In October 2010, the European Parliament’s Committee on the Internal Market and Consumer Protection (IMCO) published a Briefing Paper on the Proposed Consumer Rights Directive, which recommends minimum harmonisation.
Although the Briefing Paper acknowledges that full harmonisation is desirable from a political and economic point of view, it notes that it would be difficult and expensive to achieve as a result of the existing divergences in national contract laws.
IMCO considers that full harmonisation can only be effective within the scope of Chapter V of the draft Directive and that it is therefore essential that boundaries to its scope are drawn clearly. The four factors it identifies as determining the scope of Chapter V are: i) the status of the contracting parties, ii) the exclusion of individually negotiated terms (Article 30), iii) the exclusion of contract terms that reflect mandatory or regulatory provisions that comply with Community law or international conventions to which the Community or Member States are party (Article 30(3)), and iv) the exclusion of terms concerning the subject matter and price (Article 32(3)).
The Paper considers these areas in detail and analyses the impact of full harmonisation on Member States’ substantive laws and on the workload of the European Court of Justice (ECJ). It also analyses a number of different models of harmonisation.
It is entirely clear that IMCO is against any form of full harmonisation, complete, targeted or unlimited. IMCO challenges convincingly the viability of full harmonisation in the area of unfair contract terms. In particular, it believes that as a matter of policy the new Directive should not be allowed to impact EU Members States outside the scope of the Directive, for example in relation to perceptions of consumer and trader. Nor should it be allowed to impact unduly Members States’ laws as they have evolved within the scope of the unfair contract terms regime. The Paper also notes that complete full harmonisation would result in a significant burden on the ECJ in interpreting and controlling the application of the Directive.
The Paper concludes that complete full harmonisation cannot be recommended due to its extreme impact on all Member States’ substantive contract law and the requirement of farreaching changes and additions to Chapter V of the Directive, as currently proposed.
The Consumer Rights Directive has fallen a long way from its heady initial aspiration of ironing out all the wrinkles of consumer law; each body that analyses it chips away a little more.