Academic journal article Texas International Law Journal

Experiences from Europe: Legal Diversity and the Internal Market

Academic journal article Texas International Law Journal

Experiences from Europe: Legal Diversity and the Internal Market

Article excerpt

I. INTRODUCTION

The theme I was given to talk about in this symposium-foreign law before the national courts from a European perspective-might be seen as an opportunity to discuss whether enhanced proximity and the increased volume of cross-border transactions within the internal market are providing more opportunities for national courts either to apply the laws of neighboring states (a traditional conflict of laws issue) or, alternatively, to look over national boundaries for inspiration in developing domestic law (a classic comparative law topic).1 However, with a small dose of poetic license, this theme can also be understood to relate to the current heated issue of legal unification in Europe, recently fueled anew by the European Commission's 2003 "Action Plan" in the field of contract law.2

Is there still room for legal diversity within the European Union? It is remarkable that the Action Plan focuses on the reasons for which the completion of the internal market3 might require Member States to share a single substantive law relating to cross-border transactions.4 Such a perspective channels discussion away from the issue it could have been designed to promote: the political and symbolic significance of unified civil legislation as building a sense of identity for Europe.5 As has been rightly pointed out, the great codes of Europe were a "political statement of the values of a liberal society and . . . a technique or affirmation of nation-building."6 In the Action Plan, the use of the term "code," with its nineteenth century overtones, appears to have been banished from the official vocabulary to allay fears relating to the loss of Member State sovereignty or the sacrifice of cultural pluralism. Moreover, technical considerations relating to cross-border trade and transaction costs sidestep the long-standing academic debate among comparative lawyers concerning the preservation of cultural pluralism in the field of nonregulatory or private law7 in favor of an apparently less controversial, economic justification for eliminating diversity.

According to the chosen approach, conflicts between the laws of Member States are presented as an impediment to cross-border transactions and thus to the exercise of the fundamental freedoms within the internal market.8 Such an approach, already present both in European Community (EC) secondary legislation and in the European Court's extensive scrutiny under the Treaty Establishing the European Community (EC Treaty) of national measures affecting the cross-border supply of goods and services, explains why the unification issue has now also become a focal point of an equally passionate debate among conflicts lawyers, who challenge the assumption that the economic logic of the internal market should override traditional considerations relating to choice of law, in many ways similar, at least in continental European jurisprudence, to those which underlie the civil law.9

Without losing the sense that the real issues behind the Action Plan are political and clearly call for a mature democratic debate, the aim of this paper is more modestly to examine the proposition that legal pluralism necessarily fragments the internal market by confronting it with the rival claims of interjurisdictional competition as an alternative to central regulation. It will be shown that at present the balance achieved in this respect, both by the Community legislator and the European Court of Justice (ECJ), seems to indicate not only a preference for the least intrusive inroads into Member States' competence when the market requires regulation on an EC level, but also the existence of techniques more conducive to preserving diversity than wholesale substantive unification. Indeed, in its important ruling in the recent Tobacco Advertising case,10 the Court holds that differences between the laws of Member States are not reasons unto themselves for harmonization on an EC level. Thus, the structural design of Community law would seem to argue against wholesale unification in the field of contract law. …

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