Foundations of Private Law from EU Perspective, Appunti di Diritto Privato Comparato

Scarica Foundations of Private Law from EU Perspective e più Appunti in PDF di Diritto Privato Comparato solo su Docsity! 2021/2022 Prof. Iamiceli Paola & Prof. Baele Hugh FOUNDATIONS OF PRIVATE LAW FROM EU PERSPECTIVE 1 FOUNDATION OF PRIVATE LAW FROM EUROPEAN PERSPECTIVE INDEX PROGRAMME ........................................................................................................................................................... 4 SCOPE AND BOUNDARIES OF PRIVATE LAW WITHIN LEGAL DISCOURSE .................................................................... 5 THE POSSIBLE ROLES FOR PRIVATE LAW .................................................................................................................................... 7 What is private law and what is it for? ...................................................................................................................... 7 STRUCTURE OF THE COURSE ................................................................................................................................................. 12 THE SOURCES OF PRIVATE LAW FOR A “GLOBAL JURIST” ........................................................................................ 13 WHY IS PRIVATE LAW MOSTLY GROUNDED UPON NATIONAL LAW? .............................................................................................. 13 WHAT ARE THE MAIN SOURCES OF PRIVATE LAW AT NATIONAL LEVEL? ......................................................................................... 14 WHAT IS THE ROLE OF INTERNATIONAL LAW IN PRIVATE LAW MATTERS? ....................................................................................... 20 WHAT IS THE ROLE OF EUROPEAN LAW IN THE DOMAIN OF PRIVATE LAW? .................................................................................... 26 EU perspective> main questions .............................................................................................................................. 26 PRIVATE LAW AND FUNDAMENTAL RIGHTS OF INDIVIDUALS (PERSONHOOD RIGHTS) ............................................ 40 INTRODUCTION ................................................................................................................................................................. 40 WHAT DO WE INTEND FOR FUNDAMENTAL RIGHTS? ................................................................................................................. 40 WHY ARE FUNDAMENTAL RIGHTS RELEVANT FOR PRIVATE LAW? ................................................................................................. 42 Fundamental rights and private autonomy ............................................................................................................ 42 WHAT ARE THE LEGAL GROUNDS FOR THE PROTECTION OF FUNDAMENTAL RIGHTS AT NATIONAL AND SUPRANATIONAL LEVEL? ............... 44 The effects of the Charter upon national law: the limited scope of the Charter ...................................................... 45 A focus on Data Protection ...................................................................................................................................... 47 QUESTION TIME AND SAMPLE QUESTIONS .............................................................................................................................. 65 PROPERTY LAW ....................................................................................................................................................... 66 INTRODUCTION ................................................................................................................................................................. 66 THE ROLE OF PROPERTY LAW IN MARKETS AND SOCIETY ............................................................................................................. 66 PROPERTY LAW AND ITS DIFFERENT REGIMES ........................................................................................................................... 68 An attempt to define the concept of ownership ...................................................................................................... 68 Public interest and the European “constitutional” domension ................................................................................ 72 4 15/02/2022 PROGRAMME COURSE OBJECTIVES We cannot learn private law as a uniform system applicable throughout the world. No unique set of rules. But we can: • Understand the main concepts and general principles in private law through the lenses of western legal tradition and EU law. • Understand the role played by private law in addressing concrete problems occurring in private relations within society and global markets; o (FUNCTIONAL APPROACH: starting from concrete problems and facts, some issues arise, how private law helps us to solve those disputes, the instrument we need, at national level and supranational level, from transnational perspective) • Grasp some of the basic tools for the comprehension of private law matters from the perspective of a “transnational lawyer” dealing with purely domestic (national) law and cross-border situations at a European level. • Understand the possible role payed by EU law (and to a minor extent, international law) in providing principles and rules applicable in private law contexts or influencing national systems under these respects; seeing how much EU law influences domestic law How will we address this learning process? METHODOLOGIES • As we will have a functional approach: 1. a multiple-step discovery § form cases to legal concepts and instruments o mapping legal sources and legal foundations of applicable rules and principles (at national and supra-national level) • search for a possible common core (unlike comparative private law) across multiple legal systems in the EU and western legal tradition; • focus on the EU dimension and its impact on national private law. LEARNING TOOLS • Handbook(s) and readings • Case analysis (especially from the Court of Justice of European Union) most of the times available online • optional readings for independent analysis and class presentation (voluntary basis) • middle break to class discussion, presentations and preparation (sample exam questions) • tutorials (support for case analysis and class presentation, by topic) • additional support for exam preparation and individual study (office hours) 5 Exam: if face-to-face written, open questions and case-based questions + oral part to confirm or complement the mark; if online: written, case-based questions + oral. SCOPE AND BOUNDARIES OF PRIVATE LAW WITHIN LEGAL DISCOURSE 1st concrete case: The hospital Alpha, located in country A, purchases a large stock of antiviral pills from the pharmaceutical company Beta, whose headquarters are located in country B. Since the availability of this treatment is still very limited in the market, the State requires by law that hospitals shall adopt an internal plan defining criteria for the best allocation of this treatment, taking in due consideration the patients’ vulnerability and the expected effectiveness of the treatment in the given circumstances. The Alpha allocation plan provides that the treatment shall be ensured on a ‘first come first served’ basis; in case of shortage, priority should be given to the most aged patients. When patients are admitted to the hospital, they (or their family members on their behalf) are asked to accept hospital’s terms and conditions, including the treatment allocation plan mentioned above. Based on this plan, Mrs Brown, a chronic disease patient, resident in country C, is refused the antiviral treatment despite her vulnerability. Whereas other treatments are provided, Mrs Brown cannot survive the infection and passes away. By contrast, Mrs Green, a 78 yrs old patient resident in country D, receives the antiviral treatment and, just afterwards, is affected by a severe allergic reaction that is not reported in the information provided by the pharmaceutical company. • Civil liability: hospital is liable for issues of breach of contract between the hospital and Mrs green. (private law is involved in the case). • Medical negligence on the side of the hospital and the pharmaceutical company because it did not provide sufficient information (tort); liability of the pharmaceutical company towards the patients, even though there is no contract. • Did the allocation plan comply with the law? The allocation plan is private law; in this case we can say that the plan was contrary to the law in the sense that vulnerability of the patients was reduced to age in case of shortage. Patients can claim liability based on the fact that a private organisation has adopted a rule contrary to the law, and as a consequence has taken decisions which could cause damage to the patients. • The line between public and private is thin. What if the hospital is public? There is sth more than just private law. Let’s try to define the boundaries of private law using this case • What are the main actors in this story? 1. [private, public or both? Individuals, organisations or both?] 6 In a sense both: the states are public, the hospital is private (may be), and individuals are private actors. In this case both: organisations and individuals: individuals and hospital and pharmaceutical body (organisations). The fact that one of the actors is public or private is a significant fact, but not detrimental to being in private or public law. Public actors may be liable under private law. Could a state be found liable, had the story been slightly different, for instance excluding the requirement of considering the vulnerability of patients? In this case private people and patients could invoke tort liability. We may still be in the realm of private law even with public actors. Public actors may use private law instruments. • What are the main interests at stake? 1. They should be private at stake [individual, collective, general interests, a mix of them? Economic, non-economic?] The blurring boundaries between public and private law if we only stick to the Roman conception of the distinction: “Public law relates to what concerns the state whereas private law relates to the interests of the individuals” (Publicum ius est quod ad statum rei Romanae spectat, privatum quod ad singulorum utilitatem; Ulpiano). It is rather likely that public and private law will deal with those matters, but not distinctive. Instead, we must look at: a. The nature and charact of the relationship between the actors; b. The type of instruments used to regulate parties’ interests. Which type of relations may be defined private? The state and the hospital à hierarchical, concept of authority grounded upon the law distinctive of public law. The hospital and the pharmaceutical company à paritarian (equal), private law. They decide on the content of the contract and have the same right to comply or refuse to have a contract. The hospital and the patients à private law, but more complex, supposed to be paritarian but often is not. In private law the relationships are equal, paritarian in the sense that there is no authority grounded on the law aimed at protecting a general and public interest and the well-being of the citizen. In principle, same accessibility to resources and same instruments; in fact, they may have different economic power, for instance. We can still have situations of asymmetric power. How is the power of the hospital different from the power of the state? The power of the state is grounded on the law, the rule of law; that of the hospital is private and specifically economic, grounded on private autonomy, space of freedom and autonomy that you may use to gain accessibility to resources, and resources may proved organisational or individual power. This is where private law intervenes, allowing these powers to be used in a fair way. Which instruments do actor use in a situation of private law to pursue/accommodate their interests? What is the distinctive feature of the instruments taken by the hospital and the state? In 9 • Article 17 (Right to property). 1. Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions. (...) The use of property may be regulated by law in so far as is necessary for the general interest. These are very important dimension of private autonomy and not surprisely these freedoms do come with limitations. National constitutions as well as the charter of fundamental rights of the European Union acknowledge that the law may limit these freedoms and may do so to protect the general interest. Compare with: • art. 17, French Declaration (1789); • art. 41 and 42, It. Const.; • art. 14, German Fundamental Law; An important concept in private law come at this point: mandatory v. default rules. This is an horizontal distinction very relevant in private law. a. Mandatory rules: parties cannot depart form those rules and freely exercise their private autonomy because of the importance of the general interest (third parties’ interest) that cannot be undermined in the fields in which mandatory rules apply. Sometimes the mandatory rules are there to protect the interest of the weaker party between the two. In family law, spouses cannot refuse to maintain and educate their child, the law acts in the interests of the child (third party, not part of the transaction), general interest or even one of the parties in the relation. See the previous example: patient-hospital. • Default rules function as an “unless” rule. They have a role unless the parties provide otherwise. In this sense, default rules enable the exercise of private autonomy. The parties may depart from those rules and freely exercise their will (limited in cases by the general interest). Even more, they play in advance for the parties: they regulate all the aspect of the transactions in advance so that every aspect is regulated by the law. E.g., marriage provides that spouses have joint property unless they provide otherwise. Default rules enable private autonomy. It is easier if you have a default rule because it mirrors what normally parties will decide, it is a majoritarian rule. Plus, you don’t need to engage into transactions. Again on ‘powers’ in private law: private law addresses relations among individuals or entities who play on level playing field (equal arms presumption). Equal arms presumption may be rebutted and private law may adjust rules and principles in respect of power asymmetry between the parties. o Mandatory rules may be aimed at limiting these powers o Default rules may also encourage a ‘fair’ use of private powers Private autonomy and its impact on general interest or third parties’ interests. ❖ In the story above, do you see any space for general interest or third parties’ interests, potentially disregarded by private autonomy? Mandatory rules may limit private autonomy in order to protect these interests. 17/02/2022 10 Recap: Private law provides rules and principles that are at the basis of the functioning of the society and the market to regulate relations between individuals and organisations. In abstract term they are in a plain field, able to exercise their private autonomy. Private autonomy is the core of private law, and the most of private law is aimed at allowing individuals and organisations to exercise private autonomy (at choice). But there are general interests, individual interests and third parties’ interests to be taken care of, so there must be a guarantee that the exercise of private autonomy does not crash with other interest that the law needs to protect. Because of the centrality of private autonomy, an important concept has been introduced: the distinction between mandatory and default rules. Default rules are rules that enables and foster private autonomy in the sense the private parties can depart from or follow them, they operate as a reference. If they forget about something, that aspect is already in the law. Default rules help and support private autonomy. What if only one of the parties thinks that a rule is a default rule and the other does not? They will have to share a common view. A default rule is presented as: “unless the parties…” or “parties may move…” (therefore they normally have an expressed formula but there may be cases in which the distinction is not straightforward. The main criterion is that a mandatory rule is to protect supraindividual interest, core values at the basis of which the society and the legal order work. Another criterion is the reference to legal sources. Some legal sources are placed at the top level (constitutions, for instance) and if a rule is based upon constitutional principles, you have a good argument to say that it is a mandatory rule. In practice what happens is that, when parties negotiate, an important aspect is who is in a more powerful position, in other words who will be more imposing. The one party more imposing may include in the contract an invalid clause (unjust or whatever) which, for the sake of private autonomy, cannot be touched or invalidated by judges. Mandatory rules are there to deal with private authonomy, they limit it, limits that may not be departed by the parties. That is because parties should be protected as well as the general interests (public interests). Private law will likely adopt mandatory rules protecting the weaker party and limiting the stronger one. E.g., employer-employee, customer-seller etc. i.e., an employer cannot invoke the private authonomy saying that the employee signed a contract limiting its rights. This concept of limiting private autonomy in order to protect the interests of the parties (namely the weaker ones) crosses all fields of private law and therefore if a right is infringed, one party may claim a remedy for that damage. The concept of right is important for private law. What is a right? A right is a legal acknowledgement of an interest qualified in favour of an individual or organisation so that his/her interest are protected within this situation (a right is a legal interest protected by the law). The right is there for the protection of a legal interest which empowers (a right is an empowerment) the situation by acknowledging the law. If I have a right, I have a legal interest protected by the law and the law vexes me the power to do something and/or restrict others. The right gives limitations to my powers. The law gives me the power to do something i.e., if I have a right to own this material, I’m entitled to use that, to dispose that, to destroy that but with limitation (countervailing principles, respect of the general interests). Rights are a fundamental aspect of private law. But what would a right be such without a remedy? Nothing. If private law was only there to acknowledge right to people, that will be little. Is important 11 that if those are violated, the right holder should be protected. A remedy is a measure of protection of rights in case rights are infringed. i.e. I own a phone, I have a right to ownership, someone demage it, I still have the right, but I have a problem, I need to be protected against someone else fault, you can go to court or ask for damages. Therefore there can be, like in the case above, injunctive measure, an order from a judge to stop infringing my right. The diverse links between rights and remedies in western legal tradition show a huge amount of remedies in case of infringements. (deterring role of civil remedies too> i.e., huge amount of damages forecasted due to historical root “ubi ius ibi remedium”: if there is a right there must be a remedy, (ubi ius ibi remedium or viceversa), because without remedies, rights are little, they prevent the infringement and make rights stronger. à There is a dispute whether remedies are part of private or procedural law. The latin definition has blurred boundaries. Indeed, procedural law is about the judicial procedures which enable individuals and organisations to bring claims before the court; but the definition of the remedy is also related to the type of right. So, actually, we speak about remedies whenever we speak about rights. The principle which a person is entitled to go to court and have an effective remedy is a general principle normally stated in the top ranked sources of law in most states – constitutions, for instance, but also European treaties and dispositions, charters etc. • Art. 16, Déclaration des Droits de l'Homme et du Citoyen de 1789. Toute Société dans laquelle la garantie des Droits n'est pas assurée, ni la séparation des Pouvoirs déterminée, n'a point de Constitution. • Art. 24, It. Const.: Tutti possono agire in giudizio per la tutela dei propri diritti e interessi legittimi. La difesa è diritto inviolabile in ogni stato e grado del procedimento. Sono assicurati ai non abbienti, con appositi istituti, i mezzi per agire e difendersi davanti ad ogni giurisdizione. • (O.W Holmes, The Path of the Law, HLR, 1897): A legal right is “nothing but a prediction that, if a man does or omits certain things he will be made to suffer in this or that way by judgment of the court” Not only are you entitled to a remedy, but to an effective remedy, something that is practical and possible and brings real redress. • TFEU, Art. 19(2): Member States shall provide (remedies sufficient to ensure effective legal protection) in the fields covered by Union law. • CFREU. Article 47(1) (Right to an effective remedy and to a fair trial). Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal in compliance with the conditions laid down in this Article [fair trial; legal aid]. • ECHR. Art. 13 (Right to an effective remedy). Everyone whose rights and freedoms as set forth in this Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity 14 WHAT ARE THE MAIN SOURCES OF PRIVATE LAW AT NATIONAL LEVEL? They may differ and their interaction may differ depending on the jurisdiction. Of course the answer depends on the system, but there are some general aspects normally relevant when we meet Private law at a national level. General aspects that are normally relevant in private law are: • Relevance/foundational role of constitutional principles 1. link between private law and fundamental values and principles like rights, freedoms, access to justice • Relevance/systematic function of civil codes in civil law jurisdiction 1. not the only legal source we have special scope-legislation as well. The civil code gives the systematic structure • In common system courts will have a higher role in comparison to the civil law as well Other elements: • Private law and private regulation Is private regualtion a source of private law? What is the role of private regulation? Private regulation is not a legal source because of the rule of law > the power to provide rule is within bodies entitled by law. They have to establish rules that are applicable to anyone in the society. Also because of the principle of equality > everybody is equal to the law and law must come to those bodies empowered by the law. Private parties are not parliaments. Private agreements are not binding upon others, only law is. In (reality there are actors producing regulations that binds everyone (i.e., the hospital exemple). Over time we had a development of private rules that are binding us as part of the society and influences our daily life but don’t come to public legislators (i.e., Instagram’s terms and conditions binds the use of the application but is not from a public legislator). Think of the deontological rules within the medical profession (Hippocrates oath, e.g.), this set of rules has a private origin and today all medical doctors abide to it and abide to those rules. Real public enforcement of a private, not public, rule. Growing importance of private regulation to which legislators refer to. The law expressly refers to private regulations, the law remains the legal source but vests private regulations a specific power (i.e., the technical standards of something). • The role of academics > what is it? There are systems in which the role of doctrine is relevant (German) not to the extent that it is a source of law, but still, it is very influential for the making of law and for the interpretation of existing law. E.g., the concept of good faith is defined by case law and scholars. (Interpretation is not making laws; this distinction can be valid in open ended terms. Normally this is not a source of law). 18/02/2022 15 Resume: Is private law grounded mainly on national or supranational law? (Legal sources). We acknowledge that private law is mainly grounded on national constitutional law for some reasons (historical one, cultural, philosophical and other related to the legal tradition of States). THE FOUNDATIONAL ROLE OF STATE CONSTITUTIONS IN RESPECT OF PRIVATE LAW We can acknowledge an increasing role of State (national) Constitutions as source of private law. There was a time in which mostly in all systems, the belief was that, when constitutions were adopted, constitutions were addressed mainly by legislators or law-makers. So from the perspective of private law, that was the narrative structure of constitutions, the constitution was addressed by legislators of private law but it was not immediately applicable in private law situations. So there was a principle that was the understanding of that time in the constitution, but then it was up to the legislator, when drafting laws of private law, to take that principle into consideration, with no means for private parties (in private relation) to immediately invoke the constitutional principle in the horizontal relation. So originally and traditionally the belief was that the national constitutional norms only had vertical application and no horizontal application. [Difference between vertical and horizontal relations The vertical relation is the one between the citizen and the state or between a supernational body and a national body, is hierarchical, link a public authority with either another or a citizen. If we say that a constitution applies in the relationship between states and citizens, we say that has a vertical application. Horizontals are private law relationships, normally among private parties but also public and private but ruled by private law. Originally, the belief was that constitutional norms had only vertical application and not horizontal. So for example: In Italian constitution, there is a principle, stated in article 32 IC, saying that the Italian Republic (the state) acknowledges the right to health as a fundamental right of individual and of general collective interest. So right to health is a fundamental right for both the individual and the collectivity. If it is said that this principle has merely vertical application, that means that, when legislator (including a private law legislator) rules albeit the right to health, he has to take into account the fact that the right to health is a fundamental right for individuals and the collectivity. At some point both scholars and judges of courts started to understand that this principle (right to health) has immediate application in private law relation: in Italian civil code, there is a rule saying that immaterial damages (non economic losses) may be recovered only if the law establishes so (so only in special cases and special instances that are especially defined by the law). As a general rule, individuals may not recover immaterial losses except for the specific instances in which the legislation provides so. It was the constitutional court in Italy, since late 70s and early 80s, to say that it would be contrary to the constitution and art 32 IC to exclude and to deny damages in cases in which the tort causes immaterial damages affecting the right to heath (a fundamental right). So if the right to health is violated and the person suffers damages (including immaterial damages) these have to be recovered under tort law (branch of private law). What the court has done, is that it has started from a norm of the constitution and has made that norm applicable and immediately relevant for a private law relation (the one between a tort and a victim suffering from an immaterial damages). So in that case the constitution has 16 DIRECT HORIZONTAL APPLICATION. It is also an example of dynamic and changeable interpretation of the constitution. This pretty much depends on the legal tradition: the distinction between a general principle and right of a constitution and law is very strong (filled with struggle to provide this general principle with direct horizontal application) so it is not totally shared and undisputed that general principles stated in the national constitutions always have direct horizontal application. For example , there is a trend towards their acknowledgement in private law relationships. Definitely this trend (to consider fundamental rights that are established in the national constitutions as very relevant for private law discourse) is shared within the German doctrine. Private has been considered for ages a branch of law keen and focused on economic contexts and interests in public relations. We cans say that nowadays there is an increasingly understanding that actually fundamental rights that are mainly stated in the Constitution play a major role in private law and private law relations. So we should somehow adapt the rule of private law to the considerations of these fundamental rights stated in the constitutions. So the trend towards a constitutional reading or constitutional perspective of private law is something that is increasingly relevant not only in scholarly debates but also in practice and in case law. Constitution are the primary sources of private law giving: • General principles (e.g., non-discrimination, proportionality in balancing rights and freedoms) • Fundamental rights and freedoms 1. Particularly rights inherent to personhood, § e.g. human dignity, private life, data protection, right to health, etc. 2. including economic rights and freedoms § e.g. right of property, freedom to run a business, to work, etc. • Access to justice and enforcement (remedy) of rights > found in the constitution, right to an effective remedy • Special protection for weaker parties > e.g. consumer protection (see, e.g. art. 76, Polish Constitution Public authorities shall protect consumers, customers, hirers, or lessees against activities threatening their health, privacy, and safety, as well as against dishonest market practices. The scope of such protection shall be specified by statute. Collins, Cosmopolitan and Transnational Private Law (2012) “The link sometimes drawn between private law and national constitutions and their statements of fundamental rights is, however, ambiguous with respect to its source of authority. On the one hand, requirements to make private law compliant with the constitution could be regarded as grounding it in cosmopolitan ideas of the protection of human rights. On the other hand, the same requirement could be regarded as a reassertion of national identity and collective solidarity by grounding private law in the nationalist constitution and its fundamental rights” On one side, constitution points to general principles that belong to a universal heritage, cosmopolitan principles shared everywhere but also a link between cultural and history of the 19 The civil code is a mirror of the private law tradition at the national level. Compare the structure. The structure is the systematic set of rules, system of norms should be complete and structured to address any type of issue of private law, we have to find the relevant norm for the issue. i.e., can immaterial demages be compensated? In principle a civil code should be complete and structured to address any type of issue of private law. Civil codes v. Special-scope legislation > Genus v. species and the diverse extent of “genus”. Within the legal system at stake, we may consider on the one hand the civil code as the general and systematic source of rule of private law and on the other the general scope legislation (the secondary law that we can have out of the civil code). In common law systems we would have the common law principles and rules and on the other hand the bills and statutes. This problem of deciding and reading the systems that combine general rules and principles and statutory law is very important. The general rule is that special scope legislation prevails over general scope legislation: therefore if we have a norm form the civil code and another from special scope legislation and our case is one that is covered by special scope legislation, the latter prevails. For example the civil code will tell us when a contract is valid or invalid (producing its effects or not) but then it is possible to have a special scope legislation (albeit tenancy law for example) and possibly this special scope legislation would provide for some special rules that will prevail over the civil code. This is the general approach. Now, how can we know about what is in the civil code and what is out the civil code? The ability to search for the legal tools and the relevant set of rule that apply to specific cases and they can be in the civil codes (in civil law traditions) or in the special scope legislation. This is even more relevant if we think of the harmonisation of private law form the perspective e of the European Union law, through the means of regulations and directives. More specifically when a Member state has to implement a directive on private law at national level, does it change the civil code or the special scope legislation? We have different answers depending on the legal tradition of the state. I.e., Italian legislation developed a set of rules out of the civil code, German and Dutch developed within the code a lot of norms implementing the directives. What is the main difference between developing a european based private law within the civil code or out of the civil code? EU law has impact on private law. One way is the adoption of directives and the implementation of the directive at national level through norms of private law. The question is whether a member state implements that within or outside the civil code and what advantages or disadvantages does it bring. For example, is consumer protection a chapter of the civil code or is it not included? The codes must mirror the general principles of the system, when you start to implement EU law it is possible that the approach to private law matters is different from the ones you had in the code. But there may be consequences of incorporating a european based legislation into a civil code. What would they be? One of the question we have when we speak civil law systems is that the civil code must mirror the very general principles of private law in the system but when we start to implement EU law it is possible that the approach to private law matters as conveyed by the EU law may be a ,title bit different from the one we have used previously in the civil code. The question is to what extent the desert of general rules and principles that are mirro in the civil code are always in line with the approach of the european law and whether the process of harmonisation of the european law (driven by the EU) is somehow changing the set of general rules that are mirror in the civil code. So 20 the consequence would be that the systems that attempt to incorporate EU law within the civil code are somehow more prone to adapt the civil code to the changes driven by the european law whilst the systems that attempt to implement European law out of the cui ultimi code may have at some point a misaligniment between the civil code approach and the private law that is based upon european law. I.e. the distinction between consumer law and other types of relations in contracts, contract law in general sets out rules, EU law says that intervene only on weak party that should be supported and help. The contract between consumer or not in EU level is important, if you incorporate in the code you have to distinguish the 2 contracts, outside you don’t need that but then you have two coexisting rules. Digital law is another exemple, it is a driver of private law rules, and this is a driver of EU law. You may have this spillover effect where EU law tries to change the traditions of national level, changes code. WHAT IS THE ROLE OF INTERNATIONAL LAW IN PRIVATE LAW MATTERS? RELEVANCE OF SUPRANATIONAL LEGAL SOURCES There is a distinction in private law • Purely domestic situation à subject to national private law. • Cross border situation i.e., contract between companies in different states à if the case is linked to more than one legal system we have to understand if only national law is relevant or also supranational (international law as substantive law); and, if only national law applies, of which country? To understand which national law applies we need private international law. If the situation is not purely domestic but cross border, it is subject to some supra national law as substantive law (international law as substantive law). 1. THE ROLE OF PRIVATE INTERNATIONAL LAW Buyer B, based in the Netherlands, has a long standing business relationship with Supplier S, based in Italy, for the supply of food and vegetables grown in accordance with biological production standards. Upon B’s request, S is requested to deliver a new type of tomatoes based on more stringent standards. The lot of tomatoes is delivered timely and transferred to B’s processing company in Denmark (P). After processing part of the products, P discovers that the product is defective and may not be safely used for food processing. Therefore B refuses payment to S and seeks damages for the incident occurred along the processing chain and involving P. What is the issue? B refuses payment, can payment be refused? B can do that if there is a substantive breach, is that the case? Can B seek demages from S, can P also seek demages? The answer may be in the contract, if it does not provide them, you need contract law that will fill the gaps of the contract and to understand if the contract is valid. Which contract law? Imagine that the private law we need is a national contract law, which one? This is where private international law intervenes. There are many factors that may be identified in the case> contract between B and S, 2 places on business, the role of P as third party and place as 21 the product is used, place of performance and place mostly related with the performance. The contract is a sailing contract, so the main feature is delivery, and the tomatoes were sent form Italy to Denmark. We have different elements and probably Denmark is the place where demages started. The question of applicable law in cross-border cases. Exactly because private law regimes are mainly national, when a situation presents elements (factors) connected with two or more different jurisdictions, an issue arises about which national law is applicable to the case => This is the subject matter of a specific area of international law: private international law (or conflicts of law). More extensively, it addresses three main issues: • which “substantive” law is applicable to the case > law that solves your legal issue • which national court has jurisdiction should parties litigate • which “procedural rules” should be applied by this court A private international law also incorporates the question of jurisdiction and is structured as follow: 1. Identify legal qualification of a case, a situation, or a relation (e.g., breach of contract or tort; sale or service contract, etc.)> relevant for framing the fact. Qualify the situation 2. depending on this qualification, PIL identifies the linking or connecting factor (e.g., seller’s place of business, or place of loss occurrence); 3. the connecting factor leads to the applicable law (e.g., the law of the seller’s place of business) E.g.: Art. 3.1(a), Reg. (EC) No 593/2008 on law applicable to contractual obligations: “a contract for the sale of goods (1) shall be governed by the law of the country (3) where the seller has his habitual residence (2)” If we have to apply the norm in the case, Italian law would be applied. Wider question> since we are in a more real private law, to what extend can the parties be the one to choose the applicable law deviating from the default provided by provate international law? This would work in contracts (parts can negotiate on the legal basis) not in tort. It doesn’t work in all cases. We can observe that there are some favoring conditions in some areas> property and succession have more free space to choose the law applicable. Why the choice of law is a good approach? Predictability> issue on cross border contracts. Is hard to face uncertainty on the contract, each party is more interested in being able to predict what is the applicable law in case of disputes. From the start we are facing the uncertainty that depending on the facts at issue appliable law changes. In a contractual or business contractual environment the advantage of predictability is useful. What is the downside> may create some tension, inequality, there may be a case in which the choice of law is based on the conviction that that law will favor certain class of interests i.e. state in which 24 Choice of law à private international law helps you identify the applicable law; this moves from the assumption that the law defines what is the applicable law. However, there are cases in which the task of identifying the applicable law is shared by the lawmaker and private parties. Private parties may influence or decide what the applicable law is. This is a possibility but does not apply all the time. What is the room for private autonomy in defining the applicable law in these situations? First, there are practical/functional constraints, which usually occur in contracts (harder in tort law); but then, to what extent does private international law as law accept that the applicable law is chosen by private parties? It is possible that a system of private international law does not recognize the choice of applicable rule. And this will be a problem. Ex ante choice brings great power, increases the predictability. Is not obvious that every PIL let people choice. There is a trend to an increasing attention towards these rules, PIL is intersectional. Soft law at Hague conference> choice in law should be acknowledged at national level, this means that not everyone choice it. At EU level the legislation enlarged a wider space for the choice of law i.e. succession law 2. THE ROLE OF INTERNATIONAL LAW AS “SUBSTANTIVE” LAW What does “substantive” law mean? It opposes to the concept of PIL as non-substantive or instrumental law. E.g., see the case above. Questions related to ‘substantive’ law: • is S in breach? • can B recover damages? • can P recover damages directly against S? You need norms of private law. You have 2 options> • these are given by the national law or • may wonder whether there are substantive rules agreed by several states as rules applicable in the case of international relationship. Can these answers be found in international law (different from PIL)? The assumption is that the private law norm doesn’t come from the national law but on norms introduced to regulate the international relations. Private International Law provides answers only indirectly, pointing out the applicable law. It is the applicable law (as national law) to provide an answer as “substantive” law. Can the substantive rule be directly provided by international law instruments? E.g. Conventions among States, Model Laws, General Principles, etc. Such instruments exist and they differ for one criteria: • 1980 - United Nations Convention on International Sale of Goods (94 contracting states) • 2005 UNCITRAL - United Nations Convention on the Use of Electronic Communications in International Contracts • UNIDROIT Convention on International Financial Leasing (Ottawa, 1988) • UNIDROIT Convention on International Factoring (Ottawa, 1988) • Convention on International Interests in Mobile Equipment (Cape Town, 2001) • 1994 - UNCITRAL Model Law on Procurement of Goods, Construction and Services 25 • 2007 - UNCITRAL Legislative Guide on Secured Transactions • ICC Force Majeure Clause 2003; ICC Legal Handbook for Global Sourcing Contracts; ICC Model Contract for the Turnkey Supply of an Industrial Plant The distinction between binding and not-binding instruments and the rise of a new “lex mercatoria”. In international law, some norms rule the states> most important in the field of private law has been the UN convention. It means that we have a trade between 2 business located into 2 states of this convention, Vienna convention applies to the contract unless the parties depart from this. If the Vienna convention is not escaped, it will be applied and states how you will conclude the contract, the main duties, which remedies apply for a breach. All these aspects may be ruled on the basis of this convention. Is helpful because one of the most common contracts, sale, between business involved very often are ruled by the same rules among all the states. There are also states that makes some reservations, parties can depart, there are loopholes but there are very powerfull. There is a distinction that you can draw form the list, you have the UN convention and the UNIDROIT conventions, then you have model laws, model contracts and others> the difference is that conventions are binding, and the others are not. States can limit their own sovereignty to sign a norm to increase their capacity in some fields. The model of the terms and conditions, model contract mirrors the practices and rules that parties choses, is a bottom-up approach. Find a way to propose this model. Lex merchatoria comes form the market and private parties and is recognized by the institutions and proposed them as a convention and recognize them. Could we think that by means of international law as substantive law we can actually have a uniformed private law at global level. Then, could we aim at establishing a uniform set of private law rules at global level based on international law as “substantive” law? What are the main obstacles? What would the advantages be? There are 2 instruments to harmonize the law at international level, hard or soft law. There is a trade betweeen using a binding instrument and enlarge the scope of them> when using binding instruments, international law is very specific. Hardly find the use of a binding international convention to regulate a wide area i.e., contract law, likely to have one on a specific type of contract, by contrast if you opt for a soft law, then you can go wider In fact, international law as substantive law tends: • to be scope-specific (e.g., Convention on Internal Sales of Goods between businesses); • when aimed at covering wider areas of private law, to use means of soft law rather than hard law (e.g., Unidroit Principles on Commercial Contracts); • to enable flexibility (e.g., by allowing signing States to deviate for specific matters or State citizens to opt out from provided rules). In cross-border situations, the role of international law as substantive law may complement but not replace the role of PIL and of national legal systems. ´ International law influences national and supranational (e.g. EU) legislation ´. More than national legislation, it opens up to the private regulatory dimension 26 WHAT IS THE ROLE OF EUROPEAN LAW IN THE DOMAIN OF PRIVATE LAW? EU PERSPECTIVE> MAIN QUESTIONS 1. [General issue] EU law as source of (substantive) private law and its impact on national private law 2. Does EU have a general legislative competence in the area of private law? 3. If not, does EU have competence in specific areas of private law? 4. Which instruments may EU adopt in these areas, for which objectives, with which results? Full v. minimum harmonization 5. When does EU law create rights enforceable in the relation between individuals or private agents (horizontal direct effects)? 6. When does EU law influence these relations so having an impact on national private law? (Horizontal indirect effects) 7. Does this impact regard only rights or also remedies? 8. Does this impact (or part of it) extend to non-EU countries? 9. What can we intend by European Private Law and what are its main features? “Mrs Haase, a German citizen, purchases a package travel to Russia through an online platform run by an Austrian travel company. The offer presented on the website refers to the customer’s right to car transfer between airport and hotel without additional charge. Nothing is further specified or mentioned in the email received by Mrs Haase upon purchase confirmation. Upon arrival no car is available for such transfer, nor information is provided via email or telephone announcing any change in the contract. Based on the website offer, Mrs. Haase seeks a refund for transportation costs incurred for transfers from and to airports. As a response, the travel company rejects the request holding that the contract is subject to Russian law pursuant to clause no. 29 of the contract; based on this law, no right can be assigned to a customer if such right is not acknowledged in writing in the final confirmation sent by the offeror.” Legal sources> cross bord situation, identify the parties> German citizen, Austrian company> 3 laws applicable. What is this case about? Contract law case with a breach of the contract, even more whether the transportation costs are covered, interpretation of the contract. Legal qualification is a contract law issue, several possible connections with the states at national law, consumer contract, what is the applicable law. The contract also includes a choice of law clause, whether the PIL of the judge to whom we bring the case, the choice of law is valid. There may be a question, you may wonder whether Russian law is a good choice. Probably national law is not the only thing you have to consider, there may be some rules of supranational source that may say something that limits the possibility of application of Russian law, this source may be EU law. Is likely that there are some limitations of the effects of the clause so that some mandatory rules of EU law should not be disregarded when also apply the Russian law. There may be some protection on consumers that should work anyway in this relation 29 THE TOBACCO ADVERTISING CASE (C-380/03) “when there are obstacles to trade, or it is likely that such obstacles will emerge in the future, because the Member States have taken, or are about to take, divergent measures with respect to a product or a class of products, which bring about different levels of protection and thereby prevent the product or products concerned from moving freely within the Community, Article 95 EC authorizes the Community legislature to intervene by adopting appropriate measures, in compliance with Article 95(3) EC and with the legal principles mentioned in the EC Treaty or identified in the case-law, in particular the principle of proportionality (Arnold André, paragraph 34; Swedish Match, paragraph 33; and Alliance for Natural Health and Others, paragraph 32)” See also Phillip Morris (C- 547/14) on the validity of Directive 2014/40/EU on manufacture, presentation and sale of tobacco [See van Gerven (2006) and Weatherill (2016) in Class materials]” Does the EU have competences in the field of health? it helps states in cases of health crisis at global level, it may have some competences, normally the meaning of the health system is competence of the member states. In the action EU union shall ensure a high level of health. Provide that EU has competences on some fields, than they still have to take health into account i.e. competition law competition among pharmaceutical companies, once EU law rules on vaccination shall ensure that a high protection of health is ensured, the ground is competition and not health. This is not the case; health is not the ground. One is protection of heath, but on the other side states trade tobacco, economic aspect, issue about the economic wellbeing. Is a policy issue, limit in trade protecting health but consider that trade as such is not forbidden but had to be regulate. Is regulating about advertisement important> consumer protection, consumers are informed of the consequences, competitions among producers, advertisement business, the advertisement companies are media, so you are going against them too. Mass comunication is limited too. Newspaper why the adv is important> they get paid. Is financing the mass comunication industry. This is why if you don’t regulate the tobacco advertisement at EU level you will have different health everywhere and systems on which tobacco industries give aids to the newspaper and so changes the mass comunication. Newspaper are not the only ones adv tobacco. Sports events, umbrellas clothing’s… does EU law have a competence limiting adv wherever or some kinds. If you remove tobacco advertisement on umbrella you don’t disrupt the market of umbrella, is not influencial but is influencial on mass comunication. You need to understand if there is a destruction of the market because of that decision. How? Which instruments? Binding instruments Mainly through directives> need implementation by members states, are not applicable as such • From a policy perspective why is this instrument most often chosen in the area of private law? are more flexible, you cope with a wider state of freedom to member states. also, subsidiarity and proportionality are important. Eu law can intervene in the aspect in which 30 national law is not enough > subsidiarity. Proportionality> laws should be applicable proportionality to every states. • The impact of directives on national private law: within or outside civil codes? Different approaches Less frequently through regulations> apply in each od member states, not need implementation, you may need complementary rules as well. Immediately enforceable. • e.g., Reg. EU/2016/679, General Data Protection Regulation • e.g., Reg. EU/2004/261 on passengers’ rights in case of denied boarding, cancellation, or long flight delay 23-02 Most regulations on private law regulates the internal market, the aim is to enable a better functioning of the internal market. The differences between the legal systems somehow have an impact and obstruct the functioning of the internal market i.e., media comunication market determined with the adv of tobacco as opposed to the umbrella case. Health was part of the legislation, art 35 charter of fundamnetal rights saying that when EU institutions adopt instruments, they should ensure a high-level protection of health. Minimum and full harmonization In the field of private law, we may find instruments which EU law imposes i.e., information duties before you conclude a contract online you should be informed about the seller, the characteristic of the product, the characteristics of the platform, what you can do in case the goods are defective… this are listed in one of the directives. If this directive was at minimum harmonization, what were the implications? The member state will implement it but may go beyond that. If is a full harmonization the consequence is that all member state has to implement the directive considering that is the only standard to have at national level i.e., informational duties 10 information duties and no more, you cannot impose more. I.e., a safe product complies with some standard, if they are minimum harmonization all can go higher and adopt stricter standards. In the field of private law is very relevant. You normally go with minimum harmonization so its easier. In some fields full harmonization has been preferred> information duties are one, if you have different standards across the state, as a professional is very difficult to adapt on the different informations, if I have to adjust for every member state is difficult to tailor the information to every nation. Shift from minimum to a full harmonization. Fragmentation is very costly to be dealt with: also, the European court of justice is not really happy with jeopardization. How do you combine the distinction between full and minimum harmonization and the one between directives and regulations? Is clear that a directive needs to be implemented having a minimum or full harmonization helps the member state to implement it. What about regulation that can have these 2 standards> are they by nature full harmonization because they are directly applicable? Technically speaking you may have a regulation that for i.e., list information duties and admit that member states can adopt complementary regulations 31 complementing the duties, or adopting other rules. In principle is not excluded, as matter of fact when EU uses regulations properly is to have a fully harmonized matter, will be less space for legislation, is in theory possible i.e., in list of duties you can have some at national level to increase them. Minimum gives more fragmentation pathways. We have norms that gives you an idea if a norm is minimum or full, in principle can apply to regulations as well. Directives and regulations are the main instruments we use at EU level to regulate private law matters. We should also consider the relevance of general EU principle as sources of private law. Principle that are common to all member states, new general principle and therefore the applicable in the EU. Are general principles that are common applied within the European law and have an impact in the field. Think of the effectiveness principle> individuals and organizations that have rights under EU law should have effective judicial protection before the court. Is not there if in order to protect their rights, they have to face obstacles that makes the realization impossible or difficult. In this case is violated and therefore the national judge should interpret internal law consistently. “In the case-law of the courts, principles which the Member states have in common, play a crucial role in the approximation of the Community and national legal orders. To be common, it is surely enough the ‘principle’ be accepted by the prevailing opinion in a sufficiently large number of Member States (…)” The role of the CJEU and that of general principles developed by EU courts, e.g.: Principles of equivalence and effectiveness in the enforcement of EU-based rights (developed by the CJ well before the CFREU Even if it is not expressively said in the regulation, as far we have to implement a right based principle, we should use that as well. Further drivers and consequences of approximation Legislative instrument is important but the mechanism through which EU law is embedded to national law are different. The role of the court should not be undermined. What happens in practice> National court going to the court of justice asking for interpreation. The court of justice will seek good interpretation in the light of the national legislation, the preliminary reference is already framed in a way that create a connection between national and EU law. If The judge says that in his view the national legislation is not consistent with EU legisaltion, the court is to ask for clarifications. EMMMA>..within this dialogue between national curt and European court of justice, the latter will gave guidelines that will have impact on national law. Somehow the national law can be interpreted in a different way or set a side, to disapply the national law because is incompatible with EU law. This dialogue also may clarify how you should interpret a directive in the EU level. Through a question of another memebr state, states can have a wider view of the legislation> cross fertilization and call for consistency between states. this makes the system more coherent through a cross fertilization. The black letter rules are important, but the role of the dialogue may enrich the regualtion, much richer and significant for national judges. The judicial system at the EU level is very creative, the EU court is much more similar to a common law court, has important impact on how you apply the EU instruments. Legal education> this can contribute in the making of EU law in the future 34 declaration already done in your national system. i.e., reasonableness, fairness, public order… 2. Harmonious conforming interpretation of national law in accordance with EU law> interpret national legislation in the light of EU law, important in the case of directives, is very accepted that you should interpret national legislation in the light of the directive and also primary law and the charter. The norms of the primary legislation are a parameter for interpretation. I.e., norms about how you apply the citizenship and norms at national level that are influence by EU law and general principle of freedom of circulation, you have to interpret them in the light of this principle. You should use the one which is consistent with EU law 3. disapplication of national law that is not compliant with EU law > The right to a period of paid annual leave, affirmed for every worker by Article 31(2) of the Charter (...) is sufficient in itself to confer on workers a right that they may actually rely on in disputes between them and their employer in a field covered by EU law and therefore falling within the scope of the Charter (...) Article 31(2) of the Charter therefore entails, in particular, as regards the situations falling within the scope thereof, that the national court must disapply national legislation negating the principle (…)Bauer case. No way to reconcile national law with EU law, national law says something that is not consistent with EU law. Very severe remedy that courts do very seldomly. When they feel that there is inconsistency, they would give conforming interpretation trying hard or refer the question to the court of justice. But you cannot ask a question that is already been asked or has obvious answer> disapplication is not obvious, also the European court is reluctant. An example of disapplication in the area of contract law Delhaize case (C-47/90): i. Spanish seller does not comply with delivery obligation in a wine sale contract with a Belgian buyer. He invokes force majeure based on national legislation prohibiting him from exporting the wine. The buyer finds this prohibition being against art. 35, TFEU (prohibition of quantitative export restrictions). The Court finds that national restriction may not be applied. Therefore, breach is not excused, and seller must perform. CAN HORIZONTAL EFFECTS BE REFERRED TO DIRECTIVES? Normally not, even if the right is clearly and unconditionally defined by a directive. To have horizontal application need national transliteration • C-684/16, Max Planck v. Shimizu: “even a clear, precise and unconditional provision of a directive seeking to confer rights on or impose obligations on individuals cannot of itself apply in a dispute exclusively between private persons”. • Faccini Dori (C-91/92): consumers may not enjoy rights to repudiate contract concluded out of business premises, if the directive, that introduces this consumer right within the limitations therein specified, has not been implemented by national legislation. Directive that enables in the 90s to repudiate a short time. The guy thought he was able to repudiate a contract when the directive was not yet implemented. However, you can have some remedies 35 • Conforming interpretation> national legislation must be interpreted along the ratio of the directive, regardless its implementation and the existence of constant nonconforming national case-law; open ended terms provided by national legislation may be invoked to pursue the same result envisaged by a directive (good faith, public order) • Conforming interpretation and disapplication > directives may be based upon European principles that are sufficiently clear and unconditional and without reservation. You can overcome the directive and directly apply the principle (e.g., right to a period of paid annual leave under Art. 31(2) CFR - C-684/16, Max Planck v. Shimizu) • Damages > in accordance with Francovich (C-6/90), damages may be claimed against the MS not implementing a directive clearly and unconditionally assigning rights. What if the reason why the not implementation is because the state is late? Then you can say that the state has breached EU law, you may not invoke the norm of the directive (if you could be already effective) you have to go through the transposition. If state is in breach of EU law, the state will be responsible not only before EU (infringment) but also towards its own citizens for non-transposition or non-conforming transposition. If you have to say that you suffered demages because of that non application, you can seek demages. It’s a way to transfer the obligations of the directive so your rights are protected. Francovich introduced state liability. In that case was related to an employment case, private law. It introduces some subsidiary remedies DOES EU LAW INFLUENCE PRIVATE LAW ONLY AS REGARDS RIGHTS OR ALSO REMEDIES? Both and this is true in 2 ways 1. art 47 and effective justice> the holder of the right has some remedies 2. more and more EU legislations, regulations and directives deals with remedies. At time they were focused on rights, now more remedies in secondary legisaltion “The concept of right refers, in my view, to a legal position which a person recognized as such by the law – thus a legal “subject” (hence the name “subjective” right) – may have and which in its normal state can be enforced by that person against (some or all) others before a court of law by means of one or more remedies, those are classes of action, intended to make good infringements of the rights concerned, in accordance with procedures governing the exercise of such classes of action and intended to make the remedy concerned operational.” The divide between rights and remedies and the principle of procedural autonomy of Member States. The impact of EU law and the limitations to the principle of private authonomy Art. 19(1), second part, TUE: “(…) Member States shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law.” Art. 47(1), CFREU (Right to an effective remedy and to a fair trial): “Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal in compliance with the conditions laid down in this Article. (…)” [fair trial, legal aid] Inter alia: ECJ Case C-40/08, Asturcom, “In the absence of Community legislation in this area, the rules implementing the principle of res judicata are a matter for the national legal order, in accordance with the principle of the procedural autonomy of the Member States.” ü However, those 36 rules must not be less favorable than those governing similar domestic actions (principle of equivalence); nor may they be framed in such a way as to make it in practice impossible or excessively difficult to exercise the rights conferred by Community law (principle of effectiveness). üE.g.: too short a prescription period; too demanding the burden of proof; national bans or obstacles against effective remedies (e.g., interim measures, injunctions, damages of immaterial loss, etc. CJEU, Egenberger Case, C-414/16 “Article 47 of the Charter on the right to effective judicial protection is sufficient in itself and does not need to be made more specific by provisions of EU or national law to confer on individuals a right which they may rely on as such” DOES EU LAW INFLUENCE PRIVATE LAW IN NON-EU COUNTRIES? Spillover effect of EU law in States out of EU (e.g., Switzerland), see van Gerven, 2006 (Class materials). Influences on • European Economic Area (EEA) (all EU MS plus: Iceland, Norway, Liechtenstein; *not UK) ÞPart. extended to it extensive EU legislation in several fields, including data protection, consumer protection, financial services, technical regulation standards, product liability, etc. • European Free Trade Area (EFTA) (composed by Iceland, Norway, Liechtenstein, and Switzerland) 25-02 WHAT CAN WE INTEND BY EUROPEAN PRIVATE LAW AND WHAT ARE ITS MAIN FEATURES? European private law is developing in the legal culture and has gained attention but is still more scholar and academic than a concept shared around Europe. See Hartkamp, 2016 (Class materials): EUROPEAN PRIVATE LAW as “segment of a national private law system” influenced by EU law, including (primarily) EU treaties, secondary legislation, CJEU caselaw. In a wider perspective, it may include soft law instruments and (academic) statements identifying principles and rules in different areas of private law, which do not amount to (hard) law adopted at EU level but are considered as common or possibly common to European legal systems. These soft laws instruments are more the result of the scholarship more than a political procedure defining pieces of law possible to be used. THE MAIN FEATURE OF EUROPEAN PRIVATE LAW Beyond the dimension of EU hard law, it includes jus commune Europeo that has been at the basis of some European projects. The development of European Private Law has been the result of a multilevel law-making beyond the hierarchy of sources of law and influence between legisaltion and case law, EU law and principle common to ms, legislation and private regulations. Also, the constitutional dimension is important: Collins, wonder whether today we do have the constitutional background that may sustain a supernational private law. In order to have a private law international system we need a communality of values that has to be found in the constitution>fundamental rights and freedoms as the core of European private law, common national constitutional traditions as general framework and sources of general principles of EU 39 The EP (…) Whereas the most effective way of carrying out harmonization with a view to meeting the Community’s legal requirements in the area of private law is to unify major branches of that law. Whereas a modernized common system of private law is a means of directly or indirectly broadening the Community’s links with countries outside itself, with particular reference to the Latin American countries (…) Requests that a start be made on the necessary work on drawing up a common European Code of Private Law, the MS being invited, having deliberated the matter, to state whether they wish to be involved in the planned unification” (…) This resolution was meaningful but was not followed by concrete actions. The way in which the commission answered was 10 years later with a comunication of European contract law. The European communication on European Contract law and the identification of available options 2001 “The Commission would like to find out if the co-existence of national contract laws in the Member states directly or indirectly obstructs to the functioning of the internal market, and if so to what extent. If such obstacles do exist, the European Institutions may be called upon to take appropriate action.” Available options: I. no EC actions II. promote the development of common contract law principles leading to more convergence of national laws. III. improve the quality of legislation already in place> acquis principles IV. adopt new comprehensive legislation at EC level> most ambitious 2003 EC Communication “A More Coherent European Contract Law. An Action Plan” (2003/C 63/01). Rephrased options and objectives: 1. To improve the quality of the Community acquis in the area of contract law. a. A common frame of reference establishing common principles and terminology in the area of European contract law. In 2009 we just arrived to a draft. Difference is that a draft is a scholarly work, never endorsed at EU political level b. High quality and consistency of the Community acquis in the area of contract law (…) 2. To promote the elaboration of EU-wide standard contract terms (…) 3. Further reflection on the opportuneness of non-sector specific measures such as an optional instrument in the area of European contract law (…)> this came back few years later in sales law. Optional instrument to have a set of rules that privates’ parties can adopt or not The most recent EU Commission’s initiatives • The revision of the existing consumer acquis • The development of a Common Frame of Reference (CFR), not adopted yet • The development of an Optional Instrument>The failed proposal for a Regulation on Common European Sales Law 2011> regulation failed • ‘A Digital Single Market Strategy for Europe’ (2015)> transformed the sales law into projects for new regulations of consumers sales in the field of digital markets. Contractions> from very general to contracts, to sales, to digital single market. The project of the civil code ended and now we are trying to capture segment of digital law as a challenge we face within the market and request many agistment in private law. The issue is having standards rules of 40 private law that enable the growth of private law and enables the use of new technologies and sustainability tools in the market. Where do we stand now? Different approach as before • A more focused approach (between digital and sale law) • Possible spillover effects upon general contract law and general private law • Persistent interest in the search for common core principles to MSs and core aspect of EU acquis as part of European Private Law • The role of EU and national courts in this cooperative venture • The role of academics • role of legal practitioners> still hidden, parts of the European law institute, network of scholars, lawyers and judges and the scope is to bring about a dialogue with European insitution and among the difference consitutences of lawyers withing the framework of law, huge reference point for the making of European law Things are dynamic, grow. Eu will have a wider role than before> if the aim is to harmonize then the states must have to have the final world. If the challenge is more at international the proves will be starting from Europe, new projects that brings the memebr states together and harmonize better. PRIVATE LAW AND FUNDAMENTAL RIGHTS OF INDIVIDUALS (PERSONHOOD RIGHTS) INTRODUCTION • Fundamental rights in private law o Focus on data protection • Questions: 1. What do we intend for fundamental rights? What are the main FRs? 2. Why are they relevant in private law? 3. what are the legal grounds for them both at national and international al level? 4. can these be directly applicable? § Direct application of general principles • Focus on data protection 1. What is data protection? Is it a matter of EU or national law or both? 2. Does data protection conflict with other fundamental rights? 3. An in-depth analysis on consent to data processing WHAT DO WE INTEND FOR FUNDAMENTAL RIGHTS? The best reference may be derived from the Preamble to the Charter of Fundamental Rights of the EU. The adoption of the charter in 2000 made a shift in the history of EU, from a focus on EU market and economic dimension to a union that was made of people. “The peoples of Europe, in creating an ever closer union among them, are resolved to share a peaceful future based on common values. Conscious of its spiritual and moral heritage, the Union is 41 founded on the indivisible, universal values of human dignity, freedom, equality and solidarity; it is based on the principles of democracy and the rule of law. It places the individual at the heart of its activities, by establishing the citizenship of the Union and by creating an area of freedom, security and justice. [...] Enjoyment of these rights entails responsibilities and duties with regard to other persons, to the human community and to future generations.” These rights became constitutional foundations of the EU law. Before were not in the legislation. This is an explicit acknowledgment of values of a community that poses them at the core of the union. The fundamnetal rights dimension become fundamental What are the fundamental rights? Dignity, freedoms (respect for private and family life, protection of personal data), equality, solidarity, citizens’ rights and justice The importance of the first section> major role, there is not a hierarchy but the ones in the first section play a major role among the others. The charter of fundamental rights map • Dignity; o Human dignity o Right to life o Right to the integrity of the person o Prohibition of torture and inhuman or degrading treatment or punishment o Prohibition of slavery and forced labour • Freedoms; o Right to liberty and security o Respect for private and family life o Protection of personal data o Right to marry and right to found a family o Freedom of thought, conscience and religion Freedom of expression and information o Freedom of assembly and of association o Freedom of the arts and sciences o Right to education o Freedom to choose an occupation and right to engage in work o Freedom to conduct a business o Right to property o Right to asylum o Protection in the event of removal, expulsion or extradition • Equality; o Equality before the law Non-discrimination o Cultural, religious and linguistic diversity o Equality between women and men o The rights of the child o The rights of the elderly 44 How to identify fundamental rights? How to understand whether they are relevant in private law relationships? If so, how to distinguish between absolute and not absolute Fundamental Rights in practice? How to prioritize/balance them? Let us look at legal sources and legal bases for Fundamental Rights. 1/03/2022 WHAT ARE THE LEGAL GROUNDS FOR THE PROTECTION OF FUNDAMENTAL RIGHTS AT NATIONAL AND SUPRANATIONAL LEVEL? At national level > are based upon fundamental values that shape the society, we expect that each state when organizing the relationship in the society will also recognize these values in the law> national constituion and written or not and fundamental law. At international level > played a major role • Universal declaration of Human rights 1948, UN assembly o “whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world,..” • European convention of human rights Rome 1950 by the council of Europe, • charter of fundamental rights of the European Union 2000, gained throught the Lisbon treaty force in 2009 These sources play a major role which is also supported by the judicial bench. The different role of courts as guarantors of fundamental rights: ECtHR; CJEU (last sector, bring a case against our state) and national constituional courts as regards both national and EU constituional principles and others national courts. Does the ECJ paly a similar role? EMMA The Charter of Fundamental rights of the European Union is a source of inspiration, means to interpret the treaties (and national law implementing EU law). It is also a ground for judicial review > EU institutions action including legilsation must comply with the charter, if an act of the commission, a piece of legislation approved violate the charter than that piece of legislation is illegitimate. Therefore EU legislation may be annulled and national legislation may be ‘set aside’ > the charter only applies in a specific and limited scope. Fundamental rights, constitutional traditions, and the European dimension: pluralism or commonality? Does the charter establish a level of protection for fundamental rights that is minimum, but states can go beyond that? The preamble of the charter: “The Union contributes to the preservation and to the development of these common values while respecting the diversity of the cultures and traditions of the peoples of Europe as well as the national identities of the Member States and the organisation of their public authorities at national, regional and local levels (…).” 45 They admit that there may be diversities also in fundamental rights and the charter is not there to homogenize all that. It’s a process through which the charter receives from the states. Also: Art. 6(3), TEU “Fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, shall constitute general principles of the Union's law” It is from these diversities that emerge some common values of EU law. This reflects the coexistence of some common parts and the differences The charter is compatible with both solutions, is a question of political choice in the application on the principle of democracy. The EU can decide to have A uniform level of protection throught the union Allow national diversity beyond the minimum level established in the charter and with due respect for primacy, unity, and effectiveness of EU law. The only thing for sure is that you cannot go under the charter. We do have the minimum level in the convention and Member states can go beyond. The charter not only established a minimum protection but allows for some more homogeneous acts in the states. THE EFFECTS OF THE CHARTER UPON NATIONAL LAW: THE LIMITED SCOPE OF THE CHARTER The vertical dimension > Art. 51, CFREU “1. The provisions of this Charter are addressed to the institutions, bodies, offices and agencies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law.” > if MS are acting in other fields not in EU competence, they are bound by their constitution but the charter does not apply in these cases. “They shall therefore respect the rights, observe the principles and promote the application thereof in accordance with their respective powers and respecting the limits of the powers of the Union as conferred on it in the Treaties.” > principle of conferral. “2. The Charter does not extend nor define the field of application of Union law beyond the powers of the Union or establish any new power or task for the Union, or modify powers and tasks as defined in the Treaties.” >Charter as the shadow of EU law> reflects EU law. If the EU law has limitation, the charter has the same limitations. They cannot expand other than EU law. The charter is not there to define the scope of application of EU law. 46 The Charter as “the shadow of EU law”. Can we derive from art 51 an interpretation saying that it may not apply horizontally, can art 51 be a limitation of the horizontal (relations at private law level) relations? There are views in the ECJ that sees art 51 as to no have horizontal application. There are more views of the other side. Art 51 does not say anything on the horizontal relation. CJEU, case C-569/16 and 570/16 (Bauer) “although Article 51(1) of the Charter states that the provisions thereof are addressed to the institutions, bodies, offices and agencies of the European Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing EU law, Article 51(1) does not, however, address the question whether those individuals” [eg, private employers] “may, where appropriate, be directly required to comply with certain provisions of the Charter and cannot, accordingly, be interpreted as meaning that it would systematically preclude such a possibility”. Can then the Charter (and FRs) also be invoked in horizontal relationships? what is it appropriate? Art. 52(5), CFREU “The provisions of this Charter which contain principles may be implemented by legislative and executive acts taken by institutions, bodies, offices and agencies of the Union, and by acts of Member States when they are implementing Union law, in the exercise of their respective powers. They shall be judicially cognisable only in the interpretation of such acts and in the ruling on their legality” > vertical effect. Reference is only to principles. But CJEU, case C-684/16, Max Plank v. Shimizu: “The right to a period of paid annual leave, affirmed for every worker by Article 31(2) of the Charter, is thus, as regards its very existence, both mandatory and unconditional in nature (...) is sufficient in itself to confer on workers a right that they may actually rely on in disputes between them and their employer in a field covered by EU law” > horizontal effect, reference is more to rights However: see IR v. JQ case (C-68/17) on the horizontal application of the principle of non discrimination giving rise to a right not to be discriminated > beyond the principle/rights division. This distinction is difficult to be operatized. Indeed the Charter may be applied in horizontal relations but this happens when a right is clearly defined > difficulty. If we have principles, they are vaguer and more enforceable in a vertical way, when we have a right, we have horizontal relation. In order to be engaged in a horizontal relation the fundamental rights have to be clearly defined, should be clearly enforceable because its content and boundary are defined, clearly. Whereas the principle is by definition vague expression of law and therefore the mere recognition of the charter is not clearly enforceable unless you have another legisaltion at national level. What we could conclude is that the charter may be applied in horizontal relations in particular when we have a right which is clearly defined in its content and scope. The general principle in order to be applied in horizontal need the sample of the law This is not the conclusive way: IR v. JQ case (C-68/17) 49 “1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic wellbeing of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.” Article 7 Charter Fundamentla Rights of the EU Respect for private and family life: “Everyone has the right to respect for his or her private and family life, home and communications” > idea of private spere that includes also communications, interactions with other people. It’s more having a private sphere hidden to the public and that is the main point. Only in the charter we find a separate provision on the data protection of personal data. Article 8 Charter Fundamemntal Rights of the EU “Everyone has the right to the protection of personal data concerning him or her. Such data must be processed fairly for specified purposes and on the basis of the consent of the person concerned or some other legitimate basis laid down by law. Everyone has the right of access to data which has been collected concerning him or her, and the right to have it rectified (> positive dimension of data, is something that you at least should have access too). Compliance with these rules shall be subject to control by an independent authority”. This idea that both the article include is the idea of private sphere that includes “communications” actually (therefore the interactions with other people). But it is more of having a private sphere that is private may be shopping to the public. And this is the point here. Only in the Charter of Fundamental Rigths that is a more recent document, we find a separate provision for data protection (article 8 CFREU). Positive dimension of the right of data protection compared to the negative dimension of the right to property. Everyone has the right of access to data which have been collected, concerning him or her, and the right to have them rectified. This is very important. It is something that at least you should have access to. Access to data is the first step that is part of this right in order to exercise the right to data protection. IS DATA PROTECTION A MATTER OF EU OR NATIONAL LAW OR BOTH? Before the Charter, can we say that the data protection is already recognised at national level? Or is it something that is added by european law? We could say that it is recognised at national level definitely although we have divergences. See references to privacy of correspondence, e.g.: Article 10 German fundamental law 50 “The privacy of correspondence, posts and telecommunications shall be inviolable. This right may be restricted only by or pursuant to a law, and only in cases in which the absence of adequate means of support would result in a particular burden for the community, or in which such restriction is necessary to avert an imminent danger to the existence or the free democratic basic order of the Federation or of a Land, to combat the danger of an epidemic, to respond to a grave accident or natural disaster, to protect young persons from serious neglect, or to prevent crime.” Article 15 Italian Constitution “Freedom and confidentiality of correspondence and of every other form of communication is inviolable. Limitations may only be imposed by judicial decision stating the reasons and in accordance with the guarantees provided by the law” See wider references extending to data in, e.g.: Sec. 18 Spanish Constitution “The law shall restrict the use of data processing in order to guarantee the honor and personal and family privacy of citizens and the full exercise of their right” Polish Constitution Article 49 “The freedom and privacy of communication shall be ensured. Any limitations thereon may be imposed only in cases and in a manner specified by statute.” Article 50 “The inviolability of the home shall be ensured. Any search of a home, premises or vehicles may be made only in cases and in a manner specified by statute.” Article 51 “No one may be obliged, except on the basis of statute, to disclose information concerning his person. Public authorities shall not acquire, collect nor make accessible information on citizens other than that which is necessary in a democratic state ruled by law. Everyone shall have a right of access to official documents and data collections concerning himself. Limitations upon such rights may be established by statute. Everyone shall have the right to demand the correction or deletion of untrue or incomplete information, or information acquired by means contrary to statute. Principles and procedures for collection of and access to information shall be specified by statute.” Why there is a rule for EU law in this field? We had a directive in 95 and then a regulation in 2017. Why is EU competent in the area of data protection? Because of transnational level of market. Why has there been a move from a Directive to a Regulation? Homogeneity and problems of 51 implementation in the directive, prevent the free flow of personal data throught the union and constitute an obstacle of economic activities at the level of the union. Recitals 9 and 10, GDPR: ✓ "(9) (...) Differences in the level of protection of the rights and freedoms of natural persons, in particular the right to the protection of personal data, with regard to the processing of personal data in the Member States may prevent the free flow of personal data throughout the Union. Those differences may therefore constitute an obstacle to the pursuit of economic activities at the level of the Union, distort competition and impede authorities in the discharge of their responsibilities under Union law. Such a difference in levels of protection is due to the existence of differences in the implementation and application of Directive 95/46/EC. > we need more data to flow to implement the market, brings an enormous economic value. The UE has also intervened in the field of economic data. ✓ (10) In order to ensure a consistent and high level of protection of natural persons and to remove the obstacles to flows of personal data within the Union, the level of protection of the rights and freedoms of natural persons with regard to the processing of such data should be equivalent in all Member States. Consistent and homogenous application of the rules for the protection of the fundamental rights and freedoms of natural persons with regard to the processing of personal data should be ensured throughout the Union." GDPR Article 1 Subject-matter and objectives 1. This Regulation lays down rules relating to the protection of natural persons with regard to the processing of personal data and rules relating to the free movement of personal data. 2.This Regulation protects fundamental rights and freedoms of natural persons and in particular their right to the protection of personal data. 3.The free movement of personal data within the Union shall be neither restricted nor prohibited for reasons connected with the protection of natural persons with regard to the processing of personal data. We could have had a full harmonization directive but a strict regualtion is better, we have many provisions which means that all 27 member states have the same rules in the field of data protection. That is an issue > flow of data with third countries. WHAT IS INTENDED BY ‘PERSONAL DATA’ IN EU LAW? General Data Protection Regulation (GDPR), EU/2016/679 Art. 4(1) ‘personal data’ means any information relating to an identified or identifiable natural person (‘data subject’); an identifiable natural person is one who can be identified, directly or indirectly, in 54 Prof. Garofalo AN IN-DEPTH ANALYSIS ON CONSENT TO DATA PROCESSING The GDPR applies to any automatic processor LUCA technological devices (laptops, smartphones etc). According to the GDPR in order to process personal data by automatic means LUCA controller must have a legal basis. - Which legal basis? Functions and dysfunctions of consent in general - Consent of the data subject. Which problems arise regarding consent and how the GDPR solves them - Strong and weak points of the current approach of the GDPR on consent - Other solutions which could be adopted The GDPR poses some broad and general basic principles in art 5 “Principles relating to processing of personal data”. The first two are fundamental. Personal data shall be: A. processed lawfully, fairly and in a transparent manner in relation to the data subject (‘lawfulness, fairness and transparency’); B. collected for specified, explicit and legitimate purposes and not further processed in a manner that is incompatible with those purposes; […]. Lawfulness and purpose limitation. If I want to process data (be a data controller) first of all I need to specify and indicate explicitly the purposes of the processing operations. E.g., the university collects data in order to let us attend classes etc. We do not only need explicit, specified purposes, but also that these purposes are legitimate. The GDPR has a series of lists of legitimate purposes (in art 6, for instance, or art 9 and 10). Legitimate purpose is a legal basis for data processing. These legal justifications are stated in the GDPR in a broad way. It has been done so in a deliberate way because the aim of the EU legislature was to leave it to practice and case law to specify these legal bases. Art. 6 GDPR “Lawfulness of processing” Processing shall be lawful only if and to the extent that at least one of the following applies: […] b. processing is necessary for the performance of a contract to which the data subject is party or in order to take steps at the request of the data subject prior to entering into a contract. Performance of a contract is a legal basis. […] e. processing is necessary for the performance of a task carried out in the public interest or in the exercise of official authority vested in the controller (à law). e.g., bus inspector can fine me if I don’t have a ticket and can take my personal data. 55 In letters b and e we find the legal basis which are the result of balancing operation between risks for the data subject and needs for processing data. In letter f we find sth different. f. processing is necessary for the purposes of the legitimate interests pursued by the controller or by a third party, except where such interests are overridden by the interests or fundamental rights and freedoms of the data subject which require protection of personal data, in particular where the data subject is a child. If there is a legitimate interest and no prevailing risk, data processing is allowed. In this case the legislature admits that there are certain circumstances in which they’ll order a provision asking case law and practice to carry out the balancing operation that I cannot do for every case. Case-by-case approach. E.g., if I am a client of Vodaphone and they send me advertisement, this is called soft spam. Spam normally should refer to article 6(f); in cases of soft spam the legitimate interest according to case law and the authorities can be used as a legal basis. Indeterminate concepts which must be completed by case law and practice. What about letter a? a. the data subject has given consent to the processing of his or her personal data for one or more specific purposes; In all the cases we have seen, this balancing operation between risks and needs is carried out in advance by the legislature, case law, practice etc. if I, as a potential data subject, want to carry out the balancing operation, LUCA prevail over the risks…Can I say that even if there is a risk, I want them to pe processed? Yes, there is latter a on CONSENT. Why consent is so different> other legal bases are content based, based on the content, specific circumnstances, in consent the allowance is given on its own by the data subject; in the case of consent, the allowance of using data is provided for from the data subject on their own. It poses a lot of problems because of the privacy paradox. Data protection is guaranteed in order to give to the data control on his/her data. Who can control? Data subject, this is the problem. We are not in the bast position to control them for 2 reasons • We don’t read privacy notes and privacy policies because we do not have so much attention to read it. • Even though we have time, is difficult to understand if our data are valuable or not, we need to project a culture on data protection> Germany This privacy paradox can be applied to the consent for two reasons When someone asks for our consent, we just give it, we do not have time, we just tick the box. We are not in the best position to balance the risk and needs, the legislature is. We are in the worst position. Asking ourselves to carry out this balancing is not a good way to do that. This leads to a negative outcome> consent ends up being a loophole with the regard of the system of data protection. Controllers know that we are not in a best position so that they just ask consent to us to say yes, we are pushed without understand. Consent should be intended as residual basis, I use it after the other legal basis if they do not apply, in reality they use it every time just because for the data controller takes less time. From the point of view of consent: if not surrounded by very strict limitations, the consent given by the data controller might not correspond to a real choice or at least to a truly considered choice = asking for and obtaining consent to process may constitute an easy loophole with regard to the system of lawfulness of processing 56 Rules are based on behavioral studies and psychological studies, how the people we react on them> effectiveness. Some of the rules in question are based on psychological and behavioural studies. The GDPR knows that the issue of consent is problematic. CONSENT REGULATION AND INTERPRETATION, TODAY Consent in general (regulated by the GDPR) v. Cookies (Cookies are not regulated only by the GDPR but also by the Cookie Law, which poses a different kind of issues which we will see further on). Art 4.11 GDPR. ‘consent’ of the data subject means any freely given, specific, informed and unambiguous indication of the data subject’s wishes by which he or she, by a statement or by a clear affirmative action, signifies agreement to the processing of personal data relating to him or her; Consent is a freely given, specific, informed, and unambiguous expression of will by which the person concerned expresses his or her consent, by means of an unambiguous statement or positive action. Positive action and above all a freely given and informed act. Art 7.1 GDPR. Where processing is based on consent, the controller shall be able to demonstrate that the data subject has consented to processing of his or her personal data. Burden of proof on the data controller. Specific regulation of the act of consent. Art 7.2 GDPR. If the data subject’s consent is given in the context of a written declaration which also concerns other matters, the request for consent shall be presented in a manner which is clearly distinguishable from the other matters, in an intelligible and easily accessible form, using clear and plain language. Any part of such a declaration which constitutes an infringement of this Regulation shall not be binding. Consent separate from the rest of the written statements; simple and clear language. Normally we give consent by signing a document prepared by someone else. Art 7.3 GDPR. The data subject shall have the right to withdraw his or her consent at any time. The withdrawal of consent shall not affect the lawfulness of processing based on consent before its withdrawal. Prior to giving consent, the data subject shall be informed thereof. It shall be as easy to withdraw as to give consent. Withdrawal of consent, always provided for. Art 7.4 GDPR. When assessing whether consent is freely given, utmost account shall be taken of whether, inter alia, the performance of a contract, including the provision of a service, is conditional on consent to the processing of personal data that is not necessary for the performance of that contract. Data as consideration: to be considered with the utmost care, verifying freedom of consent. Data as consideration. Data are an asset; in some cases, we may pay through them – data is the price of a service. 59 Another example of conflict: Data protection v. freedom of expression and right to information. Article 11, CFREU. Freedom of expression and information protected in the charter (see art. 10, ECHR): “1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. 2. The freedom and pluralism of the media shall be respected.” Need to strike a balance between the two rights but how? CASE Google Spain and the right to be forgotten. CJEU, 13 May 2014, Case C 131/12, Google Spain SL, Google Inc. v Agencia Española de Protección de Datos (AEPD), Mario Costeja González On 5 March 2010, Mr Costeja González, a Spanish national resident in Spain, lodged with the AEPD a complaint against La Vanguardia Ediciones SL, which publishes a daily newspaper with a large circulation, in particular in Catalonia (Spain) (‘La Vanguardia’), and against Google Spain and Google Inc. The complaint was based on the fact that, when an internet user entered Mr Costeja González’s name in the search engine of the Google group (‘Google Search’), he would obtain links to two pages of La Vanguardia’s newspaper, of 19 January and 9 March 1998 respectively, on which an announcement mentioning Mr Costeja González’s name appeared for a real-estate auction connected with attachment proceedings for the recovery of social security debts. 04/03/2022 Which fundamental rights are at stake in Google Spain? • Respect for private life • Data protection • Freedom of expression • Right to information of the general public • Freedom to conduct a business The right to retain personal data has an expiry date? Meaning where there is no more public interest involved and information needed. The activity of newspaper would be strongly undermined. The remedy should be effective for the data subject but also proportional so he should not too much infringe other freedoms of others (freedoms to conduct a business for the newspaper and right to information of others). So it’s possible that we may think to an adaptation of the remedy, not to delete information but to archive these information in a way that is not much visible and accessible. This is where it comes the link with the search engine. There has been a very similar case in Italy (corriere della sera) before case Google Spain, and they said at that point that the duty of the newspaper to provide updates (in that case was even tricker because the data subject was prosecuted for crime but then was absolved*) and the news about his prosecution were still available when no update was in about the fact that he was absolved. So there is a duty to provide updates in that case, we cannot leave visible one piece of news without updates. So there is a duty for the one that produce the content to either provide updates or delete the information if not relevant anymore or frame the news in a way that is very clear that is not up to date and further evolution can be in place. So in the Italian case the ECJ said that the search engine was not liable but it was duty of the content creator to provide the updates because the search engines was only 60 an intermediate and it has no chances to control the content and therefore it should not be involved in the litigation. Whereas the case Google Spain in 2014 overturned this interpretation and since then the case law in Italy has changed. So at some point the ECJ said that there is a duty of the newspaper to warn that the news may not be up to-date and here is the role of this change in case law. What is the exact role of the search engine? The search engine should also verify the information listed and collected. Normally the search engine process data. To what extend you can say that the search engine should make a deeper analysis of content> lawfulness courts have refrained to do so. Overtime the problem became so relevant (hate speech problem i.e.) that it was important that those who were in the position of this flow of data they did so. Indeed, the court what is saying here is that the search engine Is responsible for making more or less visible the content, if you complain saying that that content should not be listed you may ask so and the search engine is obliged to either remove the link or delist it, making less visible. Not a black and white> exist or not, data may be made less visible, the search engine is so that they can make the info more visible. Is not relevant that the data is delated but is make it less visible, you ask to google to downgrade that, you can scale down the visibility. Are these rights at stake different, if any, when newspaper are published online? Should they enjoy a different protection or should they be differently balanced? The role of search engines in information society. Does the information indexed by search engines include personal data? “Data found, indexed and stored by search engines and made available to their users include information relating to identified or identifiable natural persons and thus ‘personal data’ within the meaning of Article 2(a) of that directive” [Dir. 95/46 now repealed by Reg. EU/679/2016]. Search engines and website publishers: which relation? “The processing of personal data carried out in the context of the activity of a search engine can be distinguished from and is additional to that carried out by publishers of websites, consisting in loading those data on an internet page” Why are they different? Does this difference impact on duties and liability? Google Spain and the right to be forgotten Are search engines processors of personal data? “In exploring the internet automatically, constantly and systematically in search of the information, which is published there, the operator of a search engine ‘collects’ such data which it subsequently ‘retrieves’, ‘records’ and ‘organizes’ within the framework of its indexing programmes, ‘stores’ on its servers and, as the case may be, ‘discloses’ and ‘makes available’ to its users in the form of lists of search results. (...) those operations (...) must be classified as ‘processing’ within the meaning of that provision, regardless of the fact that the operator of the search engine also carries out the same operations in respect of other types of information and does not distinguish between the latter and the personal data. Nor is the foregoing finding affected by the fact that those data have already been published on the internet and are not altered by the search engine.” Balancing through the principle of effectiveness 61 “It cannot be accepted that the processing of personal data carried out for the purposes of the operation of the search engine should escape the obligations and guarantees laid down by Directive 95/46, which would compromise the directive’s effectiveness and the effective and complete protection of the fundamental rights and freedoms of natural persons which the directive seeks to ensure” “Given the ease with which information published on a website can be replicated on other sites and the fact that the persons responsible for its publication are not always subject to European Union legislation, effective and complete protection of data users could not be achieved if the latter had to obtain first or in parallel the erasure of the information relating to them from the publishers of websites.” Normally, data protection prevails over right to information and economic interests “As the data subject may, in the light of his fundamental rights under Articles 7 and 8 of the Charter, request that the information in question no longer be made available to the general public on account of its inclusion in such a list of results, those rights override, as a rule, not only the economic interest of the operator of the search engine but also the interest of the general public in having access to that information upon a search relating to the data subject’s name.” However, special circumstances may overturn that priority “However, that would not be the case if it appeared, for particular reasons, such as the role played by the data subject in public life, that the interference with his fundamental rights is justified by the preponderant interest of the general public in having on account of its inclusion in the list of results, access to the information in question” To delist is to prevent future events that may harm you a lot. The reason why the court of justice decided that the search engine could be obliged to provide an effective remedy consisting in downgrading was not because a technical understanding but because the curt made a functional approach. The reason why we had this judgment was only functional, if you insist on the newspaper content, you may undermine the right to information, if you act on the engine, you do not put an excessive border on the information market, less intrusive but more effective one. This functional approach was based on proportionality and effectiveness was the basis of the new remedies and now we have art 17 on erosion when your data are processed unlawfully or your data are not relevant anymore, the legislator used the expression to say right to be forgotten, privacy side of the data. When does a right to be forgotten exist? Article 17.1, GDPR. Right to erasure (‘right to be forgotten’) “The data subject shall have the right to obtain from the controller the erasure of personal data concerning him or her without undue delay and the controller shall have the obligation to erase personal data without undue delay where one of the following grounds applies: § the personal data are no longer necessary in relation to the purposes for which they were collected or otherwise processed. § the data subject withdraws consent (…) § the data subject objects to the processing (…) 64 · processing is necessary for the performance of a contract to which the data subject is party or in order to take steps at the request of the data subject prior to entering into a contract · processing is necessary for compliance with a legal obligation to which the controller is subject · processing is necessary in order to protect the vital interests of the data subject or of another natural person · processing is necessary for the performance of a task carried out in the public interest or in the exercise of official authority vested in the controller. · processing is necessary for the purposes of the legitimate interests pursued by the controller or by a third party, except where such interests are overridden by the interests or fundamental rights and freedoms of the data subject which require protection of personal data, in particular where the data subject is a child An example (Privacy Policy, Facebook) “We collect, use and share the data that we have in the ways described above: as necessary to fulfill our Facebook Terms of Service or Instagram Terms of Use; consistent with your consent, which you may revoke at any time through the Facebook Settings and Instagram Settings; as necessary to comply with our legal obligations to protect your vital interests, or those of others; as necessary in the public interest; and as necessary for our (or others') legitimate interests, including our interests in providing an innovative, personalized, safe, and profitable service to our users and partners, unless those interests are overridden by your interests or fundamental rights and freedoms that require protection of personal data. The modes of data subject’s consent GDPR, Article 7 Conditions for consent Where processing is based on consent, the controller shall be able to demonstrate that the data subject has consented to processing of his or her personal data. If the data subject's consent is given in the context of a written declaration which also concerns other matters, the request for consent shall be presented in a manner which is clearly distinguishable from the other matters, in an intelligible and easily accessible form, using clear and plain language. Any part of such a declaration which constitutes an infringement of this Regulation shall not be binding. The data subject shall have the right to withdraw his or her consent at any time. The withdrawal of consent shall not affect the lawfulness of processing based on consent before its withdrawal. Prior to giving consent, the data subject shall be informed thereof. It shall be as easy to withdraw as to give consent. When assessing whether consent is freely given, utmost account shall be taken of whether, inter alia, the performance of a contract, including the provision of a service, is conditional on consent to the processing of personal data that is not necessary for the performance of that contract Data subject’s rights Chapter III, GDPR · Right to information (to be provided where personal data are collected or are not collected from the data subject) 65 · Right of access by the data subject · Right to rectification · Right to erasure (‘right to be forgotten’) · Right to restriction of processing · Right to data portability · Right to object · Right not to be subject to a decision based solely on automated processing, including profiling, which produces legal effects concerning him or her or similarly significantly affects him or her Enforcement rights Chapter VIII, GDPR Right to lodge a complaint with a supervisory authority> administrative level • This may trigger investigating powers • Available measures: injunctions, fines Right to an effective judicial remedy against a supervisory authority’s decision Right to an effective judicial remedy against a controller or a processor Right to compensation for material and non-material damages Art. 82(1), GDPR “Any person who has suffered material or non-material damage as a result of an infringement of this Regulation shall have the right to receive compensation from the controller or processor for the damage suffered.” To sum up Data protection as fundamental right linked with many other fundamental rights The role of EU law between market-driven policy and fundamental right protection The enforcement challenge and the effective empowerment of data subject through consent The role of administrative authorities and the one of private law remedies QUESTION TIME AND SAMPLE QUESTIONS 1. Difference between mandatory and default rules and what is their role in defining the scope of private autonomy? 2. what is the role of private international law and what is the role of EU in private international law? 3. does EU law have competence in the area of private law? If ever, on which legal grounds? 4. can EU principles have direct application in matter of private law? Can you make one or te examples based on the case-law of the CJEU? a. van gend & Loos / COSTA v ENEL (?) b. IR v JQ principle of no-discrimination 5. to what extent and how can the CFREU be applied when addressing matters of private law? 6. why is data protection regulated under EU law? 66 7. what are the main principles relating to processing of personal data pursuant to EU law? 7/03/2022 PROPERTY LAW INTRODUCTION 1. What is property law? What is its role in market and society? 2. The different property regimes (public v. private) and the boundaries of property in a realm of scarce resources • Individual v. general interests and property regimes: • the concept of ownership and its multiple facets • private v. public ownership • private ownership and general interests • Public v. common property: the new frontiers of the sharing economy 3. The main issues addressed by the law of property • Defining regimes of use and movement of resource Regarding art and cultural assets (e.g., Colosseum or Mona Lisa) their preservation is entrusted to the state, which ensures the legitimate use of these assets and the fulfilment of the general interest. It is a responsibility that should be given to the state rather than to privates. Private ownership, however, is not forbidden by the law and we could have pieces of art owned by private persons or organisations. Instead of prohibiting such a thing, you can use regulation as an alternative: u can still allow private ownership but u can also regulate it in a way that … in the future. First of all, depending on the type o asset u can decide that only public ownership is allowed; for the Colosseum we have no alternative. Then, u can discourage individual ownership by using, for instance, the right of first refusal: the state has priority over the possibility of acquiring a cultural object. In this case freedom of trade is somehow limited. Third option is regulation, u admit private ownership but regulate it in a way to protect the general interest value attached to the piece of art. Some laws may even oblige u to recognise the openness of your asset in certain times of the year. Patent Advantages à economic interests; an incentive to engage in investments shall be given so that investors produce more value and part of this is owned by the ones that contributed to create the value. FILL IN.. THE ROLE OF PROPERTY LAW IN MARKETS AND SOCIETY Mona Lisa> preservation of the value of the asset that is why the state owns it. Power of deciding over it and a duty to preserve it, ensuring the preservation and the possibility to fulfill general interest concerning the using of this asset. Discourage private ownership by the right of first refusal> state has priority over the possibility of purchasing a cultural object. Limit to the right of ownership because it also implies the right to sell the thing and here you are not totally right, the state has the 69 can use the land, grow produces but cannot sell the land which is a power that remains on the owner (naked owner). Numerus clausus > by legal traditions, at least in civil law countries, there is this principle of numerus clausus of property rights, limited list of right. Why is that the case? There could have been too much fragmentation not wealth to individuals. One of the objectives is to facilitate the use of resources and their circulation so that everybody can have access to resources and certainty is maintained (ownership assumes that you have full controll over the object) if there was an unlimited power to create limited rights you would find to have a limited power and have no certainty. When you have a limited right you have a registration system, so that you can make public the information that which legalizes what said. If could make too many titles< too many systems of registration. Registration systems are complex and established not for all the objects i.e., immovable but not movables. If too many property rights could be created on the object> we would fear the risk that the ownership is not full but limited by someone else right. This property right can be enforceable vis a vis anyone> limited number of property right> circulation of property is not negatively afflicted by the existence of these rights Limited proprietary rights in the sense of this Book are: • security rights if characterized or treated as proprietary rights by Book IX or by national law. Is a right that is assigned to a person who has a credit towards the owner or someone else, i.e., the bank, I have a credit to the bank, a loan and then the bank will give it but will ask you to have a mortgage over the apartment you are going to buy. If you don’t pay back the loan the bank will seize the asset and let the apartment be sold and had a priority among all the creditors. I may have it as a borrower because the bank has a mortgage over the thing Is a priority right assigned to a creditor vis a vis all the creditors and people that if ever this creditor needs to seize that object to satisfy that credit will have priority over the creditor. I can create security right over something else i.e., painting and with a pledge. Very specific aspect of ownership> the single power of being prioritize other creditors is seized to satisfy the creditor. • rights to use if characterized or treated as proprietary rights by other provisions of these model rules or by national law. • trust-related rights if characterized or treated as proprietary rights by Book X or by national law. Why is it relevant here> is a limited property right. When you create a trust, the settlor creates a trust you define an object and assign to someone the trustee the power to be exercised over the object for the benefit of a beneficiary that can be a third party or the owner as such, power that is distinguished by the beneficiary, power to a person that is distinct of the beneficiary i.e. I am the owner of the land I assign Emma as a trustee, and she has to menage this land for the benefit of my child. She has power on it, but this power is characterized by a duty to use the power for the benefit of a beneficiary. This situation which is a mix of powers and duties is a property right. Consequence> if I sell the formal title to someone the trust will remain there, and Emma will retain the power and the child will retain 70 the benefit. If my creditors seize the land will not do so unless this is for the credit for the management of the land for the benefit of my child. Works with money too> intangibles. Trust is common law concept> exported in many other states, international convention in Hague in the 80s in which several states signed the convention and recognize the possibility to apply common law to regulates trust in the community. The concept of trust is so wide and flexible and expanding so much private authonomy of the owner that if you accept in your system you can do everything to create a new property right> content of the trust can be defined by the private authonomy of the settlor, can create an indefinite number to property right but there is the numerus clausus> depending on the type of property right the numerus clausus have a different scope. In common law numerus clausus has less values, most civil law countries therein the numerus clausus plays a quite important role. Limited right you have the owner and the possessor of the limited right> owner of an apartment and the one having the usufructs of that, the latter can use the apartment and to keep the fructus. He does not have the right to sell it, you will have 2 people in the same land> owner have all the rights to do except those of the usufructs. If the owner sells the land the usufructs is a property right, so the new owner of the land has to respect that. 8/03/2022 Ownership> wide meaning that law assigns to an individual or a group or organization of controll of some resources, wider concept which may include any title that may be enforced by individual or organization vis a vis towards the society and all the other members of the community> absolute nature of the property right is at the core of real rights. If I had to find a civil law transplant of property right, I will refer to a real right> comes from latin res a real right is a right over a resource, object asset. Normally a tangible one but over time becomes intangible that may be enforced vis a vis all the remaining erga omnes effect. When we speak about absolute rights, we say something that may be enforced by anyone in the society, opposed to the concept of personal right which is normally contractual which may be enforced to specific persons that are in a specific relation with me. Absolute rights are the strongest right we can think of. This family includes both right of personhood and real rights over an object different from a person. The closest terminology to real right is a property right. A right that relates to an object different form a person and may be enforced against anyone, does not depend on the specific relationship with a specific person. Within the family of property right the right to ownership is the main important property right. The right to ownership is the most comprehensive right that one can have> definition said above. Ownership is the legal title whereas possession looks at the substance that I possess a thing as if I own that. Ownership, a complex concept or a bundle of rights? Owner’s powers/control may concern/imply: 71 • Use • Management and protection • Investments • Access by third parties (granting/denying access; the exclusionary feature of ownership) • Transfer of resources (rights on resources) • Right to profits or other benefits ´Duty to bear costs, risks, and liabilities, … Different regimes may exist depending on whether these powers/rights/liabilities are assigned to: • Individuals • Groups of individuals (closed groups/open communities) • Public in general • Individuals/institutions in charge of holding the property in the interest of one of the above Terminology to capture these dimensions may vary: • Private v. public ownership: a private entity or a public one • Individual v. collective ownership, collective v. co-ownership> individual is the ownership of one single person, collective has the ownership of several persons nature of the owner These are based on the nature of the owner. We are not defining this distinction on the base of the object indeed we can do it> private v public goods. Normally we don’t speak about of private and public ownership but look at the nature of the object whether it embeds a general interest which is prominent. Public goods are resources that may not be easily excluded from the full enjoyment of someone else and that may be used at the same time by multiple users without tha use affecting other people use i.e. I have an apple I can decide to exclude someone to use it, moreover if I eat it, others won’t be able to use it, my use is inconsistent with the use of others. By contrast look at the colosseum Is different. Resources that are available to several people for whom is very difficult to exclude someone or to make the enjoyment of someone rival to the enjoyment of someone else this applies to many cultural goods. This brings about a number of consequences> whether the public goods for a economic point of view should also be public from a legal point of view i.e. river, you cannot deny one to use it and benefit can be on larger individuals, rivers are public. There are 2 aspects that should be taken in consideration when thinking about the economic distinction between private and public goods • EXCLUDABILITY >Many goods over time became scarce> water is not an infinite resource, climate change and others. Resources more than before have become scarce resources. The problem of administration of these scares resources comes> private ownership has become the preferred approach of underinvestment of efficient use of resources for these goods that carry on this value, private ownership may be the best solution • RIVARLY> Technological change> whereas in the past many resources cannot be excluded, now the exalumen of someone form the resources is accessible i.e. Defence is not public good but Defence goods are based on technologies that will enable you to exclude someone from the enjoyment of Defence> signal system more sophisticated. This implies that you have technology, there is the possibility to exclude others. 74 and of the declaration thereof. 1988: applicant’s offer to the State (not accepted); subsequent sale to Guggenheim, declared to the State for the possible exercise of pre-emption rights. Nov 1988: State exercises pre-emption rights in respect of 1977 sale (much lower price), considering the 1977 declaration as non-compliant with legal requirements, therefore making the right of pre-emption free of any time limitation. Question was whether the painting was owned by a private or the intermidiate was the owner. At that time at the first sale, the state was informed in a very fishy way, was deemed later irregular. At that time the state did not express any interest. Time passed and the owner that bought the painting in the 70s wanted to sell it again to the Guggenheim collection. Again, there was an information to the state. The state started to express his concern about this painting saying that the first sale was not valid, the ultimate purchaser was never known by the state. Been an invalid purchase for the state the notification was invalid. Few years later the owner makes another offer, and the state did not accept. The owner sells it to the Guggenheim. After that the state exercises the right not to the latest offer but on the 1976 which was for the intermediary, the value of the painting has changed and the past offer was lower, somehow the state played a nasty trick> not the owner for the state, just received a valid notification at the beginning for the value at that time. First challenge was for unjust enrichment by the state, second the state cannot accept an offer that was 11 years old, too late> limitation time. Since the notification was not formally corrected the deadline never ran> actually the term was still open, position of the state. The question went before the court in Italy and the state could exercise the right on the thing. The private owner complied to the ECtHR and though that the state abused its power. Scope of application of Art. 1 and concept of “possessions” “The Court points out that the concept of “possessions” in the first part of Article 1 has an autonomous meaning which is not limited to ownership of physical goods and is independent from the formal classification in domestic law: certain other rights and interests constituting assets can also be regarded as “property rights”, and thus as “possessions” for the purposes of this provision” General principles “(...) the control by the State of the market in works of art is a legitimate aim for the purposes of protecting a country's cultural and artistic heritage. The Court points out in this respect that the national authorities enjoy a certain margin of appreciation in determining what is in the general interest of the community (...) it is legitimate for a State to take measures designed to facilitate in the most effective way wide public access to them, in the general interest of universal culture Conclusions of the Court “(...) the Italian authorities waited until 1988 before giving serious consideration to the question of ownership of the painting and deciding to exercise their right of pre-emption. (...) if the authorities could exercise their right of pre-emption at any time the seller's rights would always be restricted, thus creating continual uncertainty as to the legal position with regard to the work (...)” 75 “Where an issue in the general interest is at stake it is incumbent on the public authorities to act in good time, in an appropriate manner and with utmost consistency (...)” The unjust enrichment of the Italian State Þ “The applicant had to bear a disproportionate and excessive burden. There has therefore been a violation of Article 1 of Protocol No. 1. (…) Notion of possession is wide so that there is no formality on the meaning. Indeed, this legislation serves the public interest, the state must have the possibility to protect the preservation of cultural object that reflect national identity. The court said that this power has to be used in respect of proportionality (art 5 TFEU). Law will define the conditions upon which the state may use this power and not to abuse that id there is a time limit must use it may not use a undetermined time limit. Indeed, there is the need for balancing and in this case the conclusion was that the applicant suffered a tort and disproportional remedy 15/03/2022 The concept of property balances the focus, on one side, the individual interest and, on the other hand, general collective interest. In general terms, the concept of private property could encompass a high level of liberty, of freedom. The first priority holder is by definition a free man, free from the state, this is from the libertanin vision of property coming from the French Revolution. Over time, another emphasis was combined with the national constitution. Individual freedom and the general interests, which implies a limitation of freedom that implies limitations of freedom, the effort to combine/balance individual freedom and the consideration of general interest. These efforts of property law to balance the individual freedom, at the basis of the concept of property, with the consideration of general interests. This is increasingly important with relation to the recent challenges of climate change and the pandemic. The avian flu case: The need to limit the spread with the avian flu, led the state to adopt measures/decisions that had an impact on economic interests. At some points, these businesses understood that this decision had an impact on their business, of these measures to protect the general interest, which is public health. The limitation of their rights should be compensated at some point. • Restrictive measures adopted in Hungary within the avian flu outbreak (2006) • Impact on business in the field of turkey and poultry rearing • Legislative compensating measures covering costs and actual losses but not loss of profits • Is this consistent with the right to run a business (art. 16 CFR), the right to property (art. 17 CFR) and the right to an effective remedy (art. 47, CFR)? What is the link with property? Because there was a limitation to the right of property, and at the same time the right to run a business. These 2 rights are enshrined in the Charter of Fundamental Rights: article 17 (property); article 16 (business). Thus there was a limitation of these 2. 76 According to article 17 of the Chapter states: “(…) No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss. The use of property may be regulated by law in so far as is necessary for the general interest.” Does the charter provide for a right compensation any time you limit property right for general interest reason? No. Does it provide some compensation for? Subject to fair compensation: it is proportional to the loss. You are entitled to fair compensation depending on the type of the loss you have been subjected to. →“the Court has previously held that the EU legislature may consider, in the context of its broad discretion in the field of agricultural policy, that full or partial compensation is appropriate for owners of farms on which animals have been destroyed and slaughtered. Nonetheless, the existence, in EU law, of a general principle requiring compensation to be paid in all circumstances cannot be inferred from that fact.” Indeed article 17 provides the right to fair compensation, but deprivation is something different from limitation. Normally, if the states deprive you of property, you are entitled to fair compensation. On the contrary, if during the pandemic in order to prevent contingencies, the state establishes that you cannot go to the gym, that is a limitation but not a deprivation, thus you are not entitled to have a right of compensation. At some point a limitation can be so persistent that, maybe, it is possible that you are entitled to compensation. The court stated that “ It is up to the state to decide whether there are and the extent of the compensation.” Was Hungary denied any type of compensation to the guy? No. There was a distinction between material loss and loss profit. →When you run this type of business, it is not the law as such, of the material that you lost, that is hidden, but the impossibility to trade/to gain a profit is what the law protects. At this point the court of justice ruled that it was not its competence: “states may provide for compensation but the amount of such is beyond my scope.” Article 17 is linked to the article 52, which states that anytime there is a fundamental right (e.g. right of property) you may have a limitation of the fundamental rights, provided that a number of conditions are presented. The first condition is that there must be a law regulating this limitation, it cannot come from an administrative body. The second condition is the fact that this limitation should either be justified by the general interest or the protection of other fundamental rights. The third condition is the fact that it should be proportional. 79 In the intermediate regime, the so-called property co-ownership, we speak about a definite group of property right holders: there should be a limited number of persons, but it is a different regime. It is different from individual ownership. Therefore you have regulations but also private autonomy because this governance is up to the people who share the values to regulate the relationship. The distinction between open access regime and common property (Ostrom) →open access: no one has the legal right to exclude anyone from using a resource, →common property: the members of a clearly demarked group have a legal right to exclude non-members of that group from using a resource. From common property regimes to co-ownership “Where “co- ownership” is created under this Book, this means that two or more co-owners own undivided shares in the whole goods and each co owner can dispose of that co-owner’s share by acting alone, unless otherwise provided by the parties.” e.g. 3 persons have a building: the property is undivided, each of the co-owners have in their patrimony ⅓ of the whole building; they share the decisions powers, the costs for the rent. The concept of share is very relevant because it defines the extent of the rights which are allocated. Normally, you can sell your share of the building, but at the same time the parties may agree the right to sell can be limited. For instance: the other 2 co-owners can decide the price of the sale; you should primarily propose to them the sale. Some of these sharing will not affect the property regime, but only the contractual right to use. e.g. bla bla car→ you share the use, and the benefit; not a share of property It may depend on the structure of the usage of sharing resources. TO SUM UP: • Property law as the domain of private law which regulates the allocation of powers, risks, responsibilities over resources. • The concept of private property combines, to a different extent depending on legal traditions, a focus on individual freedom with different forms of limitations or regulations stemming from the balancing between individual and general interests • The need to define property rights in a way that makes them verifiable by subjects different from the right holder imposes a certain level of standardization of property rights (numerus clausus) but… • … it is not incompatible with the role of private autonomy of the right holder This autonomy is particularly relevant when individuals and organizations decide to share property rights and need to organize their enjoyment, management, control, etc. 17/03/2022 The contribution of EU law, in particular European case law, through the definition/the concept of property: whether it is focused on individual rights or freedom of the owner. 80 Topic of the next lessons: Which interest is satisfied, and how many types of regime we can conceive (from open access regime towards exclusive individual property rights; between these 2 there are other regimes). Now, we come to the rules of property law from the EU perspective. • What are the main issues addressed by the law of property? Thus the content of the law of property • What are the legal sources of property law? Can they be found at national, international or EU law? What is the role of EU law for property law? • What is the role of EU law for the development of national property law? Example which we will issue: the question of EU competence in the area of property law: the example of usufruct legislation and the Segro case ii. EU law and transfer of movables: the case of cultural objects iii. EU law and transfer of property rights via succession: the Kubicka case iv. EU law and security rights THE MAIN ISSUES ADDRESSED BY THE LAW OF PROPERTY DEFINING REGIMES OF USE AND MOVEMENT OF RESOURCES What do you expect to find within a legal order? Rules that: • Defining property regimes, distinguishing between private/public, individual/collective, etc. in respect of goods or contexts The property law system will define which means are recognized in accordance with that regime. • Taking regulation into account when defining the powers of holders of property rights (possible limitation of private autonomy inherent to property rights) • Balancing different interests inherent to property (public v. private interests; private v. private interests) The registration system may provide help, thus property law will define it applicable to some of the goods: e.g. for immovable object in order to protect everybody’s interest Another important aspect that is affected by property law is the circulation of property rights: As you lead individual and organization access to these rights, thus enable people to adquire of proprietary rights. The acquisition of property rights is different between almost all legal systems. There are systems in which the mere transfer of the right there is either the delivery or the registration of the transition. Lastly, how do you protect property rights? The protection of property rights is very important, as they are the strongest rights that have been conceived after the French revolution. Indeed, systems developed the idea that property rights should be protected, there is a civil judicial response that enables the holder to receive back the object that has been stolen. There are complementary means of protection (e.g. damages), but also the possibility to have a judicial order obliging someone from doing something: e.g. owner of the garden and the neighbor disturb you with the music→ you can obtain a judicial order imposing your neighbor to enjoy your property 81 At which level you may find these rules? Where do we find these? At national or supranational level? At the national level, because the type of the economy was mainly focused on the property of land and industrial means. Property law has been at the core of the first civil code, French civil code: even a contract is a means to acquire property. And also: →Creating a legal infrastructure apt for enjoyment, circulation and protection of property rights: • Clear definition of rights • Standardization (numerus clausus of property rights) Distinguishing between ownership and other property rights • Observability/verifiability of rights by every possible interested party (registration systems; the role of possession) • Clear rules on access to property rights and circulation (the role of possession; the role of contracts; property and succession law) • Strong protection in case of violation: the importance of remedies in kind and restitutionary remedies At which level(s) (national/supranational) are these rules and legal infrastructures established? →Indeed, property circulates not only within national borders but also in cross-borders situations. From this perspective, the main rule applicable is the: Lex rei sitae (where the object is placed/the location of the property). If you move from immovable property to movable, it would be a problem as the latter can cross the boundaries. Nowadays, lex rei sitae causes more problems than solutions. THE SOURCES OF PROPERTY LAW BETWEEN NATIONAL, INTERNATIONAL AND EU LAW • The national dimension of property law and the role of comparative law The private international law perspective: →The lex rei sitae rule and its shortcomings For immovable property the choice will not be difficult; whereas for movable property it will be difficult. The simplification brought by succession regulation: the whole succession is subject to the same applicable law, whereas if you move from the traditional approach (thus the one of lex rei sitae) in which you have different goods that are transferred, you will have numerous laws applicable. If you apply the lex rei sitae in a succession for a different number of objects, thus you will have different laws applicable. But if you decide that the full succession is subject to the same law, it is a semplication. Secondly, these laws may be decided in advance, it is a means of simplification in order to favor private property because the applicable law defines the content of property rights (e.g. numerus clausus). We favour private property in defining which is the applicable law because the applicable law defines the content of property rights. 84 Before the accession to the EU law, the approach of Hungarians was to limit the property of Hungarian owners. Even if you are a legal person you need an authorization to acquire property in Hungary. Why a legal person? it can be established in Hungary but also it can be Hungarian. Thus the approach was conservative. These rules had to be changed. Over time, Hungary changed these rules but in a way that preserved the resistance towards foreigners investors. →the rule of 2016: the acquisition right of usufructs was precluded over agricultural land, unless the right is created in favour of a close member of the owner. It did not say that you cannot create an usufruct, it just said that you can do it but only for the members of your close family. This rule was challenged before the court because the company and its members were not Hungarian, and it was rejected. The argument was that it was within the autonomy/competence of the member state to define the regime of owner property under the treaty. Why do you complain about this? Even if the EU has to be neutral when it comes to the system of property ownership, still the articol means that rules which govern the system of the member state have to be coherent with the fundamental rights that are present in the EU law when it comes to property rights. Which principles were involved? Free movement of capitals and non-discrimination. This legislation was in contrasting with these principles. Can these freedoms of fundamental law be limited by law? Yes, but in which condition? that it is done by law, and they attain general interests and this limitation is proportionate. The Court of Justice goes through this type of text: the limitation was provided by law, was there in order to attain general interest? to avoid speculations; avoid fragmentation of property rights. Although the court acknowledged all these objectives may be the basis of some limitations, still it states that the way in which limitations were imposed was disproportional. The provision does not state that the non-Hungarian residents may not have this right, but indirectly it has attained a similar concept. The rulings of the court of justice are binding, not only for the parties involved in the disputes, but also in the judicial system of a country and the judges for other countries. The way you should interpret the law is binding too. In 2018 in Hungary: the right of usufructs cannot be considered null et void. The usufruct was automatically canceled by the law. The ruling of the court clarified that this deletion was against EU law. THE ISSUE: What are the consequences? Does it only apply in the future or also in the past? The ruling clarifies: EU legislation needs to be interpreted as in contrast with national legislation, as the Hungarian. Therefore, the Hungarian legislation in contrast with EU law, cannot be applied anymore, it has been considered as non-existing. The Hungarian states may not delete the right of usufruct; if it has done so, it has done so on the basis of a law which may not exist. Therefore: 85 NOT ONLY IN THE FUTURE THE RIGHT OF USUFRUCT MAY BE ESTABLISHED IN FAVOR OF THOSE WHO ARE NOT CLOSE MEMBER OF THE FAMILY OF THE HUNGARIAN OWNER, BUT ALSO THOSE WHOSE USUFRUCTUS WAS CANCELED BEFORE FROM THAT LAW, ARE ENTITLED TO GET BACK THE RIGHT OF USUFRUCT; OR AT LEAST TO GET SOME COMPENSATION. →infringement procedure: when a state violates a law, the EU commission can launch an action against the state. It was an infringement procedure: the state had to change the legislation and if for some reasons the right for usufruct could not be restored, you should provide compensation. On the property side perspective, a new law was introduced. These people needed to be protected by getting the right of usufructs back. If it was not possible, at least they had to get some compensation. The Hungarian state should ensure protection to the 500 people. Because of the formal or material defect, that right could not be registered because of the law in force at the time of the original registration. Then there will be an investigation by the public prosecutors. Until the state will not change the law of registration of usufruct, the state is still obliged to apply the right to usufructs. Thus, according to the law, you may not be a holder of that right as you are not a Hungarian citizen. This is why the case went again before the court. The court of justice wanted to be clearer: indeed when the court provides a law it has to be applied. The privacy principles impose for the state a duty to give full effect to those provisions. If you have a rule of national property law, which is in contrast with the EU law, it should be disapplied. The conclusion of the court: article 267 (the power of the court of justice) states that the state is forced to provide an effective application of the ruling of the court of justice. With the consequence that it shall disapply the legislation against it, unless there are objective and legitimate obstacles. The judiciary and the administrative are part of the state, and the duty of cooperation regards both. 24/03/2022 It is true that member states are free to regulate property law field of PL that reflects the specific characteristics of the national system. But it is true that establishing a freedom (of movement) in the “internal market” is Eu’s. Segro case exemplificative and also Grossmania, main point: regulation restricting property rights because of nationality it is not in line with European idea. Rights that had to be protected were restricted. Property of eastern communist regimes are different from the libertarian idea of western idea of PL. Examples of how European Legislation has an impact at national level. 86 Cultural objects (van Gogh case → cultural object is subject of national legislation, that somehow should try to protect them). Why at state level? Why is state recognized and entitled to the protection? Culture - protection of the goods. European Legislation has something to deal with cultural object? Art. 34-35 TFEU: free movement of goods and prohibition of restriction on import and export But Art. 36: The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States. It creates kind an exception, a limitation to the principle of freedom. General principle: free movement but at level of cultural object or treasure under national protection, in a way art.36 is a confirmation of the power of exceptions in this case to protect. Coordination at national level is required when objects circulate, EU does not emerge in this situation, only when the objects are unlawfully removed from one state to another. A directive was adopted in 1993 to facilitate the cooperation among MS, so the cultural objects unlawfully removed can be placed back to their place. A directive established that even if a MS asked to take back and object even if the cultural object had been sold to someone (lawfully so a contract) What happens if you become the owner but the one who transfer the oner is not the owner? (s/he has stolen the object for ex.) Most of them are bona fide purchasers’ rule (good faith) You may become the owner despite the seller is not an owner, you acquire the possession of the thing in good faith, you ignore that the object does not belong to the seller, your good faith “saves you”. It could happen in the daily life. It protects the buyer but why such disfavor towards the real owner. The message for the owner “be careful” and also to encourage the circulation of goods. In case it gets stolen, it is a crime, the owner will be protected (English law). Rule in the Netherlands adopted following the directive (Eu), rule of Bona Fidae does not apply for cultural objects. TRANSFER OF PROPERTY RIGHTS VIA SUCCESSION (First is usufruct, then movable objects and now transfer of property rights) EU regulation no 650/2012, between EU PIL and national substantive and procedural legislation. Directive enables court to have an easier situation, a uniform criteria to identify the applicable law. Object of succession is also property rights, very strong link. Problem is to ensure the succession as a mean of transfer, there is an important principle that is generally at the basis of succession law at national level. 89 how could a legal system allow that the owner is deprived of ownership without of compensation? This was the challenge. Usu capio v adverse possession à functionally the same concept, but there are differences depending on applicable law. Italian rule v common law doctrine. Eg, under Italian law you have a warning procedure, u need to show that you possess it for a number of years without interference, the years are different, usually 20 for Italy. In Kubika the numerus clausus principle is a criterion used by EU in … but it requires to find functional equivalent. Indeed, in the kubika case, the court observed that … was not a question of numerus clausus and there was no need to adapt German law, it was an issue of respecting the right to transfer of ownership. The diff approach between Germany and Poland concerned the modes of transfer. The issue was about the modes, and this issue was coered by the Regulation; no adaptation needed. There was also a question of registration and the Reg says that any member state is free to choose its own method of registration, which in Germany is only by damnation. But the Court forced Germany to “make space” because the right to ownership had to be respected. [mov from the regulation and then present Kubika case as an example, but be careful because he question was not about numerus clausus]. 29/03/2022 CONTRACT LAW INTRODUCTION Contract law is the area in which you find the best expression of private autonomy. 1. What is a contract and what is its role for the market society? 2. What is contract law and what does it regulate? 3. The wide scope of contract law regimes and the life-cycle of a contract 4. Getting oriented in the wide domain of contract law: general contract law v special regimes 5. Mapping legal sources (a) What is the role of the EU in contract law? (b) What is the role of international law? (c) What is the role of soft law at supranational level? WHAT IS A CONTRACT AND WHAT IS ITS ROLE IN THE MARKET AND SOCIETY Starting from an example: Is there a contract? - Alpha ltd’s and Beta ltd’s representatives meet at a wine fair and plan to trade large stocks of champagne for the forthcoming Christmas Season - Alpha ltd’s and Beta lts’s representatives meet at a wine fair and Beta agrees on a purchase order for 100 champagne bottles at 3000 euros to be shipped one month later. No paper is signed. 90 Precontractual phase (negotiations) à many contracts are stipulated without a precontractual phase. The passage from the negotiation phase to the binding one is critical, the moment on which a contract becomes binding depends on the legal tradition or on the type of contract. - Anthony gives Sarah a ride to school. Anthony’s car stops for fuel shortage. Sarah walks to school and arrives late. - Sarah gets on the bus to go to school. The bus stops for fuel shortage. Sarah walks to school and arrives late. Issue of relationship à amical relationships exclude contractual relationships; Sarah and Anthony do not intend to be bound. - Sarah joins the Alumni association. Associations contain contracts (multiparty, associational). This tell us the richness of contract law. In general terms, the law allows verbal contract; also the purpose and the context tell you whether there is a contract. Coffee machine there is a contract because the sell is shown in the display and your acceptance is shown in the introduction of the money. What if the same fact can be framed as a tort and as a contract? E.g. if you go to Macca and get burned by the spilled coffee. Concurrent regimes, there are systems (e.g. Belgium and France) which normally decide contract as the controlling regime using tort only if it cannot frame the situation in a contract; other systems are more open (e.g., Italy), which allow the freedom of choice. Reference to DCFR (II.-1:101), a contract is an agreement which is intended to give rise to a binding legal relationship or to have some other legal effect; it is a bilateral or multilateral juridical act. The contract is… “Le contrat est un accord de volontés entre deux ou plusieurs personnes destiné à créer, modifier, transmettre ou éteindre desobligations.” (French civil code, art. 1101) “Il contratto è l'accordo di due o più parti per costituire, regolare o estinguere tra loro un rapporto giuridico patrimoniale” (Italian civil code, art. 1321) “A contract is an agreement giving rise to obligations which are enforced or recognized by law” (Treitel, The Law of Contract – UK) The contract is used to: • Create obligations (and corresponding rights), e.g. when providing finance, insurance or other services • Create real rights (e.g., security rights) • Transfer rights (e.g., property) • Set a company, an association, a partnership • Plan and execute a common interest project AGREEMENT BINDING LEGAL RELATIONSHIP 91 There may be specific elements in specific traditions, but in any case there is, from socio- economic functions agreed by the parties, a (legal) enforceability of promises. Is the idea of reciprocity behind the notion of contract? Are gratuitous promises contracts? The doctrine of consideration in English common law: “Something of value in the eye of the law must be given for a promise in order to make it enforceable as a contract” (Treitel, based on Thomas v. Thomas, 1842). A wider idea of contractual value/interest as justification for legal appreciation of economic transactions in the shape of legally binding agreements, i.e. contracts. Gratuitous contracts are possible in many legal systems, although normally a higher level of formality are required, to compensate the lack of economic consideration. Compare: donations v. Sales v. Companies’ article. WHAT IS CONTRACT LAW (FOR) AND WHAT DOES IT REGULATE? Contract law is intrinsically based upon the principle of private autonomy, a contract is based on the wills of the parties, no one obliges to conclude a contract: freedom to choose the party, the terms, the contractual form (oral v. written) and contractual formation (online v. offline, automated v. competitive procedures of formation, negotiated v. smart contracts, etc.). The role of private autonomy and the role of private law is also including but not limited to mandatory rules that protect interests of third parties or general interests that may not disregarded by the contracting parties. - Freedom to enter a contract or not - Freedom to choose a contractual party - Freedom to define contractual terms - Freedom to choose contractual forms and techniques for contract formation (oral v. written, online v. offline, automated v. competitive procedures of formation, negotiated v. smart contracts, etc.) The role of contract law is the one enabling the use of contracts by defining the procedural infrastructure in which contracts are formed, interpreted, executed and enforced. Contract law also fosters private autonomy by defining models and forms to be used as defaults. We find rules aimed at rebalancing the parties’ powers or unfair terms that impair the effective use of contractual freedom. Another scope of contract law is defining the possible limitations of private autonomy through a balance between private autonomy and the need to respect general interests and third parties’ rights, including fundamental rights. Default rules are more prominent, but mandatory rules are more important in the protection of weaker parties and general interests. Open-ended terms of a contract must be interpreted, thus have rules of interpretation, with also rules on how to perform a contract (e.g., good faith). DCFR. II.–1:102: Party autonomy (1) Parties are free to make a contract or other juridical act and to determine its contents, subject to any applicable mandatory rules. 94 Examples of cross-fertilization btw national general contract law and EU special regimes See e.g. sec. 307, BGB, on standard terms creating unreasonable disadvantages contrary to the requirement of good faith (BtoC and BtoB); new art. 1171, French civil code, on standard contract terms creating significant imbalance. Compare these with Unfair Contract Terms Directive. See, e.g., extension of BtoC regimes on unfair commercial practices to BtoB relations (Scandinavian countries, Austria). b) what is the role of EU in contract law from a private international law perspective? The role of EU contract law from a private international law perspective is Rome I Regulation (EU Regulation no. 593/2008), which allows the choice of applicable law in contracts, the role of overriding mandatory rules as a limitation, the default criteria and the rule of “closest connection” to the contract. WHAT IS THE ROLE OF INTERNATIONAL LAW IN CONTRACT LAW? An example: the major role of the Convention on International Sales of Goods (CISG - Vienna, 1980) and its impact on EU and national (general) contract law The impact of the CISG on commercial practices in international trade The impact of the CISG upon national and EU legislative reforms WHAT IS THE ROLE FOR SOFT LAW AND GENERAL PRINCIPLES IDENTIFIED AT SUPRANATIONAL LEVEL BY SCHOLARS AND LEGAL EXPERTS GROUPS? Not legally biding; either general scope or focused on specific transactions. • International (EU and extra-EU) o The UNIDROIT Principles (1994-2010)—BtoB commercial contracts o Uncitral model laws on specific contract transactions (e.g. construction contracts, procurement of goods, e-commerce, etc.) • European o The Principles of European Contract Law (1995-2003) o The European Contract Law Action Plan (2003) and the Draft Common Frame of Reference (2009) People are free to choose how to shape their legal relations thus choosing which goals they want to pursue. They can be written down or not As a result of the Industrial Revolution, we now have contractual freedom → the binding force of a contractual agreement depends on the parties’ consent only, so as a result the parties are free to decide what rights and obligations they have towards each other Contracts are as binding as legislation made by legislators → once one enters a contract he’s bound by it in its entirety, but this is true only for the parties concluding it 95 The conditions under which contracts are entered may be flawed, therefore this field cannot be self- regulated at all times → it may happen that the law has to intervene through courts to protect a disfavoured party → attempt to reestablish a balance and equality between the contracting parties Courts also have to make sure that contracts do not go against mandatory rules, public order or good morals → expected to set the boundaries of contractual freedom Courts also provide contracting parties with default rules defining those aspects of the contractual relationship not expressly specified, which apply unless they specifically agree to different terms Why are contracts binding? Different theories: 1. meeting of the minds 2. there’s a promise involved → respect for individual autonomy and trust encourages the parties to honor their promise and respect the contract 3. free exchange between individuals maximises value → both parties involved are satisfied because they gain something out of this contractual relationship which they consider more valuable than what they started with 4. contracts promote virtuous moral behaviour → only fair contracts are binding When is a contract concluded? PECL: when the parties intend to be legally bound and there’s a sufficient agreement between them. The law decides when such an intention exists* and it’s possible to identify an agreement by dissecting the contracting process into an offer and an acceptance The law makes sure that people only enter contracts they’re actually willing to enter into after having been sufficiently informed; another possibility is to allow parties to withdraw within a short time after the conclusion of the contract. The most used means to ensure informed consent is mandatory disclosure of information from the offerer to the offeree (especially in case of consumer contracts → to restore contractual autonomy given the consumer’s informational disadvantage) → mandatory disclosure: different approaches → English law: buyers should be careful and inform themselves, Civil law: the seller generally has a duty to give info on the quality of the object of the contract → However, much depends on the circumstances → e.g. are there ways for the buyer to autonomously inform themselves? Contracts should be interpreted how a reasonable person would → subjective approach (civil law): how a reasonable person in the position of the party would understand the intentions to be at the beginning of the process, objective (English law): how a reasonable person would understand the intentions after having acquired all the available background information At times it is possible to set aside contracts on the ground that they’re unfair, e.g. one party took advantage of the other/ if contracts include ‘take it or leave it’ terms decided by the seller, making the contract one-sided → legislators have decided rules to protect against these unfair situations, e.g. in Europe contracts can be annulled if there’s a significant imbalance between the rights and obligations of the contracting parties 96 Contracts can also have a negative impact on third parties, but since they only bind the contracting parties there’s currently not much that can be done in this respect In civil law jurisdictions it is not so unusual for courts to force the debtor to perform → claim for specific performance, the debtor is forced to do what he promised thus placing the creditor in the position he would’ve been in had the debtor complied in the first place; common law systems instead usually rely on monetary compensation instead When a party can’t perform because of unforeseen circumstances he’s usually excused. When should a damages claim in contract be available? → common law: granted for any case of non-performance regardless of the circumstances → civil law: possible to make a claim for damages if the party in breach was actually at fault Termination of a contract: last resource available for a creditor when it’s clear that a debtor doesn’t want to/doesn’t have the possibility to comply → attempt to strike a balance, the aggrieved party is granted the possibility of terminating the contract but the defaulting party still has a possibility of performing until the very last minute. Termination is allowed for very serious breaches only. Summing up: NEUTRAL RULES FOR INTERNATIONAL TRANSACTIONS: • Restatements part of effort to simplify cross-border contracts o One party must use “foreign” law o Useful to have “neutral” rules, translated § Principle are in fact all part of a big momentum to make international contracting easier: e.g. between a French buyer and a German seller, if no international law, one has to use a foreign legal system. A set of rules, meant to be neutral between the parties, was thought to be useful and could be translated in many different languages. • International Conventions o Vienna, International Sale of Goods (CISG) • International “soft law” (beyond conventions) to help with international transactions o Unidroit Principles for International Commercial Contracts • But also other things within Europe: o Academy of European Private Lawyers (by Gandolfi) o EC Group on Tort & Insurance Law (PETL) o Restatement of Insurance Law o Commission on European Contract Law (Lando commission) § Study Group on a European Civil Code which in term gave rise to the Draft of the Common Frame of Reference o DCFR § Proposed Common European Sales Law (2011) 30/03/2022