Verbatim report of proceedings

Monday, 1 September 2008 - Brussels

22. Common frame of reference for European contract law (debate)

  President. − The next item is the debate on the oral question to the Commission by Mr Lehne, on behalf of the Committee on Legal Affairs, on the common frame of reference for European contract law (O-0072/2008 - B6-0456/2008).

  Hans-Peter Mayer, draftsman. − (DE) Mr President, Commissioner, ladies and gentleman, the Draft Common Frame of Reference (DCFR) has brought the work on European civil law to a head, at least for the moment. It is, of course, a draft produced by legal scholars which has yet to be debated politically. The goal of this debate, then, is to try and get a broad policy discussion going on the future of European private law. The European Parliament wants to achieve a situation in which all stakeholders are involved in this debate but, in order for that to happen, we have to make sure that the academic draft, which is currently only available in English, is produced in other official languages as well.

Commissioner, the funds earmarked for translation have not been used up for 2008 yet. We need these translations if there is to be a proper Europe-wide dialogue on the future of European civil law. It is not enough just to get the forthcoming Commission document translated, although obviously that has to be done. The Commission has started a selection process internally, trying to sift through the rules of the academic frame of reference and picking up what needs to be included in the Commission text.

We welcome the fact that all the relevant Directorates-General are involved in this selection process. However, I would stress that the ‘European contract law’ project should really be led by DG Justice and Home Affairs because the reference framework is not just about consumer contract law; it is also intended to make it easier for SMEs to shape their cross-border contracts with other business partners who are not consumers.

Precisely because the Common Frame of Reference (CFR) needs to take account of the SME sector as well, over recent months the Commission has been holding workshops on selected problem areas in the business-to-business (B2B) arena, and the outcomes of these workshops need to be taken into account in the forthcoming Commission text as well.

In the resolution, we also say that the final version of the academic frame of reference could play a toolbox role; indeed, it has already done so, in effect, simply by virtue of its publication. The Community legislator will have to make sure that, in future, legal acts in the field of Community private law are based on the CFR.

The CFR can, at a subsequent stage, be turned into an optional instrument; the parties would then be able to choose an alternative system of civil law to govern their legal relationships. That is a step that will need to be taken in order to solve problems that are quite clearly still with us in the sphere of the internal market.

In order to give a boost to legal transactions in the internal market, an optional instrument will, however, have to go beyond general contractual law. For example, besides rules governing the conclusion of sales contracts, there will have to be rules on transfer of property and on the rescinding of asset transfers which have no sound legal basis: in other words, the law of obligations.

Parliament is particularly keen to ensure that it is consulted and involved on an ongoing basis by the Commission throughout the selection process. We will undoubtedly have to consider how, in future, the significance of this project can be enhanced, especially in the Committee on Legal Affairs. The Commission needs to start considering now, though, what sort of mechanisms we need in order to ensure that the new Commission document can take account of future developments. In the current selection process, the Commission must already start to consider, in its planning, the changes that will feature in the definitive version of the academic frame of reference.

All this shows that this CFR is taking us into new territory in European contract law. The European Parliament, the Commission and the Council need to make a clear commitment to this project, which is likely to be the most important initiative for the next parliamentary term. It is a project which offers benefits for everyone: consumers, because they will soon be able to go shopping all round Europe with the backing of European contract law, and companies, because with this greater legal certainty, they will be able to tap into new markets, and as there will be a uniform set of rules, they will be able to achieve substantial cost savings.

  Meglena Kuneva, Member of the Commission. − Mr President, the Commission as a whole welcomes wholeheartedly the interest that Parliament is taking in the Common Framework of Reference, or, as I will refer to it in short, the CFR. The CFR is a long-term project to improve the quality and coherence of EU legislation.

Let me answer your questions in this connection. First of all, I would like to say that the Commission indeed intends to ensure that the Commission CFR will be translated so that it can be discussed and applied in order to improve the quality of EU contract law legislation and to make it more coherent.

However, this reasoning does not apply to the academic preliminary draft. The Commission CFR will most probably be considerably shorter than the academic draft. Given the huge work which will already be necessary to translate the CFR, it does not make sense to spend valuable translation resources to translate parts of an academic draft which are not relevant for the purposes of the CFR.

The Commission is currently proceeding to select those parts of the academic CFR which are relevant for the final Commission CFR, on the basis of its policy objectives. All the DGs concerned are involved in this selection process according to their field of competence, of course including DG JHA. The final selection will be presented for consultation to the other institutions, including Parliament and stakeholders.

The Commission will indeed ensure that the outcome of the workshops which were organised in 2007 will be taken into account in the CFR.

The Commission has always conceived the CFR as a tool for better law-making. The CFR should contain a set of definitions, general principles and model rules in the field of contract law. The Commission has not yet decided which topics of contract law the CFR should cover.

In adopting the decision on CFR, the Commission will take into account the position of Parliament and the Council.

As I have already mentioned, the Commission will in all likelihood shorten the present academic draft and it will probably be necessary to amend the remaining text in order to make it useful for policy-making purposes. Even if it is premature to say so, it is likely that the CFR should form a non-binding legislative tool.

The Commission understands fully that Parliament wants to be kept informed of, and involved in, the ongoing work on the CFR. We welcome Parliament’s involvement in the CFR process and we very much rely on this involvement. The Commission will continue to keep Parliament informed of developments in the most appropriate way, in particular through the Parliament working group dedicated to the CFR, and will consult Parliament and all stakeholders on the results of its preliminary selection process.

Once the Commission CFR is completed, the Commission will decide on the need for keeping it up to date and on the best possible mechanism to do this.

I would like to conclude by thanking you for Parliament’s support for the Commission work on this important dossier.

  Jacques Toubon, on behalf of the PPE-DE Group. – (FR) Mr President, our colleague Mr Meyer has correctly indicated the challenges of this issue. I should like to say to the Commissioner that I do understand your technical answer on the translations, but what Mr Meyer said on this subject absolutely embodies the real issue: how do you go from university work to a political decision and a legal decision?

I believe it is absolutely vital that everyone understands this because this draft Common Frame of Reference (CFR) that was presented to you at the end of last year must be considered in relation to all the work done on this issue, and not just the draft presented to you. For example, it is clear that a choice must be made between the law of obligations and the law of contract. There are several schools of thought on this but this is the choice that we must make and, to do so, there must of course be several proposals on the table. Likewise, will the content of the CFR be restricted and therefore binding or will it be general and therefore much more indicative?

As a result of all this, we need a range of information and it is of course essential that Parliament can do its work, and that it can do this at a very early stage. That is why – and I will conclude on this very practical point – it is very important that many Members participate in the hearing that the Commission will organise with experts at the beginning of October and in the conference that the French Presidency of the European Union will hold in Paris on 23 and 24 October. This subject merits open and transparent debate that goes beyond the experts and involves those responsible for the political decisions.

  Manuel Medina Ortega, on behalf of the PSE Group. – (ES) Mr President, I agree with Mr Toubon’s observations, namely that the work of the academic group on the Common Frame of Reference is clearly very valuable and serious work. However, how do we get from this academic work to political proposals? Perhaps the answer is, based on the use of a single language and, possibly, only one theoretical direction.

While recognising the internal work that has been done, Commissioner, I believe that we must move on to the next phase in which Parliament and the sectors concerned are involved, not just large companies, but also small companies, trade unions and other types of economic operator.

The PSE Group has tabled an amendment to increase the participation in this project at an early stage, for which we of course would need a translation of the text, albeit a summary of the text. This text could subsequently form the basis of an optional element but, to do this, we first need to define what the content is.

To sum up, this debate must serve to inform European citizens that the Commission is working on a project. However, the Commission, given that it is only one of the European institutions, cannot keep this project to itself. The time has come for the Commission to share this knowledge with the European Parliament and with the general public. I repeat: trade unions, large companies, small companies, other economic operators and people in general.

Regulation of the contractual framework affects all European citizens and the drafting of a possible code of substantive law would require the greatest possible number of sectors to be involved which, without a translation into all the languages of the European Union, would seem impossible. This would also be impossible without increased participation by other sectors.

  Diana Wallis, on behalf of the ALDE Group. – Mr President, the Commissioner has answered some of the questions put by my colleagues. However, this project is of great importance to all our institutions, and we are now coming to the politics of it, and the major issues concerning the democratic legitimacy of the creation of a CFR. There has been a lot of consultation, with many working groups and many stakeholder groups, from which we can learn a lot, but now it is time for decision-making, and we need a process that is open, inclusive and coherent.

The Commission is rightly conducting a selection process before presenting a white paper. However, that process needs to be as inclusive as possible, and we are obviously worried about the languages used, since if this were mainstream legislation it would be available in all the languages. Can Parliament have an assurance that at white paper stage it will still be possible to change the selection if it considers that appropriate?

This is at the heart of the conundrum we face. Will the white paper kick off a legislative process, or something analogous to it, or are we going to deal with a separate legislative process each and every time in the future that we look at anything to do with contract law? It comes down to the question of whether it will be binding or non-binding. The Council seems to think it should be non-binding and voluntary. If that is the case, it is arguable whether we need a selection process at all. You can keep everything open and have the political debate at every moment in the future that a contract law question arises in a legislative proposal. On the other hand, if we are creating something binding now – which Parliament is well known to prefer, in the form of an optional instrument – then we have to have some very serious inclusive political debates now about content and coverage, leading us on to the next set of questions about a legal base and the involvement of Parliament as something more than a mere consultee.

  Ieke van den Burg (PSE). – (NL) Mr President, I endorse what the previous speakers have said and I should like to highlight two points in particular. One is how we guarantee that there really is an inclusive and democratic process of consultation, in which not only this Parliament, but also national parliaments play a role and in which all stakeholders can be consulted. I am especially concerned about whether this consultation will be balanced and whether, for instance, consumer organisations, small and medium-sized enterprises, trade unions and others will be able to bring in the expertise and pay for it, so that they can also play a real role in this consultation process.

The Commission has a responsibility in this respect and so I should like to ask the Commission how they intend to support this. I should like to ask Parliament to support an amendment that we are submitting on this point.

The other point concerns the breadth of the selection. I ask myself whether we should really be ruling out certain things now in paragraph 12. It makes more sense to keep these things open at this stage.

  Andreas Schwab (PPE-DE). – (DE) Mr President, Commissioner, ladies and gentlemen, I have followed this debate with great interest, but have had the impression at times that the various joint meetings between the Committee on Legal Affairs and the Committee on Internal Market and Consumer Protection never actually took place. Yes, Mrs van den Burg, we have noted – also among our colleagues in the committees – that it is extremely difficult, at the various events, to find the interest and expertise that are required for this important legal policy initiative in Europe. In my view, doing so is not only a task for the Commission, it is also the job of parliamentarians to ensure that the relevant associations, trade unions, employees and SMEs are involved in this debate as early as possible.

However, I also take the view – and I fully endorse what Hans-Peter Mayer has said on this point, and Jacques Toubon also touched upon this – that this early involvement of the various stakeholders can, of course, only be successful if the legal bases are available in all the languages. I am not surprised by the Commissioner’s answer and her withdrawal to the position that the available academic documents are no more than a technical basis for the development of the White Paper position. Nonetheless, in this difficult process, I would say to the Commissioner that, in my view, it is indeed necessary to translate these bases of her White Paper recommendations as well, as this is the only way to ensure a meaningful debate. I believe that the motion therefore points in the right direction and I would ask the Commissioner to take appropriate supportive action here.

  Meglena Kuneva, Member of the Commission. − Mr President, all the honourable Members’ remarks have been very well presented and very wise. I would like to stress that the decision to translate only parts of the academic text is a political one. That is because the areas which are not useful for the purposes of the CFR will not be translated. I am sorry to repeat myself, but it is very important to stress that the CFR will be a toolbox by nature, and Parliament will be fully involved in the decision on which parts of the text are to be translated.

I would also like to inform you of the meetings tabled by the French presidency, which has scheduled two meetings of the Civil Law Committee for 5 September and 3 November, in order to discuss selection of the chapters of the draft academic CFR for the future Commission CFR. As you can see, nothing is set in stone. Both Parliament and the Commission can fully participate and do the job together. The outcome of these discussions should be adopted as JHA Council conclusions in December 2008. That gives us sufficient certainty that the process is truly inclusive of all the interested parties. With reference to Mrs van den Burg’s remark, I would like to assure you that the consultation process will be broad and inclusive.

I have received feedback from the academics, who have announced that they will translate their draft, which means that there will definitely be French, German and English versions. This guarantees, besides the efforts of the Commission, that the project will certainly be available in those three languages. The Commission has a clear interest in working together with Parliament, which has been so supportive of this project, and with the Council, to ensure proper scope, with translated versions of the already-completed academic part of the project.

  President. − I have received one motion for a resolution⁽¹⁾ pursuant to Rule 108(5) of the Rules of Procedure.

The debate is closed.

The vote will take place on Wednesday.

(1) See Minutes.