The Government Response to the European Commission’s proposal for a Common European Sales Law (“CESL”), which was published on Tuesday (13 November), has concluded that there are fundamental flaws in both the principle and the practical operation of the CESL.

The key aim of the Commission’s proposal for a new set of contract law rules for cross-border contracts (click here for more detail on the proposal) was to remove barriers to cross-border trade. The evidence, however, suggests that the CESL will not promote cross-border trade and will be time-consuming and cumbersome to negotiate and implement.  The government calls on the Commission to reconsider its plans and to carry out a careful and specific review of the barriers to cross-border trade, considering the most appropriate solutions to them, before proceeding any further with negotiation of the proposal.  In the government’s view the harmonisation of consumer law is more likely to promote cross-border trade.

The Government Response was published following an analysis of the 43 responses to its Call for Evidence, which was issued in February 2012 and sought views on whether the proposal would actually deliver the suggested gains and what the costs would be (click here for more detail).  The responses to the Call for Evidence (from the legal profession, businesses and consumers, the judiciary, academics and individuals) showed general support for the Commission’s aim of increasing cross-border trade.  However most of the respondents did not see CESL as a viable way of achieving that aim and even those respondents who were generally more supportive of the proposal in theory had concerns about it as currently drafted.

The Government identified the following recurring themes in the responses to the Call for Evidence:

  • Evidence of need – Respondents did not believe that sufficient need for the proposal had been demonstrated. They questioned the Commission’s claims that the different contract laws of each Member State currently act as a barrier to trade or certainly not a sufficiently serious barrier to warrant such a complex and wide-ranging proposal.  Other more significant barriers existed and they would not be dealt with by CESL.
  • Legal uncertainty – Respondents considered that the CESL would lead to uncertainty and incoherence, placing an additional burden on the UK’s judicial system and on the EU’s Court of Justice.
  • Confusion – The general view was that the introduction of CESL would create more confusion for consumers and businesses, making it more difficult for businesses to agree contracts and for consumers to know their rights when purchasing cross-border.
  • Cost – Respondents considered that the cost of the proposals would outweigh any possible benefits.