hands we will look at it, we will consider it. One could imagine for instance a box or appendix in every relevant Commission proposal that attached the appropriate part of the CFR and gave some analysis or discussion on it. There will be no point at all in having it, nor in now having a great debate about the contents of the CFR, if we are not afterwards obliged to have regard to it as part of the legislative process, even if we are not bound by it. If Parliament follows Council's lead, it may be that we do not need a great political debate now about the content of the CFR, but rather we will still be free to take political choices in respect of each legislative proposal on the basis of the information on a particular subject in the CFR toolbox.

My last theme is the effects of the CFR. In my view it will indeed produce an effect, a discussion, a debate, and will be referred to, just by being there. The real question is: how far are we prepared to use it politically? Some might say we have created an Internal Market without the coherent contract law regime that it so obviously needs. We now have the scientific work, but are we as politicians really prepared to grasp it and use it ? The answer from the Council seems to be 'no'; even if a positive 'no'!

Oddly, we have all seen in the recent Eurobarometer study on civil justice that our citizens are rather more pragmatic and positive than we are as politicians. Are we perhaps being too timid? Even standard terms and conditions at a European level seem to have been ruled out; in my view the final text of the so-called "Rome 1" Regulation was a huge missed opportunity and one I suspect we will live to regret. E-commerce will demand the blue flag button sooner rather than later. The issues and problems involved in trying to use 27 or even 28 legal regimes will not go away; rather, the problems will get worse for our citizens and businesses. As to our current fascination with conflict rules, I tend to agree with Professor von Bar; these tend to make life more difficult, and, in applying them, how many of our national judges either has or wishes to have the requisite knowledge of foreign law to apply such rules successfully?

Maybe we have to live with these difficulties longer before we are convinced that the CFR could indeed provide a more thoroughgoing answer. There is no doubt that traditional national civil law is a sensitive subject. Yet again, there can be no point in having a great political battle over the content of the CFR at this stage if its use will be so limited. Anticipating such a battle, the Parliament had recently requested a further study to investigate and highlight the issues relating to freedom of contract and, conversely, the incidence of social justice underpinning 'mandatory' or 'policy' rules or choices in the CFR. Whilst this will be both informative and interesting, it now seems unlikely that there will be any great political choices to be made at this stage; or will there? Maybe the Parliament will persist in asking for a binding optional instrument!

Of course, next year, 2009, we have elections to the European Parliament. I am trying hard to imagine that contract law will be an item that I will campaign on around the streets of my home town! Yet maybe we should trust the people, for there is another option bearing in mind the contents of the Lisbon Treaty, that is that, based on the outcome of the Euro-barometer study, perhaps we might see one million European citizens getting together and raising a European initiative to request the Commission to come forward with a coherent European contract law based on the DCFR! Who knows!