Select Committee on European Union Thirty-Seventh Report




Letter from Rt Hon Baroness Ashton of Upholland, Parliamentary Under Secretary of State, Department for Constitutional Affairs to the Chairman

  I am writing to formally respond to the Committee's report on "European Contract Law—the way forward". It has come to my notice that we have not formally responded until now and I am sorry that this means the response has come such a long while after the Report was published in April of last year.

20 July 2006

Government's Response

  I am grateful to the Committee for producing such a comprehensive report and list of recommendations which are largely in line with Government policy. I note, in particular, the Committee's concerns about any move towards harmonisation of European Contract law. The Government shares this concern and would certainly not support any move towards such harmonisation, whether on a mandatory or optional basis. The report has also, to some extent, predicted recent developments on the issue of "reprioritisation" following the Mansion House Conference by urging that the much-needed review of the acquis should not be delayed by the development of the CFR.

  The importance of the involvement of stakeholders in the project is emphasised in the report. We welcomed the efforts made by the Commission to engage with stakeholders and the Government is continuing to work similarly closely with UK stakeholders, several of whom gave evidence to the Committee's enquiry, to ensure that UK interests are represented as effectively as possible in this work. Lastly, the Committee expresses some concerns about the proposed works on standard terms and conditions (STCs) and the creation of a website. The Commission has now announced that the work on STCs will not now be taken forward. I understand that this is due in part to similar concerns on the part of the Commission about how such a website would be supervised.

  The Committee's enquiry into the Contract law project, which involved fairly extensive taking of evidence from a wide range of sources, and the subsequent report have both proved valuable to the Government in its dealings with the Commission as the project has progressed. A sufficient degree of clarity about the precise nature of the Commission's work has taken some time to emerge and there are still a number of important unanswered questions, particularly surrounding the nature and future function of the CFR. We will continue to take the Committee's conclusions into account as we work further with the Commission to address these issues.


  The Explanatory Memorandum that I tabled last October updated the Committee on a number of developments namely the Commission's first Annual Progress Report on the European Contract Law project and the Review of the Consumer Acquis, the joint UK Presidency/Commission conference held at the Mansion House last September and the subsequent conclusions produced by the Competitiveness Council. The overriding theme of the Commission progress report was the Commission's intention to reprioritise the work of the CFR so it would be more focused on feeding into the review of the consumer acquis. This was also the key message that emerged from the Mansion House conference.

  Following that event, the Competitiveness Council, chaired by the UK Presidency, produced a set of conclusions on 30 November 2005. These welcomed both the review of the consumer acquis as a unique opportunity to update and modernise Community legislation in this area and also the Commission's commitment to refocusing the entire project to prioritise the review of the acquis. The Conclusions also specifically invited the Commission to come forward with a timetable re-prioritising the project. The Commission duly produced a revised timetable for Workshops throughout the early part of 2006 which concentrated on contract law issues that were directly relevant to the consumer acquis.


  The conference, which was jointly hosted by the Austrian Presidency and the Commission, was the second annual event on the European Contract law project and attracted a wide range of delegates including representatives from Member States, the Commission's stakeholder network (the CFR-Net) and the academic research network that is developing the CFR and the review of the acquis.

  Although the conference provided a good opportunity for useful discussion, it is clear that there is still a considerable degree of uncertainty as to what the CFR will eventually look like and how it will be used and we are continuing to work with the Commission to resolve these issues. There was, however, continued support for the review of the consumer acquis which appears to be progressing well. The Commission intend to produce a Green Paper on the review at the end of this year.

Letter from the Chairman to Rt Hon Baroness Ashton of Upholland

  Thank you for your letter of 20 July which was considered by Sub-Committee E (Law and Institutions) at its meeting on 11 October. The Response is most welcome, not least for the news of the "reprioritisation" of the Commission's work. We are also interested to learn that the Commission has announced that work on STCs will not now be taken forward.

  Whilst the substance of the Government's Response is welcome, it is regrettable that it took so long to reach us. However, we are grateful for your postscript and pleased to see that you are taking action aimed at ensuring that your Department will provide information and reply to the Committee's questions more quickly in future.

  Finally, we note that the Commission is to produce a Green Paper on the review of the Consumer Acquis later this year. We look forward to receiving this and also to being kept informed of other developments relating to European contract law.

12 October 2006

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