Certification – Trust, Accountability, Liability

248 Pages·2019·2.872 MB·English

by  Peter Rott

Studies in European Economic Law and Regulation 16
Peter Rott Editor
Certifi cation –
Trust,
Accountability,
Liability
Studies in European Economic Law
and Regulation
Volume 16
Series editors
Kai Purnhagen
Law and Governance Group, Wageningen University
Wageningen, The Netherlands
Josephine van Zeben
Worcester College, University of Oxford
Oxford, United Kingdom
Editorial Board
Alberto Alemanno, HEC Paris, Paris, France
Mads Andenaes, University of Oslo, Oslo, Norway
Stefania Baroncelli, University of Bozen, Bozen, Italy
Franziska Boehm, Karlsruhe Institute of Technology, Karlsruhe, Germany
Anu Bradford, Columbia Law School, New York, USA
Jan Dalhuisen, King’s College London, London, UK
Michael Faure, Maastricht University, Maastricht, The Netherlands
Jens-Uwe Franck, Mannheim University, Mannheim, Germany
Geneviève Helleringer, University of Oxford, Oxford, UK
Christopher Hodges, University of Oxford, Oxford, UK
Lars Hornuf, University of Bremen, Bremen, Germany
Moritz Jesse, Leiden University, Leiden, The Netherlands
Marco Loos, University of Amsterdam, Amsterdam, The Netherlands
Petros Mavroidis, Columbia Law School, New York, USA
Hans Micklitz, European University Institute, Florence, Italy
Giorgio Monti, European University Institute, Florence, Italy
Florian Möslein, Philipps-University of Marburg, Marburg, Germany
Dennis Patterson, Rutgers University, Camden, USA
Wolf-Georg Ringe, University of Hamburg, Hamburg, Germany
Jules Stuyck, Katholieke Universiteit Leuven, Leuven, Belgium
Bart van Vooren, University of Copenhagen, Copenhagen, Denmark
This series is devoted to the analysis of European Economic Law. The series’ scope
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More information about this series at http://www.springer.com/series/11710
Peter Rott
Editor
Certification – Trust,
Accountability, Liability
Editor
Peter Rott
University of Kassel
Kassel, Germany
ISSN 2214-2037 ISSN 2214-2045 (electronic)
Studies in European Economic Law and Regulation
ISBN 978-3-030-02498-7 ISBN 978-3-030-02499-4 (eBook)
https://doi.org/10.1007/978-3-030-02499-4
Library of Congress Control Number: 2019932706
© Springer Nature Switzerland AG 2019
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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Peter Rott
Part I Foundations
Certification as Solution to the Asymmetric Information Problem? . . . . . 11
Georg von Wangenheim
Challenges for Responsible Certification in Institutional Context:
The Case of Competition Law Enforcement in Markets
with Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Victoria I. Daskalova and Michiel A. Heldeweg
The Use of Conformity Assessment of Construction Products by the
European Union and National Governments: Legitimacy, Effectiveness
and the Functioning of the Union Market . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Richard Neerhof
Part II S uccess and Shortcomings of Certification Systems
Privacy Through Certification?: The New Certification Scheme of the
General Data Protection Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Gerrit Hornung and Stefan Bauer
Can Certification Enhance the Feasibility of Insurance? . . . . . . . . . . . . . . 133
Miranda P. M. Meuwissen
Control in the Label: Self-Declared, Certified, Accredited? . . . . . . . . . . . . 143
Hanna Schebesta
Certification of the Sustainability of Biofuels in Global Supply Chains . . . 163
Carola Glinski
v
vi Contents
Part III Liability for Negligent Certification
Certification of Medical Devices: Lessons from the PIP Scandal . . . . . . . . 189
Peter Rott
Public Function Liability of Classification Societies . . . . . . . . . . . . . . . . . . . 213
Vibe Ulfbeck and Anders Møllmann
Liability of Rating Agencies Under German and European Law . . . . . . . . 231
Axel Halfmeier
Introduction
Peter Rott
1 The Theme of the Book
Certification means the confirmation of compliance with a pre-defined standard
relating to a business, a product, a service or a management system. That standard
can be a public law standard, a private standard or a hybrid.1
Certification has become a hot topic, in particular at the European level. It is a
popular instrument of private governance of public goods, promising greater effec-
tiveness than control by public authorities while at the same time taking the burden
away from the State and its budget. Being a private instrument, it had long been
attributed to the private sphere; which has changed drastically through recent deci-
sions of the Court of Justice of the European Union (CJEU) that take into consider-
ation the immense factual power of at least some private actors with regard to the
facilitation of trade or to creating obstacles to trade. In the case of Fra.bo,2 the
German privately organised Deutsche Vereinigung des Gas- und Wasserfaches eV
(DVGW) denied the certification of copper fittings for piping for water or gas, pro-
duced by the Italian producer Fra.bo. The Court held that Article 28 TFEU on the
free movement of goods must be interpreted as meaning that it applies to standardi-
sation and certification activities of a private-law body, where the national legisla-
tion considers the products certified by that body to be compliant with national law
and that has the effect of restricting the marketing of products which are not certified
1 For detailed account, see chapter 3 by VI Daskalova and MA Heldeweg. See also Schepel (2005),
p. 3 ff.
2 CJEU, 12/7/2012, Case C-171/11, Fra.bo SpA v Deutsche Vereinigung des Gas- und Wasserfaches
eV (DVGW) — Technisch-Wissenschaftlicher Verein, ECLI:EU:C:2012:453.
P. Rott (*)
Institute of Economic Law, Faculty of Economics and Management, University of Kassel,
Kassel, Germany
e-mail: [email protected]
© Springer Nature Switzerland AG 2019 1
P. Rott (ed.), Certification – Trust, Accountability, Liability, Studies in European
Economic Law and Regulation 16,
https://doi.org/10.1007/978-3-030-02499-4_1
2 P. Rott
by that body. The decision in the case of James Elliott3 complemented this line of
thinking. In this case, the CJEU found that it has jurisdiction to provide a prelimi-
nary ruling concerning the interpretation of a harmonised standard that was devel-
oped by a private body under the so-called ‘New Approach’ of EU product safety
law, thus treated that private standard as part of EU law. The two decisions have
triggered intense discussion relating to the constitutionalisation of standardisation
and certification by private actors, in particular in the context of the ‘New Approach’.4
In a parallel development, the relevance of certification and similar phenomena,
such as credit ratings, for the protection of the economic interests or the health and
safety of third parties has come to the fore. The breast implants scandal around the
French producer Poly Implants Prothèse (PIP) forms a prime example. PIP had
filled the breast implants with industrial silicone rather than medical silicone. Within
the system of EU medical devices law, TÜV Rheinland acted as notified body to
monitor the activities of PIP. TÜV Rheinland had certified compliance of the prod-
uct design of the PIP breast implants and of PIP’s quality management system with
the underlying standard. Since TÜV Rheinland had not noticed the fraudulent
change of production by PIP (and since PIP itself went bankrupt following the dis-
covery of the fraud), victims initiated litigation against TÜV Rheinland in German
and French courts. Out of the many cases, the case of Elisabeth Schmitt was referred
to the CJEU.5 Rating agencies, in turn, attracted the attention of policy-makers and
of investors likewise in the context of the financial crises, and in particular of the
collapse of Lehman Brothers whose financial products had been rated “AAA” by
Standard & Poor’s. Litigation has already been initiated in different countries
including Australia and Germany.6
The above-mentioned areas of medical devices, or product safety generally, and
of credit rating are only two examples for areas in which certification plays an
important role. Other areas are the certification of food standards, of social and/or
environmentally sound production or sourcing or of compliance with standards of
consumer law or data protection law.
The cases of PIP and Lehman Brothers trigger several questions. Who benefits
from certification? Standardisation benefits primarily the relevant industry whose
transactions costs are reduced through standardisation and through certification of
compliance with certain standards.7 At the same time, certification systems may
serve further purposes, such as the protection of users or other third parties, and the
certificates that are issued may be addressed to a diversity of actors. Thus, the main
addressee of certificates can be the customer of the producer or trader who or whose
3 CJEU. 27/10/2016, Case C-613/14 James Elliott Construction Limited v Irish Asphalt Limited,
ECLI:EU:C:2016:821.
4 See, for example, Schepel (2013), p. 530; van Leeuwen (2013), p. 406; Purnhagen (2017), p. 586;
Volpato (2017), p. 597; Colombo and Eliantonio (2017), p. 332.
5 CJEU, 16/2/2017, Case C-219/15 Elisabeth Schmitt v TÜV Rheinland LGA Products GmbH,
ECLI:EU:C:2017:128. See chapter 9 by P Rott and the references therein.
6 See chapter 11 by A Halfmeier and the references therein.
7 See, for example, DIN (2000) and Blind et al. (2011).
Introduction 3
products, services, or management are certified, as in the case of credit rating or of
the certification of social and/or environmentally sound production. Certificates
may, however, be also addressed to public bodies where certification is part of a
public law control system, for example of cars, aircrafts or medical devices. Or, they
may serve the purpose to assist other third parties such as insurers that may base
their risk calculation on certificates that confirm compliance with certain
standards.
Another set of questions concern the regulatory design. Which design fits a cer-
tification system best? Which incentive system, including sanctions, should be in
place to ensure compliance of certification bodies? This may depend on a variety of
factors, including the way in which the certification body is involved (solicited by
the actor that is to be certified or commissioned by an independent party) or the
geographical scope of the certification system (national, EU-wide or global). Within
that context, (private law) liability may play an important role not only in providing
compensation to victims but also as a regulatory instrument to ensure compliance.
The book at hand unfolds the merits and perils of certification, employing the
perspectives of different disciplines and using examples from different areas of life
and law. There is an increasing amount of literature available on individual certifica-
tion systems as well as on the relevance of standardisation and certification for
(cross-border) trade, not least triggered by the above-mentioned recent case law of
the CJEU. This book takes research from various areas up and presents certification
as a cross-cutting issue. It invites lawyers and regulators from different branches, in
which certification plays a role, to learn from the experience of other branches,
rather than re-inventing the wheel time and again for each specific area. Indeed, it is
one aim of the book to discover commonalities between certification systems but
also to find differences that call for differential treatment.
2 The Structure of the Book
The book is structured in three parts. Part 1, consisting of three chapters by Georg
von Wangenheim, Michiel Heldeweg and Victoria Daskalova, and Richard Neerhof,
focuses on the fundamentals of certification: its economic background, the manifold
shapes and forms certification can take, and its relevance for competition and free
trade.
The chapters of Part 2 deal with the conditions for the success of certification in
creating trust as well as incentives for compliance with private standards, and in
monitoring compliance with standards, using examples from various sectors. Gerrit
Hornung and Stefan Bauer introduce and discuss the new data protection seal as
envisaged by the General Data Protection Regulation. Miranda Meuwissen presents
empirical studies that show how certification gains relevance for insurance by facili-
tating risk classification and management. In a more skeptical approach, Hanna
Schebesta looks at problematic (voluntary) certification practices in the food sector
and presents the new certification marks of the EU Trademark Regulation of 2015