Living Apart Together – Is the UK becoming a laboratory for European Private Law?

As the UK moves towards more decentralisation of power, and therefore more power to its component legal systems – referring to Welsh, Scots and Northern Ireland law, and more and more Justices in the Supreme Court are also considering how a certain case would have been resolved in their component legal system (such as the possible outcome of an English case in Scots law written by a Scot’s Justice), the UK is fast on track to position itself as a laboratory for European private law.

It is no secret that Scots law is greatly distinct from English law in many areas. One of these, most notably, is the law of property. With the Abolition of Feudal Tenure (Scotland) Act 2000, the Scots effectively abolished the feudal system of landholding that still reigns (quite literally as the Queen owns all land in England and all others hold land from her in tenure) in English law. As more autonomy is given to national parliaments in Edinburgh, Cardiff and Belfast, this can be expected to result in pluralism rather than uniformity.

With all of these countries remaining part of the United Kingdom, so bound in unity, the UK is set to become perhaps the latest and most modern example of a laboratory of creative private law solutions. Especially because of the influence Scots law brings as a mixed legal system, the mix in the laboratory – perhaps more than ever – includes the diverging common law and civil law divide. New solutions, as for example land reform in Scotland will only increase the differences and hence sometimes ask for joined solutions to cope with these.

European private lawyers should keep a close eye on these development. The same applies for UK private lawyers, as this may just be a very good reason to remain in the European Union and promote their own solution.

(Thanks to Jill Robbie of Glasgow University for the interesting discussion on this and the encouragement to use the title)

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New EU Succession Rules enter into force

On 17 August, after years of negotiations, followed by years of preparations, Regulation 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession (the ‘Regulation’) enters into force. Although toned down from its original proposed version, the Regulation brings a ‘revolution’ in private international law and substantive succession and property law.

Until now each legal system deals with its own succession cases based on the lex rei sitae principle: the law of the place where the object is situated, decides on the applicable succession law and jurisdiction of the court. Until 16 August 2015, international succession cases – i.e. situations in which there is either a person with multiple nationalities, or property, in whatever form, in different countries. The Regulation brings revolution to this by creating a uniform regime that applies to an entire succession.

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The Capital Markets Union Proposal: Private Law back at the forefront of European Integration

On 22 June 2015 the president of the European Commission Jean-Claude Juncker, in close collaboration with the president of the European Union (Tusk), Eurogroup (Dijselbloem), European Central Bank (Draghi) and European Parliament (Schulz) published a 22 page document on ‘Completing Europe’s Economic and Monetary Union’.

In this document the five presidents propose to further deepen the economic cooperation between the EU Member States and work towards a more complete single market. Apart from the timing – the document is published in the midst of the Greek-debt-crisis, the proposal contains very interesting material for private lawyers. The proposal contains a roadmap towards a ‘genuine fiscal union’ and is of course just a proposal.

However, under the heading ‘Towards Financial Union – Integrated Finance for an Integrated Economy’, the proposal goes into the issue of completing the banking union and the launching of the Capital Markets Union. Under the heading of the latter the proposal states:

‘A true Capital Markets Union also requires other improvements, some of which can only be achieved through legislation, such as: simplification of prospectus requirements; a revived EU market for high quality securitisation; greater harmonisation of accounting and auditing practices; as well as addressing the most important bottlenecks preventing the integration of capital markets in areas like insolvency law, company law, property rights and as regards the legal enforceability of cross-border claims.’

These improvements are so important, the report states, that

‘[t]o complete the Financial Union, we need to launch a common deposit insurance scheme and the Capital Markets Union. Given their urgency, these measures should all be implemented in Stage 1.’

Stage 1, the report informs us, is planned to be carried out between 1 July 2015 and 30 June 2017. The digital single market initiative, therefore seems only one of potential more regulatory proposals that affect European Union private law.

This is especially exiting news for property lawyers, as for the first time contract law is no longer mentioned, but property law comes to the forefront. This does – of course – not mean that contract law is now excluded. After all, no property law can exist without contracts. We must therefore all look at this process with renewed interest as more information becomes available.

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The limits of Party Autonomy: Contracting out of consumer protection advertising rules?

A very interesting case in the Netherlands, dealing with the television programme Heel Holland Bakt. This programme is an adaptation of the immensely successful British version The Great British Bake Off, and actually made under license from the British intellectual property right holders of the programme.

As a part of the second season of the Heel Holland Bakt version, the Dutch supermarket chain Albert Heijn started selling baking equipment, making use of the logo of the Heel Holland Bakt programme. The programme, however, is broadcasted on Dutch public television by broadcast organisation Max. Max, as the responsible organisation for the broadcast of the Heel Holland Bakt series, has now been fined 162.000 euro by the Dutch Media Commissariat (Commissariaat voor de Media) because it enabled Albert Heijn to profit by providing the merchandise-rights on the programme.

Max is now appealing this decision because it claims this is not how it works. The BBC Worldwide company, the commercial branche of the BBC, has sold the rights to make the television programme to Max, but this did not include the merchandise-rights, which remained with BBC World. BBC Worldwide in its turn sold the merchandise rights to Ahold, mother company of Albert Heijn supermarkets. Max claims, right so it seems, that it has nothing to do with this and can therefore not be held to have enabled a commercial party to benefit from its publicly-financed broadcast.

This raises the very interesting question whether this now offers a model to contract out of mandatory consumer protection rules. Dutch consumers are protected through a prohibition on advertising in programmes on the Dutch public television networks (there are three of these networks, that do have blocks of advertising on television named STER). However, by bringing the programme format to another country and licensing the broadcast rights back (a variety of the sale and lease back construction), perhaps these mandatory rules can be broken? We will have to follow the appeal in order to find out.

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Social Justice for Investors: what about complex financial products?

Over the weekend I saw an interview with Dutch journalist Joris Luyendijk who, in the past two years, has been working for the Guardian in London seeking to uncover the workings of ‘The City’ the financial heart of Londen. For a while therefore Luyendijk published on the BankingBlog and now published some of his findings in a book with the illustrative title “This cannot be true” (‘Dit kan niet waar zijn’ in Dutch, soon to be translated into English). In the past years Luyendijk has been seeking to City employees and former employees about their work, their experiences and their own fears. In the television programme (in Dutch) to promote his book, Luyendijk gave a few anecdotes to illustrate what we are talking about. This concerned illustrations of ‘the bubble’ in which some people in the financial world are trapped that removes them from reality.

A very interesting anecdote in this respect concerned a man completely focused on profiting from the market effects after 9/11 only to realize at the end of the business day he actually knew a lot of people in the World Trade Centre in New York City. However another Luyendijk story sparked my interested:

He explained that in his book he distinguishes various types of people, one of which he calls the cool frog (‘koele kikker’). One of these, in conversation with him, stated that all that she did was completely legal and to get off her back for asking poignant questions about it. Luyendijk then continued to explain that in the financial services word there are products made by specialists that are so complex that, although the makers understand what they are doing (most of the time), the client that purchases these products, i.e. investors, do not have a clue. These can be very profitable products, but in cases of losses the losses are for the investor and not for the bank. Luyendijk actually warns for the complexity of these products and foresees some of these to go wrong in the future in such a way as to cause another financial crisis.

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