EU competence in private law: the Treaty framework for a European private law and challenges for coherence

Abstract

The notion of private law has a long tradition and is of great importance in most EU Member States. National private law is seen as the constitution of civil society and enjoys a high degree of democratic legitimacy with regard to social justice. Furthermore, the public vs. private distinction in national legal orders translates into the structure of the judiciary (civil vs. administrative courts), as well as to distinct remedies available to private parties. However, the public vs. private law distinction is not of utmost importance in EU law, where EU legislative competences are structured according to a functionalist paradigm. In line with the principle of conferral, the EU may regulate a given field of law only when explicitly provided for in the Treaties. There is no general EU competence to regulate private law in its entirety, but a number of specific competences addressing selected aspects. Articles 114 and 115 TFEU allow the EU to regulate those elements of private law which create obstacles to trade in the internal market. The most frequently used legal form is that of a directive. Article 118 TFEU allows the EU to create EU-wide intellectual property rights, such as an EU trademark; this is a recent provision, added by the Treaty of Lisbon. Article 50 TFEU, which is concerned with freedom of establishment, enables the EU to harmonise various aspects of company law. Article 153 TFEU allows the EU to coordinate certain aspects of employment law, including private-law elements regarding employment contracts. A particular feature of this competence is the institutionalised involvement of social partners in the legislative process. Articles 67 and 81 TFEU, whose origins date back to the Treaty of Amsterdam, confer upon the EU competence to lay down measures regarding judicial cooperation in civil matters. The ordinary legislative procedure applies, save for issues regarding cross-border family law. This legal basis has enabled the EU to regulate, in the form of regulations, numerous areas of private international law as well as cross-border civil procedure, including 'autonomous' EU procedures. The 'flexibility clause' of Article 352 TFEU empowers the EU to regulate, under certain circumstances, areas of private law not falling within the scope of specific competence rules. Finally, a number of Treaty provisions, such as those on competition law and antidiscrimination, regulate private law relationships directly, without the need for the EU to adopt secondary legislation. The clash between, on the one hand, coherent national systems of private law and, on the other hand, the EU functionalist approach, leads inevitably to a fragmentation of EU legislation regarding private law. This poses a challenge to the coherence of national systems of private law, with adverse effects not only on consistency, but also transparency and legal security. However, of potential options for restoring the necessary coherence of private law, the only feasible one is through spontaneous harmonisation. This can occur as a spill-over of EU law rules and principles, adopted by national legislatures and judiciaries, but above all through the framing of both national and EU law-making in the field of private law within a common grid of concepts, principles and rules of private law. Great potential in that regard rests in the (Draft) Common Frame of Reference.