This is the first time that the Study Group on a European Civil Code has met outside of the European Union. On behalf of the Swiss Federal Council I am pleased to welcome you all here to Lucerne.

You are meeting today in Switzerland. What is Switzerland? Switzerland is above all part of Europe but does not wish to join the EU. And despite this fact, everyone assembled here today belongs to a constitutional, democratic state.

The only difference is that Swiss democracy is direct democracy. What does that mean? In Switzerland direct democracy means the right of the people to have the ultimate say on every law enacted by Parliament. This kind of democracy, in other words the sovereignty of the people, is the main reason why Switzerland does not wish to join the Union, because the Swiss electorate has the opportunity to reject bills at the ballot box, and this is incompatible with EU membership.

What is direct democracy?

But what does direct democracy really mean on a practical level? A popular ballot on legislation enacted by Parliament is held if fifty-thousand citizens who are eligible to vote so request: the signatures must be collected within one hundred days of the law being enacted. Unlike an amendment to the Constitution, a popular ballot does not always take place following the enactment of a new law. One therefore often speaks of an optional referendum, rather than direct democracy.

If voters approve a new law, it can enter into force. If they reject it, it can not enter into force and has therefore failed. Thus, the nature of such an election is not merely consultative or plebiscitary. That is why despite the failure of a new law the government may remain in office, and Parliament is not dissolved. If this were not the case, Switzerland would probably have more changes of government than Italy; that is to say, quite a few.

Private Law - The Origin of Direct Democracy

Direct democracy is undoubtedly a remarkable feature of Swiss constitutional law. Voters can exert direct influence on legislation, and not just by means of electing certain people or parties as is usually the case in other countries. Naturally this principle also applies to private law - a principle that is at the origin of direct democracy.

The right of optional referendum was incorporated into the Swiss Constitution in eighteen-seventy-four (1874), at the same time as the people and the cantons approved an amendment to the Constitution paving the way for the standardisation of private law at the federal level. This was followed in eighteen-eighty-one (1881) by the law of obligations and in nineteen-hundred-and-seven (1907), after a further amendment to the Constitution, by the Civil Code.

The concurrence of direct democracy and the standardisation of law in the Constitution in eighteen-seventy-four (1874) was not coincidental. On the contrary: it was evident to the political players of the time that the only way to obtain a majority in favour of standardising private law at the federal level would be to extend democracy at the federal level. In other words: no uniformity of law without a referendum!

The Significance of Direct Democracy

Although the Swiss electorate seldom calls for a referendum, it would be wrong to believe that the institution of direct democracy is meaningless.

On the contrary, direct democracy provides the people with the means to say "no". Every political player in Switzerland - from political parties through the Federal Council to Parliament - is only too aware that it is futile to be convinced of the positive aspects of a bill if they cannot, in the end, convince the electorate. The possibility of a future referendum therefore accompanies the process of lawgiving right from the beginning. The value of direct democracy could therefore be described as "prevention against anti-civil legislation".

You may now ask the question, "Is direct democracy beneficial or detrimental to private law"?

There is no answer to this question, because it is a matter of individual judgement.

Anyone who supports a particular piece of legislation that is approved by voters will usually commend their wisdom and vision. Anybody who is defeated in a popular vote, on the other hand, suffers and will curse the folly of the electorate, and direct democracy. I suspect similar reservations on the part of academics. Private law has traditionally long been the domain of scholars.

Some may consider it objectionable that for the last two hundred years Parliament, and therefore inevitably legal amateurs, have had a hand in shaping private law.

This applies all the more if the common people are allowed the right of co-determination.

Private Law and the Academic World

It is quite obvious that private law shaped in this fashion can never conform to the ideals of scholars. The question, however, is whether private law should conform to an academic ideal. If one tries to be a little more objective, it would be true to say the following:

Private law that has been shaped by direct democracy is no better or worse than private law that has not. However, direct democracy is instrumental in making private law become embedded in the population and thus guarantees stability and dependability. Although progress is therefore sometimes late in coming, it constitutes a lasting achievement when it finally does come.

Ladies and Gentlemen, what conclusions can be drawn for your project regarding a European Civil Code from what has been said?

A European Civil Code

An important consideration is that uniform law harbours the danger of repeating the same mistakes.

In industry this risk is met, for example, with calls for increased competition. Why should the same not also apply to private law?

Why do certain groups want to prevent states from competing for the best system of private law? Why, for example, should the same consumer protection regulations apply throughout the whole of Europe?

Experience in the last few years and decades has inevitably shown that different systems of private law do not hinder a flourishing exchange of goods and services. This also applies to trade between Switzerland and the European Union.

What is much more important than uniform private law is that everyone involved - both states and individuals - adhere to certain basic values. Such values that come to mind are, for example, the protection of property, contractual freedom, and the protection of the individual. A European Civil Code, too, should conform to these values. Only then does the process of standardising private law make any sense and is worth the time, energy and money!
I wish you all the best and every success in your efforts.

Private Law and Direct Democracy