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European Commission holds first contract law roundtable with business and consumer groups

European Commission - IP/10/1095   07/09/2010

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IP/10/1095

Brussels, 7 September 2010

European Commission holds first contract law roundtable with business and consumer groups

The European Commission held the first meeting of business, consumer and legal practitioners' groups today to discuss European contract law. At the moment, different national contract laws lead to higher transaction costs for businesses. Companies – particularly small businesses – cannot exploit economies of scale in the EU’s Single Market. Consumers suffer because there are fewer goods sold across borders, leading to less choice and higher prices. Progress towards a European contract law could help resolve these problems. The Commission is seeking to build a consensus among key stakeholders on the best way forward on European contract law. It wants to ensure that proposals being drafted by a group of contract law experts (IP/10/595) meet the needs of both consumers and businesses, especially small and medium-sized enterprises (SMEs). On 1 July, the Commission proposed options for a European contract law in a strategic policy paper and opened a public consultation (IP/10/872).

"The European Commission wants to help consumers and businesses get the most out of the Single Market. That’s why their views are crucial if we want to find real solutions to their problems regarding contractual relations. Small businesses often lose out because high transaction costs prevent them from expanding into new markets. The European Commission's work on European contract law, which has found a strong echo in the European Parliament, is therefore an important step towards opening new doors for businesses and helping 500 million consumers benefit from our Single Market," said Vice-President Viviane Reding, EU Commissioner for Justice, Fundamental Rights and Citizenship. “The contribution by consumer and business groups, notably SMEs, is of crucial importance to the Commission. We want to ensure that the expectations of consumers, enterprises and legal practitioners are met. Today's meeting shows that we will be listening to European consumers and businesses during every step towards future European contract law solutions."

A group of legal experts has been meeting since May to prepare a possible European contract law. Key stakeholders from across Europe who will be closely associated with this group's work met today for the first time. Among those present:

  • BusinessEurope, EuroCommerce, Eurochambres, the European Association of Craft, Small and Medium-Sized Enterprises or UEAPME and the International Chamber of Commerce;

  • BEUC, the European Consumers' Organisation;

  • lawyers' associations such as the Council of Bars and Law Societies of Europe and the Council of the Notariats of the European Union.

The group will meet on a monthly basis to follow the expert group’s work and ensure that it takes into account businesses’ practical problems in cross-border trade and consumers’ interests.

Background

On 26 April 2010, the Commission set up an expert group to explore the feasibility of developing an optional instrument that would support cross- border contracts.

Divergences between national contract laws impede the Single Market. Businesses that want to expand to other EU Member States face high transaction costs. In addition, consumers’ choices are limited and prices remain high. As a result, the EU is not reaping the full potential of online commerce. Out of almost 11,000 cross-border tests, 61% of all e-commerce orders failed – among other reasons – because traders refused to serve the consumer's country.

On 1 July, the Commission adopted a strategic policy paper, which set out seven options. One of the suggested solutions is an optional European contract law. A public consultation is open until 31 January 2011.

Under the Europe 2020 strategy – launched by President José Barroso on 3 March (IP/10/225) – the Commission is tackling bottlenecks in the Single Market to drive economic recovery. This includes making progress towards an optional European contract law. The creation of such an instrument is one of the key actions in the Commission's Digital Agenda for Europe, which was issued on 19 May.

The European Parliament backed the idea of an optional European contract law in a resolution on 25 November 2009. Former Internal Market and Competition Commissioner Mario Monti also identified in his Single Market Report of 9 May the advantages of an optional "28th system" for consumers and businesses.

On 21 May, the Commission convened an expert group to transform a first draft for a European contract law developed under the EU's Research Programme into a user-friendly solution adapted to the needs of consumers and business (IP/10/595). The group, composed of legal experts from all over Europe, is currently meeting once a month in Brussels.

For more information

Justice Directorate-General Newsroom:

http://ec.europa.eu/justice/news/intro/news_intro_en.htm

Homepage of Vice-President Viviane Reding, EU Commissioner for Justice, Fundamental Rights and Citizenship:

http://ec.europa.eu/commission_2010-2014/reding/index_en.htm


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