With 27 countries free to organise their own laws, the European judicial space is highly fragmented and access to the legal redress is a complicated issue for companies operating in non-domestic EU states. Comparing the various systems and debating the potential advantages of harmonisation is the object of a voluminous study carried out by the Business Law Research Centre (CREDA), an institute of the Paris Chamber of Commerce and Industry (CCIP) (1). “The European Union is now the world’s leading economic power,” says Robert Badinter, Emeritus Professor at the University of Paris I in the preface to the study.
In a market economy, commercial jurisdictions play a vital role “because a vigorous, prosperous market cannot exist unless its rules are well regulated and respected in all Member States.”
National pride
CREDA questioned magistrates, enterprise committees, and lawyers on the foreseeable or desirable evolutions in European commercial law over the next five to ten years. An initial observation: jurisdictions are extremely heterogeneous. There were as many approaches to resolving commercial disputes as there were countries studied. Specialised commercial divisions and procedures, conflicts dealt with by different bodies, courts employing both professional and non-professional judges, and disparities in notices of appeal, are just some of the features characterising the fragmented nature of European commercial law. The differences are numerous and reflect the legal cultures of various countries. Everywhere, “and it’s the first surprise in this report,” according to Aristide Lévi, head of CREDA, “it is apparent that commercial jurisdictions enjoy, generally speaking, a very good reputation. The overall satisfaction rating was over 65%.” The only drawback: the length of procedures came in for serious criticism.
For those involved in legal cases in foreign countries, such differences often render proceedings incomprehensible. These economic players would like to see the law becoming more compatible with the needs of the business world: simple, rapid, and predictable.
This wide diversity of jurisdictions has encouraged certain economic actors to practice the art of “forum shopping”, which consists of choosing the legal approach best suited to their needs. “Even if it doesn’t happen very often, I have sometimes seen that kind of thing,” says André Lombart, a lawyer who works with the Brussels-based law firm, CMS DeBacker. Mr Lombart gives the example of a company that failed to pay its bill at the conclusion of an international contract of sale with assignment of jurisdiction. A Belgian party intent on recovering its debt rejected the assignment in favour of the jurisdiction of the debtor, a manoeuvre which made it possible to pursue the case in the country in which the debtor was based. “This approach is more effective, avoiding as it does going through a second procedure abroad to have the Belgian court’s judgment recognised and executed. In trademark law, for example, it is not infrequent that the jurisdictions of certain countries are preferred to those of others.”
Unify or harmonise?
Should Europe develop a unique judicial model? The idea is not universally popular. For Robert Badinter, “we should safeguard their ancient diversity. It is one of the jewels of European culture.” However, all the professionals approached in the survey were very keen on the idea of harmonised systems. For the Brussels lawyer, who is familiar with the workings of the Paris Commercial Court, “harmonisation in terms of the recognition of legal decisions would be desirable. That a legal decision taken in a Member State should be immediately recognised as binding in another Member State would represent real progress.”
Supreme Court idea rejected
Amongst the ideas examined in the survey was the creation of a supra-national European Court of Cassation, or Supreme Court, overseeing all national jurisdictions and regulatory authorities. However, this idea was rejected. Another avenue that was explored was the possibility of setting up a pan-European magistracy, “a kind of Erasmus for magistrates,” in the words of Aristide Lévi. “Magistrates would take part in a kind of international exchange programme in which they could, without adversely affecting the secrecy of deliberations, audit, perhaps even with a right to vote, the preparation of the judgments of their European colleagues.” But for the jurists, lawyers and magistrates questioned on the issue, by far the most important issue was the harmonisation of day-to-day practices. “Harmonisation, which is already underway, concerns, notably, modes of proof, procedural time limits, and the execution of legal decisions,” explains Professor Yves Chaput of the University of Paris I and Scientific Director of CREDA. “This would be a step forward in the field of assignations, for example, thanks to informalisation. Artificial differences should be done away with.”
EU law: impetus for harmonisation
International law is also a unifying factor. The recognition by all the EU’s Member States of a series of fundamental rights, including the right to equitable justice, sanctioned by the European Convention on Human Rights (ECHR) and the EU Charter of Fundamental Rights, leads naturally to a harmonisation of judicial concepts. “The European judicial space therefore already exists, if only partially, thanks to the recognition on the part of all Member States of a number of shared principles, the rights recognised by the ECHR. In this sense, the EU is a ‘state’ subject to the rule of law,” says Professor Chaput. Moreover, large areas of EU law, including competition law, have a direct impact on certain aspects of commercial law. In other areas, EU law acts as a regulator. “Thus, bankruptcy law has become pan-European in the sense that a judgment delivered in France is recognised as having full force of law in other EU ember States in virtue of the principle of mutual trust.”
Highly popular networks
In effect, “it seems that European commercial jurisdictions themselves will have to take their fate into their own hands,” says Guy Canivet, President of the Conseil Constitutionnel (“Constitutional Court”) and author of the conclusion of the survey. “And the judicial networks of judges and authorities, both formal and informal, promote analysis, encourage comparisons, and create the conditions of possibility for relevant discussion and dialogue.” Member States have created a number of civil and commercial judicial networks, including the European Judicial Training Network which focuses on providing training for judges, the Lisbon Network which trains magistrates under the aegis of the Council of Europe, and the European Network for Councils for the Judiciary. These organisations, which serve as bridges between judges, all encourage harmonisation. “The European Commercial Judges Forum demonstrates that judges are taking an increasingly spontaneous interest in what goes on in foreign jurisdictions,” says Mr Lévi. “When judges in one country are preparing to make a decision, they often contact their European counterparts to request their views on the issue.”
Conciliation, mediation, arbitration
Lastly, the survey reveals a high level of interest in alternative approaches to resolving disputes, such as conciliation, mediation and arbitration, which share two features much appreciated in the business community: speed and discretion. However, arbitration is more costly than going to law in that the arbitrator has to be paid by the parties involved. However successful these solutions are, it is highly unlikely that they will ever replace the Commercial Courts.
The ultimate objective of harmonisation is to find a way of ensuring an increased level of judicial security. The main point of interest of the survey is its emphasis on comparative aspects and its suggestions for making law more effective in the European context (2) It is now up to the judges themselves to take up the baton and continue, perhaps with the help of the Council of Europe and the European Commission, with the task of creating a more efficient international legal framework (3).
1. “Quelles juridictions économiques en Europe , du règne de la diversité à un ordre européen”,edited by Yves Chaput and Aristide Lévi, CREDA, CCIP, Editions Litec (629 pages, 95 euros TTC).
2 “Pour une justice économique efficiente en Europe : les enjeux d’une harmonisation”, 4 December 2007 in Paris, www.creda.ccip.fr
3 www.coe.int/cepej
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