Chapter 2: History of the Common Frame
of Reference
6. The development of work on the CFR can be
dated back to July 2001, when the Commission published a Communication
on European Contract Law.[4]
By that time, there had been resolutions of the European Parliament
encouraging work towards "a European Code of Private Law"
or "greater harmonisation of civil law",[5]
as well as a request by the European Council, meeting at Tampere
in 1999, for an "overall study" on the need to approximate
the civil legislation of Member States "as regards substantive
law … in order to eliminate obstacles to the good functioning
of civil proceedings".[6]
We observe that this formulation itself bears the signs of a compromise.
Lack of harmonisation of substantive law is not normally identified
as a main obstacle to the good functioning of civil proceedings
in Member States, even in a cross-border context. In the event,
the consultation which the Commission launched between July 2001
and March 2003 (when it produced its Action Plan) was inconclusive
as to the extent to which obstacles existed which required action
in relation to substantive national laws, since it called for
further examination of any general problems and of their solution.
7. Significant work had also been done on the
law of contract by a group of academic lawyers—the Commission
on European Contract Law, inspired by and commonly associated
with the name of Professor Ole Lando. The Commission on European
Contract Law's Principles of European Contract Law was
published in 2000.[7] In
1998 an academic Study Group on a European Civil Code was established
under the chairmanship of Professor Christian von Bar. In
2001 European Contract Code—Preliminary draft[8]
was published, based on the work of the Academy of European Private
Lawyers.
8. Against this background, the Commission's
Communication of 2001 identified various options for public consideration,
from (I) no action, (II) promoting the development of common contract
law principles leading to greater convergence of national laws,
(III) improving the quality of existing Community legislation
(the acquis) to (IV) adopting new comprehensive legislation
at Community level (e.g. in the form of an optional instrument).
The Commission acknowledged the work done by others and sought
information and views on these options. In 2002, a further academic
Acquis Group was established, to focus on the existing acquis.
9. This Committee undertook an inquiry into the
Commission's Communication; its Report, European Contract Law,
was published in January 2002.[9]
We noted that there was no consensus about, and that it was difficult
to assess, the magnitude of any problems caused by differences
in national laws, as distinct from other aspects of cross-border
transactions (such as language and/or cultural differences). We
commended the work which had led to the Principles of European
Contract Law for its educational value and as potentially
offering contracting parties and legislators a common legal language.
We considered that comparative research might help resolve some
of the difficulties in formulating coherent EC legislation, but
that any convergence of national laws (suggested by the Commission's
option II) should be a gradual, evolutionary process. There were
inconsistencies in EC legislation, in substance and terminology,
removal of which (as proposed by option III) would be welcome.
But the Communication had also proposed extending the scope of
existing directives, and this, we said, should only be undertaken
where a practical need was clearly demonstrated, and where tangible
benefits would result for users and consumers. In relation to
the idea of new comprehensive legislation at Community level (option
IV), we recorded widespread criticism (from business, legal practitioners
and academics), and an absence of any demonstrated need. There
seemed to be little support for a directly applicable European
Code of Contract Law, let alone for the European Civil Code which
the European Parliament had been advocating. Insofar as there
should be action at Community level, the way forward was thus
encompassed by options II and III.
10. The Commission, by further Communication
in February 2003, reported on the responses to its consultation
and set out its Action Plan.[10]
At the core of this was the development of a "common frame
of reference". This was to "ensure greater coherence
of existing and future acquis in the area of contract,
by establishing common principles and terminology" and "providing
for best solutions in terms of common terminology and rules i.e.
the definition of fundamental concepts such as 'contract' or 'damage'
and of the rules which apply, for example, in the case of non-performance
of contracts". The CFR was also to form the basis for reflection
on the opportuneness of non-sector specific measures, such as
an optional instrument of contract law to exist in parallel with,
rather than instead of, national contract law.
11. The Commission published a further Communication
in October 2004.[11]
This identified as the primary focus of the CFR improvement of
the existing acquis (listing eight existing directives
for specific attention), but also mentioned as further possible
roles use for an optional instrument or standard terms, use in
Community contracts, use by national legislatures and inspiration
for the European Court. It explained that the CFR would be developed
by financing three years of research (under the Sixth Framework
Programme for Research). The research was to be undertaken by
academic researchers, working in co-ordination with stakeholders
representing a diversity of legal traditions and economic interests
whose participation was to be essential. There were to be workshops
and a dedicated website (the CIRCA website) and "a structure
for ensuring overall co-ordination of stakeholder input, such
as a steering group involving both members of the academic research
and stakeholder experts". A first conference of stakeholders
was held in Brussels on 15 December 2004, and workshops were scheduled
thereafter.
12. The Committee undertook an inquiry into the
Commission's Communication of October 2004, and published a report,
European contract law: the way forward in April 2005.[12]
We noted that the CFR was "the most important element"
of "the ambitious programme of work" on which the Commission
had embarked.
13. We considered that there was uncertainty
about what the CFR was or would look like, and concluded that
it was likely to take on the form of an annotated statement both
of general contract law and of the law relating to specific types
of contract (with the potential to become an optional instrument).
We doubted whether the CFR project would have been undertaken
without the substantial base of academic work which already existed.
We questioned whether it was a good idea to spend substantial
resources of time and personnel on such a programme, rather than
on what was certainly needed, which was improving the acquis,
but noted that commitments had already been entered into. We observed
that the case for harmonisation of contract law across Europe
had yet to be made, and would have to be considered on its merits,
but that the creation of a CFR could itself increase the pressure
for harmonisation. While the Commission was clearly concerned
to have a CFR which was usable and the researchers would no doubt
have the same aim, we noted that the means of funding which had
been adopted gave rise to potential problems, namely that, because
the Sixth Framework Programme exists to fund primary research
the Commission in its own words "cannot determine terms of
reference for the researchers or dictate either methodology or
results". We underlined the need for proper control over
the use of the large sum of public money to be spent preparing
the CFR. We pointed out that, whatever the researchers produced,
would not bind the Commission as to the final content of any CFR,
in relation to which there would be an important political dimension.
14. The Committee has scrutinised two Progress
Reports on the CFR from the Commission.[13]
The Committee welcomed the second Progress Report in October 2007
as a useful description of the work on the CFR project but expressed
concern about the scale of the project and the relatively limited
field of stakeholders that had been consulted.
15. On 8 February 2007 the Commission published
a Green Paper on the Review of the Consumer Acquis,[14]
followed after consultation by a proposal on 8 October 2008 for
a Directive on consumer rights[15]
which is currently the subject of scrutiny by Sub-Committee G
with a view to the preparation of a report to the House by this
Committee.
16. The Justice and Home Affairs Council of Ministers
on 18 April 2008 defined its position on four fundamental aspects
of the CFR in these terms:
(a) Purpose of the Common Frame of Reference:
a tool for better law-making targeted at Community lawmakers;
(b) Content of the Common Frame of Reference:
a set of definitions, general principles and model rules in the
field of contract law to be derived from a variety of sources;
(c) Scope of the Common Frame of Reference: general
contract law including consumer contract law;
(d) Legal effect of the Common Frame of Reference:
a set of non-binding guidelines to be used by lawmakers at Community
level on a voluntary basis as a common source of inspiration or
reference in the lawmaking process.
17. In February 2009, the CFR project was transferred
from the Commission's Consumer Affairs Directorate (DG SANCO)
to its Justice, Freedom and Security Directorate, of which Jonathan
Faull is Director General.
4 Doc 10996/01; COM(2001) 398. Back
5
A2-157/89, repeated A3-0329/94; and B5-0228, 0229-0230/200. Back
6
Presidency Conclusions, 15-16 October 1999. Back
7
Principles of European Contract Law Parts I and II; edited
by Ole Lando and Hugh Beale. Back
8
Università di Pavia, 2001. Back
9
European Union Committee, 12th Report (2001-02): European Contract
Law (HL 72). Back
10
A more coherent European contract law: an action plan;
COM(2003) 68. Back
11
European Contract Law and the revision of the acquis: the way
forward; COM(2004) 651. Back
12
European Union Committee, 12th Report (2004-05): European contract
law: the way forward (HL 95). Back
13
Docs 13065/05 and 12269/07. Back
14
Doc 6307/07; COM(2006) 744. Back
15
Doc 14183/08; COM(2008) 614. Back
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