European Private International Law as a Transition Stage?(1)
1. The fragmentation of European private (international) law
What are the causes of this fragmented approach? First of all, questions of competence must be looked at. Whether a measure can be taken at the European level depends upon the European treaties: Do they confer legislative power upon the European institutions? The European treaties only transfer limited powers from the (sovereign) member states to the European institutions. Furthermore, the principles of subsidiarity and proportionality play an important role, as they contain general limits in regard to the powers of European institutions (see Article 5 EC, to be found through Eur-Lex, the portal to European Union law: http://www.europa.eu.int/eur-lex/en/index.html).
If legislative power at the European level exists, a choice will have to be made between different procedures. For private law harmonisation as such, the most relevant provisions can be found in articles 94 and 95 EC (concerning the establishment or functioning of the common market and the establishment and functioning of the internal market, respectively). Regarding private international law the most relevant article is 65 EC. The European Court of Justice made it clear that mere reference to the establishment and functioning of the internal market is not enough to justify the use of the article 95 procedure: substantive reasons have to be given. Reference can be made to the so-called 'Tobacco cases': Case C-376/98 (Federal Republic of Germany v European Parliament and Council of the European Union) and Case C-74/99 (The Queen v Secretary of State for Health and Others, ex parte Imperial Tobacco Ltd and Others), to be found through Eur-Lex (http://www.europa.eu.int/eur-lex/en/index.html). Although article 295 EC states that this '… Treaty shall in no way prejudice the rules in Member States governing the system of property ownership', it has become clear from case law developed by the European Court of Justice that this does not mean that property law as such cannot be touched by European legislation. See, e.g., Case C-350/92,  ECR I-1985 (Kingdom of Spain v Council of the European Union) and Case C-222/97,  ECR I-1661 (Trummer and Mayer). The former case concerns the creation of a supplementary protection certificate for medicinal products, the latter case is about Austrian mortgage law and the law regarding land registry.
The two measures that are being used widely in the area of private law are the regulation and the directive. In the words of the Treaty establishing the European Community (article 249), 'A regulation shall have general application. It shall be binding in its entirety and directly applicable in all member states. A directive shall be binding, as to the result to be achieved, upon each member state to which it is addressed, but shall leave to the national authorities the choice of form and methods.' Although it looks as if a directive leaves considerably more freedom to member states than a regulation, a recent case decided by the European Court of Justice made it clear that, at least in the area of consumer law, statutory implementation is required; standing national case law is not seen as adequate protection of consumers: Case C-144/99 (Commission of the European Communities v Kingdom of the Netherlands).
2. (Dis)advantages of fragmented unification
This incremental approach also has certain disadvantages. European legislative measures are the result of a political bargaining process. Consequently, the language of these measures may be imprecise, inconsistent or may show grave lacunae. Various questions will then arise. European regulations and directives have to be interpreted in a European-autonomous way. This means that national interpretation (by national courts or administrative authorities) of, e.g., regulations and directives is not decisive. Based on the European nature of the measure, a European interpretation has to be found, not dependent upon interpretation as adopted by (certain) member states. This also applies to problems resulting from gaps in, e.g., a directive. Are the gaps to be filled at a European level or are they to be filled at a national level? All these questions, at the end of the day, will have to be decided by the European Court of Justice in Luxemburg. This may take many years.
3. A European Civil Code to resolve fragmentation?
Historically, this development from a customs union to a more complete union and from diversity of local law to unification of private law, can be seen in, e.g., Germany. There are, however, examples which show that economic integration does not, by necessity, need overall legal integration. Reference can be made to federal systems, such as the United States and Canada, and - even within the European Union - to the United Kingdom. Although Scotland was united with England in 1707, Scottish law preserved its distinct nature as a mixed legal system (see http://www.st-and.ac.uk/~scotparl/Union.htm). That Scottish law and English law are not converging can be seen in the Abolition of Feudal Tenure etc. (Scotland) Act 2000 (to be found at http://www.scotland.gov.uk/landreform/feudal.asp). In this Act, the recently re-established Scottish Parliament abolished the feudal system as the foundation of Scottish land law. As is well known, the feudal system of land tenure still is the historical basis for land law in England and other countries of the common law family.
In regard to the European Civil Code, questions arise as to both form and substance. Answers to questions regarding form depend, at least in part, on the legal basis for an overall legislative measure such as a Civil Code. Such a legal basis has to be found in the European treaties. If no such basis exists, the only alternative for a binding European measure is a treaty between the member states, otherwise the form can only be of a non-binding nature. Possible models might then be 'principles' or - more formal in nature - a model law attached to a treaty to be concluded among the member states. If such a legal basis for a European Civil Code would exist, the choice would be between a directive and a regulation.
Whether or not the European Community can enact a European Civil Code is being debated. See, e.g., the responses to the Communication from the Commission to the Council and the European Parliament on European Contract Law (COM(2001) 398 final), to be found at http://www.europa.eu.int/comm/consumers/policy/developments/ contract_law/index_en.html. On several occasions the European Parliament made it very clear that it would favour the enactment of a code. This was reaffirmed in its resolution on approximation of civil and commercial law, in which the European Parliament expressed support for further initiatives by the European Commission leading to a European Civil Code (Minutes of 15/11/2001 (A5-0384/2001), European Parliament resolution on the approximation of civil and commercial law of the member states (COM(2001) 398 - C5-0471/2001 - 2001/2187 (COS)), to be found at http://www2.europarl.eu.int/omk/OM-Europarl?PROG=REPORT&L=EN&PUBREF=-//EP//TEXT+REPORT+A5-2001-0384+0+NOT+SGML+V0//EN). It is clear from this resolution and earlier European Parliament documents that, in its view, the following areas are considered to be in need of (overall) harmonisation: general contract law, the law on sales contracts, the law governing service contracts including financial services and insurance contracts, the law governing personal securities, the law governing non-contractual obligations (tort, law of restitution), the law governing the transfer of ownership of moveables, the law governing credit guarantees and the law on trusts. The European Parliament advocates the setting up of a European Legal Institute, in which policy-makers, administrative authorities, the judiciary and those responsible for applying the law co-operate on a scientific basis in drawing up principles of European private law. The idea, probably, is to create an institution comparable to the famous American Law Institute, which is responsible for, among other projects, the Restatements of the Law (see http://www.ali.org/). The European Parliament also asks for the creation of a European database of common legal terminology. A beginning has already been made through the creation of Eurodicautom (http://www.europa.eu.int/eurodicautom/login.jsp). It may also be mentioned here that, for more than 15 years, the Netherlands Comparative Law Association has a standing committee on the translation of Dutch legal terminology into English, French and German, to which recently Russian and Spanish were added. Members of this committee are professional legal translators and comparative lawyers. I have the pleasure to chair this committee. The results of the commission's work are published in print. The next edition will also be made available electronically through the EJCL web site.
4. European private international law as a transitory stage?
One could wonder whether this is the right way. As I already indicated, the fragmentation of European private law has various causes. The European treaties only confer legislative power on the European institutions under certain conditions. A further limitation is found in the principles of subsidiarity and proportionality. Before a European legislative measure can be taken, it should be considered whether, on balance, harmonisation of the law is necessary. A further consideration should be whether the harmonisation of substantive law is required or whether the harmonisation of private international law suffices. It may very well be that resolving private international law issues is enough. In other words, a balanced approach is needed. As economic integration is a dynamic process, it may happen that the outcome of this balanced approach changes over time. This may lead to a different result. In that situation, the harmonisation of private international law may - looking at it with hindsight - have been a transitory stage towards the Europeanisation of substantive law. I would advocate this more pragmatic view of the harmonisation of private law. A different view would be too rigid. Legal integration is, just as much as economic integration, a dynamic process with varying outcomes, which may change over time. The unification of private international law may very well be the final stage in this process.
Sjef van Erp,
1. This editorial is a modified and expanded version of an introductory paper presented on 24 September
2001 in Budapest at a Netherlands-Hungarian conference on civil code revision in the light of the growing
European private law.
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Sjef van Erp,