Prohibition of abuse of law : a new general principle of EU law?

662 Pages·2011·2.69 MB·English

by  Rita de La Feria

PROHIBITION OF ABUSE OF LAW
The Court of Justice has been alluding to ‘abuse and abusive practices’ for more than
thirty years, but for a long time the significance of these references has been unclear.
Few lawyers examined the case-law, and those who did doubted whether it had led to
the development of a legal principle. Within the last few years there has been a radical
change of attitude, largely due to the development by the Court of an abuse test and its
application within the field of taxation. In this book, academics and practitioners from
all over Europe discuss the development of the Court’s approach to abuse of law across
the whole spectrum of European Union law, analysing the case-law from the 1970s to the
present day and exploring the consequences of the introduction of the newly designated
‘principle of prohibition of abuse of law’ for the development of the laws of the EU and
those of the Member States.
Volume 13: Studies of the Oxford Institute of European and Comparative Law
Studies of the Oxford Institute of European and
Comparative Law
Editor
Professor Stefan Vogenauer
Board of Advisory Editors
Professor Mark Freedland, FBA
Professor Stephen Weatherill
Professor Derrick Wyatt, QC
Volume 1: The Harmonisation of European Contract Law: Implications for
European Private Laws, Business and Legal Practice
Edited by Stefan Vogenauer and Stephen Weatherill
Volume 2: The Public Law/Private Law Divide
Edited by Mark Freedland and Jean-Bernard Auby
Volume 3: Constitutionalism and the Role of Parliaments
Edited by Katja Ziegler, Denis Baranger and A W Bradley
Volume 4: The Regulation of Unfair Commercial Practices under EC Directive 2005/29:
New Rules and Techniques
Edited by Stephen Weatherill and Ulf Bernitz
Volume 5: Human Rights and Private Law: Privacy as Autonomy
Edited by Katja Ziegler
Volume 6: Better Regulation
Edited by Stephen Weatherill
Volume 7: Forum Shopping in the European Judicial Area
Edited by Pascal de Vareilles-Sommières
Volume 8: The Reform of Class and Representative Actions in European Legal Systems:
A New Framework for Collective Redress in Europe
Christopher Hodges
Volume 9: Reforming the French Law of Obligations: Comparative Reflections on the
Avant-projet de réforme du droit des obligations et de la prescription (‘the Avant-projet
Catala’)
Edited by John Cartwright, Stefan Vogenauer and Simon Whittaker
Volume 10: Performance-Oriented Remedies in European Sale of Goods Law
Vanessa Mak
Volume 11: Current Issues in European Financial and Insolvency Law: Perspectives from
France and the UK
Edited by Wolf-Georg Ringe, Louise Gullifer and Philippe Thery
Volume 12: Article 82 EC: Reflections on its Recent Evolution
Edited by Ariel Ezrachi
Prohibition of
Abuse of Law
A New General Principle of EU Law?
Edited by
Rita de la Feria and Stefan Vogenauer
OXFORD AND PORTLAND, OREGON
2011
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Preface
Is there a general principle of European Union law, according to which ‘abuse of law’
is prohibited? The contributions to this volume attempt to provide an answer to this
question. They are based on papers delivered at a symposium held at the University
of Oxford in October 2008 under the coordinating auspices of the Centre for Business
Taxation and the Institute of European and Comparative Law at Oxford.
Whilst the Introduction to this volume sets out the research pathway that led to this
event – as well as giving an overview of the following chapters – it was clear to us from the
outset that this academic gathering should have three key dimensions. First, reflecting the
somewhat fragmented research context in this field, the ethos of the event was to be more
of a workshop than a conference in the traditional sense. Second, we wanted it to be truly
intra-disciplinary, bringing together EU lawyers, tax lawyers and comparative lawyers,
with different interests, different perspectives and different areas of expertise. Third, and
as a consequence of the preceding characteristics, the event was structured with a view
to ensuring a productive discussion and encouraging exchange of ideas between these
lawyers from diverse research backgrounds.
Over the course of two intense days almost forty papers were presented by invited
speakers from across Europe and further afield, each bringing their own specialised
knowledge in different areas of EU, comparative and tax law, and all demonstrating
remarkable commitment and patience. The event, and this resultant compilation,
presented challenge and reward in equal measure. The topicality of our subject became
all the more evident after the conference, as the Court of Justice was increasingly called
to address questions of abuse. Even as this book went to press, the Court issued three
decisions referring to ‘abuse of law’, ‘abuse of rights’, and the ‘principle of prohibiting
abusive practices’ within a single day (Case C-303/08 Bozkurt, C-103/09 Weald Leasing,
C-277/09 RBS Deutschland – all on 22 December 2010), and it reiterated that this principle
applies across various spheres of EU law (Weald Leasing). We hope that the contributions
to this volume will prove beneficial in the future development of the emerging general
principle of abuse of law.
Since this book deals with such a highly dynamic area, the authors had to contend with
a long and arduous editorial process. Whilst it has not been possible to include the most
recent developments in all of the chapters, in the majority of them the law is stated on
the basis of the information available to the authors in mid 2010. In addition, all chapters
were amended in order to take into account the changes necessitated by the Treaty of
Lisbon that came into force in December 2009.
Finally, in a project as long and testing as this one was, there are always many people
and institutions to thank. We are particularly grateful to Richard Hart for taking on the
risk of publishing a book compilation dealing with such a new area of law. His editorial
team, notably Mel Hamill and Tom Adams, were exceptionally efficient and helpful
throughout. The Oxford Centre for Business Taxation provided generous financial
support and, together with the Institute of European and Comparative Law, assisted
with organising the symposium, for which Miguel Poiares Maduro was a superlative
vi Preface
chairman. Judith Freedman and Stephen Weatherill were constant presences throughout
this whole process, since the initial idea for the symposium started to emerge, and we
are grateful for their continuous support. Lindsay Loomer, our copy editor, worked
tirelessly on all the chapters, liaising directly with both the authors and the publisher.
Philipp Eichenhofer and Ioannis Papathanasiou provided invaluable assistance, namely in
bringing the chapters into line with the terminology and the numbering of the Treaty of
Lisbon. Our final words, however, are of profound gratitude towards the speakers at the
symposium and the authors of the contributions to this volume, who remained patient
and faithful to this project throughout the period that it took for this compilation to come
to light. It was the outstanding academic standard of their work, and their belief in what
we were trying to achieve with this project, which kept us going.
Rita de la Feria
Stefan Vogenauer
Oxford, January 2011
Foreword
Several recent high profile cases at the Court of Justice of the EU have made the principle
of abuse of rights and/or abuse of law one of the most discussed and relevant current
issues of EU law. This is a timely and important book, discussing whether there is an
emerging general principle of abuse of law in EU law and its possible implications.
Though its profile has been raised by recent cases, the concept of abuse of law has long
been present in EU law. That is even more so if one takes into account the many instances
where the concept is not referred to as an autonomous principle but guides a constructive
interpretation of the applicable rules so as to exclude from their scope circumstances of
abuse. This is natural: any legal system needs to protect itself from different forms of
attacks which the legislator has not explicitly foreseen. It is a safety valve protecting the
integrity of the system.
Nevertheless, although one can find it in any legal system, a concept of either abuse
of law or abuse of rights remains controversial. This is for two main reasons: first,
because of the inherent difficulty in its practical application and the possible negative
consequences for legal certainty; and, second, because it is normatively conceived as a
restriction to liberty. As Rousseau put it, ‘obedience to the law which one imposes on
oneself is freedom’. From this, it is deduced that anything that it is not prohibited by
the law is allowed by it. For some such prohibitions need to be clear and precise so as to
protect the presumption of freedom. On the other hand, the law is not whatever one can
do with its words. To allow that would also promote legal uncertainty but, moreover,
it is also challengeable in normative terms. In fact, the prevention of abuses can also be
defended by reference to the democratic character of the legislative process. It can be
conceived as limiting opportunistic behaviour that, through interpretative manipulation
of the existent rules, would derive from the legislation effects which were neither intended
nor deliberated in the democratic process. Underlying the debate on the concept of abuse
of law is therefore a tension between two sources of legal uncertainty and two conflicting
normative concerns.
The discussion of the concept of abuse of law in the EU law context has to take into
account this background but is made more complex by three factors: First, an important
dimension of the EU project is mobility, including the idea that individuals can choose
between legal systems. It therefore becomes difficult to distinguish between an evasion of
national law (to be considered abusive) and a choice of law that is intended or protected
by EU law itself. Second, the EU legal system is frequently ‘incomplete’ and fragmented,
with plenty of ambiguous legal terms and legislative gaps. Potentially, reliance on a
concept abuse of law may solve some of those problems but it may also contribute to
legislative inertia and, in the long run, exacerbate these problems further. Third, the EU
legal system operates in the context of different legal cultures. These have developed
different concepts and instruments to prevent abuses and protect the integrity of the legal
system and these may not always be easy to coordinate and accommodate.
The contributions to this book compilation explore these themes whilst, at the same
time, testing the application of the principle of abuse of law in specific contexts of EU
viii Foreword
law. From these contributions, several questions emerge as to the extent to which the
concept is used in the case law of the Court of Justice, how it is used and whether it
should be used at all. Is there a uniform approach to abuse in different EU law areas
and ought there to be one? What is the right approach: abuse of rights, abuse of law
or a constructive interpretation of the legal rules which takes into account the concept
of abuse? Should the determination of abuse depend on objective or subjective criteria?
What are the different implications of the concept of abuse for legal certainty? What
is the right balance between the role to be played by Member States and EU law in the
prevention of abuses? And what is the right balance between the role to be played by
courts and the legislator in developing such a principle?
These and many other questions are addressed in the different contributions to this
book. It is a unique and long awaited contribution for a topic that is in urgent need of
the kind of serious and in depth analysis that is undertaken in the discussions that follow.
Miguel Poiares Maduro
Florence, January 2011
Contents
Preface v
Foreword
Miguel Poiares Maduro vii
Contributors xii
I Introduction
Introducing the Principle of Prohibition of Abuse of Law
Rita de la Feria xv
II The Framework: General Principles of EU Law and the Prohibition
of Abuse
1 Prohibition of Abuse of (European) Law: The Creation of a New General
Principle of EC Law through Tax: A Response
Paul Farmer 3
2 What is a General Principle of EU Law?
Anthony Arnull 7
3 What is a General Principle of EU Law? A Response
Karsten Engsig Sørensen 25
4 The Abuse of Rights in the Civil Law Tradition
James Gordley 33
III The Origins: Free Movement of Services
5 Fitting ‘Abuse of Rights’ into EU Law Governing the Free Movement
of Goods and Services
Stephen Weatherill 49
6 Free Movement of Broadcasting Services and Abuse of Law
Dimitrios Doukas 63
7 The Notion of Abuse and the Freedom to Provide Services: A Labour
Lawyer’s Perspective
Catherine Barnard 93
IV T he Development: Freedom of Establishment, Company Law and
Competition Law
8 Sparking Regulatory Competition in European Company Law: The Impact
of the Centros Line of Case Law and its Concept of ‘Abuse of Law’
Wolf-Georg Ringe 107
9 Sparking Regulatory Competition in European Company Law: A Response
John Vella 127
x Contents
10 Abuse of Law in the Context of European Insolvency Law
Horst Eidenmüller 137
11 Abuse of European Insolvency Law? A Discussion
John Armour 157
12 Abuse of Rights in EU Law: Some Reflections with Particular Reference to
Financial Law
Takis Tridimas 169
13 Comments on Abuse of Rights in EU Law
Pierre Schammo 193
V The Test: Free Movement of Goods and Common Agricultural
Policy
14 The Emsland-Stärke Abuse of Law Test in the Law of Agriculture and Free
Movement of Goods
Panos Koutrakos 203
15 The Notion of and a General Test for Abuse of Rights: Some Normative
Reflections
Jukka Snell 219
VI The Unknown: Private Law and International Civil Procedure
16 Abuse of Law in EU Private Law: A (Re-)Construction from Fragments
Axel Metzger 235
17 Comments on ‘Abuse of Law’ in European Private Law
Simon Whittaker 253
18 The Rejection of Abuse in International Civil Procedure
Adrian Briggs 261
19 The Discreet Influence of Abuse of Law in International Civil Procedure
Gilles Cuniberti 279
VII The Exceptions? Free Movement of Workers and Citizenship
20 ‘Prohibition of Abuse of Law’: A New General Principle of EU Law
Jonathan Faull 291
21 ‘Abuse of Law’ in the Context of the Free Movement of Workers
Katja S Ziegler 295
22 Comments on Abuse of Law and the Free Movement of Workers
Eleanor Spaventa 315
23 Citizenship of the Union: Above Abuse?
Cathryn Costello 321
24 Some Comments on the Idea of a General Principle of Union Law
Prohibiting Abuses of Law in the Field of Free Movement
for Union Citizens
Michael Dougan 355