Legal Common law?
The European Commission has published a Green Paper outlining various options for changing contract law to encourage cross-border trading, writes Hywel Davies
T
he European Commission is consulting on potentially far-reaching contract law reform in Europe. It claims that this is needed to stimulate cross-border trading, particularly
involving small businesses. Although it is primarily focusing on cross-border trading, the proposals include options for a European Regulation on contract law. Announcing the consultation, the Commission says
that only 8% of consumers buy online from another member state. And 61% of cross-border sales are rejected because traders refuse to serve the consumer’s country. This is largely due to regulatory barriers and legal uncertainty about the applicable rules. ‘I want a Polish, German
or Spanish consumer to feel as safe when doing business with an Italian, Finnish or French company online as when they are at home,’ said Justice Commissioner Viviane Reding. ‘I want Europe’s small and
it help business-to-business transactions in the current economic circumstances? The Commission Green Paper seeks opinions
on seven proposed reform options, ranging from publishing suggested model contracts to an EU-wide law replacing all national contract laws. The options are: • non-binding model contracts; • a ‘toolbox’ for national legislators to improve consistency when passing national contract laws;
• a non-binding request to member states to incorporate a ‘European contract law’ into their law;
It would be unwise to
medium-sized companies to offer their products and services to consumers in other countries without having to become experts in the national contract law systems of all EU countries. ‘This is certainly a time of crisis for Europe’s
• creation of an optional ‘28th system’ of EU contract law in parallel to the 27 member state’s legal systems; • partial harmonisation of contract law through an EU directive;
dismiss this as another wacky idea from Brussels
• full harmonisation of contract law through a Regulation; and
• an EU civil code on contracts which would replace national contract law.
The Green Paper was prepared by an expert group,
economy. But it is also a time where we have an historic opportunity to drive economic growth by easing the cost of cross-border transactions. It is therefore now the time to make a quantum leap towards a more European contract law.’ Has anyone asked a plumber in Pontefract, or an
electrician in Eccles, whether they have any interest in rewiring a chateau in the Dordogne, or replacing a boiler in Bamburgh? I suspect not: they may feel its risky enough working in England under a legal system of which they have some knowledge. But it seems that, in the interests of cross-border
trade, the Commission wants to rewrite contract law for them anyway. This may be thought to stimulate greater competition in consumer markets, but how does
22 CIBSE Journal August 2010
including three academics from the UK, to provide a ‘common frame of reference’ on which discussions could be based. It is the culmination of many years of study and effort by several cohorts of European academics. It resulted in a previous attempt, in 2001, to introduce
major contract law reforms, so it represents a significant investment of academic time and EU taxpayers money, with all the attachment that creates amongst its advocates. It would therefore be unwise to dismiss it as another
wacky idea from Brussels. Rather, we should be taking careful note, and responding to the consultation process, which runs until 31st January 2011. Depending on the outcome of the consultation, the Commission could propose further action by 2012. l
Hywel Davies is technical director of CIBSE.
DOWNLOAD The Green Paper from the European Commission on policy options for progress towards a European Contract Law for consumers and businesses can be downloaded at http://
ec.europa.eu/justice_home/ news/consulting_public/news_
consulting_0052_en.htm
www.cibsejournal.com
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