The European Commission issued a Green Paper on “policy options for progress towards a European Contract Law for consumers and businesses” in July 2010. This falls under the responsibility of Commissioner Reding (DG Justice), who has referred to her wish to create a “European civil code” or to harmonise EU contract law to provide a high level of consumer protection.
The European Parliament plenary vote on the Own Initiative report by Diana Wallis took place on 8 June 2011 and members voted in favour of the “optional instrument”—one of seven options put forward by the European Commission in its Green Paper. The following points were included in the final text:
- the scope should cover both business to business and business to consumer contracts;
- the proposal should be issued in the form of a Regulation;
- the Optional Instrument could be complemented by a tool-box (which it proposes introducing on a step-by-step basis);
- it believes the instrument should offer very high levels of consumer protection;
- insurance contracts should be included within its scope;
- it urges caution in terms of including financial services more generally at this stage, calling on the Commission to establish a dedicated intra-service expert group for any future preparatory work on financial services to ensure that their specific characteristics are taken into account;
- it calls on the Commission to clarify the intended relationship between the Option Instrument and the Rome I Directive; and
- it also asks the Commission to clarify which contracting party will have the choice between the instrument and the normally applicable law.
The deadline for responding to the findings of the European Commission’s Expert Group (in the form of a feasibility study) is 1 July 2011. Commissioner Reding has advised that she intends to present a legislative proposal on EU contract law in October 2011. (This already features in the Commission’s work programme for that period).
This EU proposal seems designed to weaken English Law as the governing law of first choice in many international commercial contracts and London as a leading venue for the settlement of disputes by substituting a civil law based system, for which there will be little demand in practice.