Common European Legal Space and Nation State – Tensions reflected in Developments in Private Law
Professor, PhD Ineta Ziemele
President of the Constitutional Court of the Republic of Latvia
Salzburg 5 July 2019
Dear Professor Rainer, dear colleagues, ladies and gentleman!
In my introductory talk I would like to discuss some of the traditional paradigms within which we function as lawyers and the challenges that globalization and European integration pose to these traditional paradigms. I would indeed suggest that there is by now a constant tension between the way we understand public and private law and ever stronger pressures of EU integration and globalization. At the outset I would like to take up briefly the way we have conceptualized the law and legal system as such. Further, I will give some examples showing the tension within elements of private and public law discourses. Finally, I shall invite you to reflect on the theory of constitutional pluralism.
The classical notion of State sovereignty and supreme authority of domestic legal system stemming from the sovereign will continue to form us as lawyers and shape our worldview. There are important differences in terms of self-perception between different EU Member States with regards to the sovereignty of a state. Some States are more aware of the issue of sovereignty than others but even the relatively larger or perhaps more open-minded EU Member States through different constitutional procedures and mechanisms carefully measure the competences they are ready to submit to supranational institutions. At the same time, no one doubts the normative and valid character of international and the EU legal orders even though they do not derive from a single pouvoir constituant as defined by Siéyès. The fact also remains that international law is able to accept the validity and equality of all sovereign legal orders. Despite a valid theory on constitutional order of a sovereign state as the highest underived legal authority above which there can be no higher authority, in modern reality along with a constitutional order other legal orders exist with relevant mechanisms and principles on the basis of which outside legal norms bind the subjects of a constitutional legal order. As one commentator has put it: “the erection of the UN Charter system in 1945 and its subsequent development, amounts to the construction of an autonomous, global, increasingly integrated legal order of constitutional quality claiming supremacy that has profoundly modified state sovereignty”.[1] It is not only the UN Charter regime but other legal regimes based on the international legal system, including the EU legal order, that have put forward claims to a certain constitutional quality as well as supremacy. According to Hans Kelsen and other classical legal theorists this cannot be compatible with the sovereignty of States. There are examples, Latvia included, that show that indeed common constitutional approach in Europe maintains that sovereignty cannot be divided, and moreover there is a core of the Constitution which cannot be transferred or otherwise affected.[2] As a result, one way or another we live the tension which is caused by the conception that a given legal order is supreme and there cannot be two claims of supremacy in relation to same set of facts.
No doubt, the public/private division is yet another classical divide which characterizes the horizontal level of legal relationships as opposed to the vertical level of individual/state relationship that is described by the concept of sovereignty. Therefore our worldview consists of numerous constant conceptual divisions, which structure the way we examine issues. The question is and has been for some time whether this intellectual framework of divisions which is prone to sustain tension should be left unaffected as well in the future, or should we perhaps challenge it?
One key feature nowadays is the fact that we move within and outside the traditional paradigms very quickly and without even being conscious of that imperceptibly. One day we are immersed in applying civil law in a classical inheritance case within our domestic legal system, another day we might be travelling to another country in the proceedings on the execution of a judgment of one State in another State applying the international or European Union law. Indeed, more than ever before the law is crossing the boundaries of sovereign States.
Economic processes and science have always been key factors that develop societies and require new legal concepts and regulations. It is even more so today when we are closer and smaller, and more mobile as ever before. The fact that we are heading in that direction became rather evident already during the second half of the 20th century. This undoubtedly promoted some codification of private international law that we have today[3][4]. The four economic freedoms is another intellectual response to the need, first of all, to establish a genuine common market in Europe. Nevertheless, like in public law also in private law the ideas of unification and codification of laws are not followed up or implemented that easily or swiftly. As noted in private law literature “in spite of the effort to harmonize the black-letter law of the different legal systems and – where possible – to bring them into complete uniformity, the procedures and judicial remedies of each state retain diverse national features. The system allows local judicial traditions to survive, and these so far show no intention of fading away”.[5] In fact, during the summer school you will be learning about several diverse legal systems. For example, all legal systems follow the principle of pacta sunt servanda in contract law. At the same time, the legal systems are very diverse in relation to the possible exceptions to that principle.[6] I believe that it is fair to say that in times of economic growth the enthusiasm of possible unification of private law grows accordingly, something that was seen before the world economic crisis. Today that optimism has subsided and the reasons given are the diversity in private law principles, concepts and legal tradition and culture.[7] There is a criticism again towards the EU institutions for their intrusion into national private law which, as often argued, has been not only central within the history of each State but also in a European cultural setting it protects the key principle of our societies, i.e., the principle of private autonomy. Another difficulty to unify the contract law in the European Union is due, at least partially, to the fact that some of the Member States represent the Romano-Germanic legal system and some other the Common-law legal system. There are conceptual differences between these two legal systems, such as the notion of “penalty payment” unknown in Common-law. [8]
Furthermore, the following view is not uncommon I believe among private lawyers and I quote: “control over civil adjudication may be the one national border that Brussels does not, and indeed must not, cross. In the legal culture of Europe, private law is perceived and may actually function as a bulwark against the flood of European regulation, a sort of antidote to the dilution of regional identities”.[9] This discourse is not unfamiliar to you and it still reflects the paradigm of divisions which our societies have constructed over the centuries and we have brought that worldview up to the 21st century.
I shall now refer to the Achmea case of the European Court of Justice and should use this judgment to make further points on the divisions between legal systems and the attempts to bridge them and to harmonize the rules therein.
I see that the Achmea judgment represents a consistent approach of the EU Court. That approach has emerged through such cases as Mox Plant, Kadi, Advisory opinion 2/13 and a few others. Although these cases are of a very different character nevertheless they all reflect a consistent string. Achmea is not a case solely about the protection of investments in European Union, as the case was between two EU member states, and the compatibility of the system of bilateral investment protection treaties with the EU law. This is yet another step towards pursuing the vision that the Court of Justice has with regards to the legal nature of the EU legal system and the European integration.
The main point here is the relationship between the EU law and other legal systems and regimes. This problem can be exemplified with a reference to relationship between the domestic legal order and the international law. Remember the Kelsenian paradox when he examined the relationship between sovereign states and international law: “The constitutional order of a sovereign state is the highest underived legal authority above which there can be no higher authority that is its source of validity, regulating and determining its conduct. Sovereignty as supremacy is a negative legal concept. Accordingly, international law as an autonomous legal system that authorizes and obligates states must be denied on the sovereignty thesis.”[10] This is a pure concept of sovereignty. In the meantime, we have found ways to make domestic legal systems and international law to co-exist. But, as said, the claim of supremacy remains a complex one and we have not been able to conceptualize it in accordance with our modern-day realities. We live in distinctly plural world which is difficult to squeeze into single supreme authority outlook.
EU legal system in fact has absorbed everything that the experience with regards to the relationship between international law and national law has accumulated. Primacy and direct effect principles have their counter-parts in the field of domestic application of international law. In short, such principles ensure the supremacy of a particular legal order. As far as the EU legal order is concerned, the problem has always been the source of the primacy of the EU law since different Member States have different views on whether they have transferred sovereign powers or competence. They certainly are of the view that the people have not lost their sovereignty. It may well be in our current world that sovereignty by now is only a myth. Nevertheless, the sovereignty concept still represents the way of our thinking even in a globalised world and to some extent it is a safety mechanism in case any external legal order, supranational or international would begin to encroach too much on what we as separate societies think belong to our sovereignty.
Even if the European communities were prompted by economic growth and interests, we have seen that to attend to necessarily private law regulated interactions across the State boundaries, a public law framework had to be built and that is what the CJEU in particular has been doing through its case law. The CJEU has indeed determined the EU legal system as a legal order of a constitutional character. Just to recall the Court’s language in the Kadi case: “In this connection it is to be borne in mind that the Community is based on the rule of law, inasmuch as neither its Member States nor its institutions can avoid review of the conformity of their acts with the basic constitutional charter, the EC Treaty, which established a complete system of legal remedies and procedures designed to enable the Court of Justice to review the legality of acts of the institutions”.[11] As you all know, in the Kadi case the Court took a German Constitutional Court Solange approach towards international law, i.e., it is compatible with the EU legal order insofar as it complies with fundamental rights of the EU legal order. And the Court emphasizes the autonomous character of the EU legal order as well as the Court’s exclusive competence to apply and interpret EU law which is the basis for the obligation to ask the Court for a preliminary view in cases when the EU legal norms are not clear.
The difficulty that I see with the approach of the CJEU is that it continues along the supremacy vision and applies it to this supranational legal system and that is what the Achmea case confirms to me apart from the fact that the future of bilateral investment treaties in the EU is under a big question mark.
In other words, the EU Court jealously guards its exclusive competence to interpret EU law and has always been ambivalent about other courts role in this, even if the principles of direct effect and effect utile could suggest that domestic courts in applying EU legal norms have to form an opinion about their scope and content.
The fact remains that even where new circumstances prompt new human interactions we continue using and applying the same philosophical and legal concepts.
Within this broader reflection on tensions and plurality one should also mention the growing influence of fundamental rights in the relationships between private parties under private law, i.e. the horizontal effect of fundamental rights in private law, which can now be traced in many European legal systems. Some scholars speak of the tendency towards the constitutionalisation of private law[12] which for those in the mindset of divisions might be too farfetched. In Latvia, we have gone beyond this difficulty and the doctrine of horizontal effect of fundamental rights that indeed puts its limitation on the principle of private autonomy has been more and more accepted also among private lawyers. Important role in constitutionalization of private law is played by the Constitutional Court. Just to mention a recent case concerning a procedure of lodging a claim with insurance company for compensation in case of a car accident, the Court identified that the legislator when it adopted the relevant rules had to bear in mind that it is confronted with a horizontal effect of two human rights. Insurance company has the right to property and so does the claimant. These two rights have a potential for a conflict. We said that in a democratic rule of law the legislator when looking for proper legal regulation had to find a solution which restricts human rights of both of these mentioned subjects in a least possible way.
Thus in Latvia in a case concerning the regime of compulsory insurance against civil liability of road vehicle owners (OCTA insurance), the Constitutional court held that “the legal relationship between the insurer and the insured must also protect the property rights of the insurer, while the insured person engages in these legal relationships to protect her property rights. When creating a legal framework, the legislator should balance the rights of two or more individuals in such a way that the restriction of every person’s fundamental rights is as small as possible” and “in private law relations between the insurer and the insured, the insurer usually has much more resources, such as material resources and human resources, than those at the disposal of the owner or authorized user of the vehicle. In order to balance the interests of the insurer and the insured person fairly, the legislator must take into account their unequal situation. This means that the legislator has to choose the means to minimize the rights and interests of the insured, without imposing a disproportionate burden on the insurer”[13].
And so we are living in the world, where different courts guard and pull their competence and influence and safeguard their legal systems and areas of law. In fact the arguments of the reasons of distinctiveness of European and national, public and private are rather similar. However, as I said such competing world view is not helpful for the development. Professor Neil MacCormick warned long time ago of the short-sightedness of the sovereignty and supremacy based world view. “One thing which it is necessary for jurisprudence or the philosophy of law to do in the present state of affairs is to guard against taking a narrow one-state or [Union]-only perspective, a monocular view of these things. The difficulty about sovereignty theory is that it seems to point inevitably in that direction”.[14]
In conclusion I invite you to reflect on the following.
The constitutional pluralism school of legal thought offers a way out of the competing claims world view. What if instead of a divided view on law we tried to conceptualize a pluralist view? Indeed it has been said, that “what is required in acknowledging and handling competing claims to authority coming from national and supranational constitutional sites is an ethic of political responsibility premised on mutual recognition and respect.”[15] In other words, this school of thoughts suggests that we should move away from the hierarchical meaning of sovereignty and develop rather the heterarchical and horizontal one.[16] There are domestic legal systems which guard the core of the Constitution but which in all other respects have adopted this heterarchical view as regards the legal norms stemming from foreign legal systems. The way forward is to re-conceptualize the discourse and to move away from competing authority claims towards accepting that all legal orders form a universal legal order and that division between public and private law has a hard time to accommodate plurality and variety of actors and situations. I believe that lawyers have truly interesting and particularly challenging times ahead.
[1] Cohen J. L. Sovereignty in the Context of Globalization: A Constitutional Pluralist Perspective. In: Besson S., Tasioulas J. The Philosophy of International Law. Oxford: Oxford University, 2010, p. 269.
[2] Priban J. Constitutional Sovereignty in Post-Sovereign Europe in Crisis: A Central European Perspective. In Motoc I., Pinto de Albuquerque P., Wojtyczek K. (eds.) New Developments in Constitutional Law. eleven International Publishing, 2018, p. 364.
[3] Such as United Nations Convention on Contracts for the International Sale of Goods, Vienna, 11 April 1980, United Nations, Treaty Series, vol. 1489, p. 3; see as well Convention on the Contract for the International Carriage of Goods by Road (CMR), Geneva 19 May 1956, United Nations, Treaty Series, vol 399, p. 189. Piemēram, ANO 1980. gada Vīnes konvencija par starptautiskajiem preču pirkuma un pārdevuma līgumiem vai Konvencija par kravu starptautisko autopārvadājuma līgumu (CMR).
[4] See as example the Principles of International Commercial Contracts drawn by UNIDROIT (International Institute for the Unification of Private Law).
[5] Daniela Caruso, The Missing View of the Cathedral: The Private Law Paradigm of European Legal Integration, 1996. p. 2.
[6] Torgāns K., Kārkliņš J., Bitāns A. Līgumu un deliktu problēmas Eiropas Savienībā un Latvijā (Problems of Contract and tort law in the European Union and Latvia), Rīga: Tiesu namu aģentūra, 2017, 19. lpp.
[7] Ibid, 18., 21. lpp.
[8] Ibid, 19. lpp.
[9] Caruso D. The Missing View of the Cathedral: The Private Law Paradigm of European Legal Integration, 1996. Available: https://jeanmonnetprogram.org/archive/papers/96/9609ind.html#II2
[10] Cohen J. L. Sovereignty in the Context of Globalization: A Constitutional Pluralist Perspective. In: Besson S., Tasioulas J. The Philosophy of International Law. Oxford: Oxford University, 2010, p. 266.
[11] Judgment of 3 September 2008 of the Grand Chamber of the European Court of Justice in cases C-402/05 P and C-415/05 P Kadi, para. 281. Also: CJEEC, 23 April 1986, Case 294/83 Les Verts v Parliament [1986] ECR 1339, paragraph 23).
[12] Cherednychenko Olha O. Fundamental rights and private law: A relationship of subordination or complementarity? http://www.utrechtlawreview.org/ Volume 3, Issue 2 (December) 2007
[13] Constitutional Court of Latvia, 6 June 2018, Judgment in case No. 201-21-01 (Recourse claims concerning the compulsory insurance against civil liability of road vehicle owners), para 19.
[14] MacCormick N. Beyond the Sovereign State. The Modern Law Review, vol. 56 (1993), no. 1, p. 5.
[15] Ibid.
[16] Cohen J. L. Sovereignty in the Context of Globalization: A Constitutional Pluralist Perspective. In: Besson S., Tasioulas J. The Philosophy of International Law. Oxford: Oxford University, 2010, p. 275.