Faculty of law

Master studies in Civil law

Semester II

Subject:

European private law

Professor:

Dennis Farrington

_____________________________________________________________________

June 2010

1. European private law is a complex and hybrid system that is made of atypical and unusual
mixture of national laws and European Community law.
 The private law as a branch is that portion of the law that defines, regulates, enforces,
and administers relationships among individuals, associations, and corporations. As used in
distinction to public law, the term means that part of the law that is administered between
citizen and citizen, or that is concerned with the definition, regulation, and enforcement of
rights in cases where both the person in whom the right inheres and the person upon whom
the obligation rests are private individuals.

Private law is a pervasive phenomenon of our social life, a silent but a ubiquitous
participant in our most common transactions. It regulates the property we own and use, the
injuries we inflict or avoid inflicting, the contracts we make or break etc. it is the public
repository of our most deeply embedded intuitions about justice and personal responsibility.

The sources of the private law are mainly on national level, through the national
codification starting from XIX century. The main role of the courts is not to create new legal
rules, but to apply, in every case specifically, the norms and rules that are part of the
codification. Making the new norms and rules is role of the Parliament as a legislative body.
That means that the courts are restricted only on their subsidiary role. The legal science takes
the codifications as an initiate point. Its role is to develop discussions and to find possible
alternative approaches for the cases that are not solved with known laws, and to develop the
basic general principles contained in the codifications. That is shown like a necessary
precondition for harmonization of the private law in Europe.

Generally considered, the European legal science is developed on the Roman law,
perceived and interpreted from the Bologna glossators in the XI century and so. The accent of
the research and educations should be placed on the legal problems (that are similar in every
state of the European legal system) and on their possible legal solutions considering the
differences in legal systems.

The Europeanization of the law is new legal theme kindly accepted on the international
level. There are two different meaning branches: the examination of the common base and
principles of all national systems of law in Europe and proper replacement of national legal
norms and rules with the ones form European community.

Europeanization is based on the law that is applied inside the European community borders,
and which law can be named with the term communitarisation.
 The increasing influence of the European law on the national civil law, administrative
law and international private law, aim or intend to keep the harmonization between the
national law and the European community law. The exceptionality of the national legal
doctrines vanishes, meaning that the national doctrines are getting bigger part of common
European doctrine, common European law – ius commune. On the other side, the closer view
of common problems and issues and different solutions that are result of ius commune
research, are essential precondition for creation, development and interpretation of the law in
the European community.

Comparatively with the regional unification, the Europeanization has its own specifics.
First of all, she is connected with the intention and target of the European Community.
Furthermore, she is limitary and is enforce for the member states of EU. Also, the uniformity
of interpretation is under supervision and control of the European Court of Justice.

The uniform apply of rules by the courts in different states, is one of the basic targets of
the uniform and standardized legislation. The specific characteristic of the European law is
that its own uniform application in the courts of the member states is guaranteed with the
previous verdicts and judgments of the European Court of Justice.

The legal nature of the European Union and its law is without precedent in the legal
history. The EU is on a half way between international organization and state. The European
Union has partial legislative power above territory and people of the member states, through
its legal rules and norms. In case of collision between EU and national law, dominates the
law of the EU. That is actually the direct power of EU, with total respect of the people, which
gives her the characteristics of a supranational construction.

Private law in Europe has undergone rapid transformation over the last two decades.
From being a branch of law that was hardly affected by European Community (EC)
legislation, it has become the object of many harmonisation measures, to the point that the
idea of a European civil code is now a priority on the political agenda of some member states,
although not all.

The European private law, as a branch of European Union law (historically called
European Community law) is a body of treaties, law and court judgements which operates
alongside the legal systems of the European Union's member states. It has direct effect within
the EU's member states and, where conflicts, problems or issues occurs, takes precedence
over national law.

The primary source of EU law is the EU's treaties. These are power - giving treaties
which set broad policy goals and establish institutions that, amongst other things, can enact
legislation in order to achieve those goals. The legislative acts of the EU come in two forms:
regulations and directives. Regulations become law in all member states the moment they
come into force, without the requirement for any implementing measures, and automatically
override conflicting domestic provisions. Directives require member states to achieve a
certain result while leaving them discretion as to how to achieve the result. The details of
how they are to be implemented are left to member states.

EU legislation derives from decisions taken at the EU level, yet implementation largely
occurs at a national level. The principle of uniformity is therefore a central theme in all
decisions by the European Court of Justice, which aims to ensure the application and
interpretation of EU laws does not differ between member states.

The number of European private law rules is increasing, so the number of the cases
increases where the Court has to interpret these rules and that further develops existing
European private law. Sometimes the Court goes even further and in order to safeguard the
basic rules of the Community laid down in the European treaties, creates new rules of
European private law applicable to and in all Member states. A major example is constituted
by the private law consequences of non implementation of the directives by Member state. In
this field, the Court establishes European rules of state liability and responsibility. Its starting
point was the well – known case Francovich v. Italy in which is claimed that the state must be
liable for loss and damage caused to individuals by breaches of norms and rules of the
Community law w. The state was also obligated to make good such loss and damage and to
take all appropriate measures to ensure the implementation of the Community law and
consequently to abolish and nullify the unlawful consequences of breaking the European
Community law. That means that the full effectiveness of Community rules would be
impaired and the protection of the rights that they grant would be weakened if individuals
were not able to gain reparation when their rights are violated by a breach of the Community
law for which a Member state is responsible.
 This decision was breakthrough concerning the legal protection of the citizens in the
Community legal order. Even if a directive does not have vertical or horizontal direct effect
(actually is not binding between an individual and Member state or between individual
citizens), its indirect effect can be such that any Member state will have great incentive to
implement it and uphold its community obligations.

There was the similar situation with other cases, such as Faccini Dori v. Recreb,
Brasserie du Pêcheur SA v. Germany and R v. Secretary of State for Transport, ex p.
Factortame, El Corte Inglés SA v. Cristine Blazquez Rivero, Dillenkofer and Others v.
Germany, and many others. For example, in the case Faccini Dori v. Recreb is mainly stated
that if Member state fails to comply with the obligation to transpose or change a directive and
if the result prescribed by the directive cannot be achieved by way of interpretation of
national law by the courts, Community law requires that Member state to make good the
damage caused to individuals through failure to transpose the directive, provided that three
conditions are fulfilled, namely that the result prescribed by the directive must entail the grant
of rights for individuals, the content of those rights must be identifiable on the basis of the
provisions of the directive and there must be a causal link or connection between the breach
of the State’s obligation and the damage suffered. In those circumstances, it is for national
court to uphold the right of aggrieved persons to obtain reparation in accordance with
national law on liability.

Furthermore, when applying the national law, whether adopted before or after the
directive, the national court that has to interpret that law must do so, as far as possible, in the
light of the wording and the purpose of the Directive.

Also in the case El Corte Inglés SA v. Cristine Blazquez Rivero in which the ability to
rely on directives against State entities is based on the binding nature of directives which
applies only with regard to the Member States to which they are addressed and seeks to
prevent a State from taking advantage of its failure to comply with Community law. The
effect of extending that principle to the sphere of relations between individuals would be to
recognize a power in the Community to enact obligations for individuals with immediate
effect, whereas it has competence to do so only where it is empowered to adopt regulations or
decisions. It follows that a directive may not of itself impose obligations on an individual and
may therefore not be relied upon as such against such a person.
In the absence of measures implementing Directive for the approximation of the laws,
regulations and administrative provisions of the Member States concerning consumer credit
within the period prescribed by that directive, a consumer may not base a right of action on
the directive itself against a lender who is a private person, on account of inadequacies in the
supply of goods or provision of services by the supplier or provider with whom the lender
concluded an exclusive agreement with regard to the grant of credit, and assert that right
before a national court. On the one hand, it provides that the Community is under a duty to
contribute to the attainment of a high level of consumer protection. On the other, it creates
Community competence with a view to specific action relating to consumer protection policy
apart from measures taken in connection with the internal market. In so far as it merely
assigns an objective to the Community and confers powers on it to that end without also
laying down any obligation on Member States or individuals, it cannot justify the possibility
of clear, precise and unconditional provisions of directives on consumer protection which
have not been transposed into Community law within the prescribed period being directly
relied on as between individuals.

The presence of the European private law is obviously noticed in much more cases, like
Rewe-Zentralfinanz eG and Rewe Zentral AG v. Landwirtschaftskammer für das Saarland
and Comet v. Produktschap voor Siergewassen. Also, in the case Dillenkofer and Others v.
Germany where is said that the failure to take any measure to transpose a directive in order to
achieve the result it prescribes within the period laid down for that purpose constitutes per se
a serious breach of Community law and consequently gives rise to a right of reparation for
individuals suffering injury if the result prescribed by the directive entails the grant to
individuals of rights whose content is identifiable and a causal link exists between the breach
of the State' s obligation and the loss and damage suffered.

The result prescribed with Directive on package travel, package holidays and package
tours, which provides that the organizer and/or retailer party to the contract is to provide
sufficient evidence of security for the refund of money paid over by the consumer and for his
repatriation, entails the grant to package travellers of rights guaranteeing a refund of money
paid over and their repatriation in the event of the organizer' s insolvency; the content of
those rights is sufficiently identifiable.

In order to comply with Directive on package travel, package holidays and package
tours, which provides that the Member States are to bring into force the measures necessary
to comply with the directive before 31 December 1992, the Member States should have
adopted, within the period prescribed, all the measures necessary to ensure that, as from 1
January 1993, individuals would have effective protection against the risk of the insolvency
of the organizer. In that connection, if a Member State allows a package travel organizer to
require payment of a deposit of up to 10% towards the travel price, but subject to a certain
maximum amount, the protective purpose pursued of Directive is not satisfied unless a refund
of that deposit is also guaranteed in the event of the insolvency of the package travel
organizer.

Directive furthermore should be interpreted as meaning, first, that the "security" of which
organizers must offer sufficient evidence is lacking even if, on payment of the travel price,
travellers are in possession of documents of value which, although guaranteeing a direct right
against the actual provider of services, do not necessarily require that party, who is himself
likewise exposed to the risks consequent on insolvency, to honour them and, secondly, that a
Member State may not omit to transpose a directive on the basis of a judgment of a domestic
supreme court, according to which package travel purchasers are no longer required to pay
more than 10% of the travel price before they obtain such documents of value.

Where a directive has not been transposed within the prescribed period, a national court
may, in order to determine the damage which must be made good, always inquire whether the
injured person showed reasonable care so as to avoid the loss or damage or to mitigate it.

2. Draft Common Frame of Reference or shortly DCFR is: a framework set of annotated
rules to which the European and national legislators and the European and national courts,
including arbitral tribunals, can refer to when in search for a commonly acceptable solution to
a given problem. This “Common Frame of Reference” is also drafted with a view to allowing
parties to a contract, whether cross-border or purely domestic, (international or national), to
incorporate its contents into their agreement.

The proper name of the DCFR is "Principles, Definitions and Model Rules of European
Private Law." It is an academic initiative, the product of collaboration by distinguished
private law scholars across Europe over a substantial period of time. Those authors have
drawn on common approaches throughout Europe in order to frame the DCFR. It is, in effect,
the follow-up to the Principles of European Contract Law (" PECL") although in scope the
DCFR is significantly more extensive. In particular, the DCFR integrates existing European
measures of a consumer protection nature, absent from PECL. The DCFR is the product of
collaboration by two separate bodies: the Study Group on a European Civil Code ("the Study
Group") and the Research Group on EC Private Law ("the Acquis Group").

The DCFR contains principles, definitions and model rules. It also contains lots of
comments and notes, and its content is divided into seven books. Thus it can be seen that the
DCFR as an ambitious project is dynamic in nature.

DCFR indicates the completion of the work on a long term project, undertaken in 2005
by a network of research groups, funded by the Commission’s Research Directorate –
General.

One of the main purposes of the Draft Common Frame of Reference is to collect a body
of uniform terms and concepts which can be used by EU institutions when they prepare and
apply legislation covering private and civil.

Furthermore, the DCFR could be a possible model for an actual or political Common
Frame of Reference (CFR). The DCFR presents a concrete text hammered out in all its
details, to those who will be deciding questions relating to a CFR. The function of the DCFR
is thus separate from that of the CFR in that the former serves to sharpen awareness and
consciousness of the existence of a European private law and also to demonstrate the
relatively small number of cases in which the different legal systems produce substantially
different answers and solutions to common problems.

Also, DCFR could be seen outside the academic world as a text form which inspiration
can be gained for suitable solutions and explanations for private law questions and issues.

The main vision of the DCFR is to be a kind of inspiration or stimulation for a reform
projects within and beyond the European Union (at both national and Community law levels)
and to contribute to a harmonious and informal Europeanization of private law. There is a
potential role of DCFR in improving the consistency and quality of EU legislation, indeed
this is the least controversial aspect of the CFR project. All the EU institutions, including the
Council, had expressed support for this role. Furthermore, it could be used by the EU
institutions to draw inspiration when drafting EU acts. Also, it could be used or take into
consideration as a possible source of inspiration and solutions in the countries, mainly in
those countries that are still structurally reforming theirs national laws.
 The DCFR as an academic text, sets out the results of a large European research project
with hope that the DCFR will promote knowledge of private law in the jurisdictions of the
European Union, and it will help to show how much the national private laws are similar each
other and have provided common and reciprocal motivation for development and how much
they can influence the overall common European legacy.

On the other hand, the DCFR does not constitute (and is not intended to constitute) a
body of law ready and available for immediate enactment. It takes the form of "soft law", or
general rules and principles functioning principally as an inspiration for legislators, both
European and national.

Reference is made to its "toolbox" function. This phrase encapsulates the role of the
DCFR as a body of uniform terms and concepts which can be used by European legislators in
the preparation of European legislation in the future. The DCFR will therefore help to ensure
that terms and concepts appearing in legislation in the European private law field in the future
will be consistent and coherent. Also, other significant role is that it could constitute an "opt-
in" (optional instrument) which parties could choose to govern their contracts.

The creation and development of the DCFR: while the DCFR in the form which is now
available, it was constructed in a relatively short space of time (the two main groups of
researchers were commissioned in 2005 and delivered the text at the very end of 2007), the
researchers were able to draw on earlier work done partly by themselves and partly by legal
scholars who had worked together under the auspices of the ‘Commission on European
Contract Law’ which drafted the Principles of European Contract Law (this group often
being termed the ‘Lando Commission’ after Professor Ole Lando who was its founding
Chairman).
The two main groups of researchers for the DCFR (the ‘Study Group’ and the ‘Acquis
Group’) worked independently of each other: the Study Group started work towards a
‘European Civil Code’ in 1998, and (by the agreement of those involved) took over the
mantle of the work of the Lando Commission; the Acquis Group was formed specifically to
draft principles from the acquis in response to the Commission’s initiatives in the area.
Within the Study Group itself, there were sub groups dedicated to particular topics which
culminated in books (for example, ‘lease of goods’ or ‘non-contractual liability’- some of this
work being published separately as it was completed and prior to the DCFR itself.
There are at least three distinct bodies of material which formed the basis of the DCFR. The
first body of material stems from the Principles of European Contract Law; the second body
of material comes from the work of the Acquis Group and its principal contents stem from
directives on consumer contract law; and the third body of material stems from the
independent work of the Study Group starting in 1998.
General private law - the bulk of the model rules contained in the DCFR - cannot be said
to be 'neoliberal' nor 'socialist'. It strikes a balance between autonomy and solidarity that is
quite similar to the ones drawn in the modern private laws (including the case law, i.e. not
merely the civil codes) of the Member States.
The draft Common Frame of Reference is likely to play a prominent role in the further
development of the European civil code, especially of the European contract law. Therefore,
with a view to its acceptability it is crucial to assess the draft from the point of view of social
justice.
The DCFR has all the characteristics of a typical European compromise, that
disappointed the Ideological and esthetical purists. A common frame of reference is not
drafted, in the first place (if at all), for esthetical or ideological reasons; it is meant to provide
some normative guidance in the further development of European contract law. European
citizens have very different interests, preferences and opinions in relation to almost all the
subjects dealt with in the DCFR. A DCFR consistently based on only one conception about
the right choices would inevitably have disappointed all European citizens with a different
idea of social justice in European private law.
Therefore, if people really want the further Europeanization of private law, people should
have to accept that it will probably look rather different from both the particular Member
State law that each of us is familiar with and our personal ideas of social justice. The
publication of the interim outline edition of the draft CFR, which is the result of a close
collaboration between hundreds of legal scholars from all Member States, has brought that
message home. The characterisations of the DCFR as 'a law for big business and competent
consumers' or, alternatively, as a 'massive reduction of private autonomy' are both unfounded.
Overall, from the point of view of social justice, the DCFR is fairly balanced. Nevertheless,
there should be certainly a room for improvement.
It is likely possible that this DCFR leads us to the European civil law, supplanting the
private laws of the various jurisdictions in the Union’s Member States, to the new collection
or codification of different norms and rules that fill cover the whole private field and that will
regulate the issues and relations between people, and that would be applied among the EU
territory, in every country that is member state of the EU. That leads to common civil code or
other formal conceptual structure which could serve as a framework within which internal
perspective could be taken and within which a dogmatic-deductive approach could be used.
But, even if the DCFR is going to remain only a soft law instrument it is still likely to
have a considerable influence on the further development of private law in Europe and will
therefore also affect, directly or indirectly, the lives of all European citizens.

3. In the case of the Draft CFR, it is important to realize that it is at most a source of
inspiration for European and national legislators and courts and an optional code to be chosen
by contracting parties if they believe it serves their interests better than national law. This
optional character of the DCFR must mean something for its legitimacy. It is primarily the
participation of the mentioned actors that decides on the actual legitimacy of the non -
binding DCFR. This does not exclude that parliaments can still play a role - for example, by
ex post accepting “public acts characterised by expertise and rationality” - but it is different
from the role they have to play in setting mandatory rules.

The present Europeanisation and globalisation processes should radically change our
view of how rules, either existing or new ones, in the area of private law are legitimised.

In my opinion, as the result of the European private law, our law will no longer be the
same. Our national law, the national law of the Republic of Macedonia, will be affected by it
in two closely connected and crucial ways which have in common a shift from form to
substance. This is not revolt against formalism, but in any case is a radical change in a legal
methodology and legal culture. European private law will ensure that we can no longer deal
with our national law in quite the same way. It is changing our way of seeing law and
therewith our law itself.

European integration forces us to re – evaluate the social links of our legal system in
general, and to reconsider the normative task of the private law in particular.
The development towards a Common Frame of Reference for European private law not only
raises questions about what should be the contents of private law rules for the European
Union, but it also challenges our traditional understanding of how rules of private law should
come into being. In the European member states, private law is traditionally ‘made’ in close
cooperation between the national legislatures and the courts: it is the result of an intricate
decision - making process at the national level, in which legal academia is often also
involved. This is, to varying degrees, true for both civil law and common law jurisdictions.
It is not valid only at the European level, but should be remembered also at the national level.
Many countries, mainly among the new member states (including my country as a possible
future member state), are in the process of adopting the new civil codes. Other EU member
states are in the process of re-codification or substantial amendment of their old civil codes.
And all these countries stand in front of the difficult task of reconciling the traditional private
law with the trends emanating from European law.
Private law is going through a period of upheaval in many European Countries. Many
new member states are going through the process of adoption of new civil codes as a final
‘good - bye’ to the old communist codes. It would be highly desirable for the creators of these
new codes to look at private law today as it stands, recognising the evolution which took
place in private law over the past century, and being thereby able to create a code which
would correspond to the changing face of private law.
With the EU primary law and regulative is accomplished the unification of the law in the
member state. That means adoption of uniform standards of material and process law or
uniform rules in the fields that are covered with the exceptional functions of the EU.
Also, if that is not a case, the mutual approach of the solutions in national laws, that can’t
reach the degree of the fully identical norms, are regulated with the harmonization of the laws.
In the case of Macedonia, the process of preparation of a membership in the European
Union pre - accession period, in significant part is a process of gradual penetration of
European rules and standards in its internal order.
The penetration of EU rules in order of the Republic of Macedonia has started a long
time, so intense and organized acceptance of European rules follows the conclusion of the
Stabilisation and Association Agreement between Macedonia and communities and countries
- members of European Community and the Interim Agreement the EC of 2001.
The penetration of European rules in order of the Republic of Macedonia follow multiple
lines, as follows: a) by direct line of validity of the provisions contained in the Stabilisation
and Association Agreement in order of RM corresponding to the relevant provisions in EU
law; b) through transformation of certain provisions in their domestic law or regulation, and -
c) a gradual transformation of the parts of the acquis communitare in domestic legislation.
Until the moment of accession of RM to the Union, when it would be necessary to ensure
full applicability and supremacy of EU law in Macedonian order, it would be required to
ensure adequate application of the provisions of the Stabilisation and Association Agreement
and the European rules (in general) that are already penetrated in our legislation.
 The principles of the direct influence of the European private law and the EU law in
general in the national laws of the member states and the supremacy of this law above the
national laws are, undoubtedly, the basic foundation upon which rests the order of the EU.

The constitutional basis for such application is provided with the monistic decision of the
article 118 of the Constitution of the Republic of Macedonia, according to which
"International agreements ratified in accordance with the Constitution are part of the internal
order and can not be changed by law”. This means that there is place for automatic
application of the Stabilisation and Association concluded with the EC and Member States in
order of the Republic and the Union's rules derived from it. But also, this article makes clear
that this agreement and any other international agreements signed by Macedonia, is
subordinate to the Macedonian constitution, and her supremacy is only applied to laws and
regulations.

The supremacy of EU law that would be applicable in the Macedonian rules, did not
extend to the constitution, so that in perspective, before the entry of Macedonia's EU
membership will have to make a proper constitutional changes that would ensure the primacy
of law created by EU in terms of the Constitution of the Republic. Such supremacy would
have to stretch at least the bulk of the provisions of the Constitution of the RM.