Pattern of Legislative and Adjudicative Integration of Private Law

8 Colum. J. Eur. L. 415 (2002)

Christoph U. Schmid. Dr. iur., University of Munich, 1 995; Ph.D., European University Institute Florence, 2002; currently research fellow and designated scientific coordinator of the “European Private Law Forum” at the EUI Florence.

The present survey is addressed mainly to lawyers without a background in European law and law students. It builds on and develops further earlier work, in particular The Emergence of a Transnational Legal Science in Europe, 19 OJLS 673 (1999); Evolutionary Perspectives and Projects on Harmonisation of Private Law in the EU, (S. Feiden, ed.), EUI Working Paper Law no. 7/1999; Desintegration und Neuordnungsperspektiven im europäischen Privatrecht, in Tradition und Fortschritt im Recht, 10 Jahrbuch Junger Zivilrechtswissenschaftler 33 (T. Ackermann et al. eds., 1999); and Legitimacy Conditions for a European Civil Code, 8 Maastricht J. Eur. Comp. L. 277 (2001). For critical comments, I am indebted to Christian Joerges. The usual disclaimer applies.

Private law and the European common market, the core field of activity of the European Community (EC), are in a relationship of mutual dependence and reinforcement. By enabling the free circulation of goods, persons, services and capital, the EC aims at integrating national markets, in order to enhance the production and distribution of goods through economies of scale. Just as any other free market economy, the European polity therefore needs private law as basic legal infrastructure, which makes available the 1 egal frameworks governing all kinds of market transactions. Conversely, by its integration into the common market, the scope and effectiveness of private law is greatly enhanced. This is true, first, in a territorial sense, in that the realm of private law instruments is extended beyond national borders. Moreover, as the European “economic constitution”, which builds primarily on the market freedoms and competition rules, forces Member States to do away with discriminating and restrictive national regulation (“deregulation”), the substantive scope left to societal self-regulation and private law as its principal tool drastically increases as well. In particular, as an effect of the deregulation of public- law structures and institutions, and of the growing complexification of the post- modem welfare state system more generally, “re-regulation” of the economy at the European level by means of p rivate law is promoted (“private g ovemance”). This trend is exemplified inter alia by self-regulatory instruments such as self- commitments, codes of conduct for cooperation agreements among firms and technical and industrial standards elaborated by national and European standard-setting bodies.

By contrast with most fields of economic regulation, the EC did not have to replace or harmonize core fields of private law such as contract or tort law to realize its market project. Instead, it could make use of the existing national private law systems. On account of relatively similar economic and social conditions in the Member States, the national legal systems were similar enough to render possible the realization of most market transactions without major obstacles. As a consequence, legislative harmonization or unification of core fields of private law such as contract or tort law was apparently not even debated during the first decade of the EC’s existence. Yet, since that time, two basic forms of private-law integration developed slowly but irresistibly, and provide the cornerstones of the private-law dimension of the European integration project up until the present day.

The first of them is legislative harmonization, which is pursued through the enactment of secondary legislation, i.e. mainly directives and in only some cases by regulations. In the seventies, European economic policy and law was gradually extended as to accommodate consumers, the passive party of market transactions. The European Commission has been engaged in drafting directives in classic fields of private law since the early eighties. These aim at both harmonizing rules to favor market transactions and protecting consumers. Examples include the directives on commercial agents, product liability, doorstep-selling, consumer credits, package holidays and tours, unfair terms in consumer contracts, time-sharing contracts, and, more recently, delay in payment, consumer guarantees in sales, distance selling and electronic commerce. Yet, these directives constitute sectoral regulation meant to fulfill specific economic, social, or political goals in the overall process of market integration – precisely those that the competent Directorate-General of the Commission has the task to monitor. Therefore, they are typically confined to specific areas, and they do by their very logic not purport to provide an exhaustive coverage of core areas of private law such as contract or tort. This functional and selective approach has led to an increasing fragmentation and splitting of European and national sources. Currently, these downsides of legislative integration are increasingly criticized. Options towards more consistent private-law legislation strategies are also discussed, culminating in.the recent project of a European Civil Code.

The second basic form of private-law integration takes place by means of adjudication, namely through the pervasive application to private law of treaty rules, the market freedoms and c ompetition Law in particular, by the European Court of Justice (ECJ). Although incremental and less visible, judicial integration of private law also plays a crucial role. Analytically, it has several dimensions. First, treaty rules such as the market freedoms may, though exceptionally, entail the disapplication of private-law norms with a discriminating or restrictive effect on free circulation. In a second setting, treaty rules are interpreted to impose positive commands on national law, such as to make available for implementation procedural and substantive remedies. Finally, in yet another situation characterized by the horizontal application of market freedoms among citizens, such as the famous Bosman case, provisos and conditions for private autonomous action are directly derived from them by the European judiciary. This essay will try to summarize and analytically reconstruct these two forms of private-law integration. Thereby, it aims at providing a by no means complete, but nevertheless representative picture of the implications of the process of European integration on private law.