17 Common Frame of Reference
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12269/07
COM(07) 447
| Second Commission Report on the Common Frame of Reference
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| Legal base | — |
| Department | Ministry of Justice
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| Basis of consideration | Minister's letter of 10 December 2008
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| Previous Committee Report | HC 41-xxxvi (2006-07), chapter 13 (24 October 2007)
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| To be discussed in Council | n/a
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| Committee's assessment | Legally and politically important
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| Committee's decision | Cleared (decision reported on 24 October 2007). Further information requested
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Background
17.1 The Common Frame of Reference ("CFR") project explores
ways of studying private law throughout the EU either as means
to providing a so-called 'tool-box' for the drafting and interpretation
of legislation or as a way of harmonising private law throughout
the EU, mainly in the area of contract law. The project can be
traced back to the early 1980s when the Commission on European
Contract Law (also referred to as the 'Lando Commission') was
set up and received funding from the Legal Services of the European
Commission. This group published the Principles of European Contract
Law ('PECL'), a set of general contract law rules in three parts,
between 1995 and 2003.[85]
The PECL were based on comparative and evaluative studies of the
contract laws of the EU Member States and of other national and
international contract law systems.
17.2 In 1998 another group of academics was established,
the Study Group on a European Civil Code ('Study Group'). This
group set out to draft the Principles of European Law ('PEL').
It employed the same comparative methodology as the Lando Commission,
but the scope of the PEL was designed to be much broader than
that of the PECL. Apart from rules for the general law of contract,
the PEL were also supposed to cover the law relating to specific
types of contracts (sales, leases etc.), extra-contractual obligations
(tort, unjustified enrichment, negotiorum gestio) and fundamental
issues regarding the law on assets other than immoveable assets
(transfer of title, security for credit etc.). The results have
been published in eight volumes since 2006[86]
and work on the PEL is scheduled to be completed in 2009.
17.3 In February 2003 and October 2004, the European
Commission published two further documents promoting improvements
in the coherence of the EC consumer acquis and outlining
the elaboration of a Common Frame of Reference ('CFR').[87]
In May 2005 the 'Joint Network on European Private Law' (also
called 'CoPECL Network of Excellence') was established, following
the grant of substantial funding by the European Commission under
the Sixth Framework Programme for research and technological development.
The Joint Network undertook to deliver a draft proposal for a
CFR by 2007. The Joint Network comprises several universities,
institutions and other organizations from all over Europe.
17.4 The 'Interim Outline Edition' of the Draft Common
Frame of Reference ("DCFR") was published in December
2007 and is the result of the work of two of the academic groups
that are members of the Joint Network. The final version of the
DCFR is currently scheduled for publication in March 2009.
The purpose of the DCFR
17.5 There remains uncertainty about the ultimate
purposes of the final CFR. The project was originally initiated
by a group of academics but it has been funded partly by the European
Commission and was recently endorsed by the European Parliament.
The European Commission in particular never clarified its approach
to the possible uses of the project. On the one hand, the CFR
is meant to be a 'toolbox' for the revision and the improvement
of the consumer law acquis, setting forth the general principles
of contract law, establishing a common legal terminology and providing
some model rules. On the other hand, the CFR might also serve
as a blueprint for a future European contract law that could be
enacted in the form of an 'Optional Instrument'; an additional
contract law regime that would be placed at the disposal of the
parties. The tension between these twin aims has never been resolved
by the Commission or by the authors of the DCFR.
17.6 In scope and content the interim version of
the DCFR, as published in 2007, clearly goes beyond a 'toolbox'
for a revision of the acquis, and could serve as the basis
for a blueprint of a draft European Civil Code in the area of
patrimonial law. Such a Code, however, is not currently advocated
by any of the European Institutions or by any Member State, and
so does not appear to be a realistic political option.
17.7 Nor does it seem at present as if the CFR will
take the form of an instrument harmonizing European the whole
field of contract law. The Commission in particular appears to
have retracted from its earlier more ambitious position.[88]
The Commission's more modest recent position appears to be shared
by the Council of Ministers. It defined its position on four fundamental
aspects of the CFR at the meeting of the Justice and Home Affairs
Council of 18 April 2008:[89]
a) Purpose of the Common Frame of Reference:
a tool for better lawmaking 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; and
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.
The structure of the DCFR
17.8 The DCFR is divided into ten Books. Very broadly
speaking, its basic structure follows that of the main Continental
civil codes, which are divided into a first general part and a
second part which contains the specific provisions. Book I contains
a small number of 'General Provisions' on the scope of application
and the interpretation of the DCFR. It also provides some definitions
and refers to the long list of definitions in Annex I to the DCFR.
Books II and III contain those rules that will mostly be relevant
for the CFR. They deal with general rules of contract law (formation
and breach), but also with rules that are relevant for other kinds
of obligations (set-off and limitation periods). Books IV-X deal
with the law relating to specific types of contracts, negotiorum
gestio, tort, unjust enrichment, ownership in movables, proprietary
security rights and trusts. The 'Interim Online Edition' does
not yet contain the last three Books and still has gaps in the
Book on specific contracts.
The Minister's Letter
17.9 When the previous Committee cleared the Commission's
second progress report on the CFR project in October 2007, it
requested that the Minister keep the Committee informed of relevant
further developments. Following publication of the interim DCFR,
the Government commissioned a report from Professor Simon Whittaker
of Oxford University to provide a critical assessment of the content
and possible roles of the DCFR. The letter from the Parliamentary
Under-Secretary of State at the Ministry of Justice (Lord Bach)
of 10 December 2008 simply refers to Professor Whittaker's report
which it attaches in its entirety.
17.10 Professor Whittaker's report focuses on the
usefulness of the DCFR as a means for improving the content and
quality of EC legislation, and tries to assess its likely effect
on the development of 'European contract law' and to explain how
such a development would relate to and affect English contract
law. Amongst the report's observations the following may be mentioned:
- the coverage of the subject-matter
of the DCFR is very broad and goes well beyond the topics necessary
to regulate contracts in general and consumer contracts;
- the DCFR does not appear to be consistent in
its use of the term 'principle', nor in its approach to how 'principles'
relate to rules;
- the DCFR was not designed and is not suitable
to be used as either a 'tool-box' or an 'optional instrument'
because of its complexity and interpretative uncertainty; and
- as a compromise between different legal traditions
and systems the DCFR necessarily deviates from English contract
in a number of respects. These include the English doctrine of
consideration and the parole evidence rules for which the DCFR
contains no equivalent provisions, the relatively broad scope
in the DCFR of the doctrine of mistake and for the conferral of
contractual rights on third parties, the general availability
of the remedy of specific performance, and the broad scope of
the principle of 'good faith and fair dealing' throughout the
DCFR
Conclusion
17.11 We thank the Minister for his letter and
the attached copy of Professor Whittaker's report. We note the
Professor's view that the Draft Common Frame of Reference would
be more suitable as a basis for the codification of private law
throughout the EU than as a tool-box for legislators and courts.
We ask the Minister if he agrees with this assessment.
17.12 We have already cleared the document, but
we should be grateful to know if the Government now favours narrowing
the scope of the Common Frame of Reference to serve as the basis
for recasting the Community acquis in specific areas of
law such as EC consumer law.
17.13 As the EC Treaty does not enumerate a specific
Community competence for harmonising European contract law, we
ask the Minister for his views on the proper legal basis for a
harmonising instrument of limited scope. We ask if the Minister
agrees that Article 95 EC Treaty would be the most appropriate
legal base and that following the Tobacco Advertising case[90]
any legislation on this basis would have to contribute to eliminating
obstacles to free movement, or to removing appreciable distortions
of competition.
85 O Lando and H Beale (eds), Principles of European
Contract Law: Parts I and II, Combined and Revised. Prepared by
the European Commission on Contract Law (2000); O Lando et al
(eds), Principles of European Contract Law: Part III (2003). A
full version of the PECL is available at http://frontpage.cbs.dk/law/commission_on_european_contract_law/
Back
86
See, for example, Principles of Europan Law: Commercial Agency,
Franchise and Distribution Contracts (PEL CAFDC), prepared by
M Hesselink et al (2006); Principles of European Law: Sales (PEL
S), prepared by E Hondius et al (2008). Back
87
European Commission, Communication to the European Parliament
and the Council - A more coherent European Contract Law: An Action
Plan, COM(2003) 68, OJ 2003 C 63/1; European Commission, Communication
to the European Parliament and the Council - European Contract
Law and the revision of the acquis: the way forward, COM(2004)
651 final. Back
88
See the statements of Commissioner M Kuneva in the European Parliament
debate of 1 September 2008. Back
89
Council of the European Union, Press Release: 2863rd Council meeting,
Justice and Home Affairs, Luxembourg, 18 April 2008, 8379/08 (Presse
96), p 18. Back
90
ECJ Case C-376/98 Germany v Parliament and Council [2000] ECR
I-8419. Back
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