Gap between law and practice is widening

A multitude of questions have to be answered when trade fairs are organised. Now, the first comprehensive work dealing with the legal framework has been published. Hermann Kresse talks about business law, federal reform and other matters.

Trade fair law - what is that exactly?
Trade fair law is not a uniform or definitive area of law such as family, purchasing or tenancy law. The term trade fair law covers all aspects of law governing the organisation of trade fairs and exhibitions and the participation of exhibitors, visitors and service providers. Relevant areas of law include aspects of general civil law, commercial law, labour and data protection law, but also areas of tendering and administration law; aspects of European law also play a role.

With such an extensive range, it's puzzling that this book was such long time coming. Why did it take so long?
That's because the problems are very heterogeneous and specific, demanding sound practical and background knowledge of the structures and processes in the trade fair sector.

Are legal matters becoming more important? If so, why?
Definitely. And I'm not saying that as a lawyer who likes to litigate but as a close observer of developments in the trade fair world. Due particularly to increasing international competition not only between trade fair companies, but also between individual events and between cities and regions, and not least, due to the strained public coffers, more attention has to be paid to legal questions, for instance, in connection with co-operative arrangements or public-private partnerships, in some cases as a result of structural adjustments.

Do trade fair law and trade fair practice always coincide?
No, as you might well imagine.

Where are the biggest discrepancies at organisers and exhibitors?
Let us take business legislation as an example: This stipulates that anyone in the business at which an event is targeted has the basic right to take part in that event, although the organiser may exclude exhibitors or visitors for practical reasons. So the organiser is confined by a relatively narrow legal corset. In practice, this often leads to difficult considerations and a little more flexibility might sometimes not come amiss, for example, slackening the obligation to contract or allowing the organiser to tailor conditions more to different customers.
Industrial property rights are another example. Recent press reports have repeatedly highlighted the acute problem of product piracy at trade fairs.

What possible effects could federal reform have on the competitiveness of Germany as an exhibition location?
German federal reform will transfer legislative competence for trade fairs and exhibitions to the states or Länder from January 1, 2007. Until now, the regulatory competence has been with the legislation of the German federal state, which in particular regulates definitions, fixing events and licensing in sections 64 to 71b of the Trade, Commerce and Industry Regulation Act. If they wanted, the states could convert the existing laws governing business into state law without changing their administrative practices. It is in the power of the Länder to create uniform standards throughout Germany and harmonise existing regulations as far as possible. On the other hand, Germany's federal structure is a constitutional principle and to a certain extent competition between the Länder is a political objective; the German chancellor recently described this objective as "competitive federalism". The phrase has been aired in the current discussions about shop opening times and Sunday working hours. Here, there is a fear that a patchwork of different state regulations could arise, which would distort competition. The same arguments are being used in the exhibition sector.

Which aspect of "trade fair law" is currently most explosive?
In my opinion, tendering law is particularly explosive. The question is the extent to which German exhibition organisers can be seen as public contractors for the purpose of anti-trust legislation despite being organisations under German private law - usually GmbH or AG.

What makes this issue so explosive?
In a recent decision, Berlin's Regional Appeal Court declared that any company in which Messe Berlin GmbH and a consortium of private companies are involved in equal parts may not award contracts for disposal services on the exhibition grounds without a tendering procedure (Regional Court of Appeal, decision dated July 27, 2006, Ref. No.: 2 VERG 5/06). This decision of the court of appeal attracted the attention of the sector precisely because the European Court of Justice in Luxembourg in a ruling dating back to 2001 failed to recognise Fiera Milano in its capacity as a public contractor with the consequence that most trade fair companies do not see themselves as public contractors.
This leaves each trade fair organisation wondering to what extent it has to observe the relevant tendering laws. Failure to do so could have expensive repercussions. Untendered contracts would be null and void, the transaction would have to be reversed with the corresponding damages payments.

What about privatisation? What does privatisation mean and how could it affect exhibition companies, exhibition locations, competitiveness of the organisers?
Firstly, I would like to point out that formally German exhibition companies are already privatised and operate as private companies according to German private law. The debate can really only be about whether ownership is privatised by selling a majority of shares in trade fair companies to private companies. There are no legal counter-arguments against a majority takeover by private investors. Local authorities and the Länder are under no obligation to stage trade fairs as part of their administrative tasks. This applies despite the indirect profitability resulting from the importance of trade fairs for a particular region. Whether privatisation makes economic sense or is undesirable for economic and structural development reasons is a decision that has to be made by the public owners of the exhibition companies.
Privatisation of the entire exhibition sector in one fell swoop is legally and practically impossible. The public owners cannot be forced to sell their companies. But, as German trade fair companies increasingly become global players, they will require greater operational and financial freedom to secure their competitiveness.

Is this book aimed at organisers or exhibitors?
At anyone with an interest in trade fairs both in the exhibition companies and those responsible for trade fairs in exhibiting and visiting companies. It also addresses all service companies that offer ancillary services to the trade fair sector, as well as fair contractors, event and advertising agencies, marketing and communications companies, trade fair logistics providers and, last but not least, legal firms.
Interview: Christiane Appel

m+a report Nr.7 / 2006 vom 27.10.2006
m+a report vom 27. Oktober 2006