On the unification of legal rules in the European Union

Abstract

Unification of legal rules in Europe is not a new phenomenon. However, nowadays, Europe is still an area with many different jurisdictions. This paper studies the process of unification of legal rules in the European Union within a non-cooperative game-theoretical framework. This paper contributes to the understanding of the process by concentrating on the role of the European Commission.

In the law-and-economics literature, it is argued that national legal rules will converge more or less spontaneously through the works of legislators and judges. But legal convergence in the European Union is not inevitable: preferences toward legal rules differ across nation-states; substituting a legal system for another one is costly; a coordination problem may arise.

We first study the interactions of two nation-states who choose non-cooperatively their legal rules. We shall argue that the action of the Commission is, at first sight, likely to eliminate the coordination problem (under certain conditions). Two factors are at work. First, the Commission has a certain expertise which enables it to propose new and perhaps more efficient rules (so that the choice of unification does not reduce to select a particular nation-state legal system). Second, the Commission may use a system of fines that induces nation-states to abide by its rules (once these rules are adopted by nation-states).

Next, we refine our first model: the process of legal unification is viewed as a game where nation-states choose the game that they will play. They choose if they will try to reach an agreement without resorting to the actions of the Commission, or if they will play the game implicitely proposed by the Commission. This captures more precisely the action of the Commission, its ‘right of initiative’’, the publication of proposals in ‘green’’ or ‘white papers’’. In this second model, a coordination problem may arise.