The Impact of European Integration on Private Law: Reductionist Perceptions, True Conflicts and a New Constitutional Perspective

If private law is defined simply as a matter of core areas such as substantive contract, torts, property or family law, it may be doubted whether European law has significantly affected national private law systems; or conversely, whether national private law is relevant to European integration. However, this paper argues that such conclusions are misleading: while there have been very few European interventions into the core areas of civil codes or the common law, the integration process has impacted forcefully upon deeper structures of national legal systems. Challenging the institutional embeddedness of national private law, European primary and regulatory law has remodelled (public) concepts of private autonomy, the realm of private governance and the social responsibility of private actors. How then to present and evaluate this indirect impact? Drawing upon concrete examples, this paper seeks first to understand this European challenge to the interdependence of national private law, borrowing from political science's analytical tool of multi-level governance to highlight the complex interrelations between European rights and regulatory law and national private law; and secondly attempts actively to assess the legitimacy of the impact of integration upon private law with the aid of the explicitly normative theory of deliberative supranationalism. However, precisely because Europe remains in a state of flux, and dependent upon contingent political processes, no final conclusions are drawn: as is the case with so many areas subject to integrationist logic, the contours of the ‘new European private law’ cannot be laid down in advance, and are instead a long and weary matter of cooperation and fine-tuning between national and European judiciaries.     

The Maastricht-Urteil: Sovereignty Now

Abstract: The sovereignty issue in European law, which was recently raised again before the highest national courts, poses a challenge to legal theory. The supremacy of EC law should not be regarded as imposing a strict hierarchy within a monistic legal system. A pluralistic and interactive analysis of the relations between the legal systems of the Member States and their common system of EC law suggests instead that the highest court within each system retains interpretative competence-competence. Although pluralist legal theory therefore supports the claim that sovereignty has not passed to the organs of the Union, the same analysis confirms that sovereignty has not remained with the individual Member States either: a more subtle understanding of the meaning of sovereignty and its locus is necessary.     

Pluralism and Integrity

One of the theoretical developments associated with the law of the European Union has been the flourishing of legal and constitutional theories that extol the virtues of pluralism. Pluralism in constitutional theory is offered in particular as a novel argument for the denial of unity within a framework of constitutional government. This paper argues that pluralism fails to respect the value of integrity. It also shows that at least one pluralist theory seeks to overcome the incoherence of pluralism by implicitly endorsing monism. The integrity and coherence of European law is best preserved by considering that both the national legal order and the international or European legal orders adopt sophisticated views of their own limits.     

Legal Pluralism and the European Union

Abstract:  This article advances a pluralist model of a legal system. It claims that a legal system is pluralist when it contains inconsistent rules of recognition that cannot be legally resolved from within the system. The first part of the article sets out the model, demonstrating why it requires a departure from the classical accounts of law advanced by writers such as Hart and Kelsen. The second half applies this model to actual legal orders: first, to Rhodesia during the crisis of 1965, and then to the legal orders of the European Union. It is argued that there are interesting and important points of similarity between the two.     

From European Integration to European Integrity: Should European Law Speak with Just One Voice?

Abstract: This article examines whether and how the moral principle of legal coherence or integrity, which has recently been developed further as a response to disagreement in the national legal context, applies to European law. According to the European integrity principle, all national and European authorities should make sure their decisions cohere with the past decisions of other European and national authorities that create and implement the law of a complex but single European legal order. Only by doing so, it is argued, can the European political and legal community gain true authority and legitimacy in the eyes of the European citizens to whom all these decisions apply. Although European integrity is primarily a product of European integration, it has gradually become one of the requirements of further integration. The article suggests that the principle of European integrity would help dealing with the growing pressure for common European solutions under conditions of increasing diversity. It places disagreement at the centre of European politics, as both an incentive and a means of integration by way of comparison and self‐reflectivity. It constitutes therefore the ideal instrument for a pluralist and flexible further constitutionalisation of the European Union.     

'New Governance' in European Corporate Law Regulation as Transnational Legal Pluralism

The present transformation of European corporate governance regulation mirrors the challenges that have been facing the EU's continuously evolving polity, marked by tensions between centralised integration programmes, on the one hand, and Member State's embedded capitalisms, path-dependencies and rent-seeking, on the other. As longstanding concerns with remaining obstacles to more mobility for workers, services, business entities and capital in recent years are aligned with post-Lisbon commitments to creating the world's leading competitive market, European corporate governance regulation (ECGR) has become exposed to and implicated in a set of highly dynamic regulatory experiments. In this context, 'New Governance' offers itself as both a tentative label and immodest proposal for a more responsive and innovative approach to European law making. The following article assesses the recently emerging regulatory forms in ECGR as illustrations of far-reaching transformations in market governance. The arguable parallels between the EU's regulatory transformation in response to growing legitimacy concerns and the recurring question about whose interests a business corporation is intended to serve, provide the framework for an exploration of current regulatory trajectories in European corporate law that can most adequately be understood as a telling example of transnational legal pluralism.     

The Open Architecture of European Human Rights Law

The evolution of the European human rights regime is often described as the development of an integrated order with the European Convention of Human Rights as its governing 'constitutional instrument'. It is argued that the regime is better regarded as pluralist - characterised by a heterarchical relationship between its constituent parts that is ultimately defined politically and not legally. The emergence and workings of this pluralist order are traced through the interaction of the European Court of Human Rights with domestic courts in the European Union. These cases not only show conflicts over questions of ultimate supremacy but also significant convergence and harmony in practice. The analysis of the factors leading to this convergence indicates that central characteristics of pluralism – incrementalism and the openness of ultimate authority – have contributed significantly to the generally smooth evolution of the European human rights regime. This suggests a broader appeal of pluralist models as alternatives to constitutionalism in the construction of postnational authority and law.     

Unravelling the Embedded Liberal Bargain: Labour and Social Welfare Law in the Context of EU Market Integration

European economic integration with a minimalist social policy at EU level was in part made possible by strong domestic labour market and social welfare institutions. The main contention of this paper is that EU market liberalisation was embedded within institutions of social citizenship at domestic level, which served to counter the liberalisation of the internal market. But this settlement has been put under strain. In addition to the challenges posed to the sustainability of European welfare states by the global economic crisis, the internal market jurisprudence of the Court of Justice casts doubt on the sustainability of the ‘embedded liberal bargain’. This paper focuses on the role of the Court, in particular in its jurisprudence on the interaction between (EU) market freedoms and (national) labour law, which undermines the ability of states to retain their regulatory autonomy over labour or social welfare law and, arguably, speeds up the unravelling of the ‘embedded liberal bargain’.     

Reforming the Market or the State? Article 30 and the European Constitution: Economic Freedom and Political Rights

This article takes as its starting-point the relationship between Article 30 of 30 of the EC Treaty (general rule on the free movement of goods) and the European Constitution. On the one hand, it examines Article 30 in the context of the constitutional dilemmas facing the European Union, particularly the balance of powers to be defined between Member States and the Union, between public power and the market, and between the legitimacy of Community law vis à vis that of national law. On the other hand, it reviews different conceptions of the European Economic Constitution by analysing the role of Article 30 in the review of market regulation.     

Contract Governance in the EU: Conceptualising the Relationship between Investor Protection Regulation and Private Law

The instrumental use of private law, in particular contract law, by the EU raises a complex issue concerning the relationship between contract‐related regulation and traditional private law and underlines the need for conceptualising the interplay between the two from the contract governance perspective. The present article aims to apply this new analytical approach in the investment services field where there is considerable tension between the EU investor protection regulation embodied in the Markets in Financial Instruments Directive (MiFID I and MiFID II) and national private laws. The article explores various models of relationship between investor protection regulation and traditional private law within a multi‐level EU legal order, considering the strengths and weaknesses of each field in pursuing public and private interests involved in financial contracting. This analysis also offers some lessons for the broader narrative of how European integration in regulated areas dominated by public supervision and enforcement could proceed.     

Institutional competition of optional codes in European contract law

The Common European Sales Law (CESL) is the European Commission’s most recent policy initiative for European contract law. It aims to address the problem that differences between the national contract laws of the Member States may constitute an obstacle for the European Internal Market. This paper develops a model of the institutional competition in European contract law and uses it to addresses the question as to whether an optional European contract code and the CESL are economically desirable for European contract law. To do so I examine the transaction costs involved in the process of choosing an applicable law that European businesses face when they conduct cross-border transactions in the European Internal Market. I then describe how these transaction costs shape the competitive environment, i.e. what I refer to as the “European market for contract laws” in which the contracting parties choose a law to govern their cross-border contracts. Having identified this environment and the competitive forces operating within it, I propose a model, the “Cycle of European Contract Law”. I use this model to analyze the competitive processes that take place in the European market for contract laws. Based on my results I make recommendations for the optimal implementation of an optional European contract code and the CESL in European contract law.     

Internal Market Rationality,Private Law and the Direction of the Union: Resuscitating the Market as the Object of the Political

This paper proposes a concept of ‘internal market rationality’ for the analysis of the political, legal and economic consequences of European integration. Internal market rationality refers to a specific pattern of political action in the field of internal market, which has emerged gradually due to the confluence of three main factors: first, the EU's functional institutional design; second, the processes of post‐national juridification; and third, a more contingent influence of ideas. In the interplay of those three factors, the interpretation of internal market has become overdetermined, restricting thereby the space of (democratic) politics in its regulation. This reification of internal market rationality has had a direct influence on the content of European law, as I demonstrate through the example of European private law. Internal market rationality has transformed the very concept of justice underpinning private law, the concept of the person or subject of law, the (re)distributive pattern of private law as well as the normative basis on which private law stands. I argue, finally, that a close examination of the legal, institutional and ideological arrangement behind internal market rationality provides clues for the democratisation of the EU.     

Constructing a European Society by Jurisdiction

Abstract:  From a sociological point of view, European integration is specifically a process of transforming deeper structures of solidarity, legal order and justice away from the segmentally differentiated European family of nations and towards an emerging European society. This transformation is the subject matter to be explained (explanandum) in this article by a set of mutually supporting explanatory factors (explanans) with the example of jurisdiction by the European Court of Justice: (1) establishing formal legitimate power of European jurisdiction in order to complement and form the driving force of international labour division: preliminary reference, supremacy and direct effect of European law; (2) establishing a substantial conception of control in the field of legal discourse: free movement and non-discrimination; (3) enforcing a genuinely European legal order against national varieties of law by establishing a dominant European legal community; (4) making transnational sense of legal change by legitimating Europeanised law in terms of advancing justice as equality of opportunity across and within nations, as opposed to equality of results within nations accompanied by inequality of opportunity across nations.     

Informal Politics, Formalised Law and the 'Social Deficit' of European Integration: Reflections after the Judgments of the ECJ in Viking and Laval

The judgments of the European Court of Justice (ECJ) of December 2008 in Viking and Laval on the compatibility of national collective labour law with European prerogatives have caused quite a heated critical debate. This article seeks to put this debate in constitutional perspectives. In its first part, it reconstructs in legal categories what Fritz W. Scharpf has characterised as a decoupling of economic integration from the various welfare traditions of the Member States. European constitutionalism, it is submitted, is bound to respond to this problématique. The second part develops a perspective within which such a response can be found. That perspective is a supranational European conflict of laws which seeks to realise what the draft Constitutional Treaty had called the 'motto of the union': unitas in pluralitate. Within that framework, the third part analyses two seemingly contradictory trends, namely, first, albeit very briefly, the turn to 'soft' modes of governance in the realm of social policy and then, in much greater detail, the ECJ's 'hard' interpretations of the supremacy of European freedoms and its strict interpretation of pertinent secondary legislation. The conflict-of-laws approach would suggest a greater respect for national autonomy, in particular, in view of the limited EU competences in the field of labour law.     

Towards a European Law of Contracts

Abstract: European contract law has recently been the subject of increasing attention and intense debate. In addressing this issue, the following contribution departs from traditional analyses of the necessity, feasibility, and opportunity to harmonise national legislation on contractual relations. Instead, the author seeks to demonstrate that, with the objective of promoting the internal market and developing trade within it, EC authorities have long since given birth to a genuine European contract law. Beginning with the analysis of a body of EC directives, this article argues that the genuine nature of this law can be ascertained despite its limits or rather by taking these limits into account. The important rights granted to different contracting parties (consumer‐purchaser, consumer‐tourist, and certain professionals) stand in contrast to the formal incoherence and fragmented character of the legal texts. The article concludes that, in analysing the notion of European contact law, it is necessary to adapt a functional approach rather than a formal one, because the functional approach has dominated European integration and the European law of contracts since its inception.     

The Paradox of American Critical Legalism

Duncan Kennedy's essay is a reprint from his recently published book. We hope to draw attention to Kennedy's work among students of European integration since we believe his analysis to be relevant both to the specific debate on the impact of European integration upon private law and to comparative legal study in general. European legal scholarship has only recently begun to examine the problems of private legal integration. The late appearance of private law in the integration arena is due to a primarily instrumental understanding and strategic use of law in the European market-building project: only once legal ‘barriers to trade’ were eliminated and national regulatory law replaced by Europeanised norms, did the degree to which the core institutions of ’private‘ law had been (indirectly) affected by the integrationist logic become apparent. Comparative legal research, however, has benefited from this awakening of interest. European Commission projects have widened the scope of and intensified comparative studies in Europe. Equally, experience gained from the ‘Integration Through (Public) Law’ project has led to a new private legal debate on the impact of national traditions, the concept of legal cultures and the social functions of private law. Accordingly, whilst Duncan Kennedy's deliberations on the history of American legal thought and the differences between American and European legal cultures are generally to be commended for their sensitive treatment of the specificities of the civil law system and the common law heritage, they are equally of particular topical concern since in addition to highlighting America's ‘utter faith and utter distrust in law,’ they also investigate the fundamentally different approaches adopted towards ‘the project law’ within each of the member states of the EU. If European private lawyers are to come to terms with the problems of integration and convergence, they must first tackle these deep-seated divergences between their own national legal cultures.     

Reflexive Governance and European Company Law

The use of reflexive forms of governance is growing within the EU, in particular as the open method of coordination (OMC) is applied to a wider range of contexts. Reflexive approaches view diversity of laws and practices across the Member States as the basis for experimentation and mutual learning within the overall process of European integration. Company law, however, seems to be an exception to this trend: recent activity in this area has mostly taken the form of 'hard law' harmonisation through directives, coupled with the stimulation of regulatory competition through judgments of the European Court of Justice concerning freedom of movement, most notably the Centro s case. The deliberations of the European Corporate Governance Forum barely qualify as a 'company law OMC' because of the limited space allowed for 'learning from diversity'; instead, differences in the laws of the Member States are seen, in the discourse of the Forum, as 'distortions of competition'. In the area of labour law, by contrast, a degree of functional convergence and a coordinated raising of standards have recently been achieved by the dovetailing of the OMC with social policy directives. The contrasting experiences of labour law and company law suggest that reflexive or experimentalist approaches to European governance can be effective when they operate so as to complement mechanisms of harmonisation and regulatory competition, rather than being presented as alternatives to them.     

The Ideal of Codification and the Dynamics of Europeanisation: The Dutch Experience

Abstract:  In response to the growing incoherence of European contract law, the Commission is planning to adopt a 'common frame of reference' (CFR) in 2009. That CFR will effectively constitute a codification in a substantive sense. As a result, in codified systems such as The Netherlands, there will be a shift from the familiar tension between impressionistic harmonisation and systematic codification to a new tension between the system of the national civil code and the system of the substantive European code. Therefore, once the CFR is adopted by the Commission as a tool for revising the acquis and for drafting new directives, national legislators inspired by the codification ideal will have to reconsider their strategies towards the implementation of directives in the area of private law. Three such strategies are considered here: resistance, segregation and surrender. Each of them has advantages, but also disadvantages. None of them solve the tension between national codification and Europeanisation. It seems unlikely that private law will ever (again) be contained exclusively in one comprehensive code, either on the national or on the European level. The CFR will make a comprehensive national codification increasingly difficult to achieve, whereas a comprehensive European Civil Code that replaces national private law both lacks a legal basis and political support. Therefore, we will have to live with a two- (or multi-) level system of private law. As a result, the Dutch and other national legislators will have to revise their codification ideals.