Coherent European Contract Law, Political Tendencies

Written by Diana Wallis MEP and published in LECTURE AT THE CENTRE FOR EUROPEAN PRIVATE LAW, MUNSTER, 6 JULY 2006 on Thu 6th Jul 2006

Thank you for inviting me here to speak as the only politician on your programme, although of course I was previously a lawyer. I hope I can bring a slightly different view to your discussions.

I hope to put in context why I think the work you are doing on legal terminology is so important - an important contribution to the future of Europe. It is surely a truism to say that in order for the European Union's civil law legal structure to work we have to understand one another's legal heritage, culture, systems and law better. Indeed I am pleased that this week the Commission announced further funding for cross border legal education, this has to be the way forward and your collaboration is likewise an important manifestation of this needful development of mutual understanding of our differing law and legal systems.

It has been one of the constant themes in the European Parliament that we have to have greater understanding and respect for one another's "foreign' law in our own domestic courts and legal work - and I say that as someone who comes from a tradition that treats foreign law churlishly requiring such laws - even those of EU Member States to be proved as a fact like any other piece of evidence. So we still have a long way to go to improve our understanding and your work and your contact with each other is an important part of this ongoing process.

You have asked me to give some thoughts as an MEP about a more coherent Contract Law for Europe. Let me start by explaining why the Parliament and especially its Legal Affairs and Internal Market Committee have always been so keen on this theme, why it is that the European Parliament Resolutions have provided the driving force for the current Contract Law Project.

The main genesis has always been the quest for the better functioning of the Internal Market, it really is that simple. And let me emphasise that means for both sides of the market; consumers and enterprises. Most will be aware of the survey by Clifford Chance (a UK law firm). Their clients recognised differences in national laws as creating transactional barriers. These are British companies; those arch Euro sceptics, actually requesting, wanting more Europe. Then we could look at evidence from consumer guichets across Europe. These constantly tell us that the main barrier to the take up cross border purchasing opportunities, both traditional and over the internet is the concern about contractual terms and fears about the lack of enforcement of contracts if something goes wrong.

Then let me tell you another story about the British. Buying property in another EU state is a big thing in the UK, there are innumerable TV programmes devoted to peoples experiences buying second homes all over Europe. There are also many magazines devoted to the same topic, giving advice and full of adverts of course. I saw a reader's letter in one; I imagine from a lady in the south of England of a certain age, asking why was it so complicated to buy abroad with different laws. Why, she asked can't we all use the same law? I have no doubt that she had in mind everyone using English law! Yet of course she had a point.

As an elected politician, as a representative of the people, there is a need to respond to citizens desires for simplicity and accessibility in a legal structure if it is to function for them. In other words if we want, perhaps one of Europe's greatest achievements, the Internal Market to really work we have to ensure that the legal framework is transparent.

There are two related issues here. The first making law accessible - in the sense of making it understandable at EU level; and the second ensuring access to justice in the practical sense, of access to the courts or legal process on a cross border basis.

EU law has had a propensity to be business orientated, sectoral, and technical - directed at breaking down barriers in the market. We have tended to respond as the legislator to sectoral problems and issues by way of specific directives - sometimes very detailed and quite intrusive in the way in which they have to be implemented into national systems. Even with consumer legislation there has been a similar pattern that has led to a higgledy-piggledy patchwork of rules and legislation. It is difficult for even experts and lawyers - so what about the poor citizen trying to understand, to access the law - to see the coherent pattern. To be respected law, rules at any level have to have a resonance. EU law has to achieve that from a complex start passing through twenty languages into twenty five or more differing legal regimes. What hope is there if we do not even have a coherent starting point, a coherent vision of EU civil law, as a whole? The very basis of civil law, contractual and non contractual obligations in EU law is hidden in various corners of directives, inserted into an existing overlay of national law and finally presents as a confused picture to citizens and businesses who attempt to use the Internal Market. So moving towards a more coherent EU Contract Law ought to make EU law more accessible - and if it's more accessible - it might just be more popular. Indeed it does many good things, if only these good things were more visible, more transparent it might well make the EU more popular! That matters to me as a European parliamentarian!

That said, I have dealt with the relatively easy part. That is the premise that a simplified, coherent, contract and so civil and commercial law at EU level, sits well with the current better legislation agenda, helping business and citizens alike to really use and reinvigorate the Internal Market.

Now the problems, the political problems! Do we as the EU have a right to have a vision of a more coherent European contract law, can we contemplate such a vision and if we can dream the point is are we actually able to do anything, to legislate? Very simply up until now everything has been justified on the basis of the Internal Market and removing barriers to its smooth functioning. Sometimes one is left feeling that if we want to, if the political will is there, almost anything could be justified on the Internal Market basis. But when you say contract law, or more properly basic civil law - hackles begin to rise in national justice ministries, people start talking about subsidiarity, and mutual recognition and judicial cooperation. In short is Europe trying to go too far? We are caught between our desire for a coherent system and subsidiarity, the respect for national legal traditions and cultures, and the current restrictive definition of Article 65 which only allows for EU interventions on cross borders issues.

So what are we doing within these political constraints? What are the Member States doing - instead of looking for a coherent system of civil law for Europe we are constructing conflict rules - Rome I, II and III on the way, underpinning the choices of national substantive law. Set against this in the Internal Market area we have mutual recognition and country of origin - which many will try argue with you is a choice of law rule, a conflict rule. It is of course nothing of the sort. And then we have this absolute road bloc from the Member States in Council with the restrictive interpretation Article 65, this despite the Commission's best efforts. The room to manoeuvre towards coherence is small and tightly constrained!

To this already complex mix we should add the real difficulties of culture and language. Language: just take the word 'Constitution'. This word has caused untold problems - in particular in my country... Maybe we could have just called it a rule book or indeed kept to treaty! The problem is the same with the phrase European Contract Code or Civil Code: Napoleon is immediately seen to be approaching the white cliffs of Dover! The cultural and historical baggage that language brings with it is enormous; 'constitution' and 'code' cause huge political problems in a UK context.

Now I, we know about these problems. Yet how many more problems lie in wait for us in an EU of 25 soon 27 Member States and 20-22 languages? Libraries have been written on comparison between French, English and German law and their respective legal languages - but what do we know about the problems and difficulties between say Finland and Malta or Ireland and Hungary? No idea!

Law is of course so closely linked to language, and in turn to culture and history. These problems are deeply sensitive. Are they intractable? Are we perhaps at a stage in the development of the European Union's civil law where we could dare to look for assistance and comparison at what has occurred in some nation states. Let me take a very special European example the Swiss confederation. Not to look at its constitution, though Europe could learn much there but instead at the Swiss Civil Code. Huber's text was developed on the basis that the time had arrived for the Swiss cantons to have a coherent system of civil law, sounds familiar. The text was developed in three languages and the German particularly is praised for its simplicity and resonance. Of course it was not an easy political journey, it took three years to wend its way through the Swiss parliament. They had the advantage of having the necessary political will to move forward.

Ironically in the European Parliament, in our working group we are already discussing the detailed content of the Common Frame of Reference, as though we were on our way towards some form of final text. There we are looking at the detail at topics like the definition of a consumer or the right of withdrawal. But these bigger problems I have outlined are sitting there hovering in the background and may yet force the Commission merely to review the consumer acquis - which has a clear Internal Market justification - and abandon the rest of the wider contract law project. This would be a crime, for the reasons I stated at the beginning, we are at a point where we should have a vision of a more coherent European contract and civil law.

We need to be daring on behalf on Europe's citizens. We need to expose the fact that the apparently technical, business orientated debated about sectoral directives for the Internal Market is really a basis for fundamental discussion about political choices, about what sort of civil and commercial values we have at European level. It is a political debate - and we need to give that political debate back to Europe's citizens. Some how it has been simple to engage people the political debate focusing around human rights in the current era of global terrorism, yet thankfully few of our citizens will be directly exposed to a terrorist attack. Yet many people may buy a worthless pension policy, a foreign property or just be involved in a road traffic accident all incidents with possible cross border implications which may have a devastating effects on their individual and families lives. The question is how do we get people to be passionate about cross border access to justice and law? Without that is just waiting for things to go wrong and continuing to deal with them by a piecemeal approach.

As a lawyer I was passionate about access to justice, I hope as a European parliamentarian I am equally passionate about the accessibility of law and having a law at EU level that speaks to our citizens albeit through the veil of our different languages and legal cultures.

We have created an internal market with basics freedoms, we now have to make those freedoms a legal reality and they will only be so if we can communicate a coherent vision of EU civil and commercial law. Now the CFR could be the basis for that. The European Union has often in its history been on a journey into the unknown, our vision of the future does not need to be of a code in the traditional national sense. Whatever the format it should be an accessible, understandable work, call it what you will, framework, toolkit. As I have said before European law should have the character and relationship to national law of a caring helpmate, not that of the officious meddler.

Diana Wallis, 6 July 2006, Münster.