The European commission has denied plans for a European civil code. But ‘improving the coherence of legal principles’ sounds rather similar
To say that “the European Commission is taking a long hard look at service contracts” is unlikely to make you choke on your cornflakes.
It is scarcely the most urgent of calls to arms, but nevertheless you should pay attention.
Those with long memories and a close interest in the workings of the European Union will know that the subject of contract law reform has been under constant discussion in European political circles. The European commission published a key paper in 2003, known as the “Action Plan”, and in October last year it produced another, known as“the “Way Forward”.
The Way Forward contained the commission’s further thinking on three measures that had first been discussed in the Action Plan. They are:
- Improving the present and future acquis in the area of contract law. (“Acquis” refers to the common principles that bind together member states of EU.)
- Promoting the use of EU-wide standard terms and conditions
- A non-sector-specific measure called an “optional instrument” in European contract law.
As a legal practitioner with a professional interest in contract law in general (and some direct involvement in handling construction litigation, too) I have been an interested observer and sometime commentator on the political process. In Eurospeak, I am a “stakeholder”.
I have to say that concerns about the broader intentions of the European institutions cannot be dismissed out-of-hand as the fanciful imaginings of a febrile mind. But the debate over “Measure III”, as the optional instrument proposal is known, is an issue for a later date.
The immediate concern is the first measure. In this, the commission’s principal proposal is to develop a common frame of reference (CFR) to improve the coherence of the acquis. The Way Forward said that the CFR would be used as a toolbox. That sounds innocuous enough.
The commission’s thinking was described in reassuringly guarded terms, but some remained concerned that it concealed another agenda
However, it went on: “The CFR will provide clear definitions of legal terms, fundamental principles and coherent model rules of contract law.”
Now, I can see that definitions of legal terms are readily compatible with the idea of a toolbox, but “statements of fundamental principles”, and the provision of “coherent model rules of contract law” seem well beyond that concept.
The commission has now set up a network of stakeholders (“CFR-net” in Eurospeak) to act as a “reality check” on the work of the CFR. This will take the form of face-to-face meetings between stakeholders and academic researchers to discuss 33 contract-related topics. For reasons that cannot be explored here because of lack of space, the subject of “service contracts” has been chosen as the first workshop topic, to be held next Friday.
To most English lawyers, the term “service contracts” is synonymous with “employment contracts”, but that is not what the term means here. Subject to a few identified exceptions (including, as it happens, employment contracts), it means any contract where one party (the service provider) supplies a service to another (the client). It therefore includes building contracts, civil engineering contracts, surveying contracts, installation contracts and design contracts. Its scope is enormously wide.
Is the industry aware that the definition of legal terms, statements of fundamental principles and even the provision of “coherent model rules” of direct application to its field of activity are being discussed? No, but it ought to be.
Even if a European civil code is not on the agenda, the possibility of an “overlay” of the EU’s “fundamental principles” and “model rules” provides plenty of food for thought. The industry should be aware of what is under way in Brussels, and its implications for construction contracts – before it it is too late.
Michael Patchett-Joyce is a barrister at Monckton Chambers. This column represents the author’s personal views