Regulatory Styles: The Diffusion of Adversarial Legalism?
R. Daniel Kelemen
Rutgers University
Department of Political Science
rkelemen@rci.rutgers.edu
Draft paper prepared for presentation at
ESF/SCSS Exploratory Workshop
"The Politics of Regulation"
Barcelona, Spain, 29-30 November 2002.
I. Introduction
A rich literature on comparative regulatory policy shows that states rely on very different
regulatory styles in pursuing their policy objectives.1 Comparative studies suggest that
the U.S. takes a particularly distinctive approach to making and implementing regulatory
policies.
American regulatory style, which Robert Kagan has labelled adversarial
legalism,2 manifests itself in detailed, prescriptive rules, substantial transparency and
disclosure requirements, formal and adversarial procedures for resolving disputes, costly
legal contestation involving many lawyers and frequent judicial intervention in
administrative affairs.
It is of course far more difficult to make generalizations about regulatory styles
across Europe, given the diversity of national systems.
Nevertheless, a number of
common attributes do distinguish European regulatory style from the American. The
approaches to regulation that have predominated across Europe are more informal,
cooperative and opaque and rely less on the involvement of lawyers and courts. Closed
networks of bureaucrats and regulated interests often develop and implement regulatory
policies in concert. Some states (such as Austria, Sweden, and Germany) rely heavily on
1
See Kagan and Axelrad 1997; Richardson 1982.
corporatist patterns of interest intermediation.3 In France, elite government technocrats
traditionally dominated regulatory policymaking.5 In the U.K., "chummy" relationships
between regulators and regulated entities prevailed.6 These systems of regulation rely on
closed policymaking networks and delegate wide discretion to regulators to pursue
informal means of achieving regulatory objectives. Regulators, regulated industries and
other network insiders apply pressure and resolve conflicts informally; they do not resort
to large law firms employing mega-lawyering techniques such as multi-jurisdictional
litigation strategies, lobbying and other non-judicial forms of advocacy.7 The courtroom
door has rarely served as a significant opening for outsiders to challenge policy.
Recently, scholars of comparative law and comparative public policy have started
to ask whether the American legal style may be spreading to Europe, supplanting wellestablished regulatory styles. Some scholars have argued that legal styles are converging
on an American model,8 while others have argued that traditional national legal styles
remain firmly in place.9 These studies have identified a wide range of factors that might
encourage the spread of American legal and regulatory style including economic
liberalization, the globalization of markets, growing distrust of government bureaucrats,
heightened judicial assertiveness, the globalization of U.S. law firms and the international
influence of American legal education.10
2
Kagan 2001.
See, for instance, Lehmbruch and Schmitter 1982; Goldthorpe 1984.
5
Suleiman 1974; Hayward 1982.
6
David Vogel 1986; Steven Vogel 1996.
7
Trubek et al. 1994:422.
8
Wiegand 1991, 1996; Shapiro 1993; Trubek 1994; Dezalay 1996; Galanter 1992, 1996.
9
See supra note 1 and Kagan 1997; Van Waarden 1995.
10
Some scholars have focused on the spread of American style adversarial legalism (See supra note 1
Galanter 1992; Shapiro 1993, 1996; Friedman 1996 and Wiegand 1991, 1996) while others focus
specifically on the spread of American style judicial review. (Stone and Shapiro 1994, Stone 1994, 2000,
Tate and Vallinder 1995). On judicial globalization more generally, see Slaughter (2000).
3
This paper argues that American style adversarial legalism is spreading across the
EU, but not for the reasons we might first suspect. Regulatory competition (i.e. race-tothe-bottom pressure) does not drive the EU toward adversarial legalism; rather,
adversarial legalism often imposes far greater costs than alternative approaches. Nor is
American regulatory style spreading because of a desire among European leaders to
emulate the US. Quite to the contrary, while US practices may be looked to as laudable
models in many areas of economic policy, most European policymakers view the
dominance of lawyers and litigation in US regulatory processes as an "American
Disease" to be strenuously avoided. Indeed, in a number of issue areas EU policymakers
have called for the adoption more flexible, informal approaches to regulation, relying on
tools such as framework laws, voluntary agreements and various forms of self-regulation.
However, the impact of such initiatives has been overshadowed by the less discussed but
more pervasive spread of transparent, legalistic and adversarial approaches to regulation
across a number of policy areas.
The shift toward adversarial legalism in the EU has been caused by a combination
of economic liberalization and political fragmentation. In a number of policy areas,
increasing economic liberalization has combined with political fragmentation at the EU
level to undermine informal, opaque approaches to regulation and to create pressure for
more legalistic, transparent approaches. The new approaches establish more transparent
procedures, more justiciable rights, and more adversarial, litigious interactions between
actors in the regulatory process. Few actors in the regulatory process would explicitly
advocate this shift.
Nevertheless, adversarial legalism is emerging as an unwanted
stepchild of European integration.
A variety of deeply entrenched national legal institutions in EU member states
will continue to limit the degree of adversarial legalism and to block the emergence of the
most notorious aspects of the US system. We are not about to see obese European
children suing McDonald's on the grounds that the firm knowingly sold them food that
damaged their health, nor are we about to see roving hordes of class-action lawyers
hunting for deep-pocketed defendants. Nevertheless, the shift toward a more adversarial
legalistic approach to regulation in Europe is palpable.
The rest of the paper proceeds as follows. Section II explains how economic
liberalization and political fragmentation have encouraged an increase in adversarial
legalism in the EU. Section III presents case studies assessing changes in regulatory style
in four policy areas: securities regulation, environmental regulation, products liability law
and anti-discrimination law. While these case studies by no means constitute a definitive
test, they serve to demonstrate the generalizability of the argument across a wide range of
issue areas. I supplement the case studies with a more general discussion of overarching
trends that indicate a shift toward adversarial legalism. Section IV concludes.
II. Explaining the spread of adversarial legalism
The confluence of two factors has incited a marked shift toward adversarial legalism in
European regulatory style since the mid-1980s.
First, the economic liberalization
resulting from the 1992 initiative and ongoing efforts to complete the Single Market has
both undermined traditional approaches to regulation at the national level and encouraged
the emergence of new forms of regulation at the EU level. Many national regulations
have been attacked as non-tariff barriers to trade. Economic liberalization has introduced
new actors, many of them foreign, into previously shielded markets.
The growing
diversity of players in national markets has undermined informal, opaque systems of
regulation that relied on closed insider networks and trust. In response to deregulation at
the national level, national and EU policymakers have pushed for re-regulation at the EU
level. Given the diversity of players in these liberalized markets, the style of regulation
that has developed at the EU level does not resemble the informal, corporatist patterns of
regulation that were common in many Member States. Instead, EU regulatory processes
emphasize formal, transparent rules and policymaking processes and legal enforceability.
Second, the transfer of regulatory authority to the EU level has lead to an
increasing fragmentation of political authority, along both vertical and horizontal
dimensions. Authority in many policy areas is divided vertically between the EU and
Member State governments and is divided horizontally at the EU level between the
Council, the Commission and the European Parliament.
Public distrust of distant,
potentially unaccountable Eurocrats in Brussels, coupled with Member States' distrust of
each other's opaque regulatory practices has lead to increased demands for transparency
and public participation in regulatory processes.11 This fragmentation of power and
distrust has encouraged the production of detailed laws with strict goals, deadlines and
procedural requirements12 and has encouraged an adversarial, judicialized approach to
enforcement.13 Doubting each other's commitment to implementation, Member States
often favor detailed directives and regulations that facilitate Commission and ECJ
enforcement actions against non-compliant states.14 The European Parliament favors this
11
Shapiro 1992; Harlow 1998, 1999; Schwarze 1996.
Prechal 1995:15-18, 109-113; Franchino 2001:174.
13
Kelemen 2000.
14
Majone 1995.
12
approach as it prefers to limit Member State discretion in implementation and to
encourage the Commission or private parties to take enforcement actions against laggard
Member States.15 The fragmentation of power also insulates the ECJ against legislative
overrides and political backlash and thus emboldens the ECJ to take a strict stance in
enforcing EU law against non-compliant Member States.16 The combination of actionforcing statutes and judicial assertiveness has encouraged the Commission to pursue
enforcement litigation, even to the point of levying financial penalties against Member
States that fail to comply with ECJ judgments.17 Also, EU treaties, secondary legislation
and expansive ECJ interpretations have created a number of legally enforceable rights for
individuals. The creation of these individual rights has enabled private parties to bring
litigation against Member State governments before national courts and to access the EU
judicial system via the preliminary ruling procedure. The EU's focus on rights creation is
no coincidence. Given the small size of the Eurocracy and the associated limitations on
the EU's enforcement capacity, advocates of regulation at the EU level have an incentive
to enlist private parties as the enforcers of EU law. As Robert Kagan has observed,
“When federal governments cannot deploy bureaucrats, they can respond to political
demands by allowing citizens to deploy lawyers and lawsuits.”18 As we will see below,
such decentralized enforcement litigation has already played a powerful role in some
issue areas, such as gender equality law.19
III. Adversarial Legalism in Four Policy Areas
15
Dehousse 1992:392.
Kelemen 1998; Alter 1998; Pollack 1997.
17
Kelemen 2002.
18
Kagan 1997:178.
16
Securities Regulation
Before the 1980s, securities exchanges across Europe were granted considerable
autonomy and relied on flexible, informal self-regulation based largely on trust between
closed networks of repeat market players.21 Most Member States had few disclosure
requirements for securities transactions, some of them not even requiring the publication
of a prospectus. As of the mid-1980s, nine of the Member States had no criminal
penalties for insider trading and none of them had an autonomous, national securities
regulatory agency.23
Shareholder litigation against financial intermediaries or listed
companies was nearly non-existent, as the flexible, informal regulations that existed
severely limited private causes of action.
In the mid-1980s, restrictions on capital movements were lifted and European
financial markets were liberalized considerably.
Cross-border activity increased
dramatically in the 1990s as investors, firms and financial services providers took
advantage of new opportunities outside their home markets. This liberalization not only
increased the number and diversity of players active in national securities markets, it also
led to the establishment of new trading platforms.24
From the outset, this market liberalization was coupled with an effort, led by the
European Commission, to re-regulate at the EU level. The Commission recognized that
the informal, opaque regulatory practices common in most Member States would
discriminate against outsiders and distort the single market. Even if Member States
introduced more transparent regulation at the national level, divergence between national
19
Alter 2001; Stone Sweet and Caporaso 1998; Alter and Vargas 2000.
Karmel 1999: 30. On the British system, see S. Vogel 1996:94-98.
23
Warren 1994: 185.
21
standards would continue to fragment the market.25 Therefore, the Commission proposed
a series of directives establishing minimum EU standards for (i) public offerings and
listings, (ii) trading activities and (iii) financial intermediaries.26 Many of these directives
were later consolidated in the 1993 Financial Services Directive. The EU's approach to
securities regulation resembles the adversarial, legalistic American approach in
fundamental respects. As in the US, EU securities regulation relies on detailed laws
focusing on disclosure, transparent regulatory processes, and an adversarial, judicialized
approach to enforcement by both government and private parties.
The Americanization of EU securities regulation accelerated with the introduction
of the Euro. In the run up to the launch of the Euro, the Commission presented a
Financial Services Action Plan that proposed a series of measures that would 'complete'
the single market in financial services by 2005.27 Subsequently, the EU established a pair
of regulatory committees (The European Securities Committee (ESC) and the Committee
of European Securities Regulators (CESR))28 and adopted a series of measures designed
to enhance transparency and disclosure.29
The fragmentation of power at the EU level has had a major impact on the design
of the new EU regulatory bodies and the shape of new legislation. As in other policy
areas, the European Parliament opposed delegating extensive rule-making powers to
24
European Commission, Progress on Financial Services: 2nd Report. COM (2000) 336 final. May 30,
2000.
25
Warren 1994: 186.
26
Lannoo 2001.
27
Financial Services Action Plan. Communication from the Commission. COM(1999)232 final. May 11
1999.
28
The CESR replaced the Forum of European Securities Commissions (FESCO), a weaker cooperative
body established by national regulatory authorities in 1997 without any formal EU mandate.
29
European Commission, Financial Services Action Plan, Sixth Report, COM (2002) 267, June 3, 2002;
Internal Market Directorate General, Toward an EU Regime on Transparency Obligations of issuers Whose
Securities are Admitted to trading on a Regulated Market
expert committees and emphasized that they must be structured in a transparent,
democratically accountable manner.30 The EP blocked the establishment of the ESC until
it won assurances that it would be notified of ESC decisions regarding implementation of
securities regulation in time to voice its views. Moreover, in an effort to limit 'agency
losses' when legislation is implemented by the ESC, the EP has proposed hundreds of
amendments to securities directives aimed at constraining bureaucratic discretion and
forcing regulators to protect consumer interests. As a result, the EU's most recent
securities directives, such as the draft prospectus and market abuse directives are
extremely detailed and action-forcing.31
Finally, the EU is moving to take a stricter, more judicialized approach to
enforcement. In response to implementation failures of some Member States throughout
the 1990s, the EP, the Council and the Commission have endorsed the Lamfalussy
reports' call for the Commission to strengthen enforcement by bringing more cases before
the ECJ via the infringement procedure. Private parties (i.e. shareholders) are increasing
their use of litigation to enforce securities regulations. American institutional investors in
Europe have begun employing their shareholder activism techniques, including
litigation.32 Shareholder activism has increased markedly in a number of Member States,
including France, the UK and Germany.33 In the UK, recent corporate collapses triggered
an unprecedented wave of shareholder class action lawsuits.34
In France, minority
shareholders litigation blocked Schneider Electric’s takeover of Legend in May 2001. In
30
European Parliament, Resolution on the Final report of the Committee of Wise Men on the regulation of
European Securities Markets, RSP/2001/2530, March 15, 2001.
31
Lannoo 2002:11-12.
32
Kissane 1997.
33
Ibid, at. 647-654. Also see Europe's Shareholders: To the Barricades. Business Week Online, March 19,
2001. Available at < http://www.businessweek.com >
Germany, where shareholder lawsuits have been nearly unheard of, shareholder groups
such as the German Association for the Protection of Small Shareholders and hundreds of
individual shareholders have filed suits against companies whom they accuse of issuing
misleading performance information.35
Environmental Regulation
In the area of environmental protection, the Commission frequently declares its
commitment to flexible, cooperative policy instruments and has issued a number of
directives that aim to increase regulatory flexibility.
However, most EU directives
continue to include detailed substantive and procedural requirements, fix rigid deadlines,
and many create rights that individuals may later rely on in court. When existing EU
environmental laws were amended during the 1990s, their strict, non-discretionary
approach was left in place.36 Most environmental directives adopted in the 1990s still
take an inflexible, command-and-control approach.37
The European Commission
consistently brings cases against member state governments for infringements of EU
environmental directives.
Even where directives appear to grant Member States
considerable discretion as, for instance, in the designation of bathing waters or bird
protection areas, the Commission and ECJ have acted aggressively to restrict Member
State discretion. Not only has the Commission challenged member states on substantive
violations, it has also forced member states to adopt more inflexible, legally binding
34
Eaglesham, Jean. 2001. Agitating for Class Action: Taking After America - Shareholder Litigation.
Financial Times, October 15, 2001, p.22.
35
Benoit, Bertrand. 2001. Survey - Europe Reinvented: Tighter rules for Europe's Nasdaq after a bad year.
Financial Times, Jan. 26, p.6; Benoit, Bertrand. Germany's courts chase after its companies. Financial
Times, November 27 , 2001, p.18
36
Jordan, Wurzel and Zito 2001.
37
Rittberger and Richardson 2001.
instruments to implement EU law. For instance, in a series of well-known cases, the ECJ
has forced Member States such as Germany to replace administrative circulars with
binding legally enforceable instruments as a means of implementation. Recently, the
Commission has started to impose penalty payments (under Art. 228) on Member States
that fail to comply with ECJ judgments. Through such enforcement action mechanisms,
the EU has forced significant shifts in the selection of policy instruments and policy
styles in many Member States.
In addition to enforcement actions brought by the Commission, the EU is creating
both greater opportunities and greater incentives for private enforcement of
environmental law. Many EU environmental directives create rights for individuals.
These include substantive rights, such as right to specified levels of environmental
quality in water or air, and procedural rights, such as the right to be consulted in
environmental impact assessments, or the right of access to information on the
environment. When Community Directives have been transposed properly into national
law, they are indistinguishable from purely national laws, and private parties can simply
defend their rights under these laws before national courts as they would any other right.
Even where national governments have failed to properly transpose EU directives,
individuals can rely on the doctrines of direct effect and supremacy of Community law to
defend their rights under Community law before national courts. National courts may
rule on these cases directly, or they may refer the cases the ECJ via the preliminary ruling
procedure (Art. 234 (ex Art. 177)). There are no comprehensive EU-wide statistics on
environmental litigation rates across the Member States; however, given the dominance
of EU environmental law (relative to purely national environmental law) and given the
abundance of justiciable rights in EU environmental law, EU environmental law has
clearly increased opportunities for environmental litigation before national courts. As for
references to the ECJ, as of 1999 only forty-six references for preliminary rulings in
environmental cases had been sent to the ECJ.38 Though the pace of referrals from
national courts accelerated in the late 1990s and has started to play an important role in
areas such as nature conservation policy,39 overall the impact of the preliminary ruling
procedure on EU environmental policy remains limited. One important reason for the
infrequency of such cases is that many Member State legal systems maintain restrictions
on standing that prevent environmental NGOs from bringing suits before national
courts.40
Recent Commission initiatives and developments in European law promise to
strengthen further the incentives and opportunities for private parties to initiate litigation.
In the mid-1990s, the Commission and the European Parliament began pressuring
Member States to harmonize their national rules on access of private parties to national
courts.41
In 1998, EU Member States and the EU itself signed the UN Aarhus
Convention, which includes a set of commitments concerning access to justice in
environmental policy making.
The Commission and Member State environmental
inspectorates have interpreted them to demand that environmental NGOs have at least
some opportunity to challenge administrative decisions in the public interest. 42
The
ECJ's case law concerning the principle of state liability has created the potential for
environmental plaintiffs to sue member states for damages they suffer due to the non-
38
Somsen 2000.
Cichowski 2001.
40
Somsen 2000; IMPEL 2000.
39
implementation of environmental law.
In a series of rulings beginning with
Francovich,43 the ECJ has developed a doctrine of state liability that provides that under
certain conditions Member States can be held liable for damages suffered by individuals
as a result of the Member State’s failure to implement Community law. Though this
principle has yet to be applied to environmental directives, considering the criteria for
state liability, it is likely that individuals may in the future bring such damage claims.
Moreover, the mere potential for such suits is likely to have an impact on states’
implementation practices. Beyond these general principles of state liability, there has
been an increase in the potential for environmental liability claims. At the national level,
there has already been a marked trend to broaden the scope of environmental liability.44
At the EU level, there is an ongoing discussion about adopting environmental liability
rules on a Community wide basis.45
The EU has developed an inflexible, adversarial and judicialized approach to
environmental regulation largely as a result of the institutional structure of the EU. The
EU is characterized by fragmentation of power at the center. Power is divided between
two legislative bodies (the Council and the Parliament), an executive that also has the
power to propose legislation (the Commission) and a highly independent judiciary (the
ECJ). The Council's (and increasingly the Parliament's) distrust of the Commission, their
mutual distrust of the Member State administrations, and the Member States’ distrust of
each other all encourage the drafting of detailed directives and regulations that can later
41
European Commission 1996. Communication from the Commission: Implementing Community
Environmental Law. COM(96) 500 final.
42
IMPEL 2000: 16, 160-163.
43
Joined cases C-6/90 and C-9/90, Francovich and Others v. Italy [1991] ECR I-5357.
44
Betlem and Faure 1998.
45
European Commission (2000) White Paper on Environmental Liability. COM(2000) 66 final; Michael
Mann (2001) "Businesses may be liable for environment harm," Financial Times, Nov. 25.
be enforced by the ECJ. For instance, the Parliament's distrust of Member State
administrations helps explain its opposition to the use of voluntary environmental
agreements as instruments of policy implementation and its demand for transparent,
legally binding measures. The fragmentation of power in Brussels safeguards the ECJ
against political attacks and emboldens it to play an active role in the regulatory process.
Products liability law in the EU
Traditionally, plaintiffs in EU Member States could make product liability claims under
general principles of civil law, such as breach of contract or tort, which generally
required proof of negligence or intentionality.46 A variety of legal rules and institutions,
such as the absence of contingency fee arrangements, class actions and punitive damages,
deterred products liability litigation. As a result of the high burden of proof and various
institutional impediments product liability litigation was extremely uncommon.
In the wake of the thalidomide tragedy of the early 1960s, national governments
across the EU increased their efforts to protect consumers from unsafe products. The
Commission recognized that differences in the emerging national product safety
standards and product liability regimes could distort the single market. The threat posed
to the single market gave the European Commission a clear rationale for and a strong
incentive to harmonize product safety regulations and products liability law at the
European level.47 Moreover, the Commission was sensitive to critiques that the EU
served the interests of big business, and it was eager to adopt consumer friendly
46
47
Hodges 2000; Spacone 2000.
Hodges 2000: 171-177.
policies.48 The Commission saw the establishment of EU products liability law as a
means to protect consumers in an increasingly open market and was eager to claim the
political credit for doing so. Given the EU's small budget and staff, using product
liability law to protect consumers had the added advantage that it did not require the
establishment of a regulatory bureaucracy.
Instead, consumers could be legally
empowered to protect their own interests in court.
In 1974, the Commission proposed a directive establishing strict liability for
defective products.49
After being blocked by some Member States for a decade, a
compromise was reached and the Council adopted the Product Liability Directive in
1985.50 The Directive reflected many legal concepts of U.S. products liability law,
including the doctrines of strict liability, joint and several liability, and expansive
definitions of liable parties and the notion of a “defect”. However, the Directive also
sought to avoid the perceived excesses of the U.S. system. To satisfy those Member
States concerned about the negative impact of the directive on European manufacturers,
the Directive included a mandatory time limit on claims, optional provisions concerning
damage ceilings, the developmental risks defense and liability for primary, unprocessed
agricultural products. The Directive left questions of non-material damages, such as
psychological pain and suffering, and punitive damages entirely to the Member States.
Debate over the directive subsided after its passage but resurged in the wake of
the mad cow crisis. Initially, the EU adopted an amendment to the Directive mandating
strict liability for damages caused by primary agricultural products.
48
49
The European
Stapleton 2002:1231.
Commission Proposal for a Directive on Strict Liability for Defective Products, 1974 O.J. (C 241).
Parliament went further, calling for a substantial revision of the Directive with the aim of
strengthening consumer protection.51 The Commission responded by issuing a Green
Paper on a series of possible revisions that might serve to enhance consumer protection.52
Many of these revisions drew on concepts developed in the American case law on
product liability, such as rules on discovery, market share liability, reporting
requirements on producers that face liability claims, non-material damages and class
action suits.
The Commission eventually concluded that in light of the ongoing
uncertainty regarding the impact of the Directive, it would be premature to make any
amendments.53
Beginning with the adoption of the Product Liability Directive in 1985, the EU
has moved the substance of EU products liability law much closer to that found in the
U.S. Despite the adoption of the much of the substance of American products liability
law, the practice of products liability law in the EU seems not to have been Americanized
significantly. The dearth of data makes it difficult to assess the impact of the directive,
but clearly the Product Liability Directive has not stimulated the flood of litigation, the
astronomical damage awards, and the unpredictability associated with the American
system. While it is quite possible that the directive has led to an increase in claims
leading to out-of-court settlements, these settlements remain confidential. The European
Consumers' Organisation (BEUC) reports that it has not observed an increase in smaller
product liability claims, that it is unaware of any major multi-party actions or large
50
Council Directive on the Approximation of the Laws, Regulations and Administrative Provisions of the
Member States Concerning Liability for Defective Products, Council Directive 85/374, 1985 O.J.
(L210/29).
51
Opinion of 5.11.98 (O.J. No. C 359 of 23.11.98).
52
Green Paper on Liability for defective products, COM (1999) 396 final, 28.07.1999.
53
Report from the Commission on the Application of Directive 85/374 on Liability for Defective Products
COM (2000) 893, 31.1.2001.
damage awards to consumers under the directive and that there are still few reported
cases based on new standards established by the Directive.54
The institutional
impediments and financial disincentives we outlined above continue to discourage
product liability litigation.
However, recent Commission proposals to encourage
“effective access to justice” by strengthening legal aid across the EU and introducing a
“loser pays” system with possible exceptions for weaker parties in consumer disputes
promise to encourage litigation, should they be adopted.55
Civil Rights: anti-discrimination policies
The EU lacks sufficient fiscal resources to engage in significant distributive or
redistributive social policies.
Eager to appeal to citizens by expanding the 'social
dimension' of the EU but unable to pursue social policies that rely on fiscal transfers, the
EU has focused on establishing social regulations that create rights for individuals.56 To
date, the EU has had the greatest impact in the area of equal treatment of the sexes, one of
the few areas of anti-discrimination law enshrined in the Treaties since the founding of
the Communities (in Article 119, Treaty of Rome).
EU Treaties and secondary
legislation have established a number of legally enforceable rights designed to ensure
equal treatment of the sexes, and ECJ interpretations of these Treaty provisions and
directives has served to expand their scope significantly. As has been well-documented,
women's rights organizations have employed litigation strategies whereby they use
54
BEUC 2000.
Commission proposal for a Council Directive to improve access to justice in cross-border disputes by
establishing minimum common rules relating to legal aid and other financial aspects of civil proceedings
COM(2002) 13 final.
56
Majone 1993.
55
lawsuits brought by individuals to pressure their governments to equalize treatment of
women in areas ranging from pay, to pregnancy, to pensions, to part time work.57
More recently, other groups that suffer from discrimination have mobilized to
pursue a rights litigation strategy similar to that pioneered by women's rights groups. For
instance, in the mid-1990s, disability rights groups and NGOs representing racial and
ethnic minorities, gays and lesbians and religious minorities lobbied for the inclusion of
nondiscrimination rights in the Amsterdam Treaty. 58 A list of non-discrimination rights
was included in Article 13 of the Treaty of Amsterdam (rights concerning discrimination
based on sex, race/ethnicity, religion/belief, disability, age and sexual orientation). This
Treaty Provision was drafted explicitly to not create direct effect; 59 however, subsequent
secondary legislation on equal treatment has created directly effective provisions. The
EU directive on racial discrimination60 and the directive concerning discrimination
against persons with disabilities61 create new bases for anti-discrimination litigation. The
latter directive includes a "reasonable accommodation" requirement similar to that found
in the Americans with Disabilities Act (ADA) and includes a provision requiring Member
States to grant disabled persons standing to sue in cases of discrimination.
The EU's competence and the catalogue of EU anti-discrimination rights remains
limited. The decision by the Member State governments at Nice not to fully incorporate
the Charter of Fundamental Rights into the Treaties clearly reduces the prospects for
societal actors to bring rights based litigation for the time being. 62 Emerging research
emphasizes that EU rights produce less litigation and have less impact in member states
57
See, for instance, Alter and Vargas 2000; Cichowski 2001.
Burke 2002.
59
Flynn 1999:1132.
60
Council Directive 2000/43/EC of 29 June 2000 OJ L 180/22; Bell 2002.
58
that limit access to the courts and provide little legal aid.63 To date, the Commission's
effort to promote harmonization of conditions for access to justice in the Member States
have met with limited success. However, looking to the future, it seems quite likely that
the role of anti-discrimination litigation will increase.
The EU has a powerful,
independent and expanding judicial branch, which has already shown a willingness to
expand the scope of EU rights, in areas such as gender equality. In many issue areas,
litigation brought by individuals via the preliminary ruling procedure to protect their
rights under European law has played a vital role in expanding the EU's power vis-à-vis
member state governments.64
Moreover, the doctrine of state liability may serve as a
powerful motivator for some forms of rights litigation in the EU.65
Finally, the
Convention on the Future of Europe is set to recommend the incorporation of the Charter
of Fundamental Rights into any new EU constitution that would be created at the next
Intergovernmental Conference (IGC). If the Charter finally provides citizen's with firmer
legal ground for anti-discrimination claims, then we are likely to see a proliferation of
rights litigation.
Overarching Developments
A number of overarching developments, which affect a wide-range of policy areas,
evidence the shift toward adversarial legalism in the EU.
First, the European
Commission has taken an adversarial, legalistic approach to policy enforcement and the
ECJ has supported this approach.
61
The European Commission has strengthened its
Directive 2000/78/EC OJ L 303/16.
Flynn 1999:1132; de Búrca 1995.
63
Conant 2001; Harlow 1999; Caporaso and Jupille 2001; Alter and Vargas 2000.
64
Alter 2001; Mattli and Slaughter 1998; Stone Sweet and Caporaso 1998; Alter and Vargas 2000.
62
enforcement activities radically since the mid-1980s. The Commission has not only
increased the number of infringement procedures it brings, it has expanded the forms of
non-compliance regarding which it pursues cases. Earlier, the Commission only pursued
infringement cases when Member States blatantly failed to transpose directives.
However, during the 1980s the Commission began to bring cases routinely when Member
States failed to implement directives in practice. At Maastricht, the Member States
granted the Commission the authority to request that the ECJ impose penalty payments
on Member States that failed to comply with ECJ rulings in infringement cases. Since
1997, the Commission has initiated dozens of these cases, imposing its first penalty
payments on a Member State in 2000. The ECJ has taken a strict view in infringement
cases, finding Member States to be in non-compliance even in cases where EU directives
appeared to provide Member States with great discretion, as for instance in a number of
the environmental policy cases discussed below.
Second, recognizing the limits on the Commission's capacity to enforce EU law
single handedly, EU institutions consistently encouraged the empowerment of private
actors to enforce EU law through the courts. In particular, as the legislative power of the
European Parliament has increased, it has emerged as a champion of private enforcement.
The ECJ too has worked to empower litigants, most famously through its development of
the doctrines of supremacy and direct effect and most recently through its development of
the doctrine of state liability in the 1990s.
Third, the European legal services industry has undergone a dramatic
transformation, shifting toward forms of organization and practice that resemble those
found in America. Between 1985 and 1999 the number of offices of American law firms
65
Tallberg 2000a.
in western Europe more than doubled and the number of lawyers they employ has
increased nearly six-fold, from 394 to 2236.66 In addition, American accounting firms
have become dominant players in some legal services markets, such as France's, where
they are authorized to provide legal services.67
The influx of American firms has helped spark a wholesale reorganization of the
legal profession in Europe. American firms had the size, forms of organization and sets
of skills necessary to provide a wide range of services that appealed to corporate clients,
and which most European firms could not match.
American firms had specialized
experience in particular legal fields, such as mergers and acquisitions and securities
regulation, which became vital in the increasingly liberalized market.68 Faced with
pressure from these formidable competitors, European firms have adopted many of the
legal techniques used by American firms and have increased their size significantly in
recent years, either through expansions, mergers, raids of other firms for partners and
practice groups, or the formation of global alliances with firms in other countries.69
Through such changes in the legal services industry, private parties, at least in the
corporate sector, now have access to law firms that are oriented to providing American
style legal services.
V. Conclusion
66
Kelemen and Sibbitt 2002.
Trubek et al. 1994: 434-435.
68
Snider, Anna. 1999. U.S Firms Leading in Eurodeals. New York Law Journal, November 19.
69
Tagliabue, John. 2000. International Merger Wave Catches Europe's Law Firms. New York Times,
August 4, 2000; The Battle of the Atlantic, Economist, February 26-March 3, 2000; Harvey, Jan. 2002. The
French Connections. Legal Week Global, May 15, 2002 (Lexis-Nexis News library); The Global 100, The
American Lawyer, November 2001, pp.89-93; Eaglesham, Jean. 2000. Law firms link up to work across
EU borders. Financial Times, July 18, 2000.
67
Many Europeans view American legal and regulatory style with a mixture of amusement
and horror.
While European policymakers may favor some attributes of American
regulatory style, such as the emphasis on transparency, they are not seeking to emulate
the US approach in a broader sense. Indeed, most would view such a development as an
abomination. The Rhetoric emanating from Brussels has emphasized flexible approaches
to regulation and governance, relying on tools such as framework laws, voluntary
agreements, various forms of self-regulation. Nevertheless, across a broad range of policy
areas, the fragmented structure of EU institutions coupled with the liberalization of
markets has encouraged a shift to adversarial legalism.
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