2001 MAIANI BIEBER Book Review Cassese et al - CMLR

Common Market Law Review 38: 805–824, 2001.

c 2001 Kluwer Law International. Printed in the Netherlands.
BOOK REVIEWS
A. Cassese, C. Lalumière, P. Leuprecht and M. Robinson, Leading by Example: A Human

Rights Agenda for the European Union for the Year 2000. Agenda of the Comité des Sages and
Final Project Report. Florence: Academy of Law, European University Institute, 1998. 125
pages.
On the occasion of the 50th anniversary of the Universal Declaration of Human Rights, the
Academy of European Law at the EUI undertook a large-scale research project intended to
provide a thorough critical analysis of the EU’s human rights-related activities and to formulate
specific proposals for their improvement.
The project, directed by Alston and funded by the EC Commission, involved a large number
of influential scholars and practitioners (Jacqué, Weiler, Clapham, Gaja, Rosas and Bradley
are but a few of them), who prepared reports on an extremely wide range of human rights
issues. Alston and Weiler synthesized many of these contributions in a final Report, on the
basis of which a Comité des Sages consisting of Judge Cassese, mme. Lalumière, Professor
Leuprecht and Mrs Robinson adopted a “Human Rights Agenda for the European Union for
the Year 2000”. This remarkable collective effort eventually led to the publication of two
distinct books: The EU and Human Rights (reviewed separately in this Review, Oct. 2000) and
Leading by Example. While the former is the collection of almost all of the papers written for
the research project and represents (in the words of its editor) the “most wide-ranging survey
yet to be undertaken of the role of the European Union in relation to human rights”, Leading by
Example, which includes the Report and the Agenda, is a very concise publication principally
intended to illustrate the vast reform plan proposed by the Sages to the European institutions.
The analysis and propositions developed in Leading by Example all rest on the basic
assumption, shared by the Sages and by the Rapporteurs, that the EU’s existing policies in the
field of human rights are no longer adequate to respond to its commitment and to its duties
in the field of human rights. The fragmentation of responsibilities between a large number
of entities, the lack of systematic training of EU officials on the increasingly complex matter
of human rights, the lack of a clear legal framework for the funding of human rights-related
activities and the absence of a systematic information base for the Union’s institutions are some
of the factors described and analysed by the authors, and that render the Union’s approach to
human rights inconsistent and fragmentary.
The EU’s strategy of protection of human rights within its own borders is also criticized, in
that it relies almost exclusively on judicial protection. Alston and Weiler effectually demon-
strate that while it is a cornerstone of any human rights regime, judicial protection of human
rights is not sufficient. The Commission, the Council and the European Parliament are therefore
called to play their role fully by promoting respect for fundamental rights, and by mainstream-
ing human rights considerations in each and every legislative initiative likely to concern them.
This last point perfectly illustrates the most distinctive feature of the book under review:
while the classic elements of a work on the protection of human rights within the European
legal order (e.g. a review of the ECJ case law starting from Stauder and Internationale Han-
delsgesellshaft) are almost utterly absent, the focus of the study is squarely placed on the role
806 Book reviews CML Rev. 2001
of the political institutions and of those agencies whose activities are related to human rights,
as well as on the effectiveness of their action. Accordingly, the proposed reforms concern
the internal structure of these institutions as well as the informational, budgetary and human
resources of which they dispose for addressing human rights issues. To mention but two of the
proposed reforms, it is suggested that in the next Commission there should be a specialized
Human Rights Commissioner, and that the information input of the Union’s institutions should
be strengthened and made consistent e.g. by means of human rights annual surveys to be estab-
lished by the Commission and the Council on the one hand, and by the Vienna Monitoring
Agency on the other.
A noteworthy quality common to all of the proposed reforms is their realism: particular
attention is devoted to their legal and political feasibility, in the sense that they do not imply
Treaty amendments, radical changes in the allocation of responsibilities and powers among
the institutions nor major additional expenditures.
Leading by Example has, in our view, a number of qualities that make it recommendable
reading: (i) its focus is almost exclusively on institutional matters; while this may constitute
in the eye of some readers its principal limitation, we think that this makes of it a very original
contribution, dealing with issues which are seldom specifically taken into consideration but
which are of crucial importance; (ii) despite its relatively small dimension, it provides the
reader with a fairly complete, albeit very concise, description and analysis; (iii) we personally
find that the book is very well written and expresses positions and ideas of great interest.
One might fear that this book may be overtaken by events. Human rights law is in fact
undergoing a constant process of evolution, and this is particularly true of EU human rights
law: in particular, in the near future the interest of legal scholars will most likely be centred on
the new EU Charter of Fundamental Rights. Will Leading by Example become an “old book”
then? In our opinion this is not be the case.
In the first place, the analysis and proposals developed therein are focused on institutional
and legal issues which will not be significantly affected by the adoption of the Charter. On
the contrary, the Charter, whatever its legal significance, will have to be complemented by the
appropriate organizational reforms if the EU is to lay down the foundations of a “coherent,
balanced, substantive and professional” human rights policy. Secondly, it will be interesting
to see if and to what extent the European institutions achieve the suggested reforms. In this
context, the book will constitute a precious tool for understanding and appraising the future
evolution of the institutional context of the EU’s human rights policies.
Finally, even though the Charter is the creation of the Convention, a body in which the
authors of Leading by Example were not directly involved, no future discussion concerning
fundamental rights should ignore the preparatory intellectual input of which this publication
proves a fine and lasting example.
Francesco Maiani and Roland Bieber

Lausanne
A. Ward, Judicial review and rights of private parties in EC Law. Oxford: Oxford University
Press, 2000. 368 pages. GBP 60.
Angela Ward’s aim is to examine critically the concepts of “individual rights” and “effective
judicial protection” in the European Community legal order. More specifically, she wants to
assess the extent to which different standards are applied when reviewing Member States’
decisions as opposed to acts of Community institutions. To this end, the case law of the
European Court of Justice and of the Court of First Instance concerning judicial protection
against Member States and Community institutions is analysed in detail.
Book reviews 807
After a short introduction, chapter two tackles the evolution of the case law on national
remedies against decisions taken by Member States in breach of Community law. The analysis
extends to the ECJ ruling in Factortame I. Ward shows how the original stance recognizing
(almost) unlimited discretion to the Member States in the procedural sphere has been slowly
left to the margins. Centre stage has been taken by the principle of effective judicial protection
of Community law rights. This principle encompasses two rules: first, national procedural
rules applied to claims rooted in Community law may not be less favourable than those applied
to comparable purely national actions; second, national procedural rules shall not render
impossible or exceedingly difficult the vindication of Community law rights. Throughout this
period the principle of effective judicial protection has been translated into a duty placed on
national courts not to apply domestic procedural provisions preventing private parties from
enjoying the rights they derive from Community law.
Chapter three, by far the longest in the book, examines the metamorphosis of the effective
judicial protection principle into an instrument placing national courts under a positive duty
to devise new procedural rules necessary to ensure that private parties can indeed benefit from
the rights bestowed on them by Community law. The well-known case law concerning interim
relief and damages liability is subject to a fresh analysis, as is the much less well-established
jurisprudence concerning time limits and related problems (such as the power of national
courts to raise Community law arguments of their own motion). The last part of the chapter is
devoted to showing how even the non-discrimination limb of the effective judicial protection
principle has come to play a growing role in shaping the national remedies landscape. Chapter
four is memorable in that it confirms that not every English-based academic is biased against
judicial creativity on the part of the ECJ. Ward is a bold spirit. Here as well as elsewhere
in the book she advocates a further evolution of the dynamic case law concerning effective
judicial protection. This position does not hinder her from pointing to the weaknesses in the
rationale behind the rights discourse so often employed with reference to judicial protection:
in particular, the much lighter emphasis placed on rights when it comes to reviewing decisions
taken by Community institutions.
Before coming to the latter theme, chapter five delves into the technicalities and evolving
patterns concerning the enforcement of directives in national law. Ward is quick to underline
how, in the past decade, the ECJ – while firmly stickling to the theory precluding directives
from having so-called horizontal effect – has in fact widened the scope of application of
unimplemented or wrongly implemented directives in litigation between private parties. An
ever widening reading of what constitutes an emanation of the State, and Community-friendly
interpretation are some instances of the ingenuity shown by the ECJ in this field.
Chapter six deals with actions for annulment under Article 230 (ex 173) EC and with
interim relief. Topics previously considered in the field of effective judicial protection against
Member States are now analysed with reference to the case law originated from actions against
Community institutions. The ensuing comparison shows the ECJ applying less strict standards
in reviewing decisions taken by the institutions. Particularly unsatisfactory is the case law
severely limiting the standing of private parties to bring actions under Art. 230.
The preliminary ruling under Article 234 (ex 177) is analysed in the following chapter.
Ward laments the fact that national courts, while forbidden to hold a Community decision
invalid themselves, are allowed to hold it valid without recourse to the ECJ. She further points
out that collateral actions for validity rarely result in a declaration of nullity. Chapter 8 deals
with damages liability. This is another field where private actions have met with very limited
success. The shortcomings of the somewhat fudged rule on the exhaustion of local remedies
are exposed. So are the very strict standards applied to the liability of Community institutions
compared to those imposed upon Member States.
The conclusions offer a useful concise résumé of the book’s findings and close with bold
suggestions for reform in the field of judicial protection. An underlying assumption of the book
is the existence of a federal or quasi-federal European legal order. Actions against Member
States and Community institutions are but two sides of one and the same coin. Coherence
must be brought to the European system of judicial review, possible on the lines of accrued
judicial protection of individual rights. Indeed, individual rights deserve to be taken seriously
quite independently from which national or European institution is found to breach them.
Individual rights cannot be treated like a clever marketing tool to force Member States into
obedience, and to be then forgotten when decisions by Community institutions are involved.
This position deserves to be shared, and not only by human rights enthusiasts and European
integration fans. The book is full of very good examples showing that at the present stage
of European integration no other position is tenable, and this due to strict reasons of legal
technique. Directives and other Community law instruments are a very important part of the
law applicable to private parties in everyday transactions. Affected parties must be given the
chance to challenge them in front of the Community judicature, especially as the cumbersome
Community legislative procedures are still far from being transformed into real democratic
processes. Cases like TWD Deggendorf and Stichting Greenpeace, to name but a few, show
the compelling need for accurately streamlining and co-ordinating the remedies available at
Community and national level in order to avoid instances of déni de justice. Joint national
and Community action is more and more widespread. So is joint national and Community
misconduct. The same misconduct cannot be artificially severed in order to apply different
legal standards. Therefore, standards of review and liability must be the same for Member
States and Community institutions.
The author pleads for reform of the Treaties but she also shows that important results could
be achieved by the case law, if only the ECJ decided to read the applicable Treaty provision
creatively. Some remarkable results achieved so far concerning Member States were the result
of judicial creative thinking, all the easier to accept with reference to judicial protection against
Community institutions.
Relaxing the strict approach to standing in proceedings under Article 230, placing onerous
conditions to damages actions only in those cases where Community institutions really enjoy
wide margins of discretion, and more generally reducing instances in which private litigants
are sent back to national courts are just some of those capital reforms which could be easily
attained by some well calibrated judgements.
Roberto Caranta
Turin
K. Lenaerts, D. Arts and R. Bray (Ed.), Procedural law of the EU. London: Sweet & Maxwell,
1999. 539 pages. GPB 30. ISBN 0-421-65170-9.
This is a fully revised English version of the authors’ Europees Procesrecht. Despite its broad
title, the book does not aim to cover every aspect of procedural law: it focuses on the most
important procedural rules applicable to proceedings before the Court of Justice and the Court
of First Instance. In dealing with those proceedings, the authors have not confined themselves
to purely procedural rules. Thus, for example, they consider not only the mechanisms by which
applications for annulment or damages may be made, but also the grounds for annulment or
the imposition of liability.
This is a basically doctrinal work covering the judicial institutions of the European Union:
it deals with hard law of the black-letter variety. The main concern is the exposition of the
law as it now stands, by reference to relevant case law. A number of existing treatises cover
more or less the same ground, and most textbooks of the survey variety include reasonably
extensive coverage of the various heads of the Courts jurisdiction. Nevertheless, this book
has features which differentiate it from what is already on offer. It is fully up-to-date, and it
Book reviews 809
sets high scholarly standards in the comprehensiveness of its treatment of the case law, and in
the breadth of its reference to secondary literature in languages other than English, especially
French and German.
Because of these merits, Procedural Law of the European Union will be a useful starting
point for academics and practitioners who wish to research a particular issue, whether they
seek a quick answer from the text or a more extensive set of references to follow up. The only
minor quibble in this regard is that the index lacks detail. For example, its entry for arbitration
directs the reader only to exposition of the Court’s jurisdiction under so-called arbitration
clauses (Art. 238 (ex 181) EC), and not to the rather more important question of how private
arbitral tribunals are accommodated under Article 234 (ex 177) EC although the book contains
a useful discussion of this problem (pp. 23–24).
A second virtue of this book is that it distils fundamental rules and principles from large
numbers of cases, stating them succinctly and clearly. There is no waffle. The attempt to show
that a mass of cases can be understood in terms of a relatively small number of underlying
considerations is frequently successful. So the book is much more than a collection and recital
of cases: it undertakes to systematize and synthesize those cases in a rigorous fashion, and it
often succeeds. Sometimes the discussion is extremely abbreviated (for example, State liability
in damages for breach of Community law is covered in just four pages, and the grounds for
annulment in fifteen). Even then, however, it offers a useful and accurate introduction, with
extensive further references given in footnotes.
Of course, there are limitations in the doctrinal approach taken. Law in books is, notoriously,
not necessarily the same thing as law in action. The famous CILFIT formulation of the
circumstances in which national courts that would otherwise be obliged to refer a question to
the Court of Justice may refrain from doing so is, in the case law of itself, very strict and so
it is presented here. But whether it is in fact strictly followed is a question requiring a careful
analysis of the practice of national courts, something these authors do not attempt. Moreover,
in sticking closely to their chosen task of exposition, the authors have refrained from any very
detailed criticism of the Courts’ jurisprudence, or from evaluating possible reforms. Finally,
the authors’ preference when it comes to explaining why the Court reaches a particular result
is for an explanation in terms of doctrinal principle; they choose not to consider possible
explanations in terms of pragmatic or policy-driven factors.
The authors should not necessarily be criticized for having chosen to keep their work within
relatively narrow limits. It is not especially difficult, nor necessarily particularly illuminating,
to pick holes in any large body of case law. And it may well be that some commentators are
too quick to explain cases in terms of policy agendas or result selection (a mode of explanation
which may not, itself, be altogether innocent of political motivation). The task of attempting
a synthesis on the assumption that the Court is doing what it claims to be doing, consistently
applying general principles and legal logic to resolve particular cases, is a necessary one.
The thoughtful reader, however, will want to consider how well the resulting structure
holds up, and how it compares to alternative explanations. Although the footnotes point to
relevant literature, the text does not generally address this issue. One senses that the authors’
preference for explanations in terms of principle and legal logic is aware of a deliberate aim
to persuade the reader that such explanations are ultimately more satisfying and more fruitful
than alternatives couched in terms of expediency or policy, that Europe’s judges are not simply
robed bureaucrats. But the argument would be stronger if it were openly conducted.
For example, in addressing the admissibility of preliminary references, the discussion pro-
ceeds in terms of principle and draws both on early and recent cases. The message seems
to be that the Court has been reasonably consistent in the approach it takes to the admissib-
ility of references, its attitude firmly anchored in considerations of principle. That message
implicitly takes issue with a familiar story of how the Court, overwhelmed with work, took a
pragmatic decision to change its attitude to references, narrowing the goal-posts and changing
its approach from one of great leniency to relative strictness. It is a pity that the challenge
was not made more directly and explicitly. So, too, the account of the admissibility of actions
for annulment brought be individuals implicitly disagrees with those who perceive substantial
inconsistencies and tensions in the Court’s decisions. Instead, the case law is presented as
(in essence) capable of remarkably economical rational explanation (pp. 157–181). If this is
intended – as seems likely – to offer a positive defence of the Courts against accusations of
unprincipled result-selection, it would have been instructive to see the contrary arguments
expressly addressed.
Even when it comes to evaluating the case law purely from a doctrinal standpoint (in terms
of internal coherence, logic, clarity of exposition, consistency with principle and so forth) the
book tends to be muted, even somewhat bland. A somewhat greater willingness to recognize
that even the Court of Justice and the Court of First Instance do not always get it right, and
to separate what is best in the Court’s case law from what is obscure or suspect, would have
added to the book’s value and interest. Because of their official positions, both authors may
have felt the need (even with the usual disclaimer) to avoid saying anything too controversial
or trenchant. One must respect this point of view, and bear in mind the countervailing benefit
which the authors’ practical experience brings to the book. Even so, one hopes that the authors
might feel able to take a slightly more critical line where that is warranted in any future edition.
In short, this book makes a valuable contribution to the doctrinal synthesis of relevant case
law on the jurisdiction of the European Union’s courts. Its coverage makes it a useful research
tool for the practitioner or academic (and for the advanced student). But it is more than a
research tool, because it offers a defence of the jurisprudence that aims to show how it is
explicable in terms of general principle. Good as it already is, however, the book would be
even better if the authors felt freer to advance that defence explicitly, and to take somewhat
more definite positions on controversial issues.
Paul Stanley
London
S. Grundmann, Systembildung und Systemlücken in Kerngebieten des Europäischen Privatrechts.

Tübingen: Mohr Siebeck, 2000. 724 pages. DM 198.
The book under review includes 28 articles altogether. These articles originated in a lecture
cycle given in the summer semester 1998 and the winter semester 1998/99 at the Martin-Luther
University in Halle-Wittenberg. The aim of the lecture cycle was the discussion of concepts,
regulation and possible over-regulation, as well as unsolved problems in the field of civil law of
the European single market. The lecture cycle and the present book intend to contribute to the
systematization of Community private law in the main fields of company law, labour law and
law of obligations. This aim has been met excellently. In accordance with the themes already
mentioned, the book is divided into four main chapters. An initial chapter on certain framework
concepts of market and integration is followed by chapters referring to company law, labour
law and law of obligations. Some excellent academics and practitioners, ranking among the
leading representatives in the field in Germany, were invited. This already reveals an almost
inevitable deficiency in the lecture cycle: authors from other systems of laws outside Germany
are missing completely. On the other hand, the economic perspective has been considered in
each chapter.
In an introduction, not part of the lecture cycle, Grundmann, the editor, examines the subject
“Systembildung im Europäischen Privatrecht” based on the main fields of harmonization by
the European Community, i.e. company law, labour law and law of obligations. He takes a first
stock of the various lectures given and the discussions that followed, also discussing many of
the subsequent articles, some of them critically. The first part of the book, on the framework
Book reviews 811
concepts, contains essays by Mestmäcker, Kerber and Kirchner. From different points of view,
the authors take up the basic question of balance between unity and variety of laws in a common
market, as well as the problem of competition between legal orders.
The book’s next part is devoted to European company law. Lutter depicts concepts, successes
and future tasks of European harmonization of company law. Schmidt and Grohs deal with
this subject with a view to the economy and Groß with a view to practice. The next lectures
on company law focus on some important specific issues: questions of maintenance of capital
are covered by Hirte and Henze, structural measurements – in particular mergers and division
– are covered by Hommelhoff and Riesenhuber in a joint article. Accounting is dealt with
by Großfeld; Hopt and Rudolph cover questions of the law of capital market and banking
supervision. European labour law, already structured by judgment of the European Court of
Justice better than any other field of European private law is dealt with in contributions by
Junker (individual labour law), Birk (collective labour law – in particular the European works
council) and Schellhaaß (economic perspectives).
The next 12 articles are devoted to the law of obligations. A main focus is set on the law
of consumer protection. In introductory articles, Kilian and Troberg look for components and
gaps in the still fragmented European law of obligations (the latter by citing financial ser-
vices). Reich, Martinek and Schäfer deal with aims and protective instruments of the European
legislation concerning the law of contract for consumers (so-called one-sided business). In
doing so, especially Martinek and Schäfer found considerable overregulation, which could be
counterproductive (Martinek cites time-sharing-contracts as an example, and Schäfer from eco-
nomic perspective). Contracts between financial service providers and consumers are covered
by Reifner, Schnyder and Gehrig. Schwintowski’s fundamental criticism on judgments of the
ECJ referring to Article 28 EC leads to the subject of unfair competition and, with case law of
the ECJ on free movement of goods in the European single market, picks up a classic subject
of Community law. The article on European law of obligations ends with contributions on
so-called bilateral commercial contracts: Müller-Graff focuses on bilateral commercial con-
tracts in Community anti-trust law. Stein examines the possibilities of system formation by
private autonomous legislation in the European single market. Scherer writes on agreements
in the field of telecommunication. The discussions following the respective lectures have been
summarized in reports placed after the respective articles.
This book gives an excellent picture of the present state of European private law created by
the Community, and is also a valuable basis for further discussions of system formation in this
field of law, which is still developing. The book should be consulted by everybody who has to
deal with the European private law – legislation, application of law or research. However, it
should be discussed in the whole Community. It is therefore advisable to translate the book as
soon as possible into further official languages of the Community.
Martin Franzen
Constance
C.A. Jones, Private enforcement of antitrust law in the EU, UK and USA. Oxford: Oxford
University Press, 1999. 263 pages. GBP 95. ISBN 0-19-826868-8.
This is an extremely timely book. It is a lucky coincidence that its publication followed shortly
the Commission’s White Paper of April 1999 on the modernization of EC antitrust policy. The
White Paper stresses – more than any other preceding policy statement of the Commission – the
importance of private action for the efficient enforcement of Community’s competition rules.
Read in this context, Jones’s scholarly monograph provides extremely interesting insights.
The author, a US law professor, delves into the systems of private enforcement of EC, UK
and US competition laws in a comparative way. In respect of the Community competition part,
this is one of the very few studies of that issue, although in the US there have been numerous
monographs on many aspects of private antitrust enforcement. This is not hard to understand,
since the ratio of private to public antitrust suits in the US ranges from 10:1 to 20:1 (p. 85). The
book admittedly is written with a common law flavour, using the US and UK legal systems as
paradigms, although this does not prejudice in any respect its readership.
The examination of the current system of EC competition enforcement begins with an
extensive reference to the fundamental principles of direct effect and supremacy and to their
bearing on EC competition law (ch. 5). Clearly, those two principles are the pillars, on which
private enforcement of EC antitrust rests. Indeed, it is stressed that “unless individuals are given
rights by the Treaty which they may protect notwithstanding contrary or absent provisions of
national law, the question of private enforcement of EC competition rules does not arise” (p.
47).
The author is very right to start from such premises, since private EC antitrust enforcement
is not only to be considered as a complement to public enforcement, which furthers the effect-
iveness and efficiency of the whole competition enforcement system and possibly addresses
enforcement gap concerns. It is also the only complete means (complaints apart) for private
parties and individuals to exercise rights guaranteed by the Treaty. Such rights, corresponding
to obligations imposed on undertakings by the Treaty competition provisions, would be a dead
letter, if they could not be pursued to their fullest extent. Thus, the exercise of those rights is
a question of general Community law. This “Treaty right” parameter of private EC antitrust
enforcement would mean that, under any economics oriented approach (p. 81), compensation
of victims of anti-competitive practices cannot be ignored as easily in Europe, as it could be
in the US.
The book then goes on to examine the bipolar system: Community rights – national remedies
(ch. 6). It should be noted here that the whole concept of remedies is more familiar to a common
lawyer than it normally is to civil lawyers. By the term remedies, common lawyers refer both
to causes of action (substance) and to actions themselves (procedure). Therefore, when one
refers to national remedies for the enforcement of Community law rights, one refers firstly
to substantive or civil remedies (i.e. causes of action of national substantive law: damages,
unjustified enrichment, etc.) and secondly to procedural remedies (i.e. actions in national
courts, interim relief, burden of proof questions, etc.). Jones’s lucid treatment of this duality
is extremely useful not just for EC competition law, but also for Community law in general.
His analysis extends from the reference to the two requirements that Community law attaches
to national remedies, equivalence or non-discrimination and adequacy or effectiveness, to the
more advanced Francovich and Factortame III/Brasserie du Pecheur case law.
A central issue is Jones’s view that there is a right under EC law allowing claims of
damages from undertakings which have violated Articles 81 and 82 EC, along the line of the
Francovich and Factortame III/Brasserie du Pecheur judgments. It is true that the recognition of
a Community right of damages in EC competition law is sometimes presented as a consequence
of that jurisprudence, and, indeed, it has been proposed in the past by A.G. Van Gerven in
Banks (Case C-128/92, H.J. Banks & Co. Ltd. v. British Coal Corporation, [1994] ECR I-1209).
However, there have been many doubts about such an approach because of the specificity of
State liability, as opposed to general individual civil liability, and also because Article 10 EC,
which has also been employed by the Court in order to justify a State’s liability for violation of
Community law, is addressed to Member States and to their organs and not to private parties
(see Ward, Judicial Review and the Rights of Private Parties in EC Law, reviewed supra, at p.
127).
There is also some difficulty in reconciling Jones’s approach with the specific case law of
the ECJ on the civil consequences of the prohibition in Articles 81 and 82 EC, which makes
clear that those consequences are a matter of national law. Thus, in Case C-230/96, Cabour SA
and Nold Distribution Automobile SA v. Arnor “SOCO” SARL, [1998] ECR I-2055, the Court
stressed that “it is for the national court to determine, in accordance with the relevant national
Book reviews 813
law, the extent and consequences, for the contractual relation as a whole, of the nullity of certain
contractual provisions by virtue of Article 85(2) [now 81(2)]” (para 51). (See also Case 319/82,
Societé de Vente des Ciments et Bétons de l’Est SA v. Kerpen & Kerpen GmbH und Co. KG,
[1983] ECR 4173, paras. 11–12). In Case C-242/95, GT-Link A/S v. De Danske Statsbaner
(DSB), [1997] ECR I-4449, dealing with Article 82 EC, again a reference was made to “the
domestic legal order of each Member State”, which was “to lay down the detailed procedural
rules . . . governing actions for safeguarding rights which individuals derive from the direct
effect of Article 86 [now 82] of the Treaty, provided that such rules are not less favourable than
those governing similar domestic actions and do not render virtually impossible or excessively
difficult the exercise of rights conferred by Community law” (para 27). Of course, these
pronouncements ought to be seen in the light of the Von Colson and Kamann case law (Case
14/83, [1984] ECR 1891), according to which sanctions for enforcement of Community law
must be able to guarantee real and effective judicial protection (in that case the award of only
negative Vertragsinteresse or Vertauensschaden, i.e. of reliance costs, which is one of the fine
doctrinal “delicacies” of German civil law, was dismissed by the ECJ because of its failure to
provide for a complete compensation). This can be very significant for the amount of antitrust
damages or even for the necessity of the granting of damages as such, as opposed to granting
other applicable remedies, if this is the only way to guarantee an effective judicial protection.
Notwithstanding these doubts, Jones’s analysis is a correct one, and the whole discourse
is likely to be given new impetus as a result of the modernization and decentralization of
EC antitrust enforcement that the Commission envisages and of the enhanced role of national
courts. It has been correctly noted by another commentator that “the Treaty competition rules
are unusually well suited to the development of a Community law principle that damage
shall be made good by parties responsible for causing loss in breach of the treaty”, since
“anti-competitive practices are more effectively controlled by opening up potential liability in
damages” (Weatherill, “Public interest litigation in EC competition law”, in Micklitz and Reich
(Eds.), Public Interest Litigation Before European Courts (Baden-Baden, Nomos, 1996), 185).
To that we must add that the competition provisions of the Treaty are unique in the respect that
they already provide for a serious “intrusion” of Community law in the sphere of private-civil
law, and that is the provision of Article 81(2) EC. A Community law based right to damages
would be only a small step further. In addition, the institutional and procedural autonomy of the
Member States could be well accommodated in continuing to provide for the overall (basically
procedural) framework for the exercise of such a Community cause of action, i.e. it can provide
for the courts, the procedural rules, the burden of proof rules, the limitation periods, the issues
of recovery of damages by parties in pari delicto, the causation, etc., subject, of course, to the
principles of non-discrimination and adequacy-effectiveness. In Jones’s words, the recognition
of a minimum standard for a right to damages governed by Community law would mean that
“domestic tort rules continue to co-exist more in their procedural aspects . . . than in their
substantive ones” (p. 148).
That such an approach is highly desirable is demonstrated by reference to the availability of
antitrust damages saga that has tarnished English (though not Scots) law for over 30 years. Out
of the author’s exhaustive report (chs. 9 to 12), one has a good example of how the labyrinth
of national legal provisions, can go as far as rendering the exercise of rights conferred by
Community law extremely difficult, to say the least. The particular difficulties experienced in
that respect in England are due, to a great extent, to the casuistic character of tortious liability
in common law, where there are separate torts, each of which is independent and protects
particular public or private interests. This conflicts with German law, where a more unified
tortious liability exists, and EC antitrust civil liability would be based on §823 para 2 of the civil
code (BGB), since the competition provisions of the Treaty would be considered a “protective
statute” (Schutzgesetz). French law, which possesses a general clause capturing every kind of
tortious liability (art. 1382 Code Civil), would accommodate such a tortious liability even more
easily.
In the examination of EC antitrust enforcement the author does not neglect to assess the sys-
tem of “enforcement pluralism” in Community competition law, where both the Commission
and national courts enforce the Treaty rules (ch. 8). Although the possibility of inconsistent
decisions is not dismissed, it clearly emerges that such dangers are rather over-estimated, if not
hypothetical, not only because of the existence of a final “arbiter”, which is the European Court
of Justice, but also because of the “narrow constructionism” that national courts would employ
in dealing with a pronouncement of the European Commission. Of course, the whole discourse
should now be seen in the light of the latest developments on the proposed modernization of
EC antitrust enforcement.
As far as the US system of private antitrust enforcement is concerned, the book stresses
the importance of some “prudential limitations” on private actions (chs. 13 to 15). These are,
according to the author, the natural consequence of the Damocles’s sword of treble damages
(p. 154). Thus, standing to sue and the ‘antitrust injury’ doctrine have both been employed by
US federal courts in order to restrict the class of persons that can have access to that rather
dramatic remedy. The concept of antitrust injury, which is rather novel to European laws –
although a certain resemblance with the German theory of Schutznorm can be identified –,
refers to the relationship between the rationale of the antitrust violation and the claimed injury
(p. 176). Jones’s view is that the latter doctrine should not be adopted in the Community
system, because it “would create a disparity between the substantive reach of the competition
rules and the scope of the private remedy” (p. 192), thus, presumably hindering the exercise
of directly effective Treaty rights. Equally cautious is Jones’s position as far as importing US
standing or locus standi theories in Europe. He would prefer national courts to engage in an
approach, which would follow the ‘legitimate interests’ test incorporated in Regulation 17 (p.
190).
Finally, Jones endeavours to reassess the importance of damages in the US system. Indeed,
this is a core issue. The existence of treble damages awards in US antitrust law is generally
perceived as the most celebre and distinctive characteristic of US antitrust litigation. European
lawyers have at times considered it as the point of divergence between the two systems and the
justification for the proliferation of private antitrust enforcement in the US, as opposed to the
meagreness of its European counter-part. In addition, treble damages have been considered in
Europe at times as quite repugnant, and there have been cases, where US treble damages awards
– admittedly, coupled usually with extraterritoriality – have not been enforced on grounds of
violation of ordre public. However, as the author proves after an extensive presentation of the
function of damages in the US (chapters 17 and 18), the bearing of treble damages is rather
exaggerated. Not only from an American perspective, because in reality injured plaintiffs
usually are not awarded excessive amounts of damages and even those damages may fall short
of providing for an adequate compensation (p. 229). But also from a European perspective,
because of the existence of other compensating mechanisms, which are not present in the US,
such as pre-judgment interest (chapter 19). Equally exaggerated proves to be the bearing on
US antitrust litigation of contingency fees and of class actions, which, according to the author,
are the exception rather than the rule (p. 249).
As a conclusion it is fair to say that Clifford Jones’s net achievement is double: he places
private enforcement of EC competition law in the more general context of effectiveness of
Community law, and at the same time he succeeds in clearing many European misconceptions
on the US system of private antitrust enforcement. It would be hard to identify any weaknesses.
One would have liked to have his views on the option of Community secondary legislation
(by means of a Regulation or a Directive) harmonizing civil remedies in the competition field.
Readers would also have liked to know whether other distinctive features of US litigation, like
the extensive role of discovery even at a pre-trial stage, make a difference in comparing the
US and the EC systems. Another issue that could have been treated is arbitration, as a distinct
forum of antitrust enforcement, although it is understood that such a theme could well make
the subject of a separate book.
Book reviews 815
In short, this is an excellent and prescient book that should appeal not just to competition
but also to general Community lawyers.
Claus-Dieter Ehlermann and Assimakis P. Komninos

Florence
K.J. Hopt, H. Kanda, M.J. Roe, E. Wymeersch, S. Prigge (Eds.), Comparative Corporate
Governance. The State of the Art and Emerging Research. Oxford: Clarendon Press, 1998.
1238 pages. GBP 90.
Decision-making and distribution of powers in a corporate entity as well as the burdens
and responsibilities of corporate directors have been a staple routine of company law texts,
as old as the discipline of company law itself. When in the 1980s, originating from the
United States, the concept of corporate governance came en vogue, sceptics were indeed
wondering what was so new about it. In the meantime the sceptics have fallen silent. Corporate
governance research has effectively established itself as an approach productive of manifold
new insights. First, corporate governance research adopts a systemic perspective. It transcends
the narrow framework of company organization law by relating subjects which are ostensibly
disparate, such as shareholder voting, worker or lender co-determination, financial reporting
and auditing, capital markets or markets for corporate control, and integrating them into
company legal analysis. Second, corporate governance research is comparative research by
necessity. It responds to, and inquires into, the paradox that different institutional arrangements
of organizing a business can survive in an environment of globalization. Finally, corporate
governance research is legal as well as economic analysis. Applying the standards of economic
efficiency, it seeks to verify optimal governance structures. Moreover, it argues for giving
free rein to the competition of institutions and of national governance systems for optimal
governance structures to emerge.
The voluminous book contains the reports presented at a conference organized by the
Hamburg-based Max Planck Institute for Comparative Law in 1997. The conference brought
together jurists as well as economists and prominent business practitioners to give their respect-
ive views on corporate governance. Accordingly, the book takes stock of the whole wealth of
arguments which corporate governance research has to offer. This review can give only a gross
survey of the more than 30 papers and discussion reports, concentrating on aspects of special
interest to the European reader.
The introductory part, headed “Roots and Perspectives of Corporate Governance”, does not
quite live up to what it heralds. In an attempt to explain what brought about early “mergermania”
in the late 19th century United States, business historian Dunlavy attributes the move toward
consolidation primarily to a specific allocation of voting rights in America (“one share one
vote”), whereas it might have been the rise of anti-trust law which enforced consolidation rather
than co-operation as a strategy to achieve industrial growth. This incomplete picture seems
to be indicative of a potential conceptual flaw of corporate governance analysis. As corporate
governance research consciously takes into consideration the impact of factors external to
the company on corporate decision-making, it tends to blur the line between external actors
and “structural” external factors, such as the legal system or political and ideological beliefs.
In Chapter 2 on “Emerging Markets”, Coffee presents a case study of the Czech Republic
in transition to privatization. Rather than contributing to corporate governance research, he
makes a strong case against “big-bang transformation” of transitional economies. Similarly,
Romano’s critique of the U. S. approach to securities regulation (ch. 3) – which suggests that
the regime of federal (i.e. centralized or monopolistic) regulation should be supplanted by a
system of what she calls “competitive federalism” – seems to be rather peripheral to corporate
governance research, yet may fertilize the theory and practice of EU financial regulation.
With Part II, “Building Blocks of Corporate Governance Systems”, the book arrives at the
focal point of the corporate governance debate. This part is also the most relevant for the reader
interested in EU company law harmonization. In a somewhat Germano-centric perspective, the
papers are mostly about the German two-tier board and labour co-determination. Hopt traces
the varying functions of the Aufsichtsrat through the course of history. The Aufsichtsrat once
originated as a “strictly separate outside board” which represented not only the shareholders
but also the public interest, thereby substituting the former State charter requirement. With
other tools of management control, e.g. financial disclosure and capital markets, emerging, the
Aufsichtsrat increasingly assumed the role of an advisor to the management board. Furthermore,
and particularly in large public corporations, it evolved into a centre of (as Hopt aptly puts
it) “networking” with the company’s principal external stakeholders, i.e. lenders (“in-house
banks”) on the one hand and trade unions on the other, both of which, either by operation of
law (work-force representatives) or by custom (lenders), have seats and say in the boardroom.
Although the German two-tier system certainly will not yield to an Anglo-American style
governance structure within the foreseeable future, in a comparative summary Hopt perceives
some indications of convergence between the two systems. In view of this convergence and
of the diversity of corporate life in Germany, Hopt prudently refrains from coming up with
concrete policy recommendations for EU law-makers.
The economics of labour co-determination are set forth by Gerum and Wagner. Their account
of economic theories is rather inconclusive yet is supported by the general tenet of empirical
surveys suggesting that “co-determination has at least not had any negative effects on compan-
ies’ efficiency” – a remarkable finding that gives evidence of the primarily ideological nature
of the fatal controversy about the aborted 5th EC Company Law Directive (1972) and the Com-
mission’s notification of 1995. A straightforward critic of co-determination made in Germany
is Roe. Co-determination, he argues, not only undermines diffuse ownership and favours the
traditional German ownership structure of big blockholders. It also weakens boardroom action
to the disadvantage of diffuse shareholders, because the presence of labour in the boardroom
has both managers and the chairman take pains to avoid board meetings altogether and shift
the focus of decision-making to subcommittees or, at worst, to informal caucuses and arrange-
ments. Identifying those failures as a cause for the weakness of German securities markets,
however, seems, from today’s better point of view, far-fetched. As a counterpoint to the German
model, Davies discusses industrial governance in Britain, where neither co-determination on
the board level nor statutory work councils exist, and collective bargaining is the only channel
of representing the interests of employees. As, in the wake of the “Thatcher revolution”, trade
unionism and collective bargaining have been in steady decline, and employment security
has become the main concern of labour policy, Britain faces the formidable task of balan-
cing the goals of maintaining an optimal level of labour market flexibility, strengthening the
involvement of workforce representatives on the firm level, and finding an appropriate role for
government intervention. Gordon calls attention to employee stock ownership transactions as
a recipe for addressing bargaining problems in economic transitions.
“Financial intermediaries” (ch. 6) have, as all papers assembled in this chapter suggest, a
crucial role to play – above all in Germany. Mülbert refutes the widely held belief that the large
(but diminishing, Breuer) equity holdings of German universal banks are a path-dependent
German version of American institutional shareholderism. More recent anecdotal evidence, it
should be added, indicates that banks do not make use of their monitoring powers effectively
until a company has fallen into financial distress. On the contrary, as Wenger and Kaserer
point out, there is “a great danger of collusion among managers tied together by a system of
cross-holdings”. Franks and Mayer examine the impact of German banks on hostile takeover
transactions; however, their findings, extracted from three cases dating back to the 1980s
and early 1990s, most likely will not survive the aftermath of the recent Krupp-Thyssen and
Vodafone-Mannesmann takeovers, which may turn out to be the big bang of a new takeover
Book reviews 817
culture in Germany. Baums presents a preliminary but multifaceted picture of shareholder

representation and proxy voting in the European Union.
That “disclosure and auditing” (ch. 9) affect almost any decision to be made in the framework
of corporate governance, both by company insiders and other stakeholders, is common wisdom.
In a comparative study, Fox explores the interplay between national governance systems and
their respective disclosure regimes. Based on empirical data, Baetge and Thiele complain that
not only in Germany but also (if to a lesser extent) under U.S. GAAP management still has too
much leeway for “creative accounting”, keeping the monitoring function of financial reporting
at a sub-optimal level.
Ever since a wave of “lender liability” litigation has flooded the U.S., we know that principal
lenders tend to interfere with corporate governance, relying on financial covenants rather than
on traditional collateralization and, on occasion, even assuming the role of “shadow directors”.
Arm’s-length lending is being substituted by (as this writer has termed it elsewhere) “symbiotic
financing”. Economists Schmidt and Drukarczyk make a good case that close monitoring by
lenders has a beneficial, debt value-increasing effect, which should not be impaired by rigid
bankruptcy and lender liability regulations.
In the concluding Part III, headed “comparative corporate governance”, Macey outlines a
theoretical framework for empirically measuring alternative schemes of corporate governance,
and applies his criteria to monitoring by U.S. institutional investors. Detailed country reports
are contributed from Japan (Kanda), Germany (Prigge), and continental Europe (Wymeersch).
As its subtitle makes you expect, the book truly represents the “state of the art” in corporate
governance analysis. One may regret, however, that the editors have “consciously chosen
to refrain from ... trying to extract a general theory of comparative corporate governance”
(foreword, IX). The European reader will notice that, throughout the book (published in
the U.K.), a German-American point of view (with a glimpse to Japan) predominates. With
few exceptions (Hopt on two-tier boards, Gerum/Wagner on co-determination, Baums on
shareholder voting, Wymeersch on company law regulations), the papers do not purposively
pursue a European perspective. Still, this volume supplies a host of new insights for the future
of European company and capital market law. If there is indeed a lesson to be learnt for the
European reader it is that, in view of the diversity of national systems of which each one has its
apparent merits, it would seem premature at this time to place a comprehensive harmonization
of company law at the top of the European law-making agenda. European company law may
be served best by giving the largest possible rein to the freedom of corporate contracting.
Johannes Köndgen
Bonn
D.J. Hayton et al. (Eds.), Principles of European Trust Law. Den Haag: Kluwer Law Interna-
tional, 1999. 215 pages. ISBN 90 411 9726 5.
Civil-law systems recognize only a limited number (a numerus clausus) of property rights, and
the split of ownership rights between trustee and beneficiary under the Anglo-American trust
contravenes the civil-law principle that such rights must be absolute. Civil-law systems do not
therefore admit the existence of the common-law trust in their domestic law. Nevertheless, the
civil lawyers have been continually fascinated by the common-law trust, and this interest has
grown in recent years with the perception in some quarters that, in lacking a device embodying
the essential features of the trust for investment and business purposes in a world in which
finance is becoming increasingly globalized, civil-law jurisdictions may be at a disadvantage.
This book, which consists of a series of essays written by some of the most celebrated of
European legal scholars, does not seek to advocate the adoption of the common-law trust in
civil-law systems; rather it explains the common-law trust for civil lawyers and explores the
various trust-like devices used in a number of European civil-law States, with a view to the
mutual enlightenment of the lawyers of each system. In some chapters, however, the national
commentators do also suggest ways in which a number of their existing devices might be
modified to make them more trust-like in their effect.
After an introduction which explores its central themes, the book sets out the principal
features of the common-law trust (as developed, with variations, throughout the common-law
world) in the form of a series of Articles. There follows an extended commentary on the nature
and uses of the common-law trust. Each later chapter is in the form of a national report from
an individual European State comparing its trust-like devices with the common-law trust and
concluding in each case with a summary of the extent to which such devices meet the criteria
specified in the Articles. There is also discussion of the effects of the Hague Trust Convention,
which provides for the recognition of foreign trusts, in those countries in which it has already
taken effect, namely Italy and the Netherlands. Italy is particularly interesting in this respect,
since it seems that the Italian courts are prepared to recognize common-law trusts which have
no foreign element other than the governing law.
The chapters dealing with the civil-law jurisdictions reveal a range of trust-like devices
which, in varying degrees, possess trust-like characteristics. Some of these devices are pecu-
liar to family property or to the administration of estates; others (exemplified in the French
fondation, the German Stiftung, and the Dutch stichting) are restricted to the promotion of
charitable, public, or welfare purposes; but because these devices are not designed as vehicles
for investment or business, they are not the book’s primary focus. Some other devices, notably
the Dutch bewind, under which the beneficiary is the legal owner of the assets, seem to be too
far removed from the common-law trust to be considered equivalents. The civil-law device
which, for general investment purposes, comes closest to the trust is one based on a transfer
of assets pursuant to an agreement. In this respect Scotland, which has a hybrid system, is
of particular interest, as its property law is entirely civilian in nature, and does not therefore
recognize equity, yet it does possess the trust. As Reid comments in his valuable essay on the
trust in Scotland, it is possible to recognize the trust (albeit not the common-law trust) without
sinking into the arms of equity. The crucial point is that the trust in Scotland is essentially not
a part of the law of property, but an aspect of the law of obligation, the beneficiary’s rights
being personal instead of proprietary. The German device called the fiduziarische Treuhand is
another notable example of this sort of arrangement. It arises on a transfer of assets (usually
for a fee) to a Treuhänder, who agrees to deal with the assets for the benefit of a third party.
The contract between the transferor and the Treuhänder is usually made enforceable by the
third party through a stipulation in the contract to this effect – a method of providing for a
third-party benefit which has also been rendered possible in English law since the enactment
of the Contracts (Rights of Third Parties) Act 1999.
The fact that the beneficiary under a common-law trust has a proprietary interest has two
important consequences: first, the trust fund is protected against the trustee’s personal creditors;
and, secondly, the beneficiary may be able to trace the property or its product into the hands
of a third party to whom it has been transferred in breach of trust. Similar protection for the
beneficiary under a civil-law obligation-based analogue cannot be explained on proprietary
grounds, and so can lead to problems for the beneficiary if the trustee becomes bankrupt or if
the property is wrongfully transferred to a third party. In Scotland, and in some other civil-law
systems (such as Germany), the first of these difficulties is overcome by treating the trust
assets as a separate fund (or patrimony) from the trustee’s personal assets, so that the trustee’s
personal creditors cannot claim the assets held in trust. By contrast, the civil-law systems of
France, Spain, and the Netherlands do not recognize the concept of a separate patrimony, so
that the nearest general trust equivalent which operates in those States for the management of
assets, the fiducia cum amico, cannot protect the trust assets against the personal bankruptcy of
the trustee. In these jurisdictions, the protection afforded to the trust assets might be improved
Book reviews 819
by appointing a corporation, rather than an individual, as trustee. In none of the civil-law

systems are the beneficiary’s rights against a third party as extensive as those recognized by the
common-law trust; a beneficiary under a contract-based trust-equivalent has merely personal
rights against a third party recipient, although in some jurisdictions the court may be able to
order the restoration of the property wrongfully transferred.
This is an important and interesting book, which repays careful reading. Lawyers, whether
from civil or common-law jurisdictions, will learn much about trusts and trust-like equivalents
in other jurisdictions; and they will undoubtedly come to see their own systems in a new light.
Peter Luxton
Leicester
A. Emmerich-Fritsche, Der Grundsatz der Verhältnismassigkeit als Direktive und Schranke

der EG-Rechtsetzung. Beiträge zum Europäischen Wirtschaftsrecht, Band 13. Berlin: Duncker
Humblot, 2000. 770 pages. DM 168.
Written as doctoral thesis under the supervision of Streinz, this massive book was submitted
to the Faculty of Law and Economics at the University of Bayreuth in 1998. With 620 pages
of actual text it goes well beyond what would usually be expected as a doctoral thesis. The
subject of the book, the principle of proportionality (Verhältnismäßigkeitsgrundsatz), is of
greatest importance for the Community legal order. No other ground of review is invoked
so often before the Court of Justice, and the interpretation of the principle has substantial
impact on the allocation of powers between Member States and Community, among the
Community Institutions and, last but not least, on the level of protection of individuals within
Europe. The thesis is presented in four chapters. The first is dedicated to the historical roots of
proportionality as a concept of legal philosophy and to the theoretical foundations of how and
why to balance different interests. The second chapter casts light on the sources of the principle
of proportionality in Community law; the competence of the ECJ for “functional law-making”;
the principle of proportionality as a principle of the constitutions of the Member States and
in the ECHR; the elements of the principle in the case law of the ECJ; and the functions of
the principle of proportionality. Chapter three of the book deals with the different kinds of
applications of the principle of proportionality in Community law, particularly in relations
between the Community and Member States, and with regard to the protection of fundamental
rights of the individual. In the fourth chapter, the author applies the doctrine developed to the
area of food law as an example of harmonization of laws.
The principle of proportionality is found to constitute ius communae europaeum, based on
the common traditional legal theory, going back as far as Aristotle. The primacy of law prevails
in the Community as a community of law (Rechtsgemeinschaft) for the sake of achieving liberty
and practical reasonableness. Lacking a democratic process capable of delivering a true volonté
générale, the common interest of the Community can only be inferred from the Treaties. Based
on the view of Community law as part of National law (staatsrechtlicher Monismus), the author
rejects the existence of an autonomous common interest, dissolute from the interests of the
Member States. Nevertheless, the interest of the Member States as a Federation of States
(Staatenverbund) might diverge from the interests of particular Member States in the area of
shared competences, and the balance of these interests against each other is seen as a matter
also in the interest of the Federation.
Rejecting the autonomy of the Community legal order, the author finds the source of the
principle of proportionality mainly in the general principles common to the laws of the Member
States. Where proportionality is laid down in the Treaties it lacks the element of proportionality
strictu sensu, which justifies the continuous application of the general principle besides Article
5 EC. The ECJ, also deriving the principle from the laws of the Member States, uses a normative
comparison to adapt the principles found to the special needs of the Community. However, this
must not lead to a standard which is lower than the standards of the Member States, or stated
differently, the Community may not enact measures which would infringe the constitutions of
the Member States. The principle of proportionality thus fulfils the criteria of a “relativized
maximum standard with a negative control function”, which means that only the highest
standard found in the laws of the Member States as adapted can be the standard of review for
measures of the Community. This highest standard in the view of the author is represented
by the German legal system, in which the principle has been elaborated to the greatest extent.
The thesis juxtaposes particularly the German and French approach to proportionality and, as
inextricably linked, to the understanding of fundamental rights in both countries. Whereas the
French system emphasizes the objective dimension and social function of fundamental rights,
the German doctrine sees the most important function in the limitation of the State’s powers for
the sake of a maximum of individual liberty. The emphasis thus clearly lies on the subjective
dimension of fundamental rights. The latter standard is seen to be higher, since the impact on
the individual concerned must be balanced against a common interest, whereas the “objective
approach” neglects the impacts on the individual. The discussion of the case law of the ECJ is
consequently strongly influenced by a comparison with traditional German academic writing
on proportionality and the case law of the Federal Constitutional Court. The thesis comes
to the conclusion that due to the influence of French legal thinking reflected in the ECJ’s
case law, the level of protection of the individual is not sufficient. In particular, the lack of a
permanent “proportionality strictu sensu-test” or at least of reasoning to that end, allows the
level of protection provided by the ECJ to fall short of the standard required by a “relativized
maximum standard”. Furthermore, the “burden of argumentation” imposed by the ECJ on
those invoking a breach of the principle, is seen to reflect a hierarchy of values, which is not
found in the treaties, but introduced through the back-door by the Court. By operating a system
of prima-facie preferences, the ECJ establishes a soft system of “in dubio pro communitate”.
Evidence for this is given in particular by the different standard of review in the application
of the principle of proportionality in cases concerning measures of the Community on the one
hand, and those of the Member States (possibly infringing the fundamental freedoms), on the
other. This “judicial self-restraint”, which is said to come close to a denial of justice, could
thus justify the non-application of secondary legislation under the Maastricht judgment of the
Federal Constitutional Court.
It is not possible in this review to give a full description of all the detailed analysis carried out
in this thesis. It certainly deserves full credit for taking up this important subject and making a
great effort to provide a full elaboration of the principle of proportionality in Community law
as well as a doctrine of fundamental rights. However, the view presented is a very German one,
based upon a fully-fledged doctrine regarding both proportionality and fundamental rights. It
is firmly based on this national perspective. Those who expect a nitty-gritty elaboration of
the case law of the ECJ might be slightly disappointed. A great deal of case law is presented
indeed, but rather as occasional evidence or object of criticism than as the main source of
analysis of the content of the principle in Community law as it stands. This maybe explains
also why non-German literature is quoted primarily with regard to the comparative analysis of
the laws of the Member States, but scarcely concerning the doctrinal basis of the thesis.
Christoph Herrmann
Bayreuth
Book reviews 821
V. Hreblay, Les accords de Schengen. Origine, Fonctionnement, Avenir. Brussels: Bruylant,

1999. 194 pages. BF 1200.
The Schengen Agreement was born on 14 June, 1985 when Germany, France and the Benelux
States signed an Agreement, at the tiny eponymous Luxembourg village, which was aimed at
facilitating free crossing by persons of the frontiers between those States as well as the free
movement of goods and services. Schengen was destined to have a long gestation period. It
would be another five years before it became possible to reach accord on the provisions of the
Schengen Implementation Agreement and another five again before this finally came into force.
As a glance at the chapter headings of this book suffices to reveal, however, there was a reason
for the delay. Schengen very quickly evolved into being about a lot more than merely border
controls. Indeed one of the most important observations which Hreblay makes in this short
work reflects this evolution, in that he notes that the Schengen Implementation Agreement of
1990 attempted to reconcile two objectives which prima facie pull in two opposite directions
– free movement in the interior of an enormous geographic space, on the one hand, and the
maintenance of a raised level of internal security within that space on the other. The structure
of the book under review reflects the consequent Janus-like character of the Schengen system.
Hence, one chapter is devoted entirely to the topic of police and judicial cooperation. Another
concerns the computerized method of information-sharing which has come to be a core feature
of the whole Schengen regime, now known to us as the Schengen Information System (S.I.S.).
And another relates to the topic of immigration control. (Interestingly – and somewhat tellingly
– the topic of frontier controls requires at most about ten pages of discussion in this book – a
great deal of the remainder is about the so-called compensatory measures).
Usefully, before getting into any of this, the author begins with an enlightening historical
context-setting. Hence (apart from the also historically-focused preamble) the first chapter
of this short book is dedicated to the contents of the Schengen Agreement of 1985, and the
second to the process of agreement and the concrete provisions of the Schengen Implementation
Agreement. Notwithstanding the rather ominous-sounding preface (in which we are informed
that “Europe is paved with good intentions”), Hreblay, judging by this work, is an unabashed
enthusiast for Schengen. He is (as we are told in the preface) an “homme de terrain”, a principal
Commissaire in the French police, who was active both in the negotiation of and then the putting
into force of the provisions of the Schengen Agreement. One would not necessarily expect in
this book – and indeed one does not get – a critique which is in any way hostile to the Schengen
system. Instead, what one gets is probably the best insider-view introduction to the history and
functioning of the Schengen Agreement that this reviewer, at least, has encountered. One is
given the details, in readable, comprehensible form and is left to draw whatever conclusions
one wants.
Numerous gems of interesting information and several telling insights are to be found in the
pages of this book. Given the recent paralysis that gripped the motorways of Europe because of
protests against rising motor fuel prices, it is interesting to read that the Saarbrücken Agreement
of July 1984 – which in turn led more or less directly to the Schengen Agreement of one year
later – was the reponse of the French and German governments to protests by international
truck-drivers, who manifested their exasperation at controls and administrative delays by
blocking numerous frontier crossings in Spring 1984. Great oak trees from little acorns grow.
It is also interesting to read (although unsurprising, in the light of the way Schengen has turned
out) that from being the almost exclusive preserve of ministries of foreign affairs at the start
of the negotiations, competence regarding Schengen shifted in many States – especially after
the Schengen Implementation Agreement came into force in 1990 – to the various national
ministries of justice and of the interior. This change arguably marked very considerably the way
in which the Schengen acquis evolved from then on. Another interesting historical feature of
Schengen’s history has been the degree of responsibility conferred on essentially technocratic
groups in drafting the 1990 Implementation agreement. Some matters almost appear to have
taken on a life of their own. It is extraordinary to note that what has become one – if not
the – key feature of the Schengen system (the S.I.S.) was not even envisaged in the original
Schengen agreement. The idea for the S.I.S. (now accessible, we are told, by about 15,000
computer terminals in France alone) was a November 1985 idea of the German delegation. It
should be emphasized that developments such as the S.I.S. are no bad thing – indeed, far from
it. But it is nonetheless intriguing to be told how they came about.
Some of the insights which this book contains stem from the fact that the author’s perspective
is informed by practical experience of police work. Hreblay’s observations on the S.I.S. are,
for example, informed by his awareness that no police action can develop properly without
the oxygen of information. It is interesting to read his view that in the world of police
information exchange, the unwritten rule has been that one good turn (in terms of information
exchanged) deserves another. For Hreblay, therefore, the creation of the S.I.S., with its pooling
of information without the police force which supplied the information being able to select
the identity of the recipient or negotiate a “return” has constituted a veritable revolution in
police cooperation. (In this connection, it should be added that Hreblay’s explanation of the
role of the SIRENE system, which supplements the S.I.S., is one of the clearest and most
straightforward this reviewer has read). For this reviewer it was also interesting to read the
author’s view that far from being confined to facilitating police cooperation, the idea was to
create a veritable moral obligation on national police forces to cooperate. Thus, the intensity of
the police cooperation intended by Schengen may be more than is apparent on the first reading
of the relevant texts. Nor is it the case that a strengthening of cooperation has necessarily
been confined to the international plane, since Hreblay notes for example that the exigencies
of setting up the national S.I.S. operations has required closer collaboration between various
national law enforcement agencies than has heretofore been the case.
Other of the author’s insights are less focused on the area of police cooperation. One point
which had a telling ring of accuracy to it is Hreblay’s warning that those elements of the
Agreement which relate to the lifting of border controls are fragile when the pressure of public
opinion becomes too strong. This fragility has in the past led to the spasmodic reintroduction
of border controls at particular crisis moments, although it may be that the political pressure to
reintroduce such controls will decline as the public gradually becomes more used to the idea
of a Europe without frontiers.
One of the main advantages of the book under review is that it should function as a good
introduction to anyone who is either coming to the subject of Schengen for the first time, or
less than completely familiar with its operational details. If the book has a disadvantage, it is
perhaps that it is a very uncritical look at that system. (This reviewer, for example, would be
far less convinced than the author is of the altruistic nature of the Member States’ desire to put
an end to the phenomenon of “refugees in orbit” – otherwise, why was there not more pressure
for a harmonization of the substantive conditions for the grant of asylum at the time when
the Schengen Implementation Agreement provisions aimed at tackling this phenomenon were
agreed? Furthermore, some information being provided about the provision made under the
accord concerning individual data protection rights might also have been thought worthwhile.)
That factor borne in mind, however, there can be no doubt that what one gets in Les Accords de
Schengen is a very good book indeed, which should be required reading for students of justice
and home affairs cooperation in the European Union. It should be noted that Hreblay’s book
takes into account the effect of the Schengen Protocol agreed at the Amsterdam IGC, although
its publication preceded the coming into force of this Protocol by just over a year.
G. Barrett
Dublin
Book reviews 823
S. Bilal and P. Nicolaides (Eds.), Understanding State Aid Policy in the European Community:
Perspectives on rules and practice. Den Haag: Kluwer Law International, 1999. 260 pages.
NLG 70. ISBN 90-411-1184-0.
This book is the product of a Workshop organized in 1998 by the European Institute of Public
Administration to address issues in Community State aid policy. The contributors provide
a range of perspectives covering the economic, legal, political and administrative concerns
arising from the operation of the Treaty rules. According to the editors, the main aim of the
book is “to explain the principles and methods of EC state aid policy in a manner which is both
accessible and useful to practitioners and policy makers.” It is organized into three parts. Part I
seeks to describe and assess the function and general operation of the Treaty rules. Part II then
provides a series of more specific discussions in relation to particular horizontal, sectoral and
regional Guidelines. Part III completes the book with thoughts on the process of legislative
reform, which at the time was still at draft stage.
As is often the case when conferences are converted into publications, the resulting collection
of papers is rather uneven in quality, coherence and durability. Seen from the perspective of
a review written in late 2000, the short articles in Part III devoted to the draft regulations
on procedural matters and block exemptions have been overtaken by the enactment of the
1999 legislation and the burgeoning literature accompanying it. As a matter of presentation,
the different perspectives included in the volume operate on rather disparate levels. Some,
especially the legal and economic contributions, are clearly academic analyses and expressed
as such with detailed sources and footnotes. Others, notably some of those in Part II, offer a
more polemical style geared to discussing practicalities and calling for directional changes in
policy.
Nevertheless, there are some lasting and important messages in the book. The editors
themselves make a lucid and cogent argument (ch. 2) that the aid rules deviate from economic
considerations. They point to a tension between the role of intervention to correct market
failure and the pursuit of other, non-economic, objectives in aid policy. Interestingly, they
deploy economic arguments to attack the use of the well-established private market investor
principle by the Commission. It is a shame that this potential mismatch between the legal tools
provided by Article 87 (ex 92) EC and economic analysis is not carried through more forcefully
elsewhere in the volume, although Slot makes some similar observations in the context of a
selection of aid decisions in the energy sector (ch. 8). The feeling that the parameters of
the notion of “aid” are rather arbitrary and uncertain also bubbles beneath the arguments put
forward in Cox’s piece on labour costs and job creation. Taking the book as a whole, more
might have been done to flesh out this recurrent latent theme.
Another strong message from the book is that Community policy may not be reaching its
goals, mixed as they are, and that reforms may not redress the current difficulties. Wishlade,
in particular, provides a cogent and thoughtful analysis of the interface between aid and
competition policy in the context of regional aid guidelines. In a detailed discussion of the
attempts to match Community designations with national organization of areas to be assisted,
she concludes that it is highly questionable whether coterminous maps have much to do with
policy coherence. Reforms, in her view, do not address the proper balance between Community
and national responsibilities for regional policy. This strain of argument is detectable, though
expressed in a more politicized form, in the contribution by Lambarri and Fernandez Ezkurdia.
Certainly, the message that different Member States prioritize and apply aid in varying ways
comes through clearly in several chapters. This finding obviously has implications for the
monitoring and evaluation of aid by the Commission. Indeed, the book rightly questions the
achievements of the Commission, with Bilal and Polmans especially critical in the light of the
statistical evidence about trends in aid to industry. Nicolaides and Bilal extend this, observing
that it is hard to believe that the level of compliance with EC State aid rules has improved to the
extent that might be implied by the relative fall-off in negative decisions by the Commission.
Much has happened since the Workshop papers of this volume were delivered. The codi-
fication of procedural rights in Regulation 659/99 and the introduction of block exemptions
have been broadly welcomed for their contributions to clarity and transparency. However, the
greatest value of the book is perhaps in revealing questions which still need to be addressed. The
proper policy role of Community intervention and the extent to which the legal approaches to
the scope and operation of Articles 87–89 need greater economic analysis and support remain
ongoing concerns.
Malcolm Ross
Sussex

2001 MAIANI BIEBER Book Review Cassese et al - CMLR

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