From public accountability to market governance : value for money between soft law and legal principle in EU financial and insurance regulation

Abstract

Value for Money (VfM), originally developed as a public sector financial accountability tool, is increasingly evoked as a supervisory reference point in EU financial and insurance law. In general terms, it refers to the assessment of whether the overall benefits reasonably expected from a product or service are proportionate to the total costs borne by the client. This paper traces the doctrinal and institutional development of VfM, charting its migration from the sphere of public management to that of private regulation through instruments such as MiFID II, PRIIPS, and the IDD. It demonstrates how VfM has been reflected primarily through supervisory practices and soft law instruments related to product governance, with the aim of promoting proportionality, consumer protection, and market fairness. In doing so, the paper also argues that VfM can be anchored to the broader and more established principle of fairness, thereby reinforcing its normative foundations and interpretative coherence across sectors. Particular attention is paid to the conceptual ambiguity and regulatory fragmentation inherent in its current implementation, including divergent interpretations advanced by EIOPA, with it substantive and outcome-oriented approach, and by ESMA, with its procedural and disclosure-based stance, the use of product intervention powers by the European Supervisory Authorities, and current discussions on legally binding VfM benchmarks under the Retail Investment Strategy.

The paper also examines the legal and theoretical implications of extending VfM into private law, where it might function as a standard of care, a benchmark for civil liability, and a tool for judicial interpretation. Given its predominantly soft law origins, the analysis considers the challenges of making VfM justiciable within national private law frameworks. By situating VfM within broader frameworks of procedural justice, market fairness, and functional regulation, the analysis highlights its integrative potential and conceptual limitations. It concludes by assessing the role that digitalisation, sustainability, and cross-border litigation are likely to play in shaping the future scope of VfM in a more integrated and consumer -centric EU financial market.