1. Harmonisation, Unification and Optionality in European Private Law Seminar on Private Law, Lomonossov State University, Moscow 11 May 2015 Prof. Dr. Dr.h.c.mult. Jürgen Basedow, LL.M. (Harvard) Director Max-Planck Institute for Comparative and International Private Law and Professor of Law, Univ. of Hamburg Associate Member, Institut de droit international

2. Survey 1.What is national about private law ? 2. Strands of Europeanisation 3.Bases, types and achievements of EU private law legislation 4. The role of the European Court of Justice 5. Towards a general framework of contract law 6. Outlook: European private law as a hybrid

3. 1. What is national about private law ? Present: Since 1800 national codifications; after 1990 a second wave History: ius commune - a European fallback legal system or conceptual framework Interests involved ? State interests generally unaffected Content of legal rules ? Perhaps in family law, but not in the law of obligations and property assets Language ? Switzerland, Belgium, Finland, Canada demonstrate that multi- linguistic legal systems are practicable Institutional framework ? Court systems, proceedings, legal education, legal press, conferences, associations of lawyers – all that bears the imprint of the nation state. But approximation and permeability of structures is possible.

4. 2. Strands of Europeanisation A growing interest in comparative law since 1900: the opening of legal minds Uniform private law of international conventions since the 1880s: IP; rail transport; maritime law; private international law; the sale of goods etc. European legal history as a paradigm for future europeanisation (Koschaker, Wieacker, Coing, Zimmermann) The New Lex Mercatoria: harmonisation through private action: observation of commercial practices, standard conditions, arbitration (Goldman, Schmitthoff) The European Union: institutionalized harmonisation and the Single Market Program of 1985

5. 3. Bases, types and achievements I Market integration, not legal harmonisation as the goal of the EU The principle of conferral, art. 5 no 1 TEU, policy-specific enabling Treaty provisions and piecemeal legislation 4 types of legislation, art 288 TFEU : (a) Decisions on the adoption of conventions by the EU (b) Directives used for the approximation of national law; implementation is needed, but wide divergences subsist; example Dir. 93/13 on unfair terms (c) “Mandatory“ regulations, directly applicable, not available everywhere, creating uniform law, example Reg. 261/2004 on denied boarding compensation (d) “Optional“ regulations, giving rise to optional private law, examples: Reg. 40/94 on the Community trademark, Reg. 2157/2001 on the Societas Europea, COM (2011) 635 of 11 October 2011 – a proposal for CESL

6. Cont‘d: Bases, types and achievements II Frequently used legislative bases (a) arts. 114, 115 TFEU: internal market orientation; mainly directives, but recently more and more regulations (b) art. 50 para. 2 (g) TFEU: company law; only directives (c) arts. 91, 100 TFEU: law of transport; mainly regulations (d) art. 103 TFEU: competition law, in particular block exemption regulations (e) arts. 19, 153 TFEU: anti-discrimination law; so far only directives (f) art. 81 TFEU: conflict of laws and jurisdictions, mainly regulations (g) art. 118 TFEU: unitary IP rights; only regulations (h) art. 352 TFEU: subsidiary competence, in practice only regulations Achievements: first company law directive in 1968, some acts on company law and labour law in the 1970s; true start in 1985 with the Single Market Program; further momentum with the Treaty of Amsterdam and new competences of EU At present about 100 acts mainly in: company law, labour law, consumer law, IP law, competition law, private international law and anti-discrimination law, “pure“ private law and “mixed“ private and public law acts

7. 4. The role of the European Court of Justice For uniform law, eg CISG, no uniform interpretation possible; ECJ is unique The referral procedure under art. 267 TFEU as a means of dialogue between the ECJ and national courts The ECJ as the creator of general principles of law, see art. 340 para 2 on the extra-contractual liability of the Union; fundamental rights, proportionality etc. Piecemeal legislation in private law would require general principles, but ECJ is reluctant to enunciate such principles when interpreting secondary EU law (by contrast to what happens in respect of primary law), see Basedow, Eur.Rev.Priv.L. 2010, 443 seq.: heterogeneous case law in private law matters Public law perspective: ECJ tends to translate private law disputes into constitutional disputes, e.g. Mangold C-144/04, Test-Achats C-236/09

8. 5. Towards a general framework of contract law I Scholarly efforts since 1980: Lando Commission or Commission on European Contract Law, following the strands of the new lex mercatoria and the Rome Convention on the law applicable on contractual obligations of 1980 The model: Restatements of the Law of the ALI; rules, comments with illustrations, comparative notes The product: Principles of European Contract Law, 2000 and 2003, covering general contract law and the general law of obligations Further scholarly commissions, dealing with tort law, insurance contract law, the law of trusts, private international law, family law. Scholarly activism: Study group on a European Civil Code as a super-structure to other groups

9. 5. Towards a general framework of contract law II The EU Commission‘s gradual turn towards general contract law: Communication 2001; Action Plan 2003; Communication 2004: establishment of a “network of excellence“ consisting of the Study group, the Acquis group, and the Insurance group; 2005-2008 December 2008: delivery of the Draft Common Frame of Reference (DCFR), prepared by the groups of the network (and published in 2009), to the Commission DCFR criticised for lack of consistency and overregulation, eg donation, benevolent intervention into another‘s affairs, trusts April 2010: Appointment, by the Commission, of an expert group charged to help the Commission in elaborating the CFR July 2010: Green Paper on Policy Options in contract law – COM(2010)348; optional instrument likely; Comments by Max Planck Institute, RabelsZ 75 (2011) 371 – 438 May 2011: publication of Feasibility Study – optional instrument with 189 articles on sales law

10. 5. Towards a general framework of contract law III October 2011: Proposal for a Regulation on a Common European Sales Law (CESL); “optional“ regulation consisting of 16 scope rules + annex with 186 substantive law provisions Substantive scope: sale of goods, supply of digital content + related services; some topics of general contract law (e.g. offer and acceptance, defects of consent), no aspects involving third parties (e.g. agency, assignment) Personal scope: both B2B and B2C, but not C2C contracts; in B2B contracts one party must be a SME: how can the other party know? Geographical scope: only available for cross-border contracts; one party must be located within the EU; not for domestic contracts Disincentives to opt in: e.g. no right to cure of seller in B2C; judicial review of standard terms even for very large transactions...

11. Towards a general framework of contract law IV Strong criticism of CESL: in the political arena see eg the German Bundestag: breach of subsidiarity principle; no legislative competence (BT-Drs. 17/8000); in academia see Eidenmüller/Jansen/Kieninger/Wagner/Zimmermann, JZ 2012, 269- 289 (in German), Edinburgh L.Rev. 2012, 301-357 (in English) Outlook: Approval by European Parliaments with many suggestions for detailed amendments; most relevant: limitation of scope to distance contracts including online contracts; limitation to cross-border contracts is affirmed, but is it still appropriate? Consequence: 2 contract law regimes for online contracts December 2015: withdrawal of proposal by new Commission; announcement of a new proposal for the digital internal market. Insurance contract law: Appointment of an Expert Group by EU Commission, OJ 2013 C 16/6. Limited mandate: ascertain to what extent insurance contract law is an impediment to cross-border insurance business; report submitted in February 2014 available on the website of DG Justice

12. 6. Outlook: European private law as a hybrid Looking into the future, what will European private law look like 10 or 20 years from now ? It will most likely be complicated and a hybrid in several respects A hybrid of national law and EU law A hybrid of private international law (PIL) and substantive law: the Rome I and Rome II Regulations cover almost the entire field of obligations; through Rome III (divorce) and Rome IV (succession) EU enters the law of personal status; the first step in cross-border cases therefore is governed by EU law, even if substantive law remains national law; PIL is no longer peripherical, it becomes part of the internal private law of the EU A hybrid of various forms of EU legislation: decisions, directives, regulations A hybrid of mandatory law, dispositive law and optional law enabling the parties to derogate even national mandatory law

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