Centre for the Study of European Contract Law Working Paper Series No.

2006/04

European Contract Law: a Matter of Consumer Protection, Citizenship, or Justice?

Martijn W. Hesselink
m.w.hesselink@uva.nl

Centre for the Study of European Contract Law Universiteit van Amsterdam P.O. Box 1030 1000 BA Amsterdam The Netherlands

European Contract Law a Matter of Consumer Protection, Citizenship, or Justice?* Martijn W. Hesselink**

I. II.

Introduction Consumer protection A. The Community policy of consumer protection B. Contract law as consumer protection C. An expanding scope for a limited perspective III. Citizenship A. European Union citizenship B. Contract law as a matter of citizenship C. A broader perspective, but a narrower basis IV. Justice A. A European area of freedom, security and justice B. Contract law as a matter of justice C. The need for a genuine area of civil justice V. A matter of consumer protection, citizenship or justice? A. The European Commissions U-turn B. Roaming for rights, or: citizenship as consumer protection C. Back to justice

2 3 3 4 12 15 15 16 19 20 20 24 34 35 35 38 41

Paper presented at the SECOLA conference Constitutional Values and European

Contract Law', on 8 and 9 September 2006 in Berlin. A short opinion article based on this paper was published European Voice, 19 October 2006: Are we human beings or mere consumers.
**

Professor of European Private Law and Director of the Centre for the Study of

European Contract Law, Universiteit van Amsterdam.

I. Introduction In its First Annual Progress Report on European Contract Law and the Acquis Review,1 the European Commission recently announced that, within the Common Frame of Reference process, it will prioritise the revision of the consumer acquis. This reprioritisation has a number of practical consequences.2 However, the more fundamental question is what the effect of a renewed focus on consumer protection will be on the character of European contract law, and on the way in which the Union addresses and views the people living in Europe. This question will become all the more important if the Commission is going to attempt, as it seems to envisage, some comprehensive and exclusive European legislation with regard to contracts with consumers (all or certain important ones, notably sales).

Obvious alternatives to the consumer protection approach to the Europeanisation of contract law include the perspectives of European citizenship and of justice. Does it matter whether European contract law is developed as a matter of consumer protection, citizenship or justice? Or, to put it differently, does it make a difference for a

First Annual Progress Report on European Contract Law and the Acquis Review

(COM(2005) 456 final, 23.9.2005).

2

These were discussed at the conference The Review of the Consumer Acquis

and the Common Frame of Reference progress, key issues, perspectives which was hosted by the Austrian Council Presidency and took place on 25-26 May 2006 in Vienna. It was the second European Discussion Forum, following the first Discussion Forum in London on 26 September 2005.

contracting party whether she is treated as a consumer, a citizen or a person?

This paper argues that it does. It presents the European policies with regard to consumer protection, European citizenship and the Area of justice, and discusses the kind of contract law that each of these approaches leads to and the kind of society they contribute towards (Sections II, III and IV). Both the citizenship and, in particular, the consumer protection approach are rejected as an exclusive approach to contract law because they are reductive. They fail to take into account important aspects of human life which would be included in an approach to contract law from the perspective of justice.

The conclusion is that European contract law should become a matter of justice (Section V). As a consequence, the European Union will need to provide a legal basis for treating contract law as a matter of civil justice. Moreover, the Union will have to articulate a common European conception of justice in contract law.

II. Consumer protection A. The Community policy of consumer protection Today, consumer protection is a well established area of European Union policy. However, this has not always been the case. Indeed, it was not until 1992 (Maastricht Treaty) that consumer protection was mentioned in the treaties as a distinct Community policy.3 Until then

The Maastricht Treaty inserted a new title Consumer Protection into Part III

(Community policies) of the EC Treaty. The original Treaty Establishing the

consumer policy was merely an aspect of the construction of the internal market. 4 B. Contract law as consumer protection Dealing with European contract law from the perspective of consumer protection is not merely a hypothetical exercise. Since halfway through the 1980s, the European Community has enacted a series of directives which have affected parts of the law relating to contracts concluded by consumers.5 Indeed, most of the acquis communautaire in the area of contract law concern only consumers.6
European Economic Community (Rome, 1957) did not refer to consumer protection. Instead, the preamble affirmed as the essential objective of the signatories, the constant improvement of the living and working conditions of their peoples. European Consumer policy did not start until the 1970s. After the Paris Summit (1972) had concluded that there was a need for consumer protection, a Council resolution on a preliminary programme for a consumer protection and information policy was adopted in 1975. That document was the first of a continuous flow of policy documents. In 1999, consumer policy obtained full institutional recognition as it was given (together with health policy) its own Directorate-General, DG XXIV (now DG SANCO).
4

The first reference to consumers in the founding Treaties came in 1986 when the

Single European Act inserted Article 100A EEC (now Article 95 EC) as an additional legal basis for harmonisation, which stated that The Commission, in its proposals envisaged in paragraph 1 concerning (...) consumer protection, will take as a base a high level of protection. Most directives in the area on consumer contract law are based on Article 100 EEC (now Article 95 EC).
5

These include: Directive 85/374/EEC concerning liability for defective products;

Directive 85/577/EEC to protect the consumer in respect of contracts negotiated away from business premises; Directive 90/314/EEC on package travel, package holidays and package tours; Directive 93/13/EEC on unfair terms in consumer contracts; Directive 94/47/EC on the protection of purchasers in respect of certain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare basis; Directive 97/7/EC on the protection of consumers

What are the main characteristics of a contract law inspired by the aim of consumer protection? 1. Protective rules Obviously, the main character of rules inspired by the policy of consumer protection is that they are protective. This means that the rules of contract law aim at the protection of the consumer against the other party to the contract (the professional). In order to make this protection effective such rules are typically mandatory, ie they cannot be waived. 2. Categorical protection Moreover, the protection of consumers is categorical. Whoever falls under the definition is entitled to protection, and to the same degree.7 Conversely, the other party is systematically deemed to be a party against whom the consumer must be protected. In addition, the categorical character of consumer protection also implies that whoever does not fall within the scope of the definition (eg SMEs,
in respect of distance contracts; Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees; Directive 2002/65/EC concerning the distance marketing of consumer financial services; Directive 2005/29/EC on unfair business-to-consumer commercial practices in the internal market (Unfair commercial practices directive).
6

Directives which affect contract law but do not concern consumers: Directive

86/653/EEC on the coordination of the laws of the Member State relating to selfemployed commercial agents; Directive 2000/35/EC on combating late payment in commercial transactions.
7

This is not always the case. For example, Directive 93/13/EEC on unfair terms in

consumer contracts provides, in Article 4 (1), that the unfairness of a contractual term must be assessed (among other things) by referring to all the circumstances attending the conclusion of the contract.

non-profit organisations) is not entitled, as such, to consumer protection, whatever the possible similarity of its condition. 3. A uniform concept The concept of a consumer is a uniform concept, maybe even with a universal vocation. Obviously, consumers differ from country to country (they have different preferences, a different attitude towards risk etc), as do consumer policies (more or less protection, more or less self-regulation etc). Nevertheless, consumers are usually defined in a uniform way (ie without local exceptions) and their protection is usually expressed in universal terms of the level of protection on the same universal scale. A striking example is the recent development, by the European Court of Justice and the European legislator, of the concept of 'the average consumer'.8 In other words, cultural diversity is not a concept that is usually associated with consumer protection.9 From this perspective, it is not
8

In a line of cases concerning advertising the ECJ has referred to the concept of

'the average consumer', who is reasonably well informed and reasonably observant and circumspect'. See eg ECJ, 16 July 1998, C-210/96 Gut Springenheide GmbH, Rudolf Tusky v Oberkreisdirektor des Kreises Steinfurt Amt fr

Lebensmittelberwachung [1998] ECR I-4657; ECJ, 13 January 2000, C-220/98 Este Lauder Cosmetics GmbH & Co. OHG v Lancaster Group GmbH. The same concept is referred to in Directive 2005/29/EC (Unfair commercial practices directive), Article 2, where unfair commercial practices are defined: 'A commercial practice shall be unfair if: (...) it materially distorts or is likely to materially distort the economic behaviour with regard to the product of the average consumer (...) or of the average member of the group when a commercial practice is directed to a particular group of consumers.' See also recital 18 which explicitly indicates that the directive takes as a benchmark the concept of 'the average consumer' as defined by the ECJ in the advertising cases.
9

Nevertheless, both in the ECJ's case law and in the Unfair commercial practices

directive the average consumer is defined 'taking into account social, cultural and

surprising that the European Commission has recently proposed to progressively give all European consumers the same level of protection (full harmonisation).10 4. A corollary to the internal market From the way in which the Union policy of consumer protection is defined in art 153 EC it seems to follow that the Union is only concerned with the interests of the consumer per se.11 However, both the history of European consumer protection and the recent policy documents reveal that confident consumers are also regarded by the European Community as a means, to use a Kantian phrase, for the creation of a properly functioning internal market.12

linguistic factors.' Thomas Wilhelmsson, 'The European Average Consumer - a Legal Fiction?' (forthcoming), has argued for a broad interpretation of this cultural exception.
10

See the Commissions Consumer Policy Strategy 2002-2006 (COM(2002) 208

final) 12: There is a need to review and reform existing EU consumer protection directives, to bring them up to date and progressively adapt them from minimum harmonisation to full harmonisation measures.
11

Art 153 EC, Paragraph 1: In order to promote the interests of consumers and to

ensure a high level of consumer protection, the Community shall contribute to protecting the health, safety and economic interests of consumers, as well as to promoting their right to information, education and to organise themselves in order to safeguard their interests.
12

In spite of the recognition by the EC Treaty as an autonomous policy area (and a

legal basis), consumer policy is still closely linked to the completion of the internal market. Indeed, according to the third paragraph of Article 153 EC, the way in which the Community shall contribute to the attainment of the objectives referred to in paragraph 1 is through either (a) measures adopted pursuant to Article 95 EC in the context of the completion of the internal market; or (b) measures which support, supplement and monitor the policy pursued by the Member States.

In its latest Consumer Policy Strategy the Commission remarked that: The development of consumer policy at EU level has been the essential corollary of the progressive establishment of the internal market13 and according to the preamble to the Consumer Sales Directive: Consumers who are keen to benefit from the large market by purchasing goods in Member States other than their State of residence play a fundamental role in the completion of the internal market.14 The idea seems to be that confident consumers will be more inclined to indulge in cross-border shopping. This will lead to more economic growth which in turn will help to contribute to the strategic goal that the Union has set itself in Lisbon in 2000 for the following decade, ie to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable growth with more and better jobs and greater social cohesion (the Lisbon agenda).15

Thus, consumer protection becomes market protection. Specifically with regard to the CFR process, Commissioner Kyprianou recently

13 14

Consumer Policy Strategy 2002-2006 (COM(2002) 208 final) 6. Recital 4. See, as another example, Consumer Policy Strategy 2002-2006, 6:

The development of consumer policy at EU level has been the essential corollary of the progressive establishment of the internal market. The free circulation of goods and services has required the adoption of common, or at least convergent, rules to ensure at one and the same time sufficient protection of consumer interests and the elimination of regulatory obstacles and competitive distortions.
15

Presidency conclusions, Lisbon European Council 23 and 24 March 2000, 5.

According to these conclusions (ibidem, 6), if the Lisbon strategy is followed an average economic growth rate of around 3% should be a realistic prospect for the coming years.

emphasised the link between a coherent consumer contract law and the internal market:16

[The Common Frame of Reference] will bring clear benefits to consumers and businesses in the internal market. By allowing for increased coherence between different pieces of EU contract law legislation, it will contribute to reducing obstacles to trade, thus promoting trade and competitiveness within the internal market in accordance with the Lisbon goals while enlarging consumer choice.

Also, the type of protection given to consumers reflects economic reasoning in terms of the market mechanism.17 Economists usually distinguish two main causes of market failures: market power on the supply side and a lack of information on the demand side. While the former problem is taken care of, on a European level, by arts 81 et seq EC, consumer protection policy is increasingly shaped in terms of the latter.18 Hence, recent consumer contracts directives contain
16

'Greeting address on behalf of Commissioner Kyprianou' at the conference The

Review of the Consumer Acquis and the Common Frame of Reference progress, key issues, perspectives, Vienna, 25-26 May 2006.
17

Against such a narrow conception of consumer protection, see Geraint Howells

& Stephen Weatherill, Consumer Protection Law, 2nd ed, (Hants: Ashgate 2005) , 7-8, 14, 'consumer law is not simply a matter of plugging a few gaps in the market system. Consumer law raises issues that are central; to the determination of how our society views the citizen (...) At stake are elements of the correction of market failures and, additionally, the achievement of fairness to consumers (inter alia) as the economically weaker parties. Consumer protection law has a wide range of forms and objectives.'
18

See eg Stefan Grundmann, European Contract Law(s) of What Colour, 1 ERCL

(2005), 184-201.

extensive information duties which aim to restore the autonomy of the consumer.19 5. A limited set of interests Addressing a contracting party in her capacity as a consumer means addressing her with a view to a limited set of interests. Usually, these interests are considered to be mainly economic, in particular an interest in a vast choice and in low prices. European consumer policy is aimed at making this presumed wish to benefit fully from the potential of the internal market come true: 20

It is important that consumers have comparable opportunities to benefit fully from the potential of the internal market in terms of greater choice, lower prices, and the affordability and
19

See eg Directive 90/314/EEC on package travel, package holidays and package

tours; Directive 94/47/EC on the protection of purchasers in respect of certain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare basis; Directive 97/7/EC on the protection of consumers in respect of distance contracts; Directive 2002/65/EC concerning the distance marketing of consumer financial services. Cf Consumer Policy Strategy 20022006, 6: Measures have frequently sought to give consumers the means to protect their own interests by making autonomous, informed choices. This typically ensures that consumers will have sufficient, correct information before engaging in transactions and certain legal rights in case the transaction does not deliver the required outcome. These measures seek to redress structural imbalances between individual consumers and business flowing from limits on the formers access to information and legal expertise as well as on their economic resources..
20

Communication from the Commission to the European Parliament, the Council,

the Economic and Social Committee and the Committee of the Regions Consumer Policy Strategy 2002-2006 Brussels, 7.5.2002, COM(2002) 208 final, 7 (emphasis in the original). See also Consumer Policy Strategy 2002-2006, 9 (under the heading: Reaping the full benefits of the internal market).

10

availability of essential services. Barriers to cross-border trade should therefore be overcome in order that the consumer dimension of the internal market can develop in parallel with its business dimension. EU consumer policy therefore aims at setting a coherent and common environment ensuring that consumers are confident in shopping across borders

throughout the EU.

In order to assist consumers in fulfilling their desire to engage in cross-border shopping the Union is investing in educating them. In the Consumer Policy Strategy 2002-2006 the Commission made the following observation:

In recent years, particularly in the context of the single market, it has become increasingly evident that more attention should be given to the education of consumers so that they can shop with confidence in the full knowledge of their rights.21

The Commission announced that it would develop on-line interactive education tools in order to solve this problem.22

Nevertheless, the scope of Community consumer protection is slightly broader than their purely economical interests: the Treaty considers health and safety to be consumer interests too. Still, peoples possible interests in, for example, happiness, dignity, freedom, equality, solidarity, pluralism or justice, are not considered to be consumer interests. Nor are the possible interests of the other
21 22

Consumer Policy Strategy 2002-2006, 23. Ibid 23.

11

party (the professional) taken into account as a matter of consumer policy. C. An expanding scope for a limited perspective In sum, the consumer protection perspective on contract law (as on other subjects) is a limited one in several respects. This is, of course, not a problem if other aspects of the contractual relationship are properly taken into account by other parts of the law. In other words, as long as the scope of the consumer protection approach to contract law is also limited, and supplemented and overridden where necessary by contract rules inspired by other policies, there is no reason for concern. However, things are entirely different if the parties to a consumer contract are only or predominantly treated as consumers and professionals respectively. Therefore, the crucial question seems to be whether contractual relationships between consumers and professionals are dealt with by consumer law only in part or in their entirety.

Originally, consumer law developed as special legislation. The presence of background rules of general contract law (or the law of obligations or private law) was presumed: only certain aspects of the contractual relationship are dealt with by special consumer rules, usually of a protective nature; the ordinary rules which are applicable to any contractual relationship (general contract law) apply to the remainder. In other words, the fact that a contractual relationship was one between a consumer and a professional did not mean that the civil code or the common law was inapplicable as such. Rather, certain general rules were substituted or supplemented for this type of relationship with specific rules, usually of a protective nature and of a mandatory character.

12

However, in recent policy documents the European Commission seems to envisage comprehensive legislation which regulates the entire contractual relationship between the consumer and the professional, or the most part thereof. This would mean that people would be treated, with regard to those relationships, (almost) exclusively as consumers.

In its First annual progress report on European contract law and the acquis review the Commission reports that with regard to the revision of the consumer contract acquis the Commission can choose between two options: a vertical approach, consisting of the individual revision of existing directives or the regulation of specific sectors; and a more horizontal approach, adopting one or more framework instruments to regulate common features of the acquis. As to the latter option, which it seems to favour, the Commission remarks:

This

framework

instrument(s)

would

provide

common

definitions and regulate the main consumer contractual rights and remedies. Under the horizontal approach, the

Commission could, for example, prepare a directive on B2C contracts of sale of goods. It would regulate consistently the contractual aspects of sale, which are currently scattered in several directives.23

23

First annual report, 9-10. See also Commissioner Kyprianous opening address

at the Conference on European contract law: better lawmaking to the common frame of reference (first European Discussion Forum), London, 26 September 2005.

13

Adding the fact that the Commission envisages moving progressively from minimum to full harmonisation, leaving the Member States with no room for initiatives which might take these broader interests into account, a somewhat worrying picture emerges of a European consumer policy with a totalitarian aspiration.

Such an aspiration would be worrying because other ways of looking at contractual relations, eg from the perspective of citizenship and fundamental rights, or from the point of view of (social) justice, and other aspects of contract law, both on a national and a European level, would risk being overshadowed and marginalised. There is more to a human being than her or his inclination to consume. It should not be forgotten that the social system shapes the wants and aspirations that its citizens come to have. It determines in part the sort of persons they want to be as well as the sort of persons they are.24

Even if the limited focus of the consumer protection approach to contract law is not formally exclusive, as indeed it is not within the present and future European constitutional frameworks, there is still a serious risk that such a focus will obscure other interests and values which would play a more central role if citizenship or justice would shape the frame of reference for the Europeanisation of contract law.25

24

John Rawls, A Theory of Justice, revised edition [first edition 1971], (Cambridge,

Massachusetts: Belknap Press 1999), 229.

25

Cf Michel Foucault, Les mots et les choses (Paris: Gallimard, 1966).

14

III. Citizenship A. European Union citizenship The concept of European Union citizenship was introduced by the Treaty on European Union (Maastricht, 1992).26 According to one of the five objectives of the Union, as formulated in Article 2 Treaty of European Union (Amsterdam, 1999), the aim of the introduction of a citizenship of the Union was to strengthen the protection of the rights and interests of the nationals of its Member States.27 Therefore, fundamental rights lie at the very heart of the concept of citizenship of the European Union.

However, the introduction of European citizenship did not add anything spectacular to the rights that European citizens already enjoyed. The main innovation brought about by the Treaty of Amsterdam was the right to move and reside freely (Art 18 (ex 8a) TEU), without reference to an economic activity; the other provisions in Part Two on citizenship concern the political rights to vote (Art 19) and to petition (Art 21), as well as the right to diplomatic protection (Art 20). Indeed, in the words of Weiler: The treatment of European citizenship both in the TEU itself and, subsequently, by the

26

The core provision of the new Part II of the EC Treaty was supplemented with a

second section, and renumbered, by the Treaty of Amsterdam (1997) and now Article 17 TEU (ex Article 8 TEU) reads as follows: 1. Citizenship of the Union is hereby established. Every person holding the nationality of a Member State shall be a citizen of the Union. Citizenship of the Union shall complement and not replace national citizenship. 2. Citizens of the Union shall enjoy the rights conferred by this Treaty and shall be subject to the duties imposed thereby.
27

See for another of these objectives below, IV.

15

institutions

and
28

the

Member

States

of

the

Union,

is

an

embarrassment.

Nevertheless, in spite of the very limited specific substance given to it by the Treaty of European Union, the concept of Union citizenship is not one without potential.29 One example is the role of social rights. As Van Gerven points out, the neo-liberal philosophy that was the basis of the European Economic Community has been gradually turned into a more socially-oriented philosophy: From a perspective of citizen rights, this means that the rights that citizens enjoy by virtue of EC law are no longer only market rights but have been enlarged to include political rights as well, and slowly social rights in the broad sense of the word, that is rights (and duties) concerned with peoples welfare generally, including work, education, health, and quality of life.30 According to Van Gerven this remarkable transformation started with the incorporation by the Maastricht Treaty of the new part II on Citizenship of the Union in the EC Treaty. B. Contract law as a matter of citizenship So far, the link between Union citizenship and private law has been given little attention. On the one hand, this is surprising because
28

J.H.H. Weiler, To be a European Citizen: Eros and Civilization, in: idem, The

Constitution of Europe; Do the New Clothes Have an Emperor? and Other Essays on European Integration (Cambridge: CUP 1999), 324-357, 332. The comments from many other lawyers were equally critical.
29

Cf Antje Wiener, Citizenship, in: Michelle Cini, European Union Politics (Oxford:

OUP 2003), 397-414, 400: 'Lawyers tended to discuss Union Citizenship from the perspective of what it was, whereas NGOs, lobby groups, and philosophers discussed what it should become or ought to be. (emphasis in the original).
30

Walter van Gerven, The European Union. A polity of States and Peoples

(Oxford: Hart Publishing 2005), 200.

16

relations between Union citizens are regulated by private (civil) law. On the other hand, however, this is not so surprising since the (little) substance that has been given to the concept in the Maastricht and Amsterdam Treaties deals nearly exclusively with vertical relationships.31

In many Member States (notably Germany), the horizontal effect of several fundamental rights has been recognised. Similarly, European fundamental rights, including social rights, may have direct (or, according to some, indirect: through general clauses like good faith) horizontal effect. In practice, the effect of the horizontal effect of fundamental rights often means a limitation on the freedom (or the enforceability) of contract. A well-known example are the German cases on personal guarantees.32

According to Weiler, giving horizontal effect to some fundamental rights would enrich the notion of a human right as part of citizenship.33 One step further would be an attempt to entirely reconceive horizontal relationships, on the European level, in terms of the values expressed in these European fundamental rights. For example, an (optional) code of contracts could be based on the values of human dignity, freedom, equality and solidarity.

This would not be merely a nice idea. In 2000, in Nice, the European Parliament, the Council and the Commission solemnly proclaimed a
31

Private law is not limited to citizens. It may also apply, through the rules of

private international law, to citizens of third countries, who are present (legally and illegally) in the Union, and to parties abroad.
32 33

See in particular, BverfGE 89, 214, NJW 1994, 36. Weiler (1999), n 28 above, 356.

17

set of rights as the Charter of Fundamental Rights of the European Union. The Treaty establishing a Constitution for Europe (signed in Rome, 2004) incorporates the charter, as Part II. The Constitution has not (yet) been ratified by all Member States.34 However, today the Charter is already binding on the institutions of the Union and on Member States when they are implementing Union law.35 This means that the European legislator has to take the Charter into account also when enacting provisions of European law, including contract law. Rodot, one of the authors of the Charter, has even argued that any act codifying private law has to be coherent with the provisions of the Charter. Hence, according to Rodot, the weakness of an approach that considers codification as a simple rationalization of existing legislation, as a pure restatement of the acquis communautaire:

The materials to be put in order and embodied in a single text have originated from an institutional context that is prevailingly, and at times exclusively, dominated only by the market logic, thus by a system of values not corresponding to those set out, in particular, in the Charter of Fundamental Rights.

The fundamental values embraced by the Nice Charter are: human dignity, freedom, equality and solidarity. It is important to point out that there is no hierarchy among them.36 Therefore, when formulating
34

As to the prospects, the European Council, meeting on 16 and 17 June 2005,

said: 'We do not feel that the date initially planned for a report on ratification of the Treaty, 1 November 2006, is still tenable, since those countries which have not yet ratified the Treaty will be unable to furnish a clear reply before mid-2007.'.
35 36

Van Gerven (2005), n 30 above. As Maduro points out, in the Nice Charter social rights are systematically placed

in an equivalent position to other economic rights (Miguel Poiares Maduro,

18

rules of European contract law these values will have to be balanced. It seems likely that, as Rodot suggests, the outcome of such a process would be quite different from a mere revision of the consumer contract acquis with a view to its internal coherence. C. A broader perspective, but a narrower basis Clearly, the citizenship perspective on European contract law would be much broader than the essentially economic conception in terms of consumer protection and market regulation. Fundamental values like human dignity, freedom, equality and solidarity would play a central role.

However, the reality is that whereas contract law legislation based on the policy of consumer protection has a secure legal basis,37 none of the articles in the Part on Citizenship in the Treaty nor any other Treaty provision (nor indeed the Nice Charter) seems to provide a legal basis for enacting provisions (let alone a code) of European contract law as matter of European citizenship.

European Constitutionalism and Three Models of Social Europe, in Martijn W. Hesselink (ed), The Politics of a European Civil Code (The Hague: Kluwer Law International 2006), 125-141). See Stefano Rodot, The Civil Code within the European Constitutional Process', according to whom in the Charter, the indivisibility of the civil, political and social rights has been affirmed. (in: Ibid p 115-124, 119.)
37

Indeed, effectively a double basis: Articles 95 EC (internal market) and 153 EC

(consumer protection).

19

IV. Justice A. A European area of freedom, security and justice The Treaty of European Union (Amsterdam, 1997) formulated as an objective that the European Union should become an area of freedom, security and justice (AFSJ).38 In order to achieve this objective the European Council of Tampere (1999) adopted a work programme (the Tampere programme).

Even though the focus of the Tampere process has been clearly on criminal justice (notably terrorism, organised crime, drugs) and immigration rather than on civil justice,39 nevertheless civil justice has been explicitly addressed from the beginning. According to the Tampere Council conclusions,40 [i]n a genuine European Area of
38

See Art 2 TEU: The Union shall set itself the following objectives: (...) to

maintain and develop the Union as an area of freedom, security and justice, in which the free movement of persons is assured in conjunction with appropriate measures with respect to external border controls, asylum, immigration and the prevention and combating of crime, (...). The Preamble to the Nice Charter also refers to the concept: [T]he Union is founded on the indivisible, universal values of human dignity, freedom, equality and solidarity (...). It places the individual at the heart of its activities, by establishing the citizenship of the Union and by creating an area of freedom, security and justice. See also the Treaty establishing a Constitution for Europe, Art I-3 (The Unions objectives), Para 2: The Union shall offer its citizens an area of freedom, security and justice without internal frontiers, and an internal market where competition is free and undistorted., and Chapter 4 of Title III. See also Art I-42 (Specific provisions relating to the area of freedom, security and justice), where the approximation of laws is mentioned as the first way in which the Union will constitute an area of freedom, security and justice.
39

See Title VI TEU Provisions on Police and Judicial Cooperation in Criminal

Matters (Arts 29-42).

40

Presidency Conclusions, Tampere European Council 15 and 16 October 1999,

20

Justice individuals and businesses should not be prevented or discouraged from exercising their rights by the incompatibility or complexity of legal and administrative systems in the Member States. Under the heading Greater convergence in civil law they announce the following:41

As regards substantive law, an overall study is requested on the need to approximate Member States legislation in civil matters in order to eliminate obstacles to the good functioning of civil proceedings. The Council should report back by 2001.

The Commissions Communication of 2001 was meant to respond to this request.42 Indeed, according to insiders, the Action Plan process was triggered by the Tampere conclusions.43 The suggested measures described in the Action Plan insert themselves, according to that Plan, within the Unions objective of developing an area of freedom, security and justice.44 In the Commissions

SI (1999) 800, 28.

41

Presidency Conclusions, Tampere European Council 15 and 16 October 1999,

SI (1999) 800, 39.

42

Communication from the Commission to the Council and the European

Parliament on European Contract Law, 11 July 2001, COM(2001) 398 final (OJ 2001/C 255/01), 4: this Communication can be considered as a first step towards the implementation of the Tampere conclusions.
43

Cf Dirk Staudenmayer, The Commission Action Plan on European Contract

Law, ERPL 2003, 113-127.

44

Communication from the Commission to the European Parliament and the

Council, A More Coherent European Contract Law; An Action Plan, 12 February 2003, COM (2003) 68 final (OJ 2003/C63/01), 12. See also the European Unions official website Europa, where, HEuropean contract lawH is presented as part of

21

communications on the Tampere process, the Action Plan process is also presented as part of the implementation of the Tampere programme.

In its Assessment of the Tampere programme and future orientations, the Commission says:45 Turning to substantive law, the Commission is already engaged in drafting a Common Reference Framework to ensure greater consistency in the acquis communautaire and improve its quality in the field of contract law. The work should be completed in 2008. This Common Reference Framework might serve in the longer term as the basis for an optional instrument on the law of contracts that the parties could freely choose to use as the law applicable to their contract, thus enhancing certainty as to the law in cross-border transactions. Interestingly, the Commission further remarks:46

To meet these ambitious challenges for judicial cooperation in civil and commercial matters, it will be advisable to have adequate legal means. The Constitutional Treaty will provide them. But it will be necessary to avoid a situation where in
Judicial cooperation in civil matters under JHustice, freedom and securityH (http://europa.eu/scadplus/leg/en/s22003.htm).
45

Communication from the Commission to the Council and the European

Parliament, Area of Freedom, Security and Justice: Assessment of the Tampere programme and future orientations, Brussels, 2.6.2004 COM(2004) 4002 final, p 11 and footnote 10.
46

Ibid p 11 and footnote 11.

22

each Member State there are two separate legal regimes, one relating to the disputes with a cross-border implication and the other to purely internal disputes. In the long term such a dual system could be inconsistent with the aim of a single area of justice for all and could raise questions of discrimination; it could in addition complicate legislation at the expense of the transparency which individuals, practitioners and companies need.

However, in the follow-up, the Hague programme (2004) and the Hague Action Plan (2005), as regards civil matters, the focus is mainly on judicial cooperation, in particular the mutual recognition of judicial decisions, (and on the introduction of a European Day of Civil Justice to be celebrated annually on October, 25th)47 rather than on the approximation of laws.48 Indeed, the only mention of the Common Frame of Reference (CFR) is as a toolbox to improve coherence and quality of EU legislation.49
47

'The main idea is to create a symbolic event, a date on which we recall that

justice is first and foremost a service to citizens which enables them to settle their private conflicts and assert their rights. Civil law is omnipresent in the life of all citizens - at work, or when they get married, have children, or buy goods and services. This is what led to the idea of dedicating a day to Civil Justice.' (Press release in 2003 by Commissioner Vitorino).
48

See also the Communication from the Commission to the Council and the

European Parliament Report on the implementation of the Hague programme for 2005, Brussels, 28.6.2006, COM(2006) 333 final, and the Communication from the Commission to the Council and the European Parliament Evaluation of EU Policies on Freedom, Security and Justice, Brussels, 28.6.2006 COM(2006) 332 final.
49

Communication from the Commission to the Council and the European

Parliament - The Hague Programme: Ten priorities for the next five years. The

23

In the light of the Council Conclusions in Tampere, which clearly link the action plan process on contract law to the aim of creating a genuine European area of justice, this recent development is somewhat surprising. Equally surprising is the Councils reaction to the Commissions first progress report, which welcomes the prioritisation of the review of the consumer acquis.50 Indeed, the Councils position is in sharp contrast to that of the European Parliament which, in its reaction to the Commissions progress report, calls for the Commission to give the primary responsibility of the CFR process to the Justice, Freedom and Security Directorate-General, which is responsible for the AFSJ.51 B. Contract law as a matter of justice 1. The need for a common European concept of justice What would it mean to treat European contract law as a matter of justice? And how would such an approach differ from the approaches to contract law as a matter of consumer protection or as a matter of citizenship?

Partnership for European renewal in the field of Freedom, Security and Justice, COM (2005) 184 final: 'Regarding the EU substantive contract law, a Common Frame of Reference (CFR), to be used as a toolbox to improve coherence and quality of EU legislation, will be adopted in 2009 at the latest.'
50 51

Conclusions of the Competitiveness Council, 28-29 November 2005, no 11. European Parliament resolution of 23 March 2006 (P6_TA(2006)0109), 14:

Calls for the Commission as a whole, under the primary responsibility of the Justice, Freedom and Security DG and with the involvement of the Internal Market and Services and the Health and Consumer Protection DGs in particular, to participate in this work, and for the material and human resources which are necessary given the importance and extent of the project to be made available; (emphasis added).

24

First, of course, the scope of European contract law would be considerably broader. Not only does justice also affect citizens other than consumers. Justice is not even limited to European citizens: it also addresses European companies and other entities having legal personality, and - through the rules of private international law - noncitizens, ie natural and legal persons having their place of residence or business outside the Union (including illegal immigrants).

The most significant implication seems to be, however, the need for a common European concept of justice. It seems to be simply unthinkable to deal with the Europeanisation of contract law, as an aspect of the creation of a truly European area of justice, without developing a common European concept of justice.

Before discussing different conceptions of justice, a terminological point needs to be addressed. Does the concept of an area of justice refer to justice in the sense of social or distributive justice (Gerechtigkeit in German) or rather to the administration of justice through the judiciary (Justiz in German), or to both? This question was recently raised by Jacques Ziller with regard to the different language versions of the Constitution for Europe. He points out that where the English text of the Constitution uses justice (and the French justice), the German version sometimes speaks of Gerechtigkeit (a concept referring to social or distributive justice) but on other occasions, including Articles III-269 and III-270 on the area of freedom, security and justice, of Justiz (the administration of justice through the judiciary).52 This seems to indicate that the area
52

Jacques Ziller, The Value of Justice in the European Constitution, EUI Working

Papers, Law No 2006/08. Interestingly, in another Germanic language, ie Dutch,

25

of civil justice might be merely about the administration of justice and not about social justice. Still, contract law as it has been discussed within the framework of the Tampere and Action Plan processes, where the focus has been entirely on substantive (as opposed to procedural) rules - think, in particular, of the common frame of reference -, necessarily has to be regarded as a matter of social justice rather than of the administration of justice.

Moreover, whatever the exact meaning of the term justice in the specific expression of an area of freedom, security and justice, it is clear that the present European Constitution (ie the EC and EU Treaties and the case law of the ECJ) and the new Constitution either explicitly refer to the concept of social justice or use concepts that imply the existence of a notion of social justice.53 Indeed, several observers have argued that it is time to develop such a common European notion of social justice. For example, Miguel Maduro argues that European integration has reached a point where its emerging European demos and its redistributive and majoritarian

the area is actually an area of justice in the sense of Gerechtigkeit, at least in the Dutch language versions of the Treaty of Amsterdam and of the Conventions draft Constitution: De Unie biedt haar burgers een ruimte van vrijheid, veiligheid en rechtvaardigheid zonder binnengrenzen, en een interne markt waar de mededinging vrij en onvervalst is., but not in the Dutch language versions of the final text of the Constitution, Artikel I-3: De doelstellingen van de Unie (...) 2. De Unie biedt haar burgers een ruimte van vrijheid, veiligheid en recht zonder binnengrenzen, en een interne markt waarin de mededinging vrij en onvervalst is..
53

Constitution for Europe, Art I-3 (The Unions Objectives), Para 3: [The Union]

shall promote social justice).

26

elements can no longer be socially accepted and legitimized without an underlying social contract and a criterion of distributive justice.54 2. Theories of justice in contract law What should a common European concept of justice in contract law look like? Obviously, this is not the place to discuss the various theories of justice in contract law in detail. Nevertheless, a very brief overview may give an impression of the variety of theories that exist and the level of disagreement. In other words, if the European Union is to develop a European concept of social justice (even if merely for contract law) choices will have to be made.55 a. THE MIRAGE OF SOCIAL JUSTICE (HAYEK) First of all, there are theorists who challenge that there is such a thing as social or distributive justice. The most well known is Hayek.56

54

Miguel Poiares Maduro (2006), n 37 above, 125-141, 135. Cf, in more general

terms, John Rawls (1999), n 24 above, 4: A set of principles is required for choosing among the various social arrangements which determine the division of advantages and for underwriting an agreement on the proper distributive shares. These principles are the principles of social justice: they provide a way of assigning rights and duties in the basic institutions of society and they define the appropriate distribution of the benefits and burdens of social cooperation.
55

Compare Rawls, op cit, 174: the question whether legislation is just or unjust,

especially in connection with economic and social policies, is commonly subject to reasonable differences of opinion.
56

F.A. Hayek, The Road to Serfdom, [first edition 1944] (London and New York:

Routledge Classics 2005); F.A. Hayek, Law, Legislation and Liberty; A new statement of the liberal principles of justice and political economy, [first edition 1973] (London and New York: Routledge 2003), in particular, Volume 2: The mirage of social justice.

27

In his view individuals have different conceptions of what would be a just outcome. In 1944 he wrote, with regard to Europe:57

Who imagines that there exist any common ideals of distributive justice such as will make the Norwegian fisherman consent to forgo the prospect of economic improvement in order to help his Portuguese fellow, or the Dutch worker to pay more for his bicycle to help the Coventry mechanic, or the French peasant to pay more taxes to assist the

industrialisation of Italy? If most people are not willing to see the difficulty this is mainly because, consciously or

unconsciously, they assume that it will be they who will settle these questions for the others, and because they are convinced of their own capacity to do this justly and equitably.

For contract law the main implication seems to be that ample space should be given to freedom of contract.58 For example, Hayek explicitly rejects price interventions.59 Nevertheless, Hayeks version of liberalism (individualism) firmly rejects laissez faire libertarians.60 Indeed, not only did he advocate strong policies against power concentrations and more generally against inequality of opportunity,61

57 58

Hayek (2005), n 56 above. Hayek has recently been invoked with regard to European contract law, by

Stefan Grundmann, European Contract Law(s) of What Colour, 1 ERCL (2005), 184-201, and Jan M. Smits, European Private Law: a Plea for a Spontaneous Legal Order, in: Deirdre M. Curtin, Jan M. Smits, Andr Klip and Joseph McCahery, European Integration and Law (Antwerp and Oxford: Intersentia 2006).
59 60 61

Hayek (2005). n 56 above, 38, 115, 133. Ibid18. Ibid106: in a system of free enterprise chances are not equal, since such a

28

he also saw a wide and unquestioned field for state activity, eg the prevention of fraud and deception (including exploitation of ignorance).62 b. WELFARE MAXIMISATION (KAPLOW & SHAVELL) In a controversial recent book Kaplow & Shavell have argued that policy decisions should never be guided by notions of justice or fairness.63 According to this theory, which is a modern version of utilitarianism and which aims to provide a theoretical foundation for the economic analysis of the law, contract law, like any legislation and policy, should aim exclusively at the maximisation of social welfare, ie on the aggregate welfare of individuals. The most efficient way of maximising welfare is the allocation of resources through the market mechanism. Only if social welfare can be increased by a certain distribution of welfare which is considered to be fair (ie when individuals have a taste for fairness),64 must redistributionist policies be pursued. However, it is unlikely that contract law can do this in a more efficient way than the tax system.65 Therefore, this is another theory which rejects a role for distributive justice in contract law.66
system is necessarily based on private property and (though perhaps not with the same necessity) on inheritance. There is indeed a strong case for reducing this inequality of opportunity as far as congenital differences permit and as it is possible to do so without destroying the impersonal character of the process by which everybody has to take his chance and no persons view about what is right and desirable overrules that of others.
62 63

Ibid 41. L. Kaplow & S. Shavell, Fairness versus Welfare (Cambridge, Massachusetts:

Harvard University Press, 2002). For some of the criticism see eg @.

64 65

Ibid 21. This is an empirical claim. See Louis Kaplow & Steven Shavell, 'Why the legal

system is less efficient than the income tax in redistributing income, 23 J. Legal

29

c. COMMUTATIVE JUSTICE (CANARIS) In another view, distributive justice is an important notion but it has no role to play in contract law. This view refers to the classical distinction between distributive and commutative justice, which was first made by Aristotle.67 In this view, which has been the dominant view at least since the 19th century when most European codifications were conceived, the realisation of distributive justice is not a function of contract law;68 contract law is a matter of only commutative justice. Moreover, commutative justice is conceived in a rather narrow way: a contract is just when there is an exchange of equal value, in the eyes of the parties.69 Indeed, today it is generally accepted that the iustum pretium doctrine, which was developed in the Middle Ages by Thomas Aquinas and others on the basis of Aristotles concept of commutative justice,70 is not part of contract law, at least not as such.71

Stud (1994) 667.

66

The difference with Hayek is that his theory is individualist and not utilitarian, ie

he would not accept a rise in social welfare at the expense of a limitation to individual freedom.
67 68

Aristotle, The Nicomachean Ethics, V, 12. See eg Claus-Wilhelm Canaris, Die Bedeutung der iustitia distributiva im

deutschen Vertragsrecht (Munich: Verlag der Bayerischen Akademie der Wissenschaften, 1997).
69

Cf Thomas Hobbes, Leviathan [first edition 1651] (London: Penguin Books,

1985) 208: The value of all things contracted for, is measured by the appetite of the Contractors: and therefore the just value, is that which they be contented to give.
70

See James Gordley, The Philosophical Origins of Modern Contract Doctrine

(Oxford: OUP 1991).

71

See Hein Ktz, European Contract Law, Part I (Oxford: OUP 1997), 130ff.

30

d. CONTRACT AS PROMISE (FRIED) Very similar results are reached, albeit on a very different basis, by the theory which was advocated by Charles Fried. In his view the binding force of contract is based on the moral obligation to keep promises, which in turn is based on the Kantian concept of autonomy:72

There exists a convention that defines the practice of promising and its entailments. This convention provides a way that a person may create expectations in others. By virtue of the basic Kantian principles of trust and respect, it is wrong to invoke that convention in order to make a promise, and then break it. In this view there is no external standard of contractual justice: the justice lies in the promises of the party as an act of autonomy. e. TWO PRINCIPLES OF JUSTICE (RAWLS) Today, more than 30 years after its publication, Rawls A Theory of Justice is probably still the leading theory of social justice.73 In the words of Nozick, Political philosophers now must either work within Rawls theory or explain why not.74 Rawls presents two principles of

72

Charles Fried, Contract as Promise; A Theory of Contractual Obligation

(Cambridge, Massachusetts: Harvard University Press, 1981), 17.

73

John Rawls (1999), n 24 above. See also John Rawls, Political Liberalism,

expanded edition [first edition 1993] (New York: Columbia University Press 2005), and J. Rawls, Justice as Fairness: A Restatement (Cambridge, Massachusetts: Belknap Harvard Press, 2001).
74

Robert Nozick, Anarchy, State and Utopia, [first edition 1974] (Oxford: Blackwell

Publishing 2006) 183. See also Samuel Fleischacker, A Short History of Distributive Justice (Cambridge, Massachusetts: Harvard University Press 2004) 116.

31

justice, the first of which has priority over the latter:75 (1) maximum equal liberties for all, and (2) social and economic inequalities must be to the greatest benefit of the least advantaged (the difference principle). These principles are applicable to what Rawls calls the basic structure of a given society. Unfortunately, Rawls was ambiguous about the meaning of the concept of the basic structure. On occasions he seemed to embrace a narrow theory according to which contract law was not a part of the basic structure, and, hence, outside the scope of the principles of justice.76 On other occasions he seems to have understood the concept in a much wider way in which contract law would indeed be a part of the basic structure. It has been argued that there is no good reason why the basic right to individual property should be part of the basic structure, as Rawls acknowledges, and not the basic freedom of at least some contract options.77 If the theory does indeed apply to contract law this means, among other things, that contract law must be instrumental to improving the situation of the least advantaged (the difference principle).

75

This does not imply, however, that freedom of contract has priority over the

difference principle, because Rawls does not regard the freedom of contract as a basic liberty. See Rawls, A Theory of Justice, 54: Of course, liberties not on the list, for example, the right to own certain kinds of property (eg means of production) and freedom of contract as understood the doctrine of laissez-faire are not basic; and they are not protected by the priority of the first principle.
76

See Rawls, Political Liberalism, 265-269 where he emphasises the need for fair

background conditions which should be distinguished from the rules governing agreements and individual transactions.
77

Kevin A. Kordana & David H. Tabachnick, Rawls and contract law, 73 Geo

Wash L Rev (2005) 598, 600: For Rawlsianism, contract law is properly understood as one of the many loci of distributive justice.

32

f. CAPABILITIES (SEN, NUSSBAUM) Rawls theory of justice is rather abstract, nearly mathematical, and therefore not always of immediate practical use for everyday questions of social justice. A more pragmatic and intuitive approach has been developed by Amartya Sen and Martha Nussbaum.78 The basic idea of their capabilities approach is that a society is more just to the extent that it better ensures that people have the basic capabilities to live the lives that they have reason to value.79 According to Nussbaum and Sen the central goal of legislators and other policy makers should be the capabilities of citizens to perform various functions.80 Clearly, since many important aspects of life today are affected by contracts, the law of contract can play an important role in enhancing the capabilities for human functioning.81 With regard to the controversial question, also within the debate on European contract law, whether justice requires the protection of cultural diversity, Martha Nussbaum emphasises that in practice local knowledge and culture often turn out to be means of oppression (of women, of minorities etc).82

78

See eg Amartya Sen, Development as Freedom (Oxford: Oxford University

Press 1999); Martha C. Nussbaum, Sex and Social Justice (Oxford: Oxford University Press 1999). The notion of capabilities is similar, though not identical, to Rawls concept of primary goods.
79 80

See eg Sen, n 54 above. In Sex and Social Justice, 41-42, Martha Nussbaum lists 10 such basic

capabilities.
81

See for a tentative capabilities approach to European contract law, Martijn W

Hesselink, Capacity and Capability in European Contract Law, 11 European Review of Private Law (2005), 491-507.
82

See Nussbaum, Sex and Social Justice, especially chapter 1: Women and

Cultural Universals.

33

C. The need for a genuine area of civil justice Clearly, different philosophies lead to different foundations for, and conceptions of, freedom of contract, which in turn lead to different views on what occasions and for what reasons this freedom can be limited. The Commissions remark, in the Action Plan,83 with regard to the Common Frame of Reference, that [i]n this context contractual freedom should be the guiding principle; restrictions should only be foreseen where this could be justified with good reasons, really begs the question: it seems very difficult to have a meaningful discussion on what might be good reasons without first having some common European understanding of social justice and contractual justice.

This is all the more important since contract law affects the everyday lives of people in Europe, both citizens and non-citizens, in their private lives and their businesses.84 For many important aspects of our life (food, work, housing, health, travelling, being a couple) many of us depend, at least in part, on contracts.85

Paradoxically, however, as we saw, today there does not seem to be a clear legal basis for the Union to approach European contract law from a justice perspective. In spite of the ambitions expressed with
83 84

COM (2003), n 44 above, 62. See Study Group on Social Justice in European Private Law, Social Justice in

European Contract Law: a Manifesto (2004) 16 European Law Journal, 653-674.

85

See (critical) Alain Supiot, Homo Juridicus; essai sur la fonction anthropologique

du Droit (Paris: Seuil 2005), 142: Le contractualisme, lide selon laquelle le lien contractuel serait al forme la plus acheve du lien social et aurait vocation se substituer partout aux impratifs unilatraux de la loi, est une composante de lidologie conomique, qui conoit la socit comme un amas dindividus mus par la seule vertu du calcul dintrts.

34

regard to an area of civil justice by the European Council in Tampere, the Treaties today simply do not provide a legal basis for greater convergence in civil law (and neither does the Constitution for Europe).

V. A matter of consumer protection, citizenship or justice? A. The European Commissions U-turn The first fifteen years of the Europeanisation of contract law were clearly dominated by the perspective of consumer protection. The European legislation that directly affected contract law consisted almost entirely of directives on consumer contract law.

The Action Plan process was meant to bring about a radical change. The Commission realised that the exclusive focus on specific measures of consumer protection and the occasional specific measure in other areas meant a threat to the coherence of contract law in Europe. In order to restore coherence, the Commission decided to address the subject from the perspective of (general) contract law. An additional reason for the shift from consumer protection to general contract law was that general contract law is not only applicable to consumer contracts (b2c) but also to commercial contracts (b2c): the focus on general contract law would allow the Commission at the same time to tackle another perceived problem: the fact that diverging national contract laws in the Member States might be an obstacle to cross-border trade in Europe and hence to the proper functioning of the internal market.86

86

Communication from the Commission to the European Parliament and the

Council; A More Coherent European Contract Law; An Action Plan, 12 February

35

The first two Communications from the Commission were focussed entirely on European contract law as a subject. See the titles: On European contract law (2001) and A more coherent European contract law: an action plan (2003). And even though in the third communication the revision of the acquis was added as an additional focal point (European contract law and the revision of the acquis: the way forward),87 the suggested structure of a Common Frame of Reference still focuses on general contract law. Moreover, all three documents referred extensively to the Convention on contracts for the international sale of goods (Vienna, 1980), the commercial agency directive and the late payment directive, all of which, of course, have nothing to do with consumer law.

Thus, the Action Plan process was started with two policy aims in mind: 1) improving the coherence of the existing EC legislation on consumer contracts, and 2) paving the way for new European facilitative legislation for commercial contracts (an optional code of contracts). Both these aims, it seemed, could be achieved by developing a set of European rules or principles on general contract, a Common Frame of Reference.

However, the First annual progress report on European contract law and the acquis review announced a prioritisation of the revision of

2003, COM (2003) 68 final (OJ 2003/C63/01).

87

Communication from the Commission to the European Parliament and the

Council European Contract Law and the revision of the acquis: the way forward, Brussels, 11.10.2004, COM(2004) 651 final.

36

the consumer within the CFR process.88 The details and implications of this shift in opinion within the Commission were discussed at a conference which was hosted by the Austrian Presidency of the European Council.89 As said, the Commission is now considering a horizontal approach to the revision of the acquis. Under the horizontal approach, the Commission could, for example, prepare a framework directive on the consumer sale of goods.90 Whereas the CFR process has been referred to as a significant step towards a European civil code,91 the resent reprioritisation (which seems to
88

Report from the Commission: First Annual Progress Report on European

Contract Law and the Acquis Review, Brussels, 23.9.2005, COM(2005) 456 final. See also Commissioner Kyprianous opening address at the Conference on European contract law: better lawmaking to the common frame of reference (first European Discussion Forum), London, 26 September 2005: When I first looked into this project, I was surprised to see how ambitious it is in terms of scope. (...) Also, there is no clear decision as to the legal nature and final outcome of the CFR. This project should not be an academic exercise or legal theory. On the contrary, it should bring practical concrete results due to be used both in the existing acquis and in new legislative measures for the benefit of European consumers. (...) We intend, in the CFR, to clearly prioritise issues that are relevant to the consumer contract law acquis.
89

See Hugh Beale, 'The European Commission's Common Frame of Reference

Project: a progress report', 2 ERCL (2006) 303-314, 106: 'It appears that there has been a shift in opinion within the Commission as to what is wanted'. The conference The Review of the Consumer Acquis and the Common Frame of Reference progress, key issues, perspectives took place on 25-26 May 2006 in Vienna. It was the second European Discussion Forum, following the Hfirst one in London.H
90 91

COM (2005), n 88 above, 9-10. See eg M.W. Hesselink, The European Commissions Action Plan: Towards a

More Coherent European Contract Law? (2004) ERPL 397419 (a European civil code in disguise); E.H. Hondius, Towards a European Civil Code, in: A.S. Hartkamp et al. (eds), Towards a European Civil Code (The Hague, London, New

37

reflect a power struggle within the European Commission, even within one DG, ie Sanco) rather has the traits of a first step towards a European Code of Consumer (Contract) Law. B. Roaming for rights, or: citizenship as consumer protection This recent development has to be seen, it seems, in the broader perspective of the recent rediscovery of the consumer by the European Commission. After the rejection of the Constitution for Europe in the French and Dutch referendums the Barroso Commission realized that it was not likely to regain the hearts of European citizens merely by implementing the Lisbon agenda. It decided that the benefits of the EU for its citizens had to be more visible. Therefore, the Commission recently presented A Citizens Agenda.92

In that Agenda the European citizens are addressed primarily in their capacity as consumers. As issues which have direct effects on citizens, the Commission discusses energy prices, roaming charges for mobile phone users and banking charges.93 In sum, roaming

York: Kluwer Law International 2004), 13, (a pre-code); H. Collins, The Common Frame of Reference for EC Contract Law: a Common Lawyers Perspective, in M. Meli and M. R. Maugeri (eds), Larmonizzazione del diritto privato europeo (Milan: Giuffr, 2004) 107124 (Lets just call it a Code); House of Lords (European Union Committee), European Contract Law - the way forward? (HL Paper 95) (London: The Stationery Office Limited 2005), 115 (Once the CFR has been agreed it would not be a major task to convert or adapt it into an optional instrument. [T]he CFR may turn out to be something of a Trojan Horse.)
92

Communication from the Commission to the European Council A Citizens

Agenda. Delivering Results for Europe, Brussels, 10.5.2006, COM(2006) 211 final.
93

P. 4.

38

instead of rights.94 Such a narrow interpretation of citizenship as mere consumer protection is not unique. On the contrary, on several other occasions the Commission has recently identified the concept of European citizenship with consumer protection. See, as an example, Europa, the official website of the European Union:

Consumer policy is central to the EU's objective of continuously improving the quality of life of all EU citizens.95

Weiler warned against the conflation of the citizen with the consumer. All too frequently he said, human rights are commodified and represent just another goodie with which to placate a disaffected consumer of European integration.96 He expresses his concern about the degration of the political process:97

of consumer replacing citizen, of a Saatchi and Saatchi European citizenship. To conceptualize European citizenship around needs (even needs as important as employment) and

94

Proposal for a Regulation of the European Parliament and of the Council on

roaming on public mobile networks within the Community and amending Directive 2002/21/EC on a common regulatory framework for electronic communications networks and services, Brussels, 12.7.2006, COM(2006) 382 final.
95

Http://ec.europa.eu/consumers/overview/index_en.htm. See also: Every citizen

is a consumer and the European Union takes great care to protect their health, safety and economic well-being. (http://europa.eu/pol/cons/index_en.htm).
96 97

Weiler(1999), n 28 above, 334. Ibid 335. See also Alain Supiot, Homo Juridicus, 165: Au nom dune citoyennet

dfinie non plus par rfrence ltat, mais par rfrence aux droits du consommateur sur le march, le Droit des contrats tend son emprise sur les biens et services publics au fur et mesure des progrs de la privatisation.

39

rights is an end-of millennium version of bread-and-circus politics.

Frankly, phrases like the Commission commits itself to removing the remaining barriers to a single market, to enable European citizens and entrepreneurs to enjoy the full benefits of the EU,98 make one think of exactly such a Saatchi & Saatchi European citizenship. Not surprisingly, the Commissions sudden passion for the everyday life of consumers99 has been rejected as populism.100

In its recent Amended proposal for a programme of Community action in the field of consumer policy (2007-2013) the Commission is even more explicit. It says:

The overall goal of the EU Consumer Policy is to improve the quality of life for EU citizens, in terms of their consumer interests. This will contribute to making Europes citizens safer and more confident, providing the means for economic and social inclusion, and thus giving substance to EU citizenship.101
98 99

P. 4. Bruxelles cherche sduire les consommateurs, Le Monde 22 July 2006. Populist or socialist - which jibe hurts Barroso more?, European Voice, 20 July

100

2006.
101

Amended proposal for a Decision of the European Parliament and of the

Council establishing a programme of Community action in the field of consumer policy (2007-2013), Brussels, 24.5.2006, COM(2006) 235 final, 2005/0042 B (COD): The overall goal of the EU Consumer Policy is to improve the quality of life for EU citizens, in terms of their consumer interests. This will contribute to making Europes citizens safer and more confident, providing the means for economic and social inclusion, and thus giving substance to EU citizenship.

40

Giving substance to European Union citizenship by taking care of consumer interests, European citizens as confident cross-border shoppers: a narrower conception of citizenship can hardly be imagined. C. Back to justice It makes a difference whether the Europeanization of contract law is carried out as a matter of consumer protection, citizenship or justice. According to John Rawls, justice is the first virtue of social institutions, as truth is of systems of thought.102

The civil law has traditionally addressed human beings as persons.103 In such an approach matters of contract law are regarded quite naturally as matters of justice in the fullest possible sense.104 However, European contract law does not address us as persons who should be treated with justice nor as citizens who have fundamental rights, but, most of the time, as consumers. Moreover, as we saw, in the European Union consumer protection is often regarded as a policy which is instrumental to the construction of the internal market. The combination of reducing persons to citizens, citizens to consumers, regarding the latter as instrumental to market building and moving towards horizontal and full harmonisation brings us very far away from contract law as a matter of justice.
102 103 104

Rawls, A Theory of Justice, 3. Gaius, Institutiones, Book 1, 9. This is not necessarily so if contract law is regarded as a matter of patrimonial

law and patrimony is defined in a narrow, monetary way, which excludes purely emotional interests, as the Dutch Hoge Raad did in a controversial tort case (HR 9 October 1998 (Jeffrey), NJ 1998, 853).

41

From this perspective, the recent prioritisation of the revision of the consumer acquis is clearly a step in the wrong direction. Instead, the European Union should have moved in the opposite direction. It should have given priority to justice. Rather than merely a matter of consumer protection, European contract law should become a matter of justice. The European Union should develop a truly European notion of contractual justice for a genuine area of civil justice.

A practical implication seems to be that from the perspective of social justice it would be best if the CFR process was guided, as the European Parliament has requested, by DG Justice, Freedom and Security, because this would allow - and oblige - the European legislator to adopt the broadest possible social justice perspective on contract law.105

To be sure, the Commission is not the only one, probably not even the first, to be blamed. The structure of the existing European constitution hardly provides a legal basis for such a justice-oriented approach to European contract law. Would it be too naive to think that the occasion of the stalling of the ratification process of the Constitution for Europe could be taken up as an opportunity to insert a legal basis for treating contract law, which affects the everyday life of individuals in many important ways, as a matter of justice?106
105

Indeed, one would expect that DG to be very active in the area of private law

since, in the words of the Commission in the Hague Programme, civil law (...) concerns citizens in their everyday lives. (The Hague Programme for strengthening freedom, security and justice in the European Union as approved by the European Council at its meeting on 5 November 2004).
106

The European Parliaments recent call for a wider CFR on general contract law

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issues going beyond the consumer protection field, underlining that the final longterm outcome could be a binding instrument; all the various possible options for the purpose and legal form of a future instrument should be kept open (European Parliament resolution of 7 September 2006 (P6_TA(2006)0352), 3 and 5), is essentially a call for the preparation of legislation for which there is no legal basis today. Coherence would require, it seems, that the Parliament should also call for the introduction of a legal basis to enact a binding instrument on European contract law.

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