House of Commons objects to proposed Common European Sales Law

The House of Commons has objected to the proposed Regulation to introduce a Common European Sales Law (see post) on the basis that it does not comply with the principle of subsidiarity. The House passed a resolution to that effect on 7 December, and has submitted to the European Commission, Council and European Parliament a reasoned opinion supporting its conclusion (click here to download a pdf).

Under the principle of subsidiarity, defined in article 5 of the Treaty on the European Union, the EU "shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States ... but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level".

The stated objective of the proposed Regulation is to improve the establishment and functioning of the internal market by facilitating the expansion of cross-border trade. However, the opinion refers to research by various consumer bodies which does not support the notion that different national contract laws present a significant barrier to cross-border trade. It also expresses concerns regarding the potential for the Regulation to create greater legal complexity, uncertainty and confusion for consumers. As a result, it concludes that the proposal does not respect the principle of subsidiarity.

The opinion also objects to the Regulation on procedural grounds, for its lack of a "detailed statement" which makes it possible to appraise the Regulation's compliance with the principle of subsidiarity.

The UK government has long opposed the concept of an optional instrument of European contract law, so the objections of the House of Commons are not surprising. For the proposal to be adopted, it must be approved by both the European Parliament and the Council of Ministers, acting by qualified majority. The European Parliament supports the Regulation, and so its future is likely to turn on the view taken by the Council. It remains to be seen how many other Member States will support the proposal and therefore whether it will receive the necessary approval from the Council of Ministers.