This paper considers how the Commission should carry out its planned review of the pre–sale mandatory information disclosure requirements in Community legislation relating to purchases of financial services products.
It examines the literature on the communication and validation of legal norms to determine which criteria should be applied in assessing the requirements. It argues that the legislation has an instrumentalist intent which requires an assessment of the aims the legislation was intended to serve, the validity of that selection, the technical specification and communication of the norm and its effectiveness in achieving the objectives. It considers commentators’ emphasis on the importance of coherence and consistency of the legal system and argues that this alone is insufficient to validate the choices made by the legislator or to validate the requirements, which must also demonstrate ‘external coherence’ with the context in which it is applied.
It applies these criteria to test the validity of the objectives and the use of disclosure to meet them. It finds incoherence between the mechanisms through which disclosure is intended to contribute to consumer protection and internal market policy objectives, and between the mechanisms assumed in the legislation and in the ECJ’s judgments.
Examining the requirements themselves, the paper argues that they do not clearly communicate the content of the norm and proposes techniques for specifying the norms more effectively. It considers the systematisation of the requirements, without assistance from adjudication, in the context of the Community legal system and ‘externally’ and identifies problems in both respects.
It considers whether these problems are sufficient to make the case for change and alternative approaches to securing change in the light of the effect of ‘due process’ requirements for the validity of new proposals on their content. It identifies constraints on the type of change likely to succeed, and identifies priorities for change in the light of the criteria for validity considered earlier.European Business Law Review