Opinion on the Green Paper on access of consumers to justice and the settlement of consumer disputes in the Single Market (94/C 295/01)

On 18 November 1993, the Council decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Economic Community, on the Green Paper on access of consumers to justice and the settlement of consumer disputes in the Single Market.

The Section for Protection of the Environment, Public Health and Consumer Affairs, which was responsible for preparing the Committee`s work on the subject, adopted its Opinion on 3 May 1994. The Rapporteur was Mr Ataíde Ferreira.

At its 316th Plenary Session (meeting of 1 June 1994), the Economic and Social Committee unanimously adopted the following Opinion.

1. Introduction

1.1. As a follow-up to its first Communication on Consumer Redress, forwarded to the Council in the form of a memorandum on 4 January 1985 (1), and to a 'supplementary` Communication of 7 May 1987 (2), the Commission decided to draw up a Green Paper on Access of Consumers to Justice and the Settlement of Consumer Disputes in the Single Market, published on 16 November 1993 (henceforth referred to as 'the Green Paper`), the purpose of which is 'to trigger a discussion between all the interested parties on the basis of the approaches outlined` in it.

1.2. First of all, from a general point of view the timeliness of the Commission initiative should be acknowledged, tying in as it does with the entry into effect of the Maastricht Treaty, which has clearly defined the scope of a Community consumer protection policy (new Article 129a of the Treaty of Rome), while at the same time making cooperation in the field of justice (Article K of the Maastricht Treaty) one of the pillars of the European Union.

Its excellent technical quality is also worth highlighting in terms of both the information compiled and the specialist legal analysis and comments relating thereto.

1.3. Although the Green Paper deals specifically with consumer access to justice and the settlement of consumer disputes in the Single Market, it provides an accurate picture of the broader context within which this specific issue arises:

- the role of access to justice as one of the bases for defining a policy on European citizenship;

- the absolute need for a common judicial area as a means of achieving a real single market.

1.4. However, it should be pointed out that the Green Paper:

a) does not fully explore the ways in which the new legal bases provided by the Maastricht Treaty might be used to deal with the questions raised;

b) does not give a detailed definition or theoretical classification of the issues discussed, nor does it systematically examine the contexts in which they arise using uniform conceptual criteria; instead it opts for a pragmatic approach to questions essentially grouped together on the basis of convenience or policy considerations;

c) does not define an action programme for the Commission, nor does it suggest specific coordinated or even aligned measures either for individual Member States or for the European Union to take in the future. It simply paves the way for discussion.

These shortcomings, natural enough in a Green Paper, result from the Commission`s failure to come out straight away with a White Paper containing suitable proposals: this would be quite possible given the wealth of accumulated experience revealed by the Green Paper.

2. The legal framework

2.1. Access to law and justice in general

2.1.1. The question of access to justice - quite rightly considered as a fundamental right of citizens and included in the draft Constitution of the European Union, recently presented to and discussed by the European Parliament (1) - cannot be dissociated from the broader issue of access to the law.

In tandem with the right to accessible, speedy and effective justice - real justice - citizens are entitled to be acquainted with the law.

This right precedes and underlies the abovementioned right: logically and ethically, it is a prerequisite.

2.1.2. Questions of legal information and legal protection both fall within the domain of access to the law. Within the context of legal protection, both legal advice and legal support are of particular importance in both their practical and financial aspects. Midway between legal protection and the organized defence of rights lies the vital question of the defence of collective and diffuse interests.

2.1.3. Additionally, for use in defending these rights, simplification of in-court procedural formalities and the establishment of out-of-court procedures for resolving disputes complement one another.

Further areas of discussion on procedural simplification include the possibility of setting up specialist legal tribunals, special procedures for specific types of dispute and simplification of the excessive procedural red tape common in certain situations. In examining out-of-court remedies, discussion should focus on the various administrative or arbitration-based options for resolving disputes.

2.1.4. The scope of these questions, however, far exceeds that of consumer relations and disputes: they affect not only consumers but also companies, particularly SMEs, which can only flourish in a stable, less potentially conflictual climate which the proposed measures could create for relations with their contractual partners.

Unfortunately, the Commission has not referred to parallel situations where the same types of problem are assuming similar importance - such as environmental protection. It persists in its compartmentalized approach to the various aspects of the Community policies it promotes.

2.1.5. The Economic and Social Committee has already commented on this issue, primarily in its Opinion on Consumer Protection and Completion of the Internal Market of 26 September 1991 (2) in which it stressed the importance of a 'global, horizontal approach` among all Commission departments (paragraph 4.1).

On the more specific question of access to law and justice, the Committee would reiterate the views it has consistently expressed, in particular in its Opinion on the Citizen`s Europe of 23 September 1992 (3), the Opinion on the Consumer and the Internal Market of 24 November 1992 (4) and the Opinion on the Working Document of the Commission on a Strategic Programme on the Internal Market, of 22 September 1993 (5).

2.1.6. The questions raised by the subject in hand might be presented as indicated on page 3.

2.2. Consumer disputes

2.2.1. The general question of access to the law and justice arises in all the aspects referred to above, but is of particular importance in consumer relations, given the special position therein of one of the parties: the consumer. This was clearly highlighted at the 3rd European Conference on access for consumers to justice, held in Lisbon on 21-23 May 1992 (6).

The concept of what constitutes a consumer will determine the concept of what constitutes a consumer dispute involving one or more consumers.

GRAPH

2.2.2. The Committee therefore feels that the conventional concept of the consumer needs to be clearly restated. The original Community texts on consumer policy consistently define a consumer as a natural person who is party to a specific final use relationship on behalf of either himself or his household in the broadest sense of the term, in the acquisition of goods or services, including public services, usually of an essential nature, supplied i) by another person in the exercise of his professional capacity or ii) by a public body in its capacity as provider of public services.

The concept of a consumer dispute, which receives special legal treatment, covers the relative disproportion between the costs and legal effort required when attempting to resolve a dispute and the relatively low economic stakes (usually known as 'small claims`).

2.2.3. It is essentially for these reasons and on the basis of the above that the Committee, following on from the views it has consistently expressed over the years, reaffirms the argument that a special system is required to safeguard consumers` rights, in or out of court, and settle consumer disputes (small claims).

Nevertheless, the Committee recognizes that producers and suppliers, especially small and medium-sized commercial concerns, will also benefit form the special arrangements, because disputes arising from goods and services transactions involving consumers can be settled with rapidity, certainty and less expense.

2.3. The Community dimension

2.3.1. All the problems outlined above have been the object of greater or lesser concern in the different Member States and of a variety of moves to resolve them; however they assume particular importance at Community level.

To begin with, the increase in the number of legal relations in general, and consumer-related ones in particular, is not only a natural consequence of the completion of the Single Market, but has been actively encouraged by it.

Of course, the risks of 'trans-frontier` disputes within a frontier-free area have also increased. The apparent contradiction in the terms used here arises - as the Green Paper quite properly points out - from the fact that completion of the Single Market has not been accompanied by the simultaneous establishment of a single judicial area.

2.3.2. The following are among the most pressing problems at Community level, which merit particular attention:

2.3.2.1. Legal information

The different systems of substantive law have not been aligned and may conflict with one another when regulating legal relations in cases where more than one such system is involved. This gives rise to complex questions of private international law, namely identifying and interpreting the applicable legislation and defining the actual concepts involved (theory of devolution or referral to country of origin; theory of classification). It also complicates access to law for citizens in general and consumers in particular, given their particular circumstances.

2.3.2.2. Legal protection

2.3.2.2.1. What is true of substantive law - where the Commission is nevertheless working towards alignment, or at least mutual recognition, so as to minimize the impact of diversity - is even more true of adjective or procedural law.

The existence of different systems of civil or commercial procedural law, each with their own differing - or even conflicting - rules on the international competence of courts and on procedural formalities (types of procedure, deadlines, costs, judicial acts, language, etc.) make it essential to have more legal protection for citizens in terms of both legal advice and legal support (practical help and legal aid).

2.3.2.2.2. Furthermore, some national legal systems do not afford adequate, effective defence of diffuse and collective rights. When they do, citizens of third countries may be excluded - perhaps not in theory, but at least in practice due to the way the systems operate, where a traditional interpretation of the rules on a party`s right to institute legal proceedings is applied to their legal representation.

2.3.2.2.3. The Committee therefore feels that an initial step - albeit restricted in scope and within a limited area - should be taken towards aligning the conditions under which consumers and their representative associations can receive legal protection in its various forms in the different national legal systems. Simple rules exempting them from costs and providing uniform legal aid would suffice for this purpose.

2.3.2.2.4. The Committee recognizes and reaffirms the need for a legal instrument, applicable throughout the Community, granting consumer associations the capacity to take legal action in any national or Community court to represent collective and/or diffuse rights. However, it also believes that it should be for each national legal system to lay down the conditions under which the right of general representation can be granted to consumer associations and that this should take place on the basis of mutual recognition, in accordance with the position set out in paragraph 4.2.1 of the Committee`s Opinion on the Communication from the Commission to the Council and Parliament and the Economic and Social Committee: Green Paper on Remedying Environmental Damage (1) [COM(93) 47 final]. Nevertheless, prior recognition of the legal personality of such associations by the legal systems under which they were established should always be required as a precondition for recognition of their active right to initiate legal proceedings.

2.3.2.3. Trans-frontier consumer disputes

2.3.2.3.1. The problem outlined above is particularly acute in 'transfrontier` consumer disputes, where all the features of consumers` particular circumstances, as identified at national level, are aggravated by specific difficulties caused by distance and differences in language and customs between the parties, the judicial or administrative authorities, and even consumer bodies (consumer associations or public consumer protection bodies, etc.), as well as by the unavoidably high costs involved.

2.3.2.3.2. Despite the considerable progress already made via conventions towards a European judicial area, notably the Brussels Convention of 27 September 1968 and the Lugano Convention of 16 September 1988 on the rules of jurisdiction, and the Rome Convention of 19 June 1980 on the rules governing conflict of laws applicable to contractual obligations, the system is still not able to provide a full response to some of the most significant questions in this area (2).

This is because (i) no progress has yet been made in aligning the rules governing conflict of laws applicable to extra-contractual obligations (ii) the extension, under the Lugano Convention, of the principles of the Brussels Convention to the EFTA countries was not paralleled by a similar extension of the principles of the Rome Convention, and (iii) given the current, continuing restrictions in this field (Articles 27 and 33 et seq of the Brussels and Lugano Conventions), there is a very long way to go before real 'freedom of movement` is achieved as regards either 'recognition` of judgments or exequatur.

2.3.2.3.3. In addition, the Brussels Convention is not applicable to actions for an injunction or criminal cases which, where consumer disputes are involved, are often inextricably linked to questions of civil law. The use of exequatur in interim procedures therefore remains illusory.

2.3.2.3.4. Moreover, despite the Luxembourg Protocol of 3 June 1971, which specifically empowers the EC Court of Justice to decide on how the Brussels Convention is to be interpreted - a power which the Court has been exercising widely - it is clear that a great deal is still left up to jurisdiction of national courts, in terms of classifying sub judice situations and interpreting the substantive rules which apply; this affects the settlement of disputes.

2.3.2.3.5. The Committee therefore considers this to be an ideal area for further modest progress towards establishing harmonized procedural arrangements for settling this specific type of dispute which necessarily brings different national legal systems up against one another. Useful lessons can already be drawn from the various pilot projects set up throughout the Community.

2.3.2.3.6. If this should prove difficult due to an absence of political will, the Committee trusts that Member States will examine the alternative possibility of using conventions. This would remedy the shortcomings which have been identified and improve the existing system, thus responding to the legitimate concerns of European citizens in general and consumers in particular.

3. The situation in the Member States and prospects for future development

Both COM(84) 692 final and the Green Paper [COM(93) 576 final] give a detailed description of the situation in the various Member States, a description which the Member States themselves helped put together (1).

This description will not be repeated here. These documents also trace progress made between 1984 and 1993.

3.1. Judicial means

The general thrust of developments in this area can be set out as follows:

3.1.1. Simplified court procedures

3.1.1.1. Efforts have concentrated on:

a) minimizing procedural formalities;

b) dispensing with mandatory recourse to a lawyer without, however, at any stage compromising defence guarantees or the principle of 'adversary proceedings`;

c) shorter procedural deadlines;

d) strengthening the guarantees surrounding informal interventions in proceedings;

e) mandatory steps to attempt conciliation;

f) simplify the procedure for producing proof; (2)

g) broader discretionary powers for judges in assessing evidence and implementing the law (decisions based on equity);

h) greater facility in applying legal decisions and ordering interim measures and actions for an injunction.

3.1.1.2. The general idea behind the simplification process is not so much the fact that these disputes involve consumers, but rather that the sums involved in the claims are deemed to be 'small`, and therefore of limited economic interest. In other words, the principal criterion determining the benefit of the simplified procedures is whether the sums involved in the disputes are relatively low, although there is absolutely no uniformity here either, as is clearly demonstrated in the table under section III.A.1.a. of the Green Paper, where 'quantification` of the values deemed to be 'small claims` varies by factors of 1 to 100 between the different Member States!

3.1.2. Special procedures for consumer disputes

3.1.2.1. Only one Member State, Ireland, has set up a special procedural system for resolving consumer disputes, based on the following:

a) mandatory prior mediation;

b) highly simplified procedures;

c) special assistance for consumers in instigating proceedings;

d) mandatory attempts at conciliation.

3.1.2.2. Special procedures for consumer disputes have also been introduced at two French courts (Dijon and Le Creusot) as part of the Commission-funded pilot project scheme. These are described in the Green Paper.

3.1.3. Special courts

3.1.3.1. Apart from the United Kingdom, with its Restrictive Practices Court, no other Member State has examined the possibility of setting up special courts to deal with consumer disputes.

3.1.3.2. A number of EC countries have, however, created special small claims courts, usually involving the simplified procedures referred to above, which have limited jurisdiction: most consumer disputes naturally fall within their ambit (France, Germany, Italy, Netherlands, Portugal, Spain).

3.1.4. Protection of collective interests

3.1.4.1. A number of Member States` legal systems allow for diffuse or collective interests to be represented in proceedings, either (i) in a general manner by public entities such as Ombudsmen (Denmark, Ireland, United Kingdom) or by associations or organizations representing parties holding such rights or (ii) by representative groups in specific areas, actions for injunctions being particularly important here, either generally or in connection with specific fields such as unfair clauses, consumer credit, financial services, misleading advertising, unfair competition etc. (Belgium, France, Germany, Greece, Italy, Luxembourg, Netherlands, Portugal, Spain).

3.1.4.2. Most Member States make special provision for the representation of diffuse or collective consumer interests by their respective organizations or associations; such provision is made either in general terms (in a few countries) or in specific areas or terms (in the majority).

3.1.5. Actions for injunctions

3.1.5.1. Most Member States also permit consumer organizations or associations to seek interim termination of unlawful or unfair practices, particularly in the area of unfair clauses or misleading advertising.

3.1.6. Implementation of 'foreign` judgments

3.1.6.1. Lastly, every Member States has its own way of 'recognizing` final judgments in disputes in 'foreign` courts, even those of another European Union Member State and even where current international conventional law - the Brussels Convention - is applicable.

3.2. Non-judicial means

3.2.1. Non-compulsory procedures (1)

3.2.1.1. A number of Member States have recognized that their judicial systems are inadequate or inappropriate for resolving consumer disputes, and have set up voluntary or non-compulsory procedures to remedy this. These vary considerably both in their content and in the impact of the resulting decisions (Belgium, France, Germany, Greece, Ireland, Italy, Portugal, Spain, United Kingdom).

3.2.1.2. This issue is generally approached on a sectoral basis. The service sector - particularly financial services - together with certain major public services accounts for most of the voluntary procedures for settling consumer disputes.

3.2.1.3. The most commonly used means under these procedures are mediation and attempts at conciliation: parties may or may not ultimately take legal action. These measures are usually preliminary or preparatory and supplementary to legal procedures.

3.2.1.4. However, the differences between the various systems of this type are such that it is hard to identify features common to all of them.

3.2.2. Arbitration

3.2.2.1. The introduction of arbitration procedures in settling consumer disputes, as an alternative to court proceedings, is attracting increasing interest in a number of Member States.

Although arbitration is a long-standing legal instrument provided for in most European legal systems at national or international level, it has been used only to a very limited extent for intra-frontier cases which are not strictly commercial.

3.2.2.2. However, several Member States (Portugal and Spain in particular) recently developed and launched official consumer dispute arbitration projects; these are either general in their scope or cover specific sectors or special areas (Italy and the United Kingdom).

3.2.2.3. Using the Green Paper`s description of the Portuguese system, the common features of such projects can be highlighted and their advantages assessed; these have been the key to their successful application in Portugal.

The main features are:

a) the procedures are completely free of charge;

b) they are straightforward and speedy;

c) prior mediation and a subsequent attempt at conciliation are mandatory; this is carried out by expert jurists, who subsequently prepare the case for judgement;

d) the arbitrator, who must be a professional judge, has extended competences and can decide 'ex aequo et bono`;

e) arbitration decisions have full legal force: this also applies to subsequent enforcement, which is the responsibility of the law courts and involves no cost;

f) arbitration is official and permanent, with highly specialized technical back-up services;

g) professionals will generally be able to use the system for most disputes in which they are involved in the future;

h) the system can readily settle trans-frontier consumer disputes arising in Portugal;

i) the system is relatively cheap, since the cost is not fully borne by the State.

3.3. Pilot projects

3.3.1. In addition to the Portuguese arbitration pilot project, the Green Paper lists and describes various pilot projects, some supported by the EC, already completed or under way in different countries: from Marchienne-au-Pont and Deinze in Belgium to the three legal information and advice schemes in Germany, four Greek legal advice centres, the Dijon-Le Creusot pilot project in France, the Irish Consumer Personal Service, the consumers` legal advice centres in Milan and Forlì in Italy, and the Dundee experiment in Scotland.

3.3.2. Nevertheless, the plethora and variety of initiatives makes comparison difficult, particularly when not supported by an evaluation of results based on objective criteria.

3.3.3. However, since a reasonable sample of different national pilot projects - some of them complementary - does exist, the Committee feels that examination of the Green Paper should provide an opportunity to take stock of the situation and compare the various schemes, identifying their advantages and disadvantages, and to come to suitable conclusions as to the general shape of future experiments in this area.

A clear example of the lessons to be drawn from such analysis is provided in the Green Paper`s highly relevant section III.C.1, 'Aid for legal advice`.

3.3.4. Rather than wholesale proliferation of pilot projects, public hearings could be held on this subject as part of the debate proposed by the Green Paper. Moreover, the results could make a most valuable contribution to defining the Commission`s future course of action in this field.

3.4. National settlement of trans-frontier consumer disputes

3.4.1. Consumer disputes have specific features which set them apart them from other, general disputes; consequently they require separate treatment both in the legal regulations defining and describing them, and in the in-court or out-of-court procedural rules for their settlement. In addition, within the context of 'trans-frontier` disputes in general, 'trans-frontier` consumer disputes assume a significance which merits particular attention and care on account of the impact which speedy and effective settlements may have on the implementation and development of the single market. At this stage it would be useful to see (i) how each Member State tackles this particular type of dispute and (ii) which rules of civil or commercial procedural law are applied.

3.4.2. However, although in this respect the Green Paper gives a precise definition of 'trans-frontier disputes` and provides a full list of the additional and specific obstacles which generally arise in such cases, it gives no hint as to how cases of trans-frontier consumer disputes have been resolved within the Member States, nor does it refer to the outcome of such cases; this would be useful for assessing the adequacy of existing systems and their capacity to resolve this type of problem.

4. Major options at Community level

4.1. The principles and their limitations

4.1.1. It is a fundamental principle of law, common to most Member States` legal systems and recognized as such in the Community legal system, that every right must correspond to an action whereby it is recognized in court. This is to compensate for the interdiction on 'self-defence`, i.e., that no one is entitled to resort to force to claim or secure his or her own rights, except in those cases - and within the limits - laid down by the law.

All procedural law is based on this fundamental principle.

4.1.2. The way in which the Green Paper establishes the link between substantive law and remedies (III.D.1) is therefore fully appropriate, and the clear way in which it demonstrates this is to be welcomed.

This applies a fortiori to the conclusions it reaches: firstly, Member States` legal systems must provide the means for firmly establishing this link between rights and remedies; secondly, the Commission is entitled to require Member States to take the necessary measures to this end.

4.1.3. It is now generally accepted - and both the most recent Court of Justice case-law quoted in the Green Paper, and other Court judgments were already moving in this direction (1) - that the European Community has its own, non-subsidiary competence in procedural matters, and may, on its own initiative, establish a forum with the appropriate jurisdiction for laying down remedies or procedures to settle disputes.

This right of initiative does not only apply when there are no national regulations (in the most extreme cases), but also when it is shown that these are not capable of defending the rights in question effectively.

The very wording of the three Directives referred to in the Green Paper [COM(93) 576 final, III.D.2 paras. 1), 2) and 3), on public sector procurement procedures; review procedures to the award of public supply and works contracts; and misleading publicity] is sufficient to illustrate this. It should be emphasized that the sole legal basis used was Article 100a of the Treaty of Rome (2).

4.1.4. The entry into force of the Maastricht Treaty has, however, introduced a new legal basis for Community action specifically geared to consumer protection - Article 129a of the Treaty of Rome - whose potential should be explored.

4.1.5. On this point, the Green Paper is completely silent, possibly because it [COM(93) 576 final] was already published on 16 November 1993, and must have been drawn up some time before.

4.1.6. It is, however, important to consider in what way the Commission`s position may be strengthened by the new Treaty of Rome Article 129a: in particular, how - in addition to the measures it can already take in this area in relation to the completion of the single market, based on Article 100a - other specific action may be taken to support and supplement Member State policy so as to protect the health and safety and the economic interests of consumers, and provide them with adequate information.

4.1.7. From this point of view, it is important to point out that the choice of this particular legal basis will always be subject to the application of the general principle of subsidiarity, and that it will always be for the Court of Justice to give a definitive ruling on how it applies in specific cases. However, it is also true that the settlement of trans-frontier consumer disputes, and matters relating directly thereto, is an area where it is legally 'impossible` to find any solution - let alone an adequate one - at national level; yet there is no doubt as to the need for a solution. This can only be achieved at Community level.

4.1.8. The Committee therefore believes that the Commission should investigate all the consequences and possible limitations involved applying Article 129a of the Treaty of Rome to this particular case, by closely examining the legal implications.

4.1.9. A further, broader aspect also arises from the full entry into force of the Maastricht Treaty: the whole question of access to law and justice in general, raised by the new Treaty Article K on cooperation in the fields of justice and home affairs.

4.1.10. Article K.1.6 specifically refers to judicial cooperation in civil matters, Article K.3.1 establishes collaboration with a view to coordinating Member States` action, and Article K.3.2 confers the right of initiative upon the Commission in this area to adopt joint positions or even joint action. New and unexpected possibilities are opening up for gradually aligning Member States` civil procedural law, including the use of agreements and conventions, and without prejudice to Article 220 of the Treaty of Rome. The specific areas to which this applies are constantly widening and far outstrip the explicit, immediate and primary objectives spelled out in the Maastricht Treaty.

4.1.11. In this particular case, the Committee considers that Member State Governments should explore the full potential of Article K of the Maastricht Treaty, particularly with regard to strengthening and further improving conditions of access to law and justice for the citizens of Europe in general, and consumers in particular, with a view to ever greater equality, certainty and security in the application of law, thereby laying the foundations for the possible establishment, in due course, of a single judicial area.

4.2. Measures and instruments

4.2.1. A common judicial area

4.2.1.1. The Green Paper repeatedly makes it quite clear that the 'ills` plaguing these issues are rooted in the fact that no common judicial area has been set up to parallel the single market and the concomitant abolition of frontiers which ensures free movement of persons and goods (1).

It is indeed absurd to say the least, as a matter of principle, that companies have been given the right to sell their products anywhere in the Community and consumers have been encouraged to buy goods in any place they choose to visit or make their home, while these same consumers have not been given the right to totally equal treatment in the event of any dispute arising from these transactions, wherever they may have been carried out and regardless of where consumers may reside or be at the time.

4.2.1.2. This idea is not new and has been discussed in several Community documents, notably those mentioned in the Green Paper itself, and especially the Sutherland Report (2) and the Communication from the Commission to the Council and the European Parliament as a Follow-up to the Report (3); the Working Document of the Commission on a Strategic Programme on the Internal Market in annex to the Communication from the Commission to the Council and the EP on reinforcing the effectiveness of the Internal Market (4), especially point 22; and the Communication from the Commission to the Council on making best use of the Internal Market - Strategic Programme (5).

4.2.1.3. Also worthy of special attention on account of its historical value, and its clear statement of the positions defended up to then - and still today - is the Boot Report on consumer access to justice, drawn up on behalf of the European Parliament`s Commission on Legal Affairs (Document A 2-152/86, 12 November 1986), in connection with the Commission Memorandum on the same subject [COM(84) 692 final, especially points 9 and 11]. This in turn gave rise to the EP Resolution of 12 March 1987 rejecting the Commission`s negative reaction to the suggestion that it propose legislation requiring amendments to Member State procedural law, since this approach offered the best means of ensuring an adequate and satisfactory level of defence for consumers (No 3).

4.2.1.4. The Economic and Social Committee strongly underlined the importance of this aspect, in particular in the abovementioned ESC Own-initiative Opinions on Consumer Protection and the Internal Market (paragraph 5.4.2) and the Consumer and the Internal Market (paragraph 4.12); it was widely discussed in the study attached to the report on the same subject (Section IV). It also addressed the question in its Opinions on the Sutherland Report (6) and on the Strategic Programme on the Internal Market (7), particularly in paragraph 3.3.1, in which the Committee stressed that 'Title VI of the Treaty on European Union gives the Commission a right of initiative in dealing with judicial cooperation between Member States`.

4.2.1.5. However, it is common knowledge that the Council has not been enthusiastic about seeking harmonization which would in one fell swoop remove the differences and discrepancies between the civil procedural arrangements in the Member States, at least in as comprehensive a fashion as the establishment of a single judicial area would entail (8).

4.2.1.6. The Green Paper, however, raises a number of topics for discussion which the present Opinion leaves open; the Committee believes that these should be investigated in greater depth with a view to consolidating and extending moves towards harmonization; it would be advisable and feasible to do this at sectoral level.

4.2.1.7. One of the areas where the Committee considers determined progress along these lines should be made is in defining common procedural principles for a system providing access to law and justice in trans-frontier consumer cases; to this end, the existing Community budget line for legal aid should be widely publicized and actually used.

Although perhaps timid, this would constitute a first step within a limited but key area for all European citizens: it would certainly make a highly valuable contribution to the effective completion of the single market.

4.2.2. Convention-based procedural law

4.2.2.1. Another area, also clearly laid out in the Green Paper, is that of the restrictions and difficulties in applying convention-based law in the procedural field, particularly in trans-frontier consumer disputes: specifically those arising from the Brussels and Rome Conventions of 1968 and 1980 respectively.

4.2.2.2. Even once the ratification hurdle is overcome, the rules of convention-based law do not prevent manifest or substantial discrepancies from cropping up in the legal system which applies in a given situation. These discrepancies are caused by the fact that these systems do not always tie in with one another. This is quite apart from the delays which can always be generated by the exceptional invocation of questions relating to the definition of courts` competences or the legal classification of the acts or contracts giving rise to proceedings; the response to these questions depends on the prior definition of the law applying to the substance of the case. This can turn final judgments on apparently straightforward disputes into brain-teasing puzzles for the amusement of experienced lawyers, as already indicated in paragraph 2.3.2.3.2 above.

4.2.2.3. Notwithstanding the above, the Committee believes that there is ample room here for progress towards constantly increasing certainty and security in consumer relations through the use of conventions - by clarifying concepts, standardizing practices and, most importantly, streamlining the workings of court machinery in all Member States, making the application of justice increasingly swift and effective. The Commission should bring all its powers to bear in this area.

4.2.3. Pilot projects

4.2.3.1. Although it is accepted that the pilot projects have been uniquely valuable, it must also be asked if they have not provided the Community with a pretext for prevaricating on these issues for almost ten years.

4.2.3.2. As indicated in paragraph 3.3 above, work to date has provided sufficient information that can be used in defining lines of action for Community programmes and specific - and where possible uniform - action throughout the Community.

4.2.3.3. The Committee is therefore convinced that except in special, duly justified cases, pilot projects should not continue to proliferate wholesale, particularly when not guided by a set of common, basic principles or rules, rooted in accumulated experience in this field.

4.2.4. The gradual alignment of civil and commercial procedural law in the Member States

4.2.4.1. On the contrary, the Committee`s feeling is that the right legal conditions are already in place so that proposals can be framed for aligning some aspects of the civil and commercial procedural law of the various Member States.

Various suggestions to this effect are made in the Green Paper, all of which are entirely valid, although, in some cases, they are not entirely consistent in form with the guidelines proposed here.

4.2.4.2. Among the suggestions made, the Committee sees the following as the most important in that they cover the areas most in need of a concerted effort at Community level:

a) actions for an injunction, intended to effect general and uniform prevention and cessation of practices which are considered illegal within the sphere of consumer relations, as a follow-up to Article 24 of the Brussels Convention;

b) general recognition of the active legal right of consumer associations to represent collective and diffuse interests, before any judicial or out-of-court authority in any Member State, irrespective of the nationality of the interested parties and the associations themselves, or of the place where the dispute arises;

c) definition of basic rules for uniform proceedings on collective and joint actions in the area of consumer disputes;

d) the above-mentioned uniform proceedings for settling trans-frontier consumer disputes, which can be initiated under any national jurisdiction.

4.2.4.3. These four areas should be covered by a single Community legal instrument, for which, as has been pointed out, the legal basis does exist in the EC and EU treaties as they stand.

4.2.5. Extending and improving the means of settling disputes in the field of Community consumer law

4.2.5.1. Lastly, within the Community judicial system itself, it is acknowledged that it is virtually impossible for private individuals to gain access to the system because of the established rules of locus standi. A good deal of thought must go into formulating proposals to improve the present situation, so that individual consumers, and consumer associations acting collectively, are guaranteed access to the Court of Justice, i.e., the court of first instance, by explicitly confirming that collective action is admissible within the European judicial area. The most recent legal thinking seems to be willing to contemplate this possibility, albeit somewhat hesitantly.

4.2.5.2. Over and above this particular aspect, the Committee feels it must again suggest, as it has on previous occasions, that a variety of mechanisms be set up which could go a long way towards improving the current situation, such as:

a) recommending that the Commission take systematic steps to ensure that the instruments used to implement Community consumer policy have a direct horizontal impact;

b) urging the Commission to improve the means and procedures for consumer access to its services, with a view to encouraging the Commission to bring actions before the Court of Justice under Article 169 of the Treaty of Rome.

4.2.6. Other initiatives

4.2.6.1. Of the other initiatives, not strictly of a legal nature, which the Green paper submits for discussion, the Committee endorses the following, and urges the Commission to concentrate its efforts on them:

a) adequate Community budgetary provision for legal aid in trans-frontier proceedings, accompanied by the necessary public information, without prejudice to increased support for consumer organizations to take action in this area;

b) Community-level promotion of Codes of Conduct, stipulating the minimum criteria to be enshrined in Recommendations, without prejudice to later conversion to Directives if required;

c) increased exchange of information and experiences between the various pilot projects;

d) encouraging dialogue between consumers and those involved in trade and industry, to ensure that the forthcoming consumer forum can serve as a model.

5. Contributions to an action programme and initiatives for legislation

5.1. The Committee urges the Commission to consider the timeliness and advisability of adopting the following, non-exhaustive list of measures:

a) compilation of a list of the means available to the public for settling consumer disputes in the various Member States, accompanied by a critical analysis thereof;

b) appropriate dissemination of information on these means in all Member States;

c) incentives for Member States to develop mediation and conciliation services, in particular by supporting private bodies, to minimize the number of consumer disputes, building on lessons learned from the pilot projects;

d) a comparative, in-depth study of the qualitative results of the pilot projects, and identification of the guiding principles of those systems judged to be most suitable for settling consumer disputes;

e) encouraging debate between the various parties concerned with access to law and justice - judges, lawyers, trade organizations, consumer bodies and similar, and representatives of the Member States` Ministries of Justice, particularly as regards arrangements for providing proof;

f) establishment of a network of free or low-cost, local legal advice offices in all Member States, specifically geared to providing legal information on trans-frontier disputes at the pre-proceedings stage (applicable law, procedures, existing practice in the various Member States);

g) consideration of the possible creation of optional legal protection insurance, covering all consumer disputes, particularly trans-frontier ones, to be underwritten or taken out by consumers or consumer associations;

h) training programmes for those involved in the application of different national law in the Member States from the viewpoint of Community law, so that they are able to do so in a uniform manner. This should be available not only to judges, staff from the public prosecutors` office or equivalent and lawyers, but also to experts responsible for transposing Community law;

i) incentives for reconciling the interests at stake, by encouraging dialogue under conditions of equality between representatives of producers/suppliers, of consumers and of the public authorities concerned;

j) encouragement for businesses, or their representative associations to set up special bodies to follow up consumer complaints, thereby promoting amicable settlements and preventing disputes.

5.2. The Committee also believes there to be an urgent need for a study and in-depth analysis of those areas where consumers experience particular difficulty in obtaining access to justice, and where settlement should be attempted at Community level. It urges the Commission to submit specific proposals on the following points:

a) the active legal right of consumer associations to represent collective and diffuse interests before the courts in any Member State and before the Court of Justice, and to be awarded compensation, in accordance with the principle of mutual recognition and provided that such associations have legal personality and are recognized as representative by the law of the Member State in which they are established;

b) a system of special legal support and aid for trans-frontier disputes, covering not only the court proceedings, but also legal advice prior to the proceedings.

5.3. Lastly, the Committee considers that the Commission should rapidly submit legislative proposals on the following:

a) definition of common principles and procedures for uniform proceedings for settling trans-frontier consumer disputes and actions for an injunction;

b) definition of basic rules for the standardization of collective or joint actions relating to consumer conflicts at Community level.

6. Conclusions

The Committee:

a) welcomes the Commission`s initiative in publishing the Green Paper, stressing its topical relevance and highlighting the excellent technical quality of its compilation;

b) shares the Commission`s concerns about i) the lack of access to law and justice in the Community, which constitutes a fundamental right of European citizens, and ii) the absence of a common judicial area, an essential tool in building an effective single market and enhancing the quality, efficiency and competitiveness of the economic system;

c) regrets, however, that the Commission has not now used this opportunity to submit concrete proposals for action within the scope of its specific powers, particularly for exploring the potential offered by Article 129a of the Treaty of Rome; the Committee therefore hopes that, in the light of the suggestions set out in paragraph 5, the Commission will submit a new action programme;

d) supports and highlights the Commission`s initiative in launching an in-depth debate on these issues, to which all the relevant public and private sector bodies should be invited to contribute;

e) is convinced that dialogue should be encouraged between public bodies, trade organizations and consumer associations with a view to reconciling the interests at stake and preventing legal disputes, by helping to put voluntary mediation and conciliation procedures on an institutional footing;

f) considers that, without prejudice to the improvement and fine-tuning of judicial mechanisms - which should be continued - institutionalized arbitration procedures should be brought to the fore as an alternative means of settling consumer disputes;

g) advises the Commission to carry out a critical, qualitative assessment of the results of the various pilot projects and to draw the appropriate conclusions from available experience, rather than continuing with the wholesale proliferation of such projects;

h) is aware of the legal and political obstacles, at this stage of European Union, to significant progress towards general standardization in the area of access to justice;

i) believes, however, that progress is possible on a modest scale and in specific areas, such as trans-frontier consumer disputes, towards the goal, of aligning practices and procedures, which would introduce real equality for all before the law, and increased certainty, efficiency and security in the application of law;

j) therefore recommends that the Commission take account of its suggestions for areas in which the Commission should submit specific proposals for Community-level legislative measures, as set out in paragraph 5.3;

k) also urges the Commission and the Member States to press ahead with up-grading international conventions for the settlement of disputes, in particular by developing the mechanisms contained in the Brussels Convention, although the Committee remains aware of the difficulties which will always be involved in using international private law to achieve the effective, swift settlement of international consumer disputes;

l) urges the Member States to lend the greatest possible substance to the provisions of Article K of the Maastricht Treaty applying to the field of judicial cooperation;

m) calls upon the Member States to focus particular attention at national level on the arrangements for access to law and justice in general, especially those relating to consumer disputes, by setting up special simplified, effective machinery for this purpose;

n) highlights, in this connection, the importance of joint representation of diffuse interests and underlines the need for recognition, in each Member State and right up to the Court of Justice, of the active legal right of consumer associations to represent such interests in court, either in actions for an injunction or in proceedings to secure compensation for loss.

Done at Brussels, 1 June 1994.

The Chairman

of the Economic and Social Committee

Susanne TIEMANN

(1) COM(84) 692 final.

(2) COM(87) 210 final.

(3) Document PE 179.622, 10. 2. 1994.

(4) OJ No C 339, 31. 12. 1991.

(5) OJ No C 313, 30. 11. 1992.

(6) OJ No C 19, 25. 1. 1993.

(7) OJ No C 304, 10. 11. 1993

(8) It is to be regretted that the proceedings of this Conference have still not been published, in view of the high quality of the contributions made in the general debate on this matter.

(9) CES 989/93, unpublished.

(10) Cf. the Proceedings of the conference on the interpretation of the Brussels Convention by the Court of Justice of the European Community, with a view to a European legal area, held in Luxembourg on 11 and 12 March 1991 (Butterworths, 1993). See also the relevant observations on this subject in the excellent Green Paper on guarantees for consumer goods and after-sales services [COM(93) 509 final].

(11) At the initiative of some Members, and at the request of the Rapporteur, the ESC received a number of comments on the situation in some of the Member States to the effect that the data compiled by the Commission in its Green Paper needed correction on account of inaccuracies or subsequent developments.

1. Denmark

1.1. Consumers and business interests are represented equally, in the event of referral to the Consumer Complaints Board (p. 20, point 2). The business community accepts the Board`s decisions in 70-80 % of cases.

1.2. As at 21 February 1994, access to justice was free subject to the following conditions:

- annual taxable income below DKR 174 000 for single persons; and

- DKR 220 000 for couples, married or otherwise, increased by DKR 30 000 for each dependent child under the age of 18.

1.3. Contrary to what is stated in the Green Paper, court costs are not covered by the Complaints Board. The Board covers its own operating costs, and provides those involved with a grant of DKR 80, or DKR 400 in disputes involving motor vehicles.

2. Ireland

2.1. The small consumer claims procedure has been extended to the whole country (p.35, point 1).

Consumers may be represented by a solicitor, but this is not included in the costs arrangements.

2.2. The upper limit for claims before the Ombudsman in the banking sector is currently IR£ 30 000 (3. 3. 1994). All banks and insurance companies belong to the system.

2.3. The expression 'parliamentary Ombudsman` (p. 36, point 2) is incorrect: the proper term is simply 'Ombudsman`.

2.4. The Director of Consumer Affairs and Fair Trade is empowered to take action on his own initiative against vendors or suppliers of services infringing the Sale of Goods and Supply of Services Act, 1981.

3. Luxembourg

3.1. There is also a legal information support service, provided by a court officer ('greffier`) attached to each of the country`s three district courts.

3.2. The aim of the service is to inform consumers of the procedures open to them for the defence of their rights, and to guide them in seeking legal representation, if necessary.

4. Portugal

4.1. Decree-Law 404/93 of 12 December introduced a procedure to seek an injunction; this is designed to secure payments under contract of a value of less than Esc. 1 000 000 (p. 45, point 1).

4.2. Generally, consumer associations may only act as assistants in representative actions (Article 13 of Law 29/81 of 22 August): however, where general contractual clauses are involved (Article 25.1(a) of Decree-Law 446/85 of 25 October), they have the right to take legal action to enjoin the cessation of the application or recommendation of general contractual clauses (p.49, point 3).

4.3. Article 52 of the Constitution provides for 'popular action`, for which no special rules exist and which is therefore directly applicable (Article 18 of the Constitution). This measure may consequently be used in certain cases.

4.4. The Public Prosecutor`s Office generally has the right to commence civil proceedings involving public interest, and particularly collective consumer interests and matters pertaining to general contractual clauses.

(12) See the Directives on general product safety (OJ No L 228, 11. 8. 1992, Directive 92/59) and misleading advertising (OJ No L 250, 19. 9. 1984, Directive 84/450).

(13) This term is preferred to the one used by the Commission, since the term 'administrative procedures` does not have a single, unambiguous meaning in all the languages.

(14) Cf. Judgments of 16. 12. 1976, Rewe, No 5 (case 33/76, ECR p. 1989) and Comet, No 14 (case 45/76, ECR p. 2043).

(15) It is arguable whether the 'right of reply` provided under Council Directive 89/552/EEC (OJ No L 298, 17. 10. 1989) of 3 October 1989 on television broadcasting is of the same nature as the procedures under the other Directives quoted.

(16) Cf. 1.A.II in fine, and I.B.2 in particular.

(17) Mainly Recommendations 18 to 30. 'The Internal Market after 1992: Meeting the challenge.`

(18) SEC(92) 2277 final, mainly Part IV.

(19) COM(93) 256 final.

(20) COM(93) 632 final, particularly Section B.III.

(21) OJ No C 201, 26. 7. 1993.

(22) OJ No C 304, 10. 11. 1993.

(23) The Council`s latest position on the Strategic Programme on the Single Market, of 16 December 1993, is decidedly unenthusiastic, as were the Council 1989 and 1992 Resolutions on the EC`s future priorities in consumer policy and on consumer policy in the EC (OJ No C 294, 22. 11. 1989 and No C 186, 23. 7. 1992 respectively).