Friday, 25 January 2013

CESL and Impact Assessment

In view of coming discussions on the proposed Common European Sales Law Regulation, the European Parliament has requested its Impact Assessment Unit to give an appraisal to the Impact Assessment which the Commission has attached to its 2011 proposal. The result of the Unit's work has now been released.

Starting with the document's conclusions, the evaluation would seem very positive: all in all, "The Commission has made considerable efforts to provide a very detailed and transparent impact assessment in which the arguments are clear and logically structured and the limitations and uncertainties of their analysis is acknowledged."

The Commission bases its proposal on the necessity to reduce transaction costs resulting from legal diversity in contract law in order to foster cross-border (online) trade.  As a consequence, the concept of "transaction costs is central to the Impact Assessment (hence IA). 

The EP's document notices that "the way the Commission calculates transaction costs can validly be the object of criticism and is disputed by numerous stakeholders and academics". This criticism, however, must be measured against the fact that "there is [...] no generally accepted definition of the concept of 'transaction costs' and that the method for calculating such costs in contract law is not yet scientifically established."

Is then everything ok? Not really. At the bottom of the conclusions page, the report accompanies praise of the Commission's "transparency" with regard to its methodology with a remark that, however easy to access, eurobarometer surveys are not a great basis for IAs.The more so, in this case, since the respondents in the studies considered were not asked about the CESL but about a "single European contract law"- not quite the same thing (p. 23).
 Furthermore, reading into the report, less "innocent" deficiencies are to be detected. For instance, the IA considers only a limited set of alternative scenarios, and "contrary to the Commission's IA guidelines, the problem definition does not appear to include a scenario describing how the baseline scenario is likely to develop in the future without any new EU action. (p.17).  further, it has ignored the IA Board's invitation to present stakeholders opinions throughout the Impact Assessment and not only in an Annex (p. 25). The report also notices how the statistics used by the commission "could be interpreted differently to demonstrate the contrary", or the very marginal relevance of contract law-related transaction costs to the (under)development of the internal market. 

What then? Even though the Commission's relaxed used of data should be a matter of concern for all those interested in the evolution of European (not only consumer) law, on this spot we can probably agree with the report that, even if the Commission had very badly overestimated the possible impact of the CESL, "given the optional nature of the instrument,  the situation would just be equivalent to the no EU action scenario". Much ado about nothing, but much more fun for lawyers.

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