Monday, 6 December 2010

The City of London Law Society responds to MoJ call for evidence on EU green paper on European contract law

in short, not big fans, full text here

Whilst the CLLS are happy for the Results of the Expert Group to be published they do not believe that any of the other options put forward by the Green Paper are useful, appropriate or justified, given the paucity of statistical evidence and analysis identifying any problems or any need for action.

There is evidence that small and medium enterprises ("SMEs") who choose not to engage in cross-border trade within the European Union (the "EU") are more influenced by factors other than the legal system prevalent in different Member States, such as cultural and linguistic differences and transport costs.1

The very competence of the EU to act on this matter is doubtful. Even if divergent national laws could be shown to deter trade, it would be difficult to show that any of the options in the Green Paper would actually reduce such effect. This means that Article 114 of the Treaty on the Functioning of the European Union ("TFEU") (formerly Article 95 of the EC Treaty ("TEC")) cannot be relied upon to provide a legal basis for enacting any of the options put forward by the Green Paper. It is also difficult to justify competence for action in this area under other legal bases in the treaties

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