REPORT on European contract law and the revision of the acquis: the way forward
2.3.2006 - (2005/2022(INI))
Committee on Legal Affairs
Rapporteur: Klaus-Heiner Lehne
Draftswoman (*): Diana Wallis, Committee on the Internal Market and Consumer Protection
(*) Enhanced cooperation between committees: Rule 47 of the Rules of Procedure
MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION
on European contract law and the revision of the acquis: the way forward
The European Parliament,
– having regard to Rule 45 of its Rules of Procedure,
– having regard to the report of the Committee on Legal Affairs and the opinion of the Committee on the Internal Market and Consumer Protection (A6‑0055/2006),
A. whereas, whilst it seems that the European contract law initiative as described in the Commission communication of 11 October 2004 (COM(2004)0651) and reported on in the Commission's First Annual Progress Report should be seen primarily as an exercise in better law-making at EU level, it is by no means clear what it will lead to in terms of practical outcomes or on what legal basis any binding instrument or instruments will be adopted,
B. whereas, even though the Commission denies that this is its objective, it is clear that many of the researchers and stakeholders working on the project believe that the ultimate long-term outcome will be a European code of obligations or even a full-blown European Civil Code, and that in any event the project is by far the most important initiative under way in the civil law field,
C. whereas the decision to work towards and on such a Code must be taken by the political authorities, since the very decision to opt for a Code is political and its content, albeit legal, is predicated on social and political objectives; whereas, given that in the future the political will may well exist to adopt such a Code, it is essential that the present work be done well and with the appropriate political input,
D. whereas, even if the initiative in its present form is limited to rationalising and tidying up the acquis in the field of consumer protection and to producing optional standard contract terms and conditions, it is essential that the political authorities have a proper input into the process; in this connection, recent experience with the adoption of a new Civil Code in the Netherlands could serve as a model,,
E. whereas, if the aim is to revise the consumer protection acquis with a view to raising public confidence in the internal market, it is necessary to deliver a high level of consumer protection,
F. whereas the final product of the initiative should be open to amendment by the EU legislature and should be formally adopted by it,
G. whereas, given that the existing consumer protection acquis is a distinctive area of Community law which reflects the EU legislature's concern to deliver a high level of consumer protection in accordance with the Treaties, and although it is clear that the European contract law initiative has a wider remit of securing and developing the coherence of contract law as a whole, this exercise should not lead to a dilution of the values at the heart of the existing consumer protection acquis,
Underlying principles and objectives
1. Reiterates its conviction, expressed in its resolutions of 26 May 1989[1], 6 May 1994[2], 15 November 2001[3] and 2 September 2003[4], that a uniform internal market cannot be fully functional without further steps towards the harmonisation of civil law;
2. Calls on the Commission to exploit straight away, in its revision of the acquis in the field of consumer protection, the ongoing work by the research groups on the drafting of European contract law, and by the Network for a common frame of reference, with a view to using the results towards developing a common civil law;
Substantive law issues
3. Strongly recommends that the proposed common frame of reference and the envisaged contract law should not be designed in such a way as to unilaterally favour one restricted group of participants in legal transactions;
4. Reminds the Commission that the term "business" covers more than just large corporations and includes small - even one-person - undertakings which will often require contracts that are specially tailored to their needs and that take account of their relative vulnerability when contracting with large corporations;
5. Notes that the law to be developed must be applicable not only to business-to-business legal transactions but also to business-to-consumer legal transactions;
6. Calls on the Commission to distinguish, where necessary, between legal provisions applicable to the business-to-business sector and those applicable to the business-to-consumer sector, and to separate the two systematically;
7. Highlights the importance of taking into account the fundamental principle of freedom to conclude a contract, particularly in the business-to-business sector;
8. Highlights the importance of taking into account the European social model when harmonising contract law;
9. Calls for differing legal traditions and systems to be respected;
10. Calls on the Commission, in its future proposals, to define adequately and precisely how those proposals will interact with the Community rules on the conflict of laws and with national legal systems, in particular as regards the conditions determining the validity of a choice of applicable law, the mandatory rules and the role of the lex fori;
11. Notes that with over-detailed legal provisions on individual aspects of contract law there is a danger of being unable to react flexibly to altered legal circumstances, and therefore favours the adoption of general regulations including legal concepts which are not precisely defined, thus giving the courts the necessary margin of discretion in arriving at their judgments;
12. Asks the Commission to conduct a thorough legal and economic impact assessment for all legislative measures concerning civil law;
Procedural issues
13. Welcomes the Commission's First Annual Progress Report and endorses its thoughtful and measured approach to the revision of the consumer protection acquis;
14 Calls for the Commission as a whole, under the primary responsibility of the Justice, Freedom and Security DG and with the involvement of the Internal Market and Services and the Health and Consumer Protection DGs in particular, to participate in this work, and for the material and human resources which are necessary – given the importance and extent of the project – to be made available;
15. Calls on the Commission to submit without delay a clear legislative plan setting out the future legal instruments by which it aims to bring the results of the work of the research groups and the CFR-Net[5] into use in legal transactions;
16. Calls on the Commission to submit to Parliament a formal plan for the incremental consultation of Parliament as the work progresses, and for the ultimate implementation of the results of the work of the researchers and the CFR-Net;
17. Calls on the Commission to ensure that the results obtained by the Network are adequately taken into account in the work of the research groups;
18. Supports the Commission in its efforts at better law-making, but emphasises that the work done by researchers in developing the CFR must follow clear guidelines laid down by the EU legislature;
19. Asks the Commission to assist clarification of the research and stakeholder processes by the production of an organisational diagram and/or flow chart which clearly identifies all the different groups, working groups, parties and so on which are involved, thereby indicating their role and position in the processes;
20. Considers it desirable for the Commission, on the basis of the researchers’ final report, to submit the various possible legal options to the Parliament, and recalls that the CFR can only finally be adopted following political approval by the Parliament and the Council;
21. Calls on the Commission to keep Parliament continually informed, at least in quarterly reports, of the results obtained and progress of the work of the research groups and of the Network;
22. Requires at least the following three kinds of information to appear in the quarterly reports:
(a) a summary of the most important results of the workshops held so far,
(b) reactions of the research groups, and
(c) a statement by the Commission on the way in which it proposes to take account of these results in its subsequent work;
23. Calls on the Commission to act in the closest possible cooperation with the Parliament in every step taken towards developing a CFR; is of the opinion that Parliament should be formally consulted first on the draft structure and subsequently on each title or section of the CFR (depending on its final structure) as it is finalised, before it is ultimately consulted on the final instrument;
24. Calls on the Commission to consult Parliament before taking any further planning measures;
25. Calls on the Commission to allow the network of representatives of practice-based interests more time to prepare and discuss the complex substance of the work of the CFR-Net workshops;
26. Urges that the organisations which appear on behalf of the interest groups in the CFR-Net be able to decide for themselves which representatives take part in the meetings;
27. Instructs its Committee on Legal Affairs and its committees asked for their opinions on European contract law to continually follow the work of the Commission, the research groups and the Network and, where appropriate, to issue opinions on the results regularly issued by the Commission;
28. Urges each Council Presidency to organise a forum in cooperation with the Commission and the European Parliament in which the progress and results of the procedure may be presented and discussed;
29. In order to give this ambitious and long-term project the visibility and attention which it warrants, undertakes to reflect carefully on how it should best be dealt with in Parliament itself, and accordingly suggests the setting-up of a parliamentary project team which should be properly resourced in order to deal with this long-term project over the period of the current parliamentary term and which should reflect the enhanced cooperation procedure between committees;
30. Instructs its President to forward this resolution to the Council and the Commission.
EXPLANATORY STATEMENT
Background
On 11 October 2004 the European Commission submitted to the European Parliament and the Council a Communication entitled “European Contract Law and the revision of the acquis: the way forward”[1] . This communication describes the Commission’s follow-up measures to the Action Plan entitled “A more coherent European contract law” of 12 February 2003[2]. On 23 September 2005 the Commission submitted the First Annual Progress Report on European Contract Law and the Acquis Review.[3]
One of the follow-up measures is the creation of a Common Frame of Reference (CFR) on Community contract law. The Commission envisages that the CFR’s spheres of action might include: national legislators’ being able to make use of the CFR even in areas not covered by Community law; the CFR serving as a basis for the elaboration of an optional legal instrument (Measure III of the Action Plan); and the CFR complementing national law.
The work on the CFR will be partly carried out by a Network of interest representatives from consumers’ organisations, industry, business and the legal profession (CFR-Net) set up by the Commission on 15 December 2004 in Brussels. The Network meets in workshops on specific topics of contract law. Underlying the work of the workshops are the results of the academic research groups. These research groups have been given the task, in the context of the Commission’s 6th Research Framework Programme, of working out proposals for a common frame of reference on European contract law.
Rapporteur’s statement
The aim of this report is to map out a strategic perspective for the future work of the Commission and the Network, involving the European Parliament.
At the meetings of the workshops, and in debates on the Commission’s communication of 11 October 2004, a number of criticisms have been expressed which coincide with your rapporteur’s assessment. These criticisms relate to issues of both substance and procedure.
In substantive terms, the main risk is seen in the lack of attention being paid to the fundamental civil law principle of freedom to conclude contracts, and that there is so far no sign of a systematic separation between business-to-business and business-to-consumer legal relationships. The highly detailed nature of the rules on individual types of contract also leads one to fear that contract law will not be allowed sufficient room to develop dynamically.
On procedural issues the criticism is made first of all that the Commission sets out no clear legislative plan predicting what legal form the frame of reference should have. In addition, the European Parliament has so far not been given a sufficiently large role to play in the development process. Accordingly there is a need for functioning information and consultation mechanisms. The quarterly reports which have been called for in this connection seek to offload in gradual instalments, during the course of the [Commissions’ and Network’s] work, the enormous volume of results which are to be expected once the work is completed. The report is also intended to provide information on how the Commission proposes to deal with the discrepancies and contradictions between the results of the Network and of the Study Group. Finally, some partial improvements need to be made to the practical work of the Network, though it is recognised that the Commission has taken on a new type of project for which it is unable to call on any specific experience.
OPINION of the Committee on the Internal Market and Consumer Protection (*) (25.1.2006)
for the Committee on Legal Affairs
on European contract law and the revision of the acquis: the way forward
(2005/2022(INI))
Draftswoman (*): Diana Wallis(*) Enhanced cooperation between committees - Rule 47 of the Rules of Procedure
SUGGESTIONS
The Committee on the Internal Market and Consumer Protection calls on the Committee on Legal Affairs, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:
A. whereas it seems that the European contract law initiative as described in the Commission communication of 11 October 2004 (COM(2004)0651) and reported on in the Commission's First Annual Progress Report should be seen primarily as an exercise in better law-making at EU level, it is by no means clear what it will lead to in terms of practical outcomes or on what legal basis any binding instrument or instruments will be adopted,
B. whereas, even though the Commission denies that this is its objective, it is clear that many of the researchers and stakeholders working on the project believe that the ultimate long-term outcome will be a European code of obligations or even a full-blown European Civil Code, and that in any event the project is by far the most important initiative under way in the civil law field,
C. whereas the decision to work towards and on such a Code must be taken by the political authorities, since the very decision to opt for a Code is political and its content, albeit legal, is predicated on social and political objectives; whereas given that in the future the political will may well exist to adopt such a Code, it is essential that the present work be done well and with the appropriate political input,
D. whereas, even if the initiative in its present form is limited to rationalising and tidying up the acquis in the field of consumer protection and to producing optional standard contract terms and conditions, it is essential that the political authorities have a proper input into the process; in this connection, recent experience in the Netherlands with their adoption of a new Civil Code could serve as a model,
E. whereas, if the aim is to revise the consumer protection acquis with a view to raising public confidence in the internal market, it is necessary to deliver a high level of consumer protection,
F. whereas the final product of the initiative should be open to amendment by the EU legislature and be formally adopted by it,
G. whereas, given that the existing consumer protection acquis is a distinctive area of Community law which reflects the EU legislature's concern to deliver a high level of consumer protection in accordance with the Treaties, and although it is clear that the European contract law initiative has a wider remit of securing and developing the coherence of contract law as a whole, this exercise should not lead to a dilution of the values at the heart of the existing consumer protection acquis,
1. Considers that the development of a Common Frame of Reference (CFR) could be of benefit to the functioning of the internal market, but that it must be properly resourced in terms of staffing at the Commission;
2. Calls on the Commission to act in the closest possible cooperation with the Parliament in every step undertaken towards developing a CFR; is of the opinion that Parliament should be formally consulted first on the draft structure and subsequently on each title or section of the CFR (depending on its final structure) as it is finalised before it is ultimately consulted on the final instrument;
3. Supports the Commission in its efforts at better law-making, but emphasises that the work done by researchers in developing the CFR must follow clear guidelines given by the EU legislature;
4. Asks the Commission to assist clarification of the research and stakeholder processes by the production of an organisational diagram and/or flow chart which clearly identifies all the different groups, working groups, parties and so on which are involved, thereby indicating their role and position in the processes;
5. Calls on the Commission to submit to Parliament a formal plan for the incremental consultation of Parliament as the work progresses, and for the ultimate implementation of the results of the work of the researchers and CFR-Net to be adopted in the form of a binding legal instrument (or instruments) on the basis of Articles 95 and/or 153 of the Treaty;
6. Considers it desirable for the Commission, on the basis of the researchers’ final report, to submit the various possible legal options to the Parliament, and recalls that the CFR can only finally be adopted following political approval by the Parliament and the Council;
7. Insists that the Commission itself must adopt a horizontal approach, so as to involve in particular DG Justice, Freedom and Security and DG Internal Market and Services, while guaranteeing the utmost transparency at every stage of the process;
8. Welcomes the Commission's First Annual Progress Report and endorses its thoughtful and measured approach to the revision of the consumer protection acquis;
9. Points out that undue emphasis must not be placed on business-to-business contracts at the expense of business-to-consumer contracts, and that any rationalisation of the consumer protection acquis will be political and necessitate the closest possible involvement of Parliament;
10. Reminds the Commission that the term "business" covers more that just large corporations and includes small - even one-person - undertakings which will often require contracts specially tailored to their needs and which take account of their relative vulnerability when contracting with large corporations;
11. In order to give this ambitious and long-term project the visibility and attention which it warrants, undertakes to reflect carefully on how it should best be dealt with in Parliament itself, and accordingly suggests the setting up of a parliamentary project team which should be properly resourced in order to deal with this long-term project over the period of this parliamentary mandate and which should reflect the enhanced cooperation procedure between committees.
PROCEDURE
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Title |
European contract law and the revision of the acquis: the way forward | |||||
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Procedure number |
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Committee responsible |
JURI | |||||
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Opinion by |
IMCO 12.5.2005 | |||||
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Enhanced cooperation – date announced in plenary |
12.5.2005 | |||||
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Drafts(wo)man |
Diana Wallis | |||||
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Discussed in committee |
24.5.2005 |
5.10.2005 |
22.11.2005 |
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Date adopted |
24.1.2006 | |||||
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Result of final vote |
+: –: 0: |
27 0 0 | ||||
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Members present for the final vote |
Charlotte Cederschiöld, Bert Doorn, Evelyne Gebhardt, Małgorzata Handzlik, Malcolm Harbour, Anna Hedh, Edit Herczog, Anneli Jäätteenmäki, Pierre Jonckheer, Henrik Dam Kristensen, Alexander Lambsdorff, Kurt Lechner, Lasse Lehtinen, Arlene McCarthy, Manuel Medina Ortega, Bill Newton Dunn, Zita Pleštinská, Giovanni Rivera, Heide Rühle, Leopold Józef Rutowicz, Andreas Schwab, József Szájer, Marianne Thyssen, Bernadette Vergnaud, Barbara Weiler | |||||
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Substitute(s) present for the final vote |
Jean-Claude Fruteau, Joel Hasse Ferreira, Joseph Muscat, Angelika Niebler, Diana Wallis, Anja Weisgerber | |||||
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Substitute(s) under Rule 178(2) present for the final vote |
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Comments (available in one language only) |
... | |||||
PROCEDURE
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Title |
European contract law and the revision of the acquis: the way forward | ||||||||||||
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Procedure number |
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Basis in Rules of Procedure |
Rule 45 | ||||||||||||
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Committee responsible |
JURI | ||||||||||||
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Committee(s) asked for opinion(s) |
IMCO |
LIBE |
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Not delivering opinion(s) |
LIBE |
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Enhanced cooperation |
IMCO |
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Motion(s) for resolution(s) included in report |
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Rapporteur(s) |
Klaus-Heiner Lehne |
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Previous rapporteur(s) |
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Discussed in committee |
14.9.2005 |
30.1.2006 |
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Date adopted |
23.2.2006 | ||||||||||||
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Result of final vote |
for: against: abstentions: |
20 0 0 | |||||||||||
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Members present for the final vote |
Maria Berger, Monica Frassoni, Giuseppe Gargani, Piia-Noora Kauppi, Klaus-Heiner Lehne, Antonio López-Istúriz White, Antonio Masip Hidalgo, Aloyzas Sakalas, Gabriele Hildegard Stauner, Diana Wallis, Rainer Wieland, Nicola Zingaretti, Jaroslav Zvěřina | ||||||||||||
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Substitutes present for the final vote |
Janelly Fourtou, Jean-Paul Gauzès, Roland Gewalt, Adeline Hazan, Eva Lichtenberger, Arlene McCarthy, Toine Manders, Michel Rocard | ||||||||||||
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Substitutes under Rule 178(2) present for the final vote |
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Date tabled – A6 |
2.3.2006 |
A6-0055/2006 | |||||||||||