Soft law and the European Union legislative process

Ecrit par Jean Albert 

Lundi, 09 Juillet 2007 00:00

Introduction

The European Commission is opting for a « soft law » approach in the field of European contract law.This approach appears to offer the flexibility necessary to ensure more harmonization in this field.However, it has raised a number of questions including the role of the European Parliament in the process of boththe adoption of such an approach and the definition of the scope and content of the « soft law » itself.

EU contract law and political mandate

EU level action in the area of contract law was recently confirmed from a political standpoint under the Hague Programme1.The programme grants the European Commission a political mandate in this respect. It also requests that rationalizationefforts be undertaken. Under its paragraph 3.4.4, the Hague Programme states2 :
« In matters of contract law, the quality of existing and future Community law should be improved by measures ofconsolidation, codification and rationalisation of legal instruments in force and by developing a common frameof reference. A framework should be set up to explore the possibilities to develop EU-wide standard terms andconditions of contract law which could be used by companies and trade associations in the Union ».
A 2006 Communication from the Commission details how it intends on implementing the program3.
The Hague Programme follows the acquis review started by the European Commission in 2001.

The 2001 Communication

In July 2001, the Commission published its Communication on European Contract Law.Through this the European Commission sought to obtain information on the effects on the InternalMarket of the significant disparities that exist between Member States in the field of contract law.The Commission perceived that such problems could hinder both business and consumers in exploiting the potential of the Internal Market.
The 2001 Communication set out four options for discussion:
  • I – no EC action;
  • II – promote the development of common contract principles leading to more convergence of national laws;
  • III – improve the quality of existing Community legislation;
  • IV – adopt new comprehensive legislation at EC level.

The 2003 Action Plan

On 12 February 2003, the Commission issued an action plan entitled « A more coherent European contract law« 4.
The Action Plan set out the results of the 2001 consultation and identifies a need for further consultations and makes proposals.
The results of the 2001 Consultation showed that only a small minority favoured Option I (No EC action).Option III on the other hand was by far the preferred option. Option II also received strong support.A majority rejected Option IV although suggested that further thought might be given to thisoption in the light of any developments under Options II and III.
Drawing from the consultation results, the Action Plan proposes a mix of non-regulatory and regulatory measures.These include the following.
  • Defining a common frame of reference (« CFR »), including standard definitions of terms such as « contract » and « damage »;
  • Using CFR to review existing EU law or prepare new proposals;
  • Increase the coherence of existing Community legislation affecting contracts;
  • Deal to the inconsistencies in the present legislation; and
  • Study the feasibility of creating a body of Contract Law at EU level.

The 2004 Communication

On 11 October 2004, the Commission published its Communication, « European Contract Law and the revision of the acquis: the way forward« 5.
The Communication takes forward the Commission’s 2001 plans for contract law and describes the follow-up measures to the 2003 Action Plan.
  • Identification of problems with the acquis
    In this Communication, the Commission acknowledges that the responses to its consultation exercise in 2001 confirmed the existence of problems with the acquis.
    The acquis consists in the substantial body of Community law affecting contracts.This body of law is provided under Annexes 1 and 2. For the most part the existing measures are consumerprotection instruments. Some target specific abusive practices6. Others such as theDirective on Unfair Terms7 are broader in scope and application.A few directly affect business to business relationships8.
    The Commission notes that the acquis contains (i) uncertainties – terms are not defined or are defined in someDirectives but not in others, (ii) inconsistencies – withdrawal periods in consumer related contracts diverge fromone Directive to another and (iii) conflicting results – in some cases regulations which produce conflicting resultscan be applicable simultaneously to a situation. This has inevitably led to differences in national implementation.
  • Review of the acquis
    As a result of the above observation, the Communication proposes to review the acquis.
    The Communication identifies eight consumer directives which it proposed to review. These are listed below.
    • Council Directive 85/577/EEC of 20 December 1985 to protect the consumerin respect of contracts negotiated away from business premises (Doorstep-selling Directive);
    • Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours (Package Travel Directive);
    • Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (Unfair Contract Terms Directive);
    • European Parliament and Council Directive 94/47/EC of 26 October 1994 on the protection of purchasers in respect ofcertain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare basis (Timeshare Directive);
    • European Parliament and Council Directive 97/7/EC of 20 May 1997 on the protection of consumers in respect of distance contracts;
    • European Parliament and Council Directive 98/6/EC of 16 February 1998 on consumer protection in the indication of the prices of products offered to consumers;
    • European Parliament and Council Directive 98/27/EC of 19 May 1998 on injunctions for the protection of consumers’ interests ((the Injunctions Directive); and
    • European Parliament and Council Directive 1999/44/EC of 25 May 1999 on certain aspects of the sale ofconsumer goods and associated guarantees (Consumer Guarantees Directive).
  • Other proposals
    The Commission’s proposals for future work on European contract law contain three key elements:
    • The creation of a CFR, which is aimed, in the first instance, at improving the existingEuropean legislation (the acquis) and the drafting of better legislation in the future;
    • The promotion of European-wide standard contract terms and conditions;
    • The possible development of a so-called « optional instrument », a set of rules on contract law whichwould apply unless its application had been excluded by the parties (opt out) or which would only applyif chosen by the parties (opt in).

The First Annual Progress Report on European Contract Law and the acquis Review

On 23 September 2005 the Commission published the First Annual Progress Report on European Contract Law and the acquis Review.

CFR and the legislative process

As stated earlier the European Commission has opted for a CFR which in fact in a repository of existing regulation,definitions, studies and best practices in the area of contract law. There is no reason to believe that CFR willbe limited to general contract law. It will likely contain detailed rules on specific types of contract.In terms of the objectives, the 2004 Communication states: « The CFR will provide clear definitions of legal terms,fundamental principles and coherent model rules of contract law, drawing on the acquis and on best solutions found in Member States’ legal orders« .CFR is a « toolbox » from which solutions are used to improve the quality and coherence of the existing acquis andwhen future instruments in the area of contract law are drafted9.
As a result the CFR may lead to a European Contract Law. This is the view of researchers and stakeholdersworking on the project as stated in the Opinion of the European Parliament Committee on the Internal Marketand Consumer Protection10. It may also be the foundation for the acquis review which again entailsa legislative process. Finally, it could create a system of « soft law » from which the legislative branch couldbe completely excluded. The issue with soft law or the development of non-binding instruments that neverthelesshave an important impact in practice is that the normal legislative process may not apply in the same way as withother legal instruments such as regulations and directives. This has been highlighted in a European Parliament resolution of March 200611.This resolution followed a European Parliament report that highlighted the importance of collaboration between the EuropeanCommission and the European Parliament at every stage of the CFR and the acquis review12.

Appendices

1 – The Council of the European Union, 16054/04, December 13, 2004.
2 – The Hague Programme on Strengthening Freedom,Security and Justice in the European Union wasagreed by Heads of State at the European Council on 5 November 2004.
3 – Communication from the Commission to the Council and the European Parliament,Implementing The Hague Programme, the way forward, 28.06.2006, COM(2006) 331 final.
4 – COM(2003)0068.
5 – COM(2004)0651.
6 – See for example, Council Directive 85/577/EEC of 20 December 1985 to protect the consumer in respectof contracts negotiated away from business premises. See also European Parliamentand Council Directive 94/47/EC of 26 October 1994 on the protection of purchasersin respect of certain aspects of contracts relating to the purchase of the rightto use immovable properties on a timeshare basis.
7 – See for example, Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts.
8 – See for example, Directive 2000/35/CE on combating late payments in commercial transactions.
9 – Communication, para 2.1.1.
10 – Opinion of 25.01.2006.
11 – P6_TA(2006)0109.
12 – A6-0055/2006.

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