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Hamburg 2016: EuSoCo Workshop Early Termination in Credit Law – what we can learn from labour and tenancy law.

June 23, 2016 By: udo.reifner Category: 2016 Hamburg, Credit Law, Early Termination

At its annual conference on financial services in Hamburg on June 2 and 3, 2016 (“Digitalisation of the bank-customer relationship”) one plenary session has been dedicated to principle 11 of the LTC principles concerning early termination of credit contracts and what can be learned from labour and tenancy law. Programme, outline and reader can be retrieved here.

The discussion was evenly spread between practitioners and academics in labour and tenancy law. Credit law provides at least at the surface no substantive restrictions and protective rules against early termination which thus becomes a neglected entrance door to overindebtedness. Instead the similar function of early termination in labour law with regard to unemployment and in tenancy law with regard to homelessness has got enormous attention by the legislators and collective regulations. In the initial statement it was pointed out that partly this is due to the rise of bankruptcy law which has developed into a kind of adapted continuity of contractual relations supervised by the state which increasingly even overrules factually the termination and puts the parties back in charge of their relation. This has already been outlined in the contributions on bankruptcy procedures in the book on LTCs by Reifner and Pulgar. But also the latest EU Directives on consumer and mortgage credit show a tendency towards adaptation when the principle of responsible credit is increasingly applied also the way such contracts can be terminated.

Many of the arguments which are brought forward against the regulation of early termination (“acceleration of debt”) have already be disused extensively in labour and tenancy law. The core element is the relation between the right to unrestricted early termination and its relation to easy access and the number of jobs offered (“hire and fire” philosophy).

One of the major points of the discussion was on the collective dimension of protective LTC law. While in labour law the collective dimension is represented by organised labour in tenancy law this is by far less the case and totally absent in consumer law. But there might be equivalent institutions in all three areas like the judge voicing concerns of collective consumer interest through good face, bank supervision which recently has been mandated to observe the “collective consumer interest” and parliaments which represent consumer and tenants’ interests.

Anyhow the audience emphasised in the general discussion that the LTC perspective was very fruitful and more cooperation should be envisaged between the separate areas of the law.

Abstracts in German:

Kündigungsschutz in der Bundesrepublik Deutschland

UeberschuldungKuendigungsschutzHamburg2016

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