Учебный год 22-23 / The public-private divide in European law

2003/54/EC111 ‘household customers’ should not be prevented from switching to another provider through direct or indirect impediments.112

The ‘universal’ or public service obligations concern access to services which should be open to anybody, with the detail to be regulated by Member States. It cannot easily be terminated; freedom of contract is suspended by mandatory rules in favour of non-professional users. These provisions are however rather weak at EU level: Member States are required only to ensure that there are ‘adequate safeguards to protect vulnerable consumers, including appropriate measures to help them to avoid disconnection’ under Article 3(5) of the Electricity Directive. Annex A gives consumers ‘a right to a contract’ with some basic information. They must be given notice ‘of any increase of charges’ and have a right to withdraw from contracts if they do not accept the new conditions, but there is no right to be informed about the calculation of the increase and a possible right to challenge it.

These principles are extended to other network services. Access rules are contained in the new Directive 2007/64/EC on payment services in the internal market.113 Articles 19–22 contain detailed provisions protecting the ‘recipient of services’ against non-discrimination, and for providing assistance and detailed information on services covered by the Directive, not limited to the traditional consumer, but also including commercial clients. This right of ‘access’ to payment services without discrimination seems to transform payment systems in the EU, despite their heterogeneity, into a ‘service of general economic interest’ based on private law (without, however, a ‘universal service obligation’) and subject to special rules going beyond traditional concepts of private autonomy and freedom of contract.

In any case, the impact of this encroachment of regulation on private law has hardly been discussed so far. The non-discrimination principle has a special role to play in this context; it is surprising that Basedow’s paper does not even mention it. This area seems to be, as Micklitz114 correctly observes, a blind spot in the eyes of private law scholars, who believe that this highly regulated area still follows the principle of party autonomy. He writes:

111Dir. 2003/54/EC of the European Parliament and the Council of 26 June 2003 concerning Common Rules for the Internal Market for Electricity [2003] OJ L176/32.

112Rott at 56; Micklitz, ‘The Concept of Competitive Contract Law’, Penn State (2005), 549 at 576; Ch. Willett, ‘General Clauses on Fairness and the Promotion of Values Important in Services of General Interest’, in Twigg-Flesner et al. (eds.), The

Yearbook of Consumer Law 2007 (2008), 67 at 95–100.

113[2007] OJ L319.

114Micklitz, ‘The Visible Hand of European Regulatory Private Law’, EUI Working Papers Law 2008/14, at 16–18.

The network law develops, within the boundaries of universal services, concepts and devices whose reach must be tested with regard to their potential for general application beyond the narrow subject matter. Just one example may be mentioned: despite privatisation, network industries have to guarantee the accessibility and the affordability of their services. What is at stake here is the obligation to contract (Kontrahierungszwang) and the duty to continue delivery even in cases of late payment.

4.A Hypothesis as Conclusion: What is the Concept of Justice in EU ‘Private’ Law?

The foregoing discussion of the theory and practice of the ‘horizontal direct effect’ of both primary and secondary EC law, as well as the analysis of the concept of non-discrimination in private law, has shown the dividing line between ‘public’ and ‘private’ in European law to be ambiguous. The instrumental character of European ‘private law’ is obvious; it mostly contains mandatory and not just default rules. Critics fear that, eventually, it may abolish private autonomy, a fear that is in my opinion unfounded. EC law seeks to implement autonomy in the interest of free movement and non-discrimination. It is concerned with equality in private law relations that aims first at ‘communitative justice’ in the sense of ‘fairness’ in freely entertained transactions in markets of goods and services,115 but which does not stop there, if we follow the scheme developed by Pakaluk on the basis of the Aristotelean

Nicomachean Ethics:

Aristotle thinks that there are there are three ways of producing an equality of divisible goods, and thus three forms of the virtue of justice. The first (‘distributive’) is for someone to distribute for individuals goods that are taken from a common stock

. . . The second (‘communitative’) is for persons freely to exchange goods [on a market, NR] . . . The third (‘corrective’) is for a judge to correct for an inequality that is created by an act of injustice.116

EU law first steps in to secure freedom and fairness in contract relations which are impeded by unequal bargaining power where this denies free movement to one side and allows promises made by the stronger side to go unfulfilled. Because they eliminate socially unaccepted differentiations in contracting without otherwise restricting party autonomy, the rules on non-discrimination only partially go beyond this concept. Communitative justice is also the guiding principle with regard to services of general economic interest, where EU law insists on free choice and transparency which must be realised by the

115See Basedow, above note 27 at 246; Eidenmüller et al., above note 104 at 534; AG Sharpston in Bartsch, above note 88 at para 30.

116Pakaluk, Aristotle’s Nicomachean Ethics: An Introduction (2005), at 195–196.

‘universal service obligation’ of certain providers, thus allowing equal access of potential users to network systems. Distributive justice comes into view in anti-discrimination provisions of employment law because these shift goods from one side (the employer) to others (certain groups of employees who must not be discriminated against, e.g. women, ethnic minorities). In services of general economic interest, in particular in cases of cut-offs, it is left to Member States to guarantee ‘distributive justice’ beyond free choice. ‘Corrective justice’, finally, is at hand in the area of non-discrimination in employment, but also in general private law relations where ‘goods and services available to the public’ must not be marketed on discriminatory terms with regard to sex, ethnic origin, nationality, and other stigmatised characteristics. Here private law has to offer adequate remedies which must be, according to the case law of the ECJ, adequate, proportionate and dissuasive. This is the task of both contract and tort law, as far as private law is concerned.

Consequently it is incorrect to deny, as Basedow does, the ‘specific operative importance of the general prohibition on discrimination in European law’.117 The principle of equality certainly has a limited field of application insofar as it attaches to specific areas (e.g. sex, age, ethnic origin, disability, sexual orientation, but not sickness, income) and ‘discrimination’ can be reasonably distinguished from ‘differentiation’. Within this field of application, however, it is without doubt a governing principle of private law. As a result it is to be welcomed that both Chapter 3 of the Acquis principles118 and Chapter 2 of Book II of the Draft Common Frame of Reference119 include provisions on discrimination, transferring into general (EU?) contract law the relevant EC directives.120

117Basedow, above note 27: ‘dem allgemeinen Diskriminierungsverbot (kommt) keine eigenständige operative Bedeutung im europäischen Privatrecht zu … Seine Rolle ist die eines hermeneutischen Prinzips, welches das Verständnis des positiven Rechts erleichtert, weil es uns gestattet, einzelne Rechtsakte im Kontext zu sehen und auf ihre systematische Stimmigkeit zu prüfen. Ein eigener Regelungsgehalt kommt ihm nicht zu’.

118Acquis Group (ed.), Principles of the Existing EC Contract Law (Acquis-

Principles) – Contract I (2008); for a comment see Leible, ‘Non-Discrimination’, in Schulze (ed.), Common Frame of Reference and Existing EC Contract Law (2008), 127.

119Study Group on a European Civil Code (ed.), Principles, Defintions and

Model Rules of European Private Law (DCFR) (2008) (similar in the Outline Edition 2009); a critique has been voiced by Eidenmüller et al., ‘Der Gemeinsame Referenzrahmen für das Europäische Privatrecht’, [2008] JZ, 529 at 535 suggesting the inclusion of the non-discrimination rules of EC law in public rather than private law provisions, thus misunderstanding the impact of non-discrimination on freedom of contract and choice and the Sanktionsaufgabe of private law as developed by Steindorff, above note 104.

120Reich [2008] JCP, 369; Schulze and Wilhelmsson, ‘From the Draft Common

What is true is that this imposition of EU/EC law principles on the private law of Member States shifts the focus away from an abstract concept of private autonomy to a more differentiated and multi-layered system of justice which may not previously have been present in Member State law, but which does not as such eliminate private autonomy.121 Private law in the EU thereby assumes a public function.

ANNEX TO III/3

On 17 July 2009 the EP and the Council adopted Directive 2009/72/EC ‘concerning common rules for the internal market of electricity and repealing Dir. 2003/54/EC’.122 Art. 3(7) contains general obligations of Member States to protect final, in particular vulnerable consumers in markets with universal service obligations.

In this context, each Member State shall determine the concept of vulnerable consumers which may refer to energy poverty and, inter alia, to the prohibition of disconnection of electricity to such consumers in critical times.

These provisions in no way improve the position of – in particular vulnerable

– consumers against the old directive as mentioned above. They are too unspecific to take direct effect. Much more specific are the transparency requirements of Annex I concerning the contracting with the universal service supplier.

Frame of Reference towards European Contract Law Rules’ [2008] ERCL, 154 at 168; reservations with regard to extending them to freedom of association have been voiced by Basedow p. 242.

121With regard to English law see the critical remarks by C. Twigg-Flesner, The Europeanisation of Contract Law (2008), at 133–138.

122[2009] OJ L 211/55.