EU-wide construction law: It’ll be back

I have just had one of those Terminator moments. In the closing stages of the first in that great series, having been shot to pieces, run over and blown up, the mangled remains of the Arnie cyborg still dragged itself onwards in its relentless quest to assassinate Sarah Connor. That is how I felt after opening an innocent-looking attachment to an email from the Ministry of Justice describing itself as the “Green Paper from the Commission on policy options for progress towards a European Contract Law”.

Quickly I found myself somehow transported back to those troubled times in the nineties when the spectre of the commission’s relentless quest to harmonise construction law and practice at the expense of priceless ideals such as diversity and freedom cast an enormous shadow over Europe. The cyborg at that stage was none other than Claude Mathurin who was tasked by the commission with coming up with a formula for a pan-European set of laws governing the construction sector that would replace existing national laws and contracts.

But that would be crazy and unnecessary, I hear you say. The idea that national laws and practices might somehow operate as serious trade barriers stifling the development of a truly European construction industry is surely even more crazy. No doubt that is why, after many years of bureaucratic and academic toing and froing, the initiative collapsed under its own weight when exposed to the reality of coming up with something practical and acceptable to the member states. Never mind, because at least the academics - and the lawyers - had a great time while it lasted.

A different cyborg resumed this relentless pursuit in the early noughties with the proposed introduction of an all-singing, all-dancing services directive, about which the only thing anyone could agree on was that no one could understand its potential scope. But that threat seemed to disappear when the commission appointed a veritable orchestra of academic bodies on the continent, locking themselves away for about a decade producing something called a Draft Common Frame of Reference, which would provide a starting point for future action. Could one be excused for assuming that that was the end of that for at least a couple of generations?

Am I unreasonable in fearing that this crusade will not now come to a conclusion with the introduction of one or two innocuous and relatively minor measures?

The awful truth is that in 2008 they did produce this hideous document, six volumes and 6,653 pages of it. Surely it would take at least a decade to absorb such erudite material and come up with a way forward? Wrong again, as my inbox was now telling me.

To launch this green paper at a time when most of Europe is trying to drag itself out of recession and when the economic institutions on which the Community depends are still teetering on the brink, seems like bad timing indeed. And it is best not to even contemplate the cost of funding this grotesque exercise.

Turning to the green paper itself, it is true that it does present a range of alternative ways forward from, at the soft end, the creation of a legal “toolbox” comparing existing rules and systems designed to assist legislators in drawing up lots of new laws for us, through to the more radical proposals involving the introduction of euro legislation on contract law that would replace existing national laws and would be applicable to all transactions in any sector and not just those involving consumer or cross-border elements.

There is an apparently respectable view that we will not end up with the more radical of the alternatives, particularly since we are told that it is only the smaller and more unruly member states such as Luxembourg and Estonia that favour such measures. This takes me back to my Terminator moment. What the document actually says is that, subject to issues of subsidiarity and proportionality, which are at least acknowledged, anything short of the more radical alternatives is highly unlikely to make much difference in tackling the pernicious practice of having different rules in different member states.

Given that that is the message that the document is conveying, and given also the massive amount of cost and energy that has been pumped into this process over decades and the legions of academics who would be twiddling their thumbs were this juggernaut now to grind to a shuddering halt, am I unreasonable in fearing that this crusade will not now come to a conclusion with the introduction of one or two innocuous and relatively minor measures?

The green paper is now out there for consultation, concluding in January 2011.

The Ministry of Justice will shortly be launching a national consultation. I urge anyone who cares about JCT and NEC contracts and all the other legal and contractual paraphernalia that goes with UK Construction Industry plc to participate.

Dominic Helps is a consultant with construction law specialist Corbett & Co